Transmission RightsWhile transmission rights (TRs) are primarily designed to provide a financial hedge for traders whose intertie trading represents a financial risk, participation in the TR market is open to any company that chooses to join the IESO-administered market.
Transmission rights are sold for specific intertie paths through auctions. Prospective TR owners submit bids to purchase the TRs, which are based on historic TR prices. Archived data is available in the TR reports on the FTP site. Previous TR bids are not made public, and neither are the various TR participants.
Transmission rights owners make money when the intertie zone price is different from the Ontario marginal clearing price (MCP).
Congestion on an intertie represents a financial risk for traders, which is why they use the TRs as hedging mechanism to recover some of the money they might lose.
Details on authorization for participating in the TR market are available on the market entry page.
During the TR auction participants submit bids on a specific intertie path and the highest bid is automatically accepted by the IESO. Participants are advised of their success in the auction a couple of days after it closes.
There are long term and short term auctions. Short term auctions guarantee the winning participant(s) ownership of TRs for a specific path for one month whereas long term auctions guarantee ownership for one year.
All applications related to TR auctions are available to market participants through the IESO’s new web portal.
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