Compliance with the Market Rules is key to the operation of an efficient and reliable electricity market and system. Market participants who breach the market rules may be subject to sanctions if appropriate.
Chapter 3 of the Market Rules provides the means by which the IESO enforces compliance with the rules and describes the processes and authorities granted it with respect to monitoring, investigation and enforcement.
The IESO's powers with respect to monitoring, investigation and enforcement of the market rules are delegated to the Director, MACD in a Delegation of Compliance Enforcement letter issued by the IESO CEO. This delegation has been in place since market opening. It affords the Director, MACD, independent discretion in the application of these powers.
The market rules have been designed to lead to efficient market outcomes and a reliable power grid. The Rule Compliance unit of MACD is responsible for fostering compliance with the rules through a variety of activities spanning prevention, monitoring, investigation and enforcement. The unit works with other business units in the IESO to perform some of these activities, mainly in the areas of monitoring, education and communications. MACD makes independent determinations of non-compliance and issues sanctions, where appropriate. It may also resolve cases through alternative means, such as negotiating settlements with parties under investigation.
Sanctions can take a variety of forms, most commonly through financial penalties and orders to come into compliance with the market rules. Determinations and sanctions can be disputed by participants. If disputed, an extensive dispute resolution process, which includes good-faith negotiations, mediation and arbitration, is triggered. Ultimately, matters remaining in dispute can be appealed to the Ontario Energy Board.
The IESO must also comply with its own obligations under the market rules and is therefore subject to MACD's enforcement processes. MACD applies the same investigative procedures and range of sanctions to the IESO as it does to all market participants.
Persistent breaches of the market rules can lead to suspension or termination from the market and disconnection from the IESO-controlled grid.
The procedures followed by MACD in its monitoring, investigation and enforcement activities are outlined in Market Administration Manual 2.6: Treatment of Compliance Issues.
How to Report or Self-Report Instances of Non-Compliance
Groups or individuals who suspect that a market participant or the IESO is not compliant with the market rules, or market participants who wish to self-report their own possible non-compliance, can report such instances, on a confidential basis, by submitting a Non-Compliance Event Report (NCER) to MACD.
Alternatively, market participants may self-report their possible non-compliance with reliability standards through the Reliability Compliance Tool (training presentation). Parties that submit a self-report or complaint may receive a request from MACD to provide additional information about their submission.
Interpretation Bulletins provide clarification on the interpretation, application or implementation of a market rule.
Market participants may seek exemptions from the obligations or standards set out in the Market Rules. See Exemptions for details on the procedure and for a list of active exemption applications.
Module 1: Reliability Compliance Enforcement in Ontario