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ARTICLE · 05 JUNE 2006

OEB Approves Reliability Must-Run Contract For The Lennox Generating Station

Stikeman Elliott LLP
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The Ontario Energy Board recently approved a reliability must-run contract. Reliability must-run contracts allow the IESO to instruct a generator to operate a facility in specific ways in order to maintain the reliability of the electricity system.

CanadaEnergy and Natural Resources
Patrick Duffy
Patrick Duffy
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The Ontario Energy Board recently approved a reliability must-run contract between OPG and the IESO for the 2,140 MW Lennox generating station near Kingston (the RMR Contract). Reliability must-run contracts allow the IESO to instruct a generator to operate a facility in specific ways in order to maintain the reliability of the electricity system. The Lennox decision was the first opportunity the Board had to review a reliability must-run contract under Chapter 7 of the IESO’s Market Rules.

The origins of the RMR Contract can be traced to the IESO’s refusal of OPG’s request to de-register the Lennox facility on the ground that its removal was likely to have an unacceptable impact on the reliability of the IESO-controlled grid. OPG and the IESO subsequently negotiated the RMR Contract, which obligates OPG to offer into the IESO-administered markets the maximum amount of energy and operating reserve from Lennox in a commercially reasonable manner and in accordance with stated

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