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How the Estimated Hourly Uplift Charge is Determined

The IESO provides a running estimate of the Hourly Uplift Charge (also known as the Hourly Uplift Settlement Amount) to provide an indication of the uplift charges that will appear on market participants' settlement statements. This estimate appears as a rate of $/MWh and ˘/kWh.

What Is the Hourly Uplift Charge?

The IESO offers a running estimate of the hourly uplift to provide an indication of the hourly uplift charges that will appear on the market participants' settlement statements. Please note that there are additional charges which are not included in this estimate. For example, items such as the IESO Administration Charge, the Rural and Remote Settlement Debit, the Debt Retirement Charge and various month-end ancillary services charges are calculated on a monthly basis. More information about individual charge types is available in the document "IESO Charge Types and Equations".

Where Do I Find the Hourly Uplift Charge Estimate?

Market participants can monitor the estimated hourly uplift charge by visiting the Today's Market page. This page features the estimate for the hour that just ended as well as a downloadable file (under Download Data) containing previous estimates for that day and the day before. Each hour, all estimates within the downloadable file are recalculated to incorporate the latest available data.

On occasion, the current hourly estimate may lag behind other hourly figures, as data used to create the estimate may not be available. The average hourly uplift rates that are reflected on market participants' preliminary settlement statements are available from the Market Summaries page.

How Does the Hourly Uplift Charge Affect a Homeowner's or Small Business Owner's Utility Bill?

Homeowners and small businesses should be aware that this variable uplift charge is a wholesale charge that applies to market participants only. On a utility bill, the cost of this charge is incorporated into a rate of 0.62˘/kWh.

The wholesale market services charge is just one component of the end-user's electricity bill – which also includes the electricity commodity, transmission services, debt retirement charges, and local distribution services. The Ontario government has announced a freeze or cap on these charges and is conducting an independent review of how they are calculated.

How Should I Use the Hourly Uplift Charge Estimate?

Many market participants may find it helpful to get an estimate of the overall direction of the hourly uplift charge. Because this is just an estimated figure, market participants should use this as an information tool only. While not all information that goes into the final determination of the uplift charge is available on a real-time basis, the IESO has been able to create a calculation that will provide an indication to market participants about the impact of uplift charges on the market.

It's important to note that the indicator does not reflect the routine adjustments to the uplift data that are made before the settlement statements are sent out. For example, readings from revenue meters are not available on a real-time basis and cannot be incorporated into the estimate. The estimate should also be disregarded for the hours in which administered-prices are in effect. Market participants should be aware that notices indicating that administered prices have been invoked may be posted up to two business days following the affected hour.

The formula used to calculate the indicator also includes a number of substitutions for the data sources that are not available on a real-time basis. The estimate is rounded off to the nearest dollar. If the estimate falls between 0 and 99 cents, it indicator will appear at $1.00. If it falls between 0 and –99 cents, the estimate will appear at -$1.00.

How Is the Estimate Calculated?

The calculation for the hourly uplift charge estimate incorporates a number of data substitutions. As a result of these differences, market participants should use the uplift charge estimate for information purposes only. While the estimate is a useful tool in predicting the final uplift charge, it can potentially vary significantly from the final results. The preliminary uplift charges which are sent to market participants ten days later reflect further refinements and adjustments which can't be determined on a real-time basis.

Here is a breakdown of the components of the hourly uplift charge. The links below provide detailed information on the variations used in the calculation of the estimate.

  • Electricity imports into Ontario are set on an hourly schedule. If that pre-dispatch price exceeds the five-minute prices set in the market, these additional costs are contained in the uplift charge. This cost is known as the Intertie Offer Guarantee Settlement Credit. (See also Market Rule Chapter 9, Section 3.8A)
  • Small amounts of electricity are lost as it travels along transmission lines. These line losses, plus other costs related to operating the grid are included here. There are also financial imbalances that take place as a result of settling quantities at the interties.
  • Congestion management settlement credits are provided to dispatchable market participants who are required by the IESO to generate or consume in a different pattern than they normally would given the current market conditions (i.e. as per the market schedule.)
  • Operating reserve payments are made to power generators and importers who offer to provide power on short notice. Operating reserve is a buffer to ensure that unexpected surges in demand or unanticipated reductions in supply do not result in shortages. Operating reserve payments are also made to dispatchable loads that offer to curtail their consumption on similar notice.

Hourly Uplift Settlement Amount Disclaimer
Please be advised that while the IESO attempts to estimate the hourly uplift settlement amount as accurately as possible, there may be significant variations between the hourly uplift settlement amount and the applicable hourly uplift settlement charges which subsequently appear on market participants’ settlement statements and invoices. Accordingly, the IESO makes no representations, express or implied, and disclaims any and all liability, as to the accuracy of the posted hourly uplift settlement amount.
 
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