Article by Robert Power, ©2006, Blake, Cassels & Graydon LLP
This article was originally published in Blakes Bulletin on Energy - March 2006
On February 28, 2006, the Ontario Power Authority (OPA) facilitated the first power auction in Ontario. Based upon the Alberta MAPS auction process, it involved NGX as the auctioneer and Bruce Power as the seller. This auction was an important Ontario market event, as the OTC market had slowed significantly in recent months, due to government price controls and a lack of forward price curve transparency, amongst other issues.
12,456,000MWs were offered for sale, in 5MW and 25MW 24x7 products, to Calendar 2010. Approximately half of the product offered was sold. Equally importantly, the OTC market sprung to life. Competitive offers were made through the OTC market during the auction process, thereby creating more competition for Bruce Power as the seller in the auction.
The average price of the energy sold through the auction process was $73.51 MW.
The auction is viewed by the OPA and participants as a success. The OPA is presently consulting on how to improve both the auction process and the product offerings. A second auction is planned for April 19. Two sellers are expected to participate: Bruce Power and Ontario Power Generation.
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