October 15, 2014 – A recent report from Ontario’s Independent Electricity System Operator (IESO) and Ontario Power Authority (OPA) highlights how electricity imports and exports can provide significant benefits to the province, including flexibility, reliability and reduced costs for consumers.

It concludes that increased reliance on interties through firm imports would require significant investments in transmission infrastructure, but that there are opportunities to enhance the benefits of existing interties that warrant Ontario’s consideration.

Currently, 85% of all electricity imports into Ontario come from Quebec and Manitoba, said IESO, adding that imports are arranged through the existing wholesale electricity market and trade on an hourly basis. These imports enhance reliability and provide Ontario consumers access to lower-cost sources of supply but offer no guarantee that generation outside the province will be available on demand, it said.

The report finds that the interties are currently restricted in their ability to import firm power, as the ability for Ontario to accommodate firm imports from Quebec is limited to 500MW because of transmission restrictions in the Ottawa area. This capability will diminish to zero in about 2020, it continued, saying that in the Northwest, up to 200MW from Manitoba could be relied on to meet local needs.

“Imports act as a shock absorber—providing flexibility and helping to maintain reliability in the day-to-day operations of the grid. They also help keep the cost of supply down for ratepayers,” said Bruce Campbell, president and CEO of IESO. “This report sets out opportunities to capture increased benefits from our interconnections without sacrificing the benefits they currently provide.”

The Review of Ontario Interties contains a number of recommendations aimed at further exploring the potential for increasing the use of Ontario’s interconnections with Quebec and Manitoba, including:
 
1. OPA and IESO should work with Hydro-Quebec and Manitoba Hydro to explore opportunities for clean imports when such imports would have system benefits and are cost effective for Ontario ratepayers.

2. OPA should continue to evaluate and regularly update the minister of energy on the specific parameters for clean-energy import arrangements that would best meet Ontario’s needs and circumstances.

3. IESO should allow for capacity import and export commitments in developing the design for a potential capacity market for Ontario.

4. In providing for capacity imports and exports, the current availability of the interconnections to support reliability and operating flexibility should be maintained. This will mean that only a portion of intertie capacity could be allocated for capacity imports.

5. Opportunities to enhance the benefits of the interties should be pursued by IESO, including more frequent intertie scheduling and expanded provision of ancillary services, such as operating reserve, through intertie transactions.