August 30, 2022

Explaining Ontario’s Electricity Sector

You have likely heard of the Ontario Ministry of Energy, Ontario Energy Board (OEB), and the Independent Electricity Operator (IESO). But do you know the role they play in delivering electricity to your home or business?

Ontario's Electricity Sector

Read on to learn more about these three organizations that regulate, oversee, and ensure the supply of electricity in Ontario.

Ontario Ministry of Energy

As one of the 29 ministries of the Government of Ontario, the Ministry of Energy sets the overall policy for the energy sector, mainly through laws and regulations. The ministry oversees the regulatory framework for electricity prices and develops policies to moderate energy prices across the province.

In addition, the ministry supports energy efficiency and conservation, and supports the growth of clean technology and innovation in the electricity sector that powers Ontario’s homes and businesses.

Ontario Energy Board (OEB)

The Ontario Energy Board is a government agency that regulates the electricity and natural gas sectors for the people of Ontario. The objectives and responsibilities of the OEB are set out in legislation, regulations, and directives, addressing industry and consumers alike.

For industry

  • Licenses generation, transmission, and local distribution companies (LDC), the IESO, and energy retailers
  • Sets the transmission rates, the same across the province
  • Sets the delivery rates for each local distribution company
  • Makes and enforces the rules and customer service standards for local distribution companies and energy retailers
  • Sets the fees the IESO can charge
  • Imposes fines and penalties, as required

For consumers

  • Sets reasonable rates for generation, transmission, and utilities to protect consumers
  • Promotes awareness, helping people better understand the rules that protect them
  • Addresses the needs of low-income consumers through utility customer service rules and delivers financial assistance programs such as the Low-income Energy Assistance Program (LEAP) and Ontario Electricity Support Program (OESP)

Independent Electricity System Operator (IESO)

The Independent Electricity System Operator is a not-for-profit corporate entity under the authority of the Ontario Minister of Energy. Its fees and licences to operate are set by the Ontario Energy Board.

The mandate of the IESO is to ensure the reliability of Ontario’s power system and that there is enough energy to meet the province’s demand 24/7, as well as to plan for future electricity needs. The organization operates the wholesale electricity market where the market price is set based on accepted offers from generators to supply electricity against forecasted demand.

The IESO offers programs that support energy efficiency and demand-management. You may be familiar with “Save on Energy”, offering energy-saving tips for consumers, business owners, and contractors, and incentive programs for residential, commercial, and first nations customers.

As Ontario’s “Smart Metering Entity”, the IESO is responsible for the implementation and operation of the province’s smart meter data. This provides processing, storage, and protection of the electricity consumption information that local distribution companies use to bill their customers.