Toronto: Ontario’s Market Surveillance Panel (MSP) has recommended that the IESO study closely the options for integrating exports into the Day Ahead Commitment Process (DACP). The MSP is apparently concerned that generators may be benefitting from the choice to receive guarantee payments through either the DACP or through the Real Time GCG program because exports are not included when generators are committed in the DACP.
In its periodic report on market conditions, issued in January, the MSP said, “The Panel has also noted that the absence of significant export participation in EDAC creates a further opportunity for generators without a day-ahead commitment to receive a guarantee in real-time. This may be contributing to higher levels of commitments under the RT-GCG program post-EDAC. In 2008, the IESO considered the issue of incentives to encourage exports to participate in EDAC, recognizing that this could lead to improved efficiency through better day-ahead commitment and that efficiency gains would be realized through reduced overall commitment costs that otherwise would not have been achieved. The IESO explored seven options, and concluded that the incentives would be difficult to structure and would likely not provide significant benefits in terms of reducing overall commitment costs under EDAC. However, in the Panel’s view the benefits of including export demand day-ahead extend beyond EDAC because doing so is likely to reduce the need to commit additional resources in real-time. Accounting for export demand day-ahead would ensure that more generation is subject to 24 hour optimization and would help to strengthen competition among generators for a day-ahead commitment in EDAC.”
The MSP report included the following (“Recommendation 3-3”):
The Panel recommends that the IESO re-examine the question of integrating exports into EDAC to reduce the need to commit additional generation in real-time to meet export demand that currently only appears in the market in real-time. While the Panel is not recommending a specific approach for integrating exports, the following have been identified as potential options:
a) introduce a mechanism that encourages exports to bid in EDAC; or
b) include a forecast of exports when commitments are made under EDAC.