Constrained-On and Constrained-Off Payments

Constrained-on and constrained-off payments compensate market participants whose dispatch instructions are different from what they would be if there were no limitations on the lines.

For example, a generator may offer energy at a price below the market clearing price, and would expect to be “dispatched on” to inject that amount of energy. If there are constraints on the transmission lines, the IESO may have to send “dispatch off” instructions, telling the generator not to inject the energy. This would result in the generator not realizing the profit that would have been realized if there had been no congestion. In a case such as this, the generator is paid a “constrained-off” payment to compensate for the profit that is not realized.

Other constrained-on or constrained-off payments for generators and loads work in a similar fashion.

Intertie Zone Prices

Interconnection lines (or interties) allow electricity to be imported into and exported out of Ontario. Congestion can also occur on these intertie lines. Separate intertie zone prices are necessary at each of the twelve intertie zones to account for price differences in the neighbouring jurisdictions resulting from constraints on the interties.