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The paid curtailment is part of the IESO’s efforts to reform the way that small independent energy producers, known in the industry as “non-utility generators” (NUGS).

The electricity system operator’s director of stakeholder and public affairs, Chuck Farmer, explained that they are trying to make the electricity production system in Ontario more efficient by having NUGs produce energy at certain times

At the moment, Ontario has large energy producers such as nuclear power plants that supply the province’s baseline energy needs. The IESO wants small generators to step in to supply more electricity when there is heavy demand for it, such as during the summer, rather than generating all the time regardless of whether the power grid needs the extra electