Gaming Of Electricity Markets — The Ontario Experience1


Electricity markets necessarily involve complex interfaces between participants’ price/quantity bids and the extensive rules and processes needed to operate the system in a manner that balances supply with demand on a real-time basis. This can result in opportunities for exercises of market power, market manipulation, gaming or other inefficient conduct. Market monitoring is important to detect such conduct, as well as to ensure compliance with applicable market rules and procedures. Ontario is one of two provinces in Canada with a wholesale electricity market (the other being Alberta). Monitoring and enforcement functions have been bifurcated between the Market Assessment and Compliance Division (“MACD”) of the Independent Electricity System Operator (“IESO”) and the Market Surveillance Panel (“MSP”) of the Ontario Energy Board3 (“OEB”). MACD enforces the Market Rules while the MSP is responsible for market monitoring and for investigation of activities which may constitute gaming or abuses of market power by market participants.4 This article focuses on gaming and similar inappropriate conduct. While there were no in-depth investigations of gaming activity prior to 2009, several have been initiated in the past few years. More recently, the IESO is in the process of developing a General Conduct Rule that would fill a void in the governance of the Ontario markets by prohibiting various types of exploitation, manipulation and other inappropriate conduct.3)

Overview of the Ontario Markets5

Ontario has a real-time wholesale energy market that establishes province-wide Market Clearing Prices (“MCPs”) on 5-minute intervals, which are averaged to produce the Hourly Ontario Energy Price (“HOEP”). The main suppliers in the market consist of nuclear, hydro, gas-fired and, increasingly, wind and other renewable sources of generation.6 There are also various “embedded generation” sources, located within local distribution company systems, which generate electricity but are not participants in the wholesale market. On the demand side, there are less than a dozen “dispatchable loads” that bid directly into the wholesale market, with the remainder of domestic demand being served on an aggregated basis. Imports and exports from Québec, Manitoba and the NYISO and MISO systems in the US (as well as the PJM and ISO-NE systems they interconnect with) also represent important sources of cross-border supply and demand.7 The IESO is responsible for operating the wholesale electricity markets in Ontario including the establishment and enforcement of the Market Rules.8 While the real-time wholesale energy market that sets the HOEP is the principal market, there are also related markets for operating reserve (for 10 minute spin, 10 minute non-spin and 30 minute non-spin, which are jointly optimized with the energy market) and for transmission rights (which is an auction-based financial market operated by the IESO to provide opportunities for traders to hedge against possible congestion over the interties connecting Ontario to the neighbouring electricity markets).9 Ontario does not have a full-fledged day-ahead market, although it has an elaborate Enhanced Day-Ahead Commitment Process.10 Unlike most other North American electricity markets, Ontario has been relying for the past several years on government procurement contracts to obtain new investment in generation. These contracts have been implemented primarily by the Ontario Power Authority (“OPA”).11 The IESO has recently commenced stakeholder consultations on the possible development of a “capacity market” in Ontario.12

Role and Responsibilities of the Market Surveillance Panel13

he use of market monitors to oversee the conduct of market participants, as well as the electricity system operator, is a reflection of the special features of electricity markets. These characteristics include complexity resulting from the technical attributes of electricity, elaborate rules and regulations governing the operation of the system and market, the fact that electricity markets are a relatively recent and still evolving construct, and the potential for exercises of market power, manipulation or gaming to be undertaken in a variety of ways in such markets.

1) Monitoring

Responsibility for market monitoring resides with the MSP, which since 200514 has operated as a panel under the auspices of the OEB, (the overall energy sector regulator).15 The MSP is composed of three part-time members appointed for fixed terms by the OEB.16 The MSP is assisted in its functions by the Market Assessment Unit (“MAU”) within MACD at the IESO. The core responsibilities of the MSP are to monitor, investigate, report and recommend remedial actions in respect of the wholesale electricity markets, as set out in the OEB By Law:

4.1.1 The Panel shall monitor, evaluate and analyse activities related to the IESO-administered markets and the conduct of market participants with a view to:

