Electricity prices change in response to supply and demand. Businesses with a peak demand of 50 kilowatts or more pay the wholesale price for electricity.
The wholesale price of electricity is determined in a market administered by the Independent Electricity System Operator (IESO). The IESO calculates the Ontario Electricity Market Price (OEMP), which is charged to large consumers that participate in the market, as well as local distribution companies, such as Alectra Utilities, who recover it from the subset of customers that pay the market price.
The wholesale electricity price charged to customers is calculated by the IESO through a day-ahead market (DAM) on the basis of the Ontario Zonal Price (OZP), which is an hourly price that is uniform across the province of Ontario, plus the Load Forecast Deviation Adjustment (LFDA) which reflects the cost impact of the difference between IESO forecasted demand that is scheduled a day ahead and the actual quantity of energy consumed in real time by non-dispatchable loads.
Where the DAM experiences a failure (e.g., software interruption), the IESO calculates the hourly price based on the real-time market (RTM) OZP (i.e., LFDA would not apply).
Alectra Utilities 50 Kilowatt Demand and Larger customers with an interval meter pay the OEMP. OEMP is the default electricity pricing, but if you are a low volume or Bulk Metered Multi-Unit Property you may elect to receive Regulated Price Plan pricing by using this form.
Learn more about the wholesale electricity market in Ontario.