A little good, more bad: recently at the IESO

The IESO posted a lot of material this week: on feed-in-tariffs, 18-month outlooks, the status of procurement. stakeholder engagement agendas, etc. It’s worth a quick post on some things I noted.

On a negative note, I noticed on Wednesday a tweet noting the Ontario Energy Report had been updated on Monday. Upon looking I immediately noticed it had a significant error on page one, and posted IESO Conveniently Bungles Ontario Energy Report.

It remains wrong as I write this, and I think that’s a statement about the IESO. The average Class B commodity rate in the second quarter of 2015 was 26% higher than 2014’s, and that was consistent across the 3 months each of which had a Class B consumer commodity rate of around 11 cents/kWh; if the IESO management was interested in the end consumer they’d have know that, and the rate, and would have been as capable as I at noting their error.

I’ll return to the top management later, but first…

On Friday we got an indication somebody in the organization may be more interested in consumers than the boss is.

The IESO posted a slide deck with background on revised feed-in tariff (FIT) pricing for 2016. The only changes I note are a drop in offered rates for solar:


These prices look like a nice transition to the elimination of any FIT, because the price is getting close to what a kWh would cost a regulated price plan consumer in Ontario. The On-Peak pricing applied during solar’s most productive summer hours was 16.1 cents/kWh this past summer, with other charges and taxes adding about another 10 cents/kWh to consumers in many distribution areas.

It would be nice if solar businesses were as willing to compete for consumers as they are to lobby for crazy rates, but… well, here’s the slide that made me smile:


This is crazy – from the stakeholders.

Bravo to the IESO on setting rates rationally despite the special interest nonsense – and, especially, kudos to the solar proponent who did note prices should decline.

An IESO rule proposal on demand response rules gave some hint as to why they attract crazy “stakeholders.”

A big issue with demand response is setting appropriate penalties when the demand reduction isn’t delivered when needed. To determine that, you might think it necessary, in a world with Volkswagen TDI, to know that they did with a confidence only measurement provides..


In those instances where an [hourly demand response] resource does not have a registered wholesale meter, they will be obligated to submit measurement data to enable the IESO to determine compliance with a DR capacity obligation.       –source

You know who has a smart meter in Ontario?

Pretty much every residence.

How about the IESO figures out how to regulate and automate the process before introducing it?

Returning to the IESO’s usual organizational disinterest in consumer costs as demonstrated by not only bungling page 1 of the Ontario energy Report, but letting it go uncorrected all week, the speech delivered by IESO President and CEO Bruce Campbell to the Ontario Energy Association on September 17, 2015 is noteworthy.

… you will also have heard me outline three strategic themes for the company:

  • Providing Public Value
  • Building Corporate Resilience
  • Respecting and Valuing Our Stakeholders

The Providing Public Value theme establishes goals within the IESO mandate, identifying and creating public value such as efficient system and market operations and cost-effective conservation

I’ve added emphasis to emphasize Campbell is failing to lead an organization providing value.

The IESO’s efficient system and market yielded, over the most recently completed 12-months, an hourly Ontario energy price (HOEP) of $22.24/MWh (2.22 cents/kWh)..

How efficient is a system that receives 20% of the cost of supply through market sales?

Maybe that’s unfair because the system is supposed to be manipulated to transfer costs to the least powerful consumers, but a minimum expectation of efficiency should be that the market recover the marginal cost of the last unit of generation purchased.

So let’s say it is and that averages 2.22 cents.

If the marginal cost of generation in this efficient system and market is 2.22 cents/kWh, what would be the implication for determining cost-effective conservation?

I’d think it would have a value of 2.22 cents/kWh, but the last time I saw a figure from an Ontario agency the number was “4¢ per kilowatt-hour.”

That’s more.

Thus record high export volume at record low pricing.


September 30: Checked OntarioEnergyReport.ca today and the figures have been corrected.



Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s