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Ancillary Services Contracts
In order to ensure the reliable operation of the power system, the IESO contracts for four ancillary services. These are: black-start capability, the Emergency Demand Response Program (EDRP), regulation service, and reactive support and voltage control service.
The IESO is committed to a fair, competitive process to award these contracts. To receive additional information, please contact IESO Customer Relations at 905-403-6900 or customer.relations@ieso.ca.
Types of Contract and Standard Terms and Conditions
Ancillary
Service |
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
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| 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. |
- 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
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| Emergency Demand Response Program |
The Emergency Demand Response Program (EDRP) is an emergency demand response measure that can be implemented by the control room in order to mitigate the impact of energy shortages in Ontario. During emergency conditions, it is the final control action implemented by the IESO before activating rotational load shedding. |
- Market participant retains the right to decide whether or not to respond to an IESO demand reduction request
- Payments are based on the actual reduction in demand, over a 2.5-hour period, and on the contracted rate, which reflects market participant costs
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| 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 for market participants to be reimbursed for any additional costs incurred. |
- 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
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On an annual basis, the IESO publishes costs and quantities of all contracted ancillary services.
For the period from May 1, 2008 to April 30, 2009:
- Consistent with the requirements of the Market Rules, all ancillary services contracts were for periods not exceeding 36 months.
- Nine facilities were under contract for an aggregate of 217 MW of potential emergency demand reduction, but there were no payments for this service during this period.
- Six market participants were under contract to provide reactive support and voltage control service from a total of 56 generation facilities having 233 generation units.
- Four generating stations were under contract to provide certified black start capacity.
- Nine generating stations were under contract to provide regulation service. The minimum regulation service to be scheduled was ±100 MW, and the maximum contracted capability was ±223 MW. Typically ±100 MW of regulation service was scheduled.
- There was one reliability-must-run contract, which has now expired and is not expected to be renewed.
- During this period, the total amount paid by the IESO for contracted ancillary services plus one now-expired reliability-must-run contract was $130,560,674.
For the period from May 1, 2009 to April 30, 2010:
- The EDRP contract will last until April 30, 2010. However, the ongoing need for the Emergency Demand Response Program will be reviewed in the light of the existing Emergency Load Reduction Program, plus two existing demand reduction programs. A Board decision will be made whether or not to continue the EDRP.
- Contracts for regulation service have traditionally been obtained from generators through an RFP process. Contracts have been signed in 2009 that will increase the total regulation capacity available from ±223 MW to ±238 MW. In addition, the IESO may eventually consider loads with suitable characteristics as a source of AGC.
- Market participants that provide reactive support and voltage control service in response to IESO direction are encouraged to enter into contracts with the IESO.
- In July 2009 the IESO issued an RFP for a black start facility in the Sarnia or Windsor areas. Decisions are expected to be made in the fall of 2009.
Previous Ancillary Services Contracts
- Ancillary Services Contracts - May 1, 2006 to April 30, 2007
- Ancillary Services Contracts - May 1, 2005 to April 30, 2006
- Ancillary Services Contracts - May 1, 2004 to April 30, 2005
- Ancillary Services Contracts - May 1, 2003 to April 30, 2004
- Ancillary Services Contracts - May 1, 2002 to April 30, 2003
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About The IESO
