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Locational Pricing (SE-25)

The purpose of this initiative is to examine the implications on stakeholders and market efficiency of changing how Ontario’s real-time electricity price is calculated, by making the calculation better reflect the impacts of the transmission system.

The IESO will address pricing model options beginning with a pricing study that examines the various forms of locational pricing that are used across the industry. This study is being conducted at this time for the following reasons:
  • stakeholder interest,
  • increasing congestion management settlement credit complexities, and
  • a recommendation in the latest market surveillance panel report to introduce locational pricing
  • as work begins on a day-ahead market design, the fundamental question of how prices will be calculated needs to addressed.

The study results will be taken into consideration in design of the day-ahead market.

Stakeholder Engagement Plan (Draft)
Stakeholder Engagement Plan (Revised, October 4, 2006)
Stakeholder Engagement Plan (Revised, October 12, 2006)

For more information on this stakeholder initiative or to participate in the next meeting, email

Working Sessions and Proposed Activities
Supporting Material
February 6, 2008 • Status update on Locational Pricing.
June 20, 2007 • Status of Locational Pricing Analysis
February 8, 2007 Locational Pricing study results presented to the IESO Board of Directors
November 1, 2006 • Present results of Locational Pricing Study to Stakeholder Advisory Committee
October 18, 2006 • Post Locational Pricing Model Study Results
October 6, 2006 Locational Pricing study results presented to Market Pricing Working Group for feedback and input on impact
• Agenda and Presentation
September 1, 2006 • Agenda and Presentations
Finalize Study Scope and Schedule at Market Price Working Group
August 25, 2006 Post and communicate Locational Pricing stakeholder plan
• TransAlta
• Manitoba Hydro
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