Ontario Energy Association (OEA) Releases Distribution System Operator Study

December 20, 2023

In Powering Ontario’s Growth, Ontario’s Minister of Energy called upon the Ontario Energy Board (OEB) and Independent Electricity System Operator (IESO) to continue to work with LDCs to explore DSO capabilities as an innovation to “meet the needs of customers – safely, affordably, and reliably – along with the clean energy objectives of the province.”  The OEA DSO study builds on “no regrets” grid expansion and modernization investments by LDCs, expanding the roadmap into the future to deliver these outcomes for customers as envisioned by the Ontario Government.

The OEA study explores the benefits and costs of having Ontario’s Local Distribution Companies (LDCs) invest in new DSO capabilities. The study compares and contrasts two different DSO models: the “Total DSO model” and the “Dual Participation model”, two specific models currently being explored through the IESO led Transmission-Distribution Coordination Working Group (TDWG). “The OEA DSO Study finds that there are significantly higher benefits for Ontario’s electricity customers from pursuing the Total DSO model” said Vince Brescia, President & CEO of the OEA. “Investing in a Total DSO model in Ontario will provide anywhere from $5 to $12 billion in net benefits to electricity customers, or an average of $48 to $111 per customer annually” added Brescia. “With the growing proliferation of distributed energy resources (DERs), there are clear benefits to customers from investments in grid modernization and DSO capabilities,” said Brescia.

The study points to the need to begin investments in grid modernization immediately to unlock these benefits for customers. The full report can be found here.

This report was developed by the OEA in collaboration with Ernst & Young LLP (EY) and a steering committee of Ontario-based local distribution companies (LDCs). They include Alectra, Elexicon, Hydro One, Hydro Ottawa and Toronto Hydro who imparted technical and analytic input.  The working group consulted with a broad range of key sector stakeholders during the report development process.


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