A combination of internal and external factors are contributing to the situation, but the most significant is the extended outage of a transmission connection between Ontario and New York State.

While wholesale customers might benefit in the short term, these lower prices will not necessarily translate into lower customer bills overall. The high—and increasing—proportion of generation that is contracted or regulated in Ontario means that the Global Adjustment (which is added to customers’ bills to pay generators the difference between their contract price and the market price) will rise sharply.

The negative prices during the last week of March and the generally low prices throughout the month will cause the Global Adjustment to increase. The IESO’s preliminary estimate (published on April 2) indicates a Global Adjustment for March above $27/MWh.

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