TORONTO, April 4, 2002 — When Ontario’s electricity market opens to competition on May 1, 2002, the body responsible for overseeing wholesale competition will be ready and able to help ensure competition works well.
“We will be alert for behavior that we feel impedes effective competition. And we will be vigilant in pursuing market participants who are gaming the system or abusing their market power,” Fred Gorbet, Chair of the Market Surveillance Panel (MSP), told an audience at the Toronto Board of Trade today.
“But it’s important to note that the watchful eye of the Market Surveillance Panel will go beyond behavior of the participants to the rules and structure of the marketplace,” he added.
The panel’s specific responsibilities include:
– monitoring behavior in the marketplace,
– investigating and recommending on:
– the behavior of specific market participants,
– the design of the rules and operating procedures of the marketplace,
– the structure of the marketplace, and
– reporting on the results of its monitoring and investigations.
Should the MSP detect that a market participant has acted to take advantage of the rules or abuse its market power, the panel will initiate investigations and make recommendations to the Independent Electricity Market Operator (IMO), the Ontario Energy Board, the federal Competition Bureau or other government agencies as appropriate.
These organizations, in turn, have the authority to penalize and influence conduct through penalties, rule changes, altered license conditions, divestiture orders or criminal prosecutions. The IMO and the MSP have signed an agreement with the OEB and the Competition Bureau outlining each organization’s role and responsibilities.
The panel will also carefully scrutinize any aspect of the market that could inhibit the normal adjustments to supply and demand that one would expect to see in a competitive marketplace.
“Our objective is to make sure that competition works well — for the benefit of all participants in the marketplace and for the benefit of all Ontarians,” said Gorbet. “As we move beyond May 1st, there will undoubtedly be surprises and a continuing need to assess and react to them. I am confident that we have the tools in place to monitor the marketplace and recommend whatever actions are necessary to enhance effective competition.”
Gorbet also noted that in the first year of the competitive market, the MSP will publish quarterly reports on its assessment of market activity.
The Market Surveillance Panel is an independent arms-length body appointed by, and accountable to, the Committee of Independent Directors of the IMO. In addition to his responsibilities as MSP Chair, Gorbet is Director of the Financial Services Program at the Schulich School of Business. Gorbet is a former federal Deputy Minister of Finance (1988-1992) and a member of the Order of Canada.
More information about the IMO’s Market Surveillance activities is contained in the document, “The Market Surveillance Panel In Ontario’s Electricity Market: Monitoring, Investigating and Reporting.”
The IMO is responsible for forecasting and monitoring the electricity needs of nearly 12 million Ontarians every minute of every day. It manages the flow of electricity to local distribution companies and major industrial customers — and will operate Ontario’s new competitive wholesale electricity market that will open May 1, 2002.
The Market Surveillance Panel, established in accordance with the Electricity Act, 1998, is charged with monitoring, investigating and reporting on Ontario’s wholesale electricity market. For more information, please visit our Web site at www.theIMO.com.