  1. identifying inappropriate or anomalous market conduct by a market participant, including unilateral or interdependent behaviour resulting in gaming or in abuses or possible abuses of market power;
  2. identifying activities of the IESO that may have an impact on market efficiencies or effective competition;
  3. identifying actual or potential design or other flaws and inefficiencies in the market rules and in the rules and procedures of the IESO;
  4. identifying actual or potential design or other flaws in the overall structure of the IESO-administered markets and assessing whether any one or more specific aspects of the underlying structure of the IESO-administered markets is consistent with the efficient and fair operation of a competitive market; and
  5. recommending remedial actions to mitigate the conduct, flaws and inefficiencies referred to in paragraphs (a) to (d).17

In summary, the MSP’s monitoring function encompasses the conduct of market participants, actions of the IESO and overall market design ‒ insofar as the issues relate to gaming, market power, efficiency and competition. In contrast to some of its counterparts in the United States, the MSP does not have any authority for mitigation of offers by market participants or recovery of market revenue.18 Nor does it have any power to impose sanctions for abuse of market power, gaming or other conduct. Breaches of the Market Rules are outside of the MSP’s jurisdiction. However, in the course of its review of the market and its semi-annual monitoring reports,19 the MSP regularly evaluates the impact of rules and procedures on the efficient operation of the market and recommends future-oriented changes to improve efficiency. It may also refer conduct that appears to be inconsistent with a Market Rule to the IESO (MACD) for investigation.20

2) Investigations

The MSP may commence an investigation in one of three ways:

  • on its own initiative where it believes such a step to be warranted;
  • at the request of the OEB Chair; or
  • in response to a complaint from a market participant or a referral from any other board, agency or tribunal.21

To date, MSP investigations have primarily been self-initiated or undertaken in response to a request from the OEB Chair.22 The MSP has broad discretion in respect of: establishing the scope of an investigation; conducting the investigation; determining whether or not to reject a complaint and terminate an investigation; and making findings regarding inappropriate or anomalous conduct.23 The party under investigation has a right to be notified when an investigation is commenced (unless this would prejudice the investigation) and to have its views addressed before a negative finding is made.24 The MSP and MAU often seek additional data and other information from market participants under investigation on a voluntary basis. Where a formal investigation has been commenced, the MSP may also use compulsory investigative powers. These include: issuing a subpoena for document production; compelling testimony; exercising inspection powers; and requesting that a court issue a warrant authorizing search and seizure.25 The output of an investigation is a report that is initially provided to the OEB Chair and then made public (subject to possible confidentiality limitations).26 In the exercise of its monitoring, investigative and reporting responsibilities, the MSP and the MAU are governed by extensive provisions which protect the confidentiality of their work as well as the confidentiality of information obtained from the IESO or market participants.27

The MSP’s Analytical Framework

The MSP has applied a general analytical approach which focuses on economic efficiency, price fidelity and market power to a wide range of issues relating to the design and operation of the Ontario electricity market.28 It has also developed more specific frameworks for the assessment of market power and gaming issues.

An early example of an examination of market power issues arose immediately after market opening in the summer of 2002. Allegations of inappropriate conduct were made in relation to an extended outage of a nuclear unit. While the MSP recognized that withholding of supply was a potential mechanism for exercising market power, it decided after a preliminary review of this situation not to launch an investigation because the fact of the outage was properly communicated and the operator in question did not stand to profit from it.29

In October 2009 the MSP issued guidance in the form of a “Monitoring of Offers and Bids” document that identified the general principles and approach that would be used to assess potential exercises and abuses of market power.30 It confirmed that the primary focus would typically be on physical withholding of available supply as well as “economic withholding” or “pricing up” (i.e. above-cost offers) that allow a market participant to raise market prices to its benefit.31 The Monitoring of Offers and Bids document did not provide similarly detailed guidance on gaming. It briefly indicated that gaming is a separate concept from abuse of market power which could be found to occur where a market defect is exploited by a market participant for its benefit and to the disadvantage of the market.32 In addition, actions that could constitute fraud, deceit or manipulation of market prices or uplift payments could be addressed as gaming.33

With respect to the relationship between market power and gaming, the MSP noted that:

