July 19, 2011
After years of looming power shortages, Ontario faces a periodic problem of excess electricity supply. This costly oversupply, which the province must take under fixed-price contracts with generators, leads to higher electricity bills for consumers. In “Plugging into Savings: A New Incentive-Based Market Can Address Ontario’s Power-Surplus Problem,” authors Benjamin Dachis and Donald N. Dewees recommend a solution: a new market mechanism that would facilitate payments to generators, who operate under fixed-price contracts, to reduce output when doing so would save money for the system as a whole.
