Sunday, November 21, 2010

Supply Mix Impact on the Global Adjustment Mechanism

I've previously posted the graph indicating any price/MWh increase during the recession, and anemic recovery, was due to the global adjustment mechanism.

Demand decreases, so does the Hourly Ontario Energy Price (HOEP) at the system operator (IESO), but production is propped up by the guaranteed contracts at inflated rates, which are paid for by global adjustment (the difference between the contracted and market price).

Working with the IESO data, I've formatted it to show the composition of the amounts requiring the Global Adjustment Mechanism (GAM) that is included on the invoicing to Wholesale customers, and included in the retail rates for the rest of us.

Public OPG is now supplying about 60% of our electricity and is responsible for around 25% of the global adjustment.

Non Utility Generators, holding contracts with the Ontario Electricity Financial Organization, seems a niche category, but … this niche now adds as much to the GAM as OPG does. In fact, over the past 12 months, it has added more. I do not know of any data to quantify the amount of energy provided from these sources, or even a list of what the sources are (since posting this I've learned these are contracts that were held by Hydro One with external suppliers, prior to the breakup in 1998 - presumably these will all end, or be moved to be OPA contracts).

But the big unbridled growth is in the OPA contracts, which now comprise over half of the approximately $4 billion annually charged through the GAM.

Contracts with private sources are responsible for 75% of the GAM, but only 40% of supply – and 40% of that 40% is Bruce Power output which is priced around 6.4 cents/kWh. The remaining supply, which is primarily gas, with increasing amounts of solar and wind, is the big driver of both the collapse in a market price, and the increase in the combined HOEP/GA price.

Global Adjustment Dollars ($Millions)


  1. Excellent blog! Do you have any suggestions for aspiring
    writers? I'm hoping to start my own website soon but I'm a little
    lost on everything. Would you recommend starting with a free platform like Wordpress or
    go for a paid option? There are so many options out there that I'm completely overwhelmed .. Any ideas? Appreciate it!
    Here is my web-site

  2. Do you have a spam issue on this site; I also am a blogger,
    and I was wondering your situation; many of us have created some
    nice methods and we are looking to trade techniques
    with others, please shoot me an e-mail if interested.

    Here is my web blog; calories burned calculator
    My website - activity calorie calculator

  3. Hey I know this is off topic but I was wondering if you knew of any widgets I could add to
    my blog that automatically tweet my newest twitter updates.
    I've been looking for a plug-in like this for quite some time and was hoping maybe you would have some experience with something like this. Please let me know if you run into anything. I truly enjoy reading your blog and I look forward to your new updates.

    Also visit my website:

  4. Excellent blog post. I absolutely appreciate this site.
    Stick with it!

    Also visit my homepage ... diet plans that work

  5. Your way of explaining the whole thing in this paragraph is truly nice, all can easily know it, Thanks a lot.

    Here is my web site :: diets that work for women

  6. hi!,Ӏ like your ωrіting verу a lot!
    propoгtiοn we be іn contact extгa about your articlе οn AOL?
    I require a sρecialist in this аreа tо unravel mу
    pгoblem. Maуbe thаt is yоu!

    Tаking а loοk ahead to look you.

    Heге іѕ mу page; beachbody derm exclusive review

  7. Having read this I thought it was rather informative.
    I appreciate you finding the time and effort to put this short article together.
    I once again find myself spending way too much time both reading and commenting.
    But so what, it was still worthwhile!

    My page - ventanas