The IESO’s June mistake, and the July victims

Ontario’s electricity system operator (IESO) made a mistake in June.

In July they made it better for themselves in a way that specifically punished one set of consumers – Class B ones not covered by Regulated Price Plans (RPP). The OEB’s lacklustre oversight in recent years continues to harm this same set of consumers. This will be a wonkish post but if you’re connected with a company with a substantial electricity bill, it will alert you to probable overcharges.

This situation should be difficult to explain, because I’ve had friends questioning the IESO on it for half a year and I haven’t seen any evidence that a fulsome explanation is pending. That may be due to the beginning of the tale.

2017 IESO global adjustment consumption page on Feb 10

The beginning was the final global adjustment calculations the IESO made for June 2017. They erred in calculating total consumption. The inability of the organization to admit that, along with the regulator’s (OEB) disinterest in monitoring the IESO’s collection of global adjustment charges, is why confusion persists.

I noted on Twitter when the figures were released that they made no sense. To explain why requires getting into some obscure details.

  • the IESO reports “Ontario Demand” hourly, but that figure is essentially demand for supply from their market participants,
  • the IESO elsewhere reports a summary breakdown of this figure as “Monthly Energy Demand” which shows some of that figure is “Generator Consumption” and some is “Losses”,
  • the IESO has not reported on generators embedded in the Local Distribution Companies (LDC’s) it services, but in the past couple of years it has noted monthly distribution-connection (Dx) figures in it’s 18-Month outlooks,
  • the Global Adjustment process requires knowing the share of consumption for each consumer, so that reporting includes a “consumption” figure .

If you took the time to subtract out the generator consumption and losses from the IESO’s reporting of “Ontario Demand”, and added the embedded generation, you’d find you were usually about 1% short of the consumption as shown in the global adjustment reporting.  In June 2017 the difference was far greater:

Consumption mistake_

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