… conduct can be subject to either an abuse of market power investigation and / or a gaming investigation depending on the nature of the activities involved. A finding of gaming could be made in the absence of an abuse or even a mere exercise of market power. Similarly, an abuse or exercise of market power could be found to occur in respect of conduct that might not constitute gaming. It is also possible the Panel could conclude that conduct constituted both gaming and an abuse of market power.34

To date, the only completed abuse of market power investigation involved a complaint by an energy trader that Ontario Power Generation was withholding some of its coal-fired generation in 2009. There was no suggestion of gaming behaviour. The MSP applied the Monitoring of Offers and Bids framework and concluded that OPG had not engaged in physical withholding.35

In the autumn of 2012, the MSP’s first two completed gaming investigations set out the following analytical framework:

Framework for Gaming Investigations ‒ The Panel’s mandate includes investigations in relation to conduct that may constitute an abuse of market power or gaming. In the course of providing a framework for analyzing market power issues, the Panel has noted that gaming is a separate concept (which may or may not overlap with market power concerns) that encompasses, among others, market manipulation and conduct that involves the following four elements:

  1. a defect in the market design, poorly specified rules or procedures or a gap in the Market Rules or procedures (collectively referred to as a Market Defect);
  2. exploitation of the Market Defect by the market participant;
  3. profit or other benefit to the market participant; and
  4. expense or disadvantage to the market.36

The two reports focused in detail on the exploitation element, which the MSP elaborated on as follows:

… an essential element of gaming related to a Market Defect is the exploitation of the opportunity. The Panel considers that exploitation may exist where the market participant had some level of intention to exploit or knowledge of an opportunity to exploit arising from the Market Defect. The Panel has not, to date, had occasion to determine whether exploitation can be said to occur where relevant information can reasonably be expected to be identified / obtained and the market participant failed to do so. It is not necessary for the purposes of this Report for the Panel to determine the precise standard applicable to the exploitation element of gaming as the Panel is satisfied that [participant] was not gaming regardless of which standard is applied.37

Cases Involving Potential Gaming Activity

1) Urgent Rule Amendments

When it detects a potential gaming opportunity, the Panel often recommends changes to rules or procedures. The IESO has implemented remedial rule amendments very quickly in several cases. For example:

  • On July 29, 2002, shortly after the Ontario market opening, the IESO passed its first urgent rule amendment which limited payment of the Intertie Offer Guarantee (“IOG”) for imports where the trader had a corresponding export (constituting an ‘implied wheel’), in order to prevent possible gaming of the difference between the higher import payment and the export price.38
  • On June 26, 2003, the IESO enacted an urgent rule amendment which limited CMSC payments to generators with negative-price offers. It did so because large CMSC payments were being paid for very low (negative) prices which were “not consistent with the intent of CMSC payments”.39
  • On August 28, 2010, in response to an MSP monitoring report which identified large CMSC payments to dispatchable loads,40 the IESO implemented an urgent rule amendment which suspended such payments.41 The Market Rules were subsequently amended to restore more limited CMSC payments for dispatchable loads.42

2) Wheeled Imports and Exports

In 2008 the MSP identified an unprecedented increase in the quantities of electricity contracted to move from the New York market through the Ontario market to the PJM market.43 This initial observation led to major reviews of trading arrangements among the Northeast electricity markets and an emergency order issued by the US Federal Energy Regulatory Commission (“FERC”) in response to an application by the New York Independent System Operator (“NYISO”) to prohibit transactions on several circuitous paths.44 The MSP continued to monitor developments for impacts on the Ontario market, including as energy flows shifted to more wheeling of power from Ontario to PJM. However, it did not identify any gaming or market power concerns in Ontario.45 An investigation by FERC ultimately concluded that no market manipulation had taken place, but ordered NYISO to submit a report proposing a comprehensive long term solution to distortions resulting from market design differences.46

3) CMSC Payments on Generator Shutdowns

In 2011, the MSP issued a Monitoring Document to address its concerns about unwarranted CMSC payments being self-induced by fossil-fuel generators which submitted very high offer prices when they wanted to shut down. It explained that:

CMSC payments were designed to “make whole” market participants who were required by transmission congestion or other factors beyond their control to follow a physical dispatch (constrained schedule) instruction that differed from the economic outcome of their offer or bid in the market (unconstrained) schedule.47 They were not intended to provide a windfall revenue stream. The Panel considers that actions taken by market participants to self-induce CMSC payments, such as submitting offer prices that are higher than necessary to ensure a generator comes offline, could constitute gaming activity.

