top of page

Ontario's Market Renewal Program: What Utilities Need to Know

In May 2025, Ontario’s electricity market will undergo significant changes as the Independent Electricity System Operator (IESO) implements the Market Renewal Program (MRP). The MRP aims to modernize Ontario’s wholesale electricity market by introducing a Day-Ahead Market (DAM) and Locational Marginal Prices (LMPs), aligning with standard practices seen in U.S. markets. 


Key Changes for Ontario's Local Distribution Companies (LDCs) 


Post-MRP, a two-settlement system will be introduced, where wholesale market participants will settle scheduled energy at the DAM price. Deviations between scheduled and actual consumption will be reconciled in the Real-Time Market (RTM). For LDCs, classified as Non-Dispatchable Loads (NDLs), a modified settlement process will be applied based on an Ontario-wide uniform price, replacing the Hourly Ontario Energy Price (HOEP). 


The new settlement process for NDLs will involves two components: 

  1. The Day-Ahead Market Ontario Zonal Price (DAM_OZP). 

  2. A Load Forecast Deviation Adjustment (LFDA), adjusting for any differences between forecasted and actual consumption and prices between the DAM and RTM. 


Additionally, several charge codes will change: 

  • Congestion Management Settlement Credit (CMSC) will be retired. 

  • New charges, like Congestion Rents and Loss Residuals, will be introduced. 


Preparing for Market Renewal 


To support a smooth transition, the IESO is conducting several testing activities, including connectivity, market trials, and end-to-end system testing. These efforts will ensure that LDCs and other market participants are ready for the new structure. 


In tandem, the Ontario Energy Board will update its Retail Settlement Code and Standard Supply Service Code and provide new accounting guidance for LDCs. 


What LDCs Must Do Next 


Ontario’s LDCs must adapt their processes to align with the changes in wholesale market settlement, customer billing, and operational procedures reliant on IESO pricing. For many, this may involve conducting readiness assessments and engaging in comprehensive education and training efforts. 


Contact Us to Get Started 


As the MRP implementation approaches, it's essential for LDCs to be fully prepared for the changes. Our team has a proven approach to help organizations navigate this transition. Contact us today to learn more about how we can support your MRP readiness journey with comprehensive assessments, tailored education sessions and execution strategies. 


In partnership with, Power Advisory.



 

0 comments

Comments


Get Business Ready Today

Meet with us to discuss how we can help you get business ready for your next business transformation.

Address

1500 Avenue Road

PO Box 70039

Toronto, ON, M5M 3X2

Email

  • LinkedIn

Contact Us

Thanks for submitting!

© 2023 by Lynch & Powell. Proudly Created with Wix.com

bottom of page