The Independent Electricity System Operator (IESO) works at the heart of Ontario's power system – ensuring there is enough power to meet the province's energy needs in real time while also planning and securing energy for the future. It does this by:
balancing the supply of and demand for electricity in Ontario and directing its flow across the province's transmission lines
planning for the province's medium- and long-term energy needs and securing clean sources of supply to meet those needs
overseeing the electricity wholesale market where the market price of electricity is set
- fostering the development of a conservation culture in the province through programs such as
Save on Energy
Power to Ontario.
Over the last decade, a transformation has been taking place in Ontario's electricity sector. Connecting generators, traders, transmitters, distributors, as well as communities, municipalities and energy consumers, the IESO encourages and embraces change − focusing its efforts on evolving to a cleaner, more sustainable and diverse power system.
Operating the System in Real Time
Ontario's IESO works to ensure sufficient electricity is available whenever and wherever it's needed. Ensuring there is enough energy to meet demand is an ongoing and highly complex process, requiring the close coordination of all parts of the system.
Every five minutes, the IESO forecasts electricity demand throughout the province and directs generators to provide the required amount of electricity to meet that demand. It can also reduce demand by calling on large volume users to cut back on consumption. This process of balancing supply and demand repeats itself 24 hours a day, seven days a week.
Preparing for the Province's Future Energy Needs
The IESO also plans and prepares for Ontario's future electricity needs. It forecasts and assesses Ontario's current and short-term electricity requirements, as well as the adequacy and reliability of the integrated power system.
For the longer term, it forecasts energy demand up to 20 years and identifies sustainable electricity solutions for Ontarians well into the future. The IESO is specifically charged with creating integrated regional plans that allow for more customized approaches to meet evolving electricity needs throughout the province.
The IESO works with local stakeholders in each of Ontario's 21 electricity regions to develop integrated solutions for maintaining a reliable supply of electricity.
Creating a Sustainable Energy Supply Mix
To meet the province's energy needs, the IESO secures new supply to meet future demand for energy, whether through contracts or market-based approaches. It does this by procuring new generation, identifying transmission needs, and developing conservation measures while working toward a clean energy supply mix. It establishes and manages thousands of contracts with a range of suppliers – from large grid-scale clean and renewable generators and distribution-connected producers to communities, small businesses and individuals developing small-scale projects.
The IESO manages contracts for more than 22,000 MW of supply, including nuclear, hydroelectric and other types of renewable fuels, and natural gas.
Working in Consultation with Partners
The IESO and its stakeholders are working together on a new, shared vision for Ontario's electricity sector – a vision that encompasses cleaner supply, smarter delivery systems and more involved consumers.
Its outreach is broad – extending beyond the traditional confines of the electricity sector. Today it includes individuals, businesses, municipalities, First Nations and Métis communities, consumers who are also generators, public sector entities, schools and hospitals.
Engaging stakeholders and communities is an integral part of the IESO decision-making process – helping transform the sector for the benefit of all. As a result, the IESO has an extensive stakeholder engagement program reaching out to communities, market participants, sector stakeholders and the public at large.
As Reliability Coordinator for the province, the IESO oversees the implementation and enforcement of reliability standards in Ontario. At all times, it works closely with and coordinates activities with system operators in other jurisdictions to ensure energy adequacy and security across North America.
In this role, the IESO leads the emergency preparedness and power restoration activities for Ontario's power grid, including coordinating the restoration and preparedness plans of its market participants.
An audit by the North American Electric Reliability Corporation cited the IESO as a model for system operators, while a peer review showed that its practices in enforcing reliability are exemplary.
Conservation is key to meeting the province's future electricity needs – providing the cleanest and most cost-effective alternative to building new generation. The IESO coordinates province-wide conservation efforts as part of the new Conservation First Framework, working closely with local distribution companies and other partners to deliver innovative programs to Ontario businesses and residents to help them reduce energy usage.
Save on Energy, the IESO offers a suite of incentives and programs for residential and business customers. It also works to expand the conservation market by supporting the development of new technologies and services.
The Conservation First Framework is designed to reduce electricity consumption in Ontario by seven terrawatt-hours by December 31, 2020.
Operating and Settling the Wholesale Electricity Market
The IESO oversees the wholesale electricity market, where the price of energy is determined. It also administers the rules that govern the market and, through an arm's-length market monitoring function, ensures that it is operated fairly and efficiently.
The market, however, can play a broader role in helping address the province's changing energy and environmental needs. The IESO supports the development of market-based approaches to managing Ontario's longer-term electricity system needs – such as a capacity auction. Further enhancements will strengthen the overall market, enhance reliability and provide Ontarians with greater access to information about their power system.
The IESO settles $14 billion in electricity charges annually.
Ontario's electricity system is becoming more participatory. The IESO works to ensure that information is accessible and relevant and that its services provide the support needed for effective participation in the market or in its various programs and services. It strives to work with all parties in the sector, to be impartial and transparent, recognizing the need for an increasing role for consumers in Ontario's electricity marketplace.
Engaging with Indigenous Communities
Recognizing that Indigenous participation in the energy sector is one of the keys to the economic development of First Nation and Métis communities, the IESO has a number of targeted programs and initiatives designed to promote the development of community energy plans, encourage renewable energy projects and support conservation. The IESO is committed to engaging with Indigenous communities in the design of its generation procurement programs and throughout the regional planning process.
The IESO is a not-for-profit corporate entity established in 1998 by the
Electricity Act of Ontario. It is governed by an independent Board whose Chair and Directors are appointed by the Government of Ontario. Its fees and licences to operate are set by the Ontario Energy Board and it operates independently of all other participants in the electricity market.
Through amendments to the
Electricity Act, the operations of the IESO and the Ontario Power Authority (OPA) were merged on January 1, 2015, bringing together real-time operations of the grid with long-term planning, procurement and conservation efforts.
The OPA was established in 2004 by the
Electricity Restructuring Act.