In order to more effectively carry out its monitoring function, the Panel believes that it is useful to identify offer price levels that normally would not warrant the initiation of an investigation into potential gaming where there are bona fide business reasons for a generator’s decision to come offline. The Panel will also consider the amount of CMSC payments received and local conditions in the generator’s area during the relevant time period. Any investigation will be conducted in accordance with all applicable requirements, including the provisions of OEB By-law #3.48

The MSP subsequently reported that several of the major fossil-fuel generators had reduced their shutdown offer prices (without any apparent negative operational impact). The MSP estimated the savings (in the form of reduced CMSC payments charged to loads as uplift) to be approximately $7 million per year.49

4) The Manitoba Intertie CMSC Investigations

The two completed gaming investigations referenced above involved traders who were making offers to import energy to Ontario from Manitoba. The investigations were initiated in response to a request from the OEB Chair after the two market participants collectively received over $160,000 in CMSC payments during a three-day period when their hourly offers were not scheduled and could not have physically flowed because of a de-rating of a transmission line in Manitoba that connected into the Manitoba-Ontario intertie. The MSP conducted an in-depth review of the traders’ actions, including their internal knowledge of the de-rating, as well as the information about the de-rating which was available from system operators and other external sources. The MSP concluded that:

Based on the evidence that was obtained in this investigation, the Panel is satisfied that [participant] did not exploit the Manitoba de rating for the purpose of receiving CMSC payments during the Relevant Period. This is supported by the following:

  • [participant’s] trading behaviour; and
  • the fact that information from Manitoba Hydro detailing the de-rating was not communicated to traders such as [participant] and could not reasonably be expected to have been identified / obtained.

None of the information provided by [participant] in its responses to the Panel’s information requests was indicative of exploitation, and the information provided by [participant] was corroborated where applicable by [an energy trading expert consulted by the MSP] and is consistent with information provided to the Panel by the Other Trader.50 While the MSP concluded that exploitation had not occurred, it has also cautioned that market participants may be expected to be reasonably diligent in making themselves aware of relevant information:

This is not to say that market participants bear no responsibility for ascertaining system conditions that are germane to their market transactions. As noted in its reports on the two investigations, it is open to the Panel to consider that there has been gaming in circumstances where relevant information can reasonably be expected to be identified or obtained and the market participant failed to do so.51

5) Other Investigations

According to the MSP’s January 2013 semi-annual monitoring report, there are six additional investigations currently in progress. All relate to “possible gaming issues involving CMSC and other payments”.52

Proposed General Conduct Rule

In 2013, the IESO began stakeholder consultations regarding the development of a “General Conduct Rule”.53 The initial “conceptual rule language” contemplated a broad obligation of market participants to act in a manner consistent with the “efficient, fair, competitive and reliable operation of the IESO-administered market and of the IESO-controlled grid”.54 This approach was a close variation on the “FEOC Regulation” which applies to the Alberta wholesale electricity market.55

In response to significant stakeholder opposition, the IESO reformulated the General Conduct Rule to focus on specific prohibitions related to: (i) the exploitation of the market, including gaps or defects in Market Rules; (ii) circumventing Market Rules; (iii) manipulating markets, including settlement amounts; (iv) undermining the ability of the IESO to discharge its mandate/responsibilities; and (v) interfering with the determination of prices or dispatch outcomes by competitive market forces.56 At the request of market participants, an option to elect a special adjudicative track before the OEB was developed as an alternative to the existing mediation/arbitration processes before the IESO.57 On May 14, 2014, the Technical Panel (which provides advice on proposed rules to the IESO board of directors) voted 8:4 to recommend the new rules be enacted.

