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Ancillary Services Contracts

The IESO contracts for four ancillary services to help ensure the reliable operation of the power system.

  • Black-start capability
  • Regulation service
  • Reactive support and voltage control service; and
  • Reliability Must-Run

The IESO is committed to a fair, competitive process to award ancillary service contracts. To receive additional information, please contact IESO Customer Relations at 905-403-6900 or

Types of Contracts and Standard Terms and Conditions
Description Relevant Terms and Conditions
Certified Black Start Facilities Certified Black Start Facilities help system reliability by being able to restart their generation facility with no outside source of power. In the event of a system-wide blackout, black start facilities would play an important role in restoration efforts by helping to re-energize other portions of the power system.

• Monthly fixed payments
• Annual and monthly testing requirements
• Payments may be reduced if the facility fails to pass tests or fails to perform during a blackout

Regulation Service

Regulation Service acts to match total system generation to total system load (including transmission losses) and helps correct variations in power system frequency. Response times may range from tens of seconds to a few minutes.

This service is currently provided by generation facilities with automatic generation control (AGC) capability, which permits them to vary their output in response to signals sent by the IESO. Under the market rules loads may also provide regulation service.

Ontario's Independent Electricity System Operator (IESO) has taken a major step forward to increase the participation of alternative technologies such as aggregated loads, flywheels and battery storage in the electricity market by selecting three new suppliers of regulation service, a grid-balancing function traditionally provided by generators - a first for Ontario. The first of these providers is expected to be in service in 2013.

• Minimum of ±100 MW of automatic generation control (AGC) must be scheduled at all times 
• Minimum overall ramp rate requirement for Ontario is 50 MW/minute
• Payments comprise fixed and variable costs
• Payments cover the lesser of: amount of regulation service scheduled or amount of regulation service delivered
Reactive Support and Voltage Control Service

Reactive Support and Voltage Control Service is contracted from generators and allows the IESO to maintain acceptable reactive power and voltage levels on the grid.

All dispatchable generating facilities that are injecting energy into the IESO-controlled grid are required to provide reactive support and voltage control service in accordance with the Market Rules. Contracts are required if market participants want reimbursement for additional costs incurred to provide this service.
• Prices are based on the costs of providing reactive power, including any additional costs from energy losses incurred by running at non-unity power factor, and, where applicable, costs of running generation facilities as synchronous condensers at the IESO’s request
• Testing requirements are in accordance with North American Electric Reliability Corporation (NERC) Planning Standards
Reliability Must-Run Reliability Must-Run (RMR) contracts are used to ensure the reliability of the IESO-controlled grid. A RMR contract allows the IESO to call on the registered facility under contract to produce electricity if it is needed to maintain the reliability of the electricity system. RMR contracts obligate market participant to offer into the IESO-administered markets the maximum amount of energy and operating reserve in a commercially reasonable manner and in accordance with stated performance standards. More information is available in Chapter 7, section 9.8.1 of the IESO's Market Rules. • On July 25, 2013 the OEB approved an RMR Agreement with Ontario Power Generation Inc.

For further information please refer to the OEB’s Decision Order and the Agreement.


Annually, the IESO publishes costs and quantities of all contracted ancillary services.

For the period from January 1, 2012 to December 31, 2012:
  1. Seven market participants were under contract to provide reactive support and voltage control service from a total of 56 generation facilities having 233 generation units.
  2. Four generating stations were under contract to provide certified black start capacity.
  3. Ten generating stations were under contract to provide regulation service. The total contracted capability was ±238 MW with typically ±100 MW of regulation service scheduled.
  4. The amount paid by the IESO for contracted ancillary services was $60,054,046.95. The portion paid for reactive support and voltage control service was $24,134,293.39.
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