Interruptible Rate Program

In February 2023, the then Minister of Energy directed the IESO to design and administer an interruptible rate pilot (IRP) that would allow participants to more easily provide demand reductions that are valued by the electricity system.

Separately, the directive included a request to report back on the design of a pilot that could be offered exclusively to hydrogen producers.

The IRP was offered to large consumers that would agree to reduce their consumption during system or local reliability events when called upon by the IESO. In exchange, participants would be charged Global Adjustment (GA) at a reduced rate, in line with the rates charged to ICI participants. In addition, each participant would pay a monthly fixed charge based on their fixed cost contribution (FCC) offered in their pilot application.

IRP applicants were selected through a competitive process that employed multiple criteria in addition to FCC, including, for example, location, sector and quality of plan for load reduction. The pilot term was three years, with the option of exiting at the end of each year.
Upon completion of the IRP in 2026, the government intends to study the performance of participants, as well as aspects of its design to inform the development of a permanent program. As part of the effort, the government is seeking input from stakeholders, including feedback on a number of questions:

1.    What types of customers or facilities (e.g., size, sector, demand level) should be eligible to participate in an interruptible rate program?

2.    Should the eligibility criteria include geographic location, potentially prioritizing demand reductions in a particular region of the province?

3.    Should customers that provide demand reductions through the IESO’s capacity auction be eligible to participate in the program?

4.    Should the program size be capped at a certain number of participants or demand reduction commitments?

5.    How should the amount of interruptible load be determined?

6.    Under what system conditions (e.g., peak demand, contingency events, market price signals) should interruptions be triggered?

7.    What should be the basis for the demand charge rate (e.g., Class A Global Adjustment value) and penalty for non-performance (e.g., multiple of benefit)?

8.    What minimum notification period (e.g., day-ahead, 4 hours, 2 hours) would allow participants to respond effectively to an interruption? Should the notification period be sector-specific?

9.    What is a reasonable maximum number of interruption events per year, and typical event duration, to balance system needs with operational impacts on customers? Should the maximum number of interruption events per year be sector-specific?

10.    Should the program allow for events to be cancelled (“called off”) if system conditions change, and if so, how should this be structured to provide certainty to participants?

Environmental Impact

The proposal is not expected to a have a material impact on the environment.