Concluding Observations

Market monitoring plays an important role in improving the efficiency and transparency of wholesale electricity markets. Ontario’s Market Surveillance Panel supports the integrity of the IESO-administered markets by monitoring for gaming and the abuse of market power, as well as actions of market participants, the IESO and other institutions which impact on market efficiency. In recent years there has been greater use of investigations to examine conduct that may have constituted market power and/or gaming, even where systemic defects are identified and addressed with amendments to Market Rules or procedures that would mitigate future recurrences. However, the MSP and OEB do not have authority to impose penalties for conduct which is determined to constitute gaming. Given the increasing cost of electricity to customers, and the government’s interest in being able assure the public that the market is subject to effective oversight, the IESO’s proposed General Conduct Rule will likely become the focal point for dealing with conduct which may exploit or manipulate Ontario’s electricity markets.

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* David J. Mullan is an Emeritus Professor of Law at Queen’s University where he taught for over 25 years. Prof. Mullan was the first Integrity Commissioner for the City of Toronto and is now a consultant and researcher. He is the author of a number of articles and books in the area of administrative law and is currently a member of the NAFTA Chapter 19 Canadian Panel. He is a frequent speaker at continuing legal education seminars for members of courts, tribunals and agencies.

1 This article is a revised and updated version of a paper presented at the 2013 Energy Law Forum, Toronto, May 9, 2013.

2 Neil Campbell is the past Chair of the Ontario Market Surveillance Panel (2007-2012) and a partner in the Competition, Trade and Energy Law groups at McMillan LLP in Toronto.

3. General information about the MSP and its market monitoring activities can be found on its section of the OEB website, online: .

4 The Alberta wholesale electricity market is monitored by the Alberta Market Surveillance Administrator; see its website online: .

5 This section draws heavily from Neil Campbell, “Monitoring Ontario Electricity Markets”, in Gordon Kaiser &Bob Heggie, eds Energy Law and Policy (Carswell, 2011) [Monitoring] at 328-329.

6 Coal-fired generation historically represented a significant component of the total supply, but is being phased out by 2014.

7 For a quantitative profile of these and other features of the Ontario market, see Chapter 1 of the MSP’s semi-annual monitoring reports, online: OEB

8 IESO, “Market Rules for the Ontario Market” MDP-RUL-0002 (5 March 2014), online: [Market Rules]. The Market Rules are organized in eleven chapters comprising some 600 pages of provisions describing the rights and obligations of both the IESO and the approximately 200 market participants.

9 Intertie congestion can induce a higher or lower price than the Ontario uniform price for imports or exports at the affected intertie.

10 IESO, “Capacity Market for Ontario” Backgrounder (27 March 2014),  online:

 11 The OPA’s mandate also includes conservation and demand response programs: see online:

12 IESO, Day- Ahead Commitment Process, online:

13 This section draws heavily from Campbell, Monitoring, supra note 5 at 330-333 and 335-336.

14 The MSP was originally established as a panel of the IESO’s predecessor, the Independent Market Operator, and reported to the independent members of its Board of Directors. Effective January 2005, the MSP became a panel of the OEB in order to enhance the independence of the MSP to carry out its market oversight responsibilities. At the same time it was recognized that the MSP would continue to need to be supported by a full-time team of analysts for the daily monitoring of market outcomes and other tasks under the direction of the MSP. As a result, the enabling legislation provided for staff and assistance to the MSP.

15 The OEB operates pursuant to provincial statute, the Ontario Energy Board Act, SO 1998, c 15 Schedule B. The OEB’s objectives with respect to electricity are described in section 1 of the Act: “1. To protect the interests of consumers with respect to prices and the adequacy, reliability and quality of electricity service. 2. To promote economic efficiency and cost effectiveness in the generation, transmission, distribution, sale and demand management of electricity and to facilitate the maintenance of a financially viable electricity industry.” 16 See the ibid s 4.3.1; and also the detailed provisions regarding the composition and appointment of MSP members contained in Ontario Energy Board, By-Law #3 – Market Surveillance Panel, as amended, online: OEB [OEB By-Law #3].

