Background to Industry Restructuring

In November 1997, the Government of Ontario  issued a White Paper entitled "Direction for Change: Charting a Course for Competitive Electricity and Jobs in Ontario" (PDF). This White Paper set the framework, policies, and principles for restructuring the Ontario's electric power industry and for establishing an open, competitive market. Key elements of the government's restructuring plan it outlined included:

• creating a competitive electricity market in the year 2000 for both wholesale and retail customers
• establishing an independent market operator to govern the operation of the competitive market
• restructuring Ontario Hydro into new companies with clear business mandates
• separating monopoly operations from competitive businesses throughout the electricity sector
• providing the Ontario Energy Board with an expanded mandate to protect electricity consumers.

In early 1998, the government established a Market Design Committee to provide recommendations on the formation of an independent market operator and on the design of a fully competitive electricity market in Ontario. Over the subsequent year, the Market Design Committee issued four quarterly reports including proposed set of rules defining the new market.

By November 1998, the government had proclaimed the Electricity Act , signaling the end of the monopoly system for generating and selling electric power in Ontario and creating five new companies from the former Ontario Hydro:

• Independent Electricity Market Operator (IMO)
• Ontario Power Generation Inc. 
• Hydro One 
• Electrical Safety Authority 
• Ontario Electrical Finance Corporation 

In February 1999, the Minister announced the members of the IMO Board and on April 1, 1999, the IMO was officially established as an independent organization.