17 Ibid art 4.1.1.

18 The MAU (on behalf of the IESO, not the MSP) has authority to recover overpayments of Congestion Settlement Management Credit (“CMSC”) payments under certain defined conditions set out in the Market Rules, Appendix 7.6, where a market participant is deemed to have ‘local market power’ because of transmission constraints. See generally IESO, Local Market Power and Constrained-off Watch Zone Mitigation online: .

19 For a more detailed discussion of the MSP’s semi-annual reporting, see Campbell, Monitoring, supra note 5 at 333-335.

20 See generally IESO, “Compliance Enforcement”, online: . See also Ch 3 of the Market Rules.

21 OEB By-Law #3, supra note 16 arts 5.1.1-5.1.3.

22 One investigation was commenced in response to a complaint from a market participant: see Market Surveillance Panel, “Report on an Investigation into Allegations of Withholding of Coal-Fired Generation” Investigation No 2010-01 (30 August 2011), online: OEB

23 OEB By-Law #3, supra note 15 arts 5, 7.2. 24 Ibid, ss 5.1.9,7.2.2. 25 See Electricity Act, 1998, s 37; and OEB By-Law #3, art 5.1.11.

26 OEB By-Law #3, arts 7.2, 7.4 and 7.5.
27 See Ontario Energy Board Act, 1998, ss 4.3.1(6), (7) and (8); and OEB By-Law #3, arts 7.5 and 8. There are limited exceptions such as disclosure to other law enforcement agencies, disclosure upon direction by the OEB Chair, or disclosure by the MSP where it concludes (after hearing from any interested parties) that disclosure would be in the public interest.

28 See Campbell, “Monitoring”, supra note 5 at 336.

29 Market Surveillance Panel, “Report on the Bruce Power Unit G6 Outage: March – August 2002” (13 January 2003), online:

30 Market Surveillance Panel, Monitoring Document: Monitoring of Offers and Bids in the IESO-administered Markets, online:  [Monitoring of Offers and Bids]. (This monitoring document was materially revised from the initial discussion draft (see Market Surveillance Panel, Market Power Framework for the IESO-Administered Market — A Proposed Framework for the Identification of the Exercise of Market Power (29 November 2006), online: OEB  [Market Power Framework] based on stakeholder input).

31 Market Surveillance Panel, Monitoring of Offers and Bids, at 11-23. (Cf., Alberta Market Surveillance Administrator, “Offer Behaviour Enforcement Guidelines” (14 January 2011), online: Market Surveillance Administrator  , which indicate that withholding or pricing above marginal costs is not problematic unless accompanied by other unilateral or coordinated anti-competitive conduct (see particularly sections 3.2.1 and 4.1).

32 Ibid at 44.

33 Ibid.

34 Ibid at 44-45.

35 Market Surveillance Panel, Report on an Investigation into Allegations of Withholding of Coal-Fired Generation Investigation No 2010-01 (30 August 2011), online: OEB . Market conditions and cost-guarantee programs were primarily responsible for the decline in output at OPG’s coal-fired plants available to gas-fired generators. (The MSP had previously examined Ontario Power Generation Inc.’s three pronged approach for implementing the Government of Ontario’s CO2 emissions targets for its coal-fired generation. It recommended abandoning a pre-determined outage strategy in favour of an emissions adder (i.e., adjustment to its hourly offer prices) as the most efficient way to offer an energy-limited resource into the market so that it is utilized at the times when it has the most economic value. See Market Surveillance Panel, July 2009 Monitoring Report, online: OEB at 181-191; and Market Surveillance Panel, January 2009 Monitoring Report, online: OEB at 226-242)

36 Market Surveillance Panel, “Report on an Investigation into Possible Gaming Behaviour Related to Infeasible Import Transactions Offered by West Oaks NY/NE, LP on the Manitoba-Ontario Intertie” Investigation No 2011-1 (22 October 2012), online: OEB [Investigation 2011-01 Report], at 7; and Market Surveillance Panel, “Report on an Investigation into Possible Gaming Behaviour Related to Infeasible Import Transactions Offered by TransAlta Energy Marketing Corp. on the Manitoba-Ontario Intertie” Investigation No 2011-02 (22 October 2012), online: OEB  [Investigation 2011-02 Report], at 7. The cases are discussed in more detail below.

37 See Market Surveillance Panel, Investigation 2011-01 Report, at 19; and Market Surveillance Panel, Investigation 2011-02 Report, at 19.

38 See IESO, Market Rule Amendment Proposal MR-00204-R00 – Eliminate Payment of Intertie Offer Guarantee for Wheeling Transactions, online: Independent Electricity Market Operator

39 See IESO, Urgent Market Rule Amendment Proposal MR-00239-R00 – Eliminate CMSC Payments Associated with Negative Priced Offers, online: Independent Electricity Market Operator

40 Market Surveillance Panel, August 2010 Monitoring Report, online: OEB, at 112 .

41 See IESO, Urgent Market Rule Amendment MR-00373-R00 – Suspend CMSC for Constrained-Off Dispatchable Loads (28 August 2010), online:

42 See IESO, Market Rule Amendment MR-00374 – Replacing the Temporary Suspension of CMSC for Constrained-Off Dispatchable Loads (3 December 2010), online: ; and IESO, Market Rule Amendment MR-00370 – Limiting CMSC for Exporters and Dispatchable Loads (3 December 2010), online:

43 Market Surveillance Panel, July 2008 Monitoring Report, online: OEB , at 164-170

44 New York Independent System Operator, Inc., 124 FERC ¶ 61,174 (21 August 2008).

45 Market Surveillance Panel, January 2009 Monitoring Report, online: OEB  , at 193-197; and Market Surveillance Panel, July 2009 Monitoring Report, online: OEB  , at 164-181

46 Order Authorizing Public Disclosure of Enforcement Staff Report and Directing the Filing of an Additional Report, 128 FERC ¶ 61,049 (2009). FERC subsequently investigated market manipulation issues involving a broader range of virtual and physical energy trading activities by Constellation Energy Commodities Group in northeastern North America. It concluded that they constituted market manipulation, and accepted a negotiated consent agreement and penalty of US$135 million plus disgorgement of profits: see Federal Energy Regulatory Commission, Constellation Energy Commodities Group, Inc. – Order Approving Stipulation and Consent Agreement Docket No IN12-7-000 (9 March 2012), online: FERC .

47 Market Design Committee, Second Interim Report (30 June 1998), c3, online: .

48 Market Surveillance Panel, “Monitoring Document: Generator Offer Prices Used to Signal an Intention to Come Offline” (19 August 2011), online: OEB , at 7.

49 Market Surveillance Panel, April 2012 Monitoring Report, online: OEB , at 51-52

50 See Market Surveillance Panel, Investigation 2011-01 Report, at 24; and Market Surveillance Panel, Investigation 2011-02 Report, at 25.

51 Market Surveillance Panel, January 2013 Monitoring Report, online: , at 135.

52 Market Surveillance Panel, January 2013 Monitoring Report, online: , at 135. In February 2003 the MSP had initiated a review of Congestion Management Settlement Credits with the release of a Discussion Paper for comment by stakeholders. (The following link to the OEB website contains a number of documents related to the CMSC review, including the Discussion Paper, online: ). The focus of the review was whether constrained-off CMSC payments (essentially compensation for not producing) should be eliminated. The MSP ultimately chose not to recommend the elimination of constrained-off payments in the expectation that there would be a move to locational marginal pricing in Ontario (which has not materialized). As a pragmatic alternative, it developed a series of recommendations designed to address some of the less desirable features of constrained-off payments.

53 See IESO, General Conduct Rule, Stakeholder Engagement SE-112, online:

54 See IESO, “General Conduct Rule, General Panel” IESOTP-3b (3 December 2013), online:

55 Fair, Efficient and Open Competition Regulation, AR 159/2009, online:

56 See IESO, Revised Market Rule Amendment Proposal, MR-00407-R00, General Conduct Rule (14 May 2014), online:  (The author acted as an advisor to the IESO on aspects of the GCR).

57 IESO, Market Rule Amendment Proposal, MR-00407-R01 – General Conduct Rule – Governance IESOTP 278-5c (5 May 2014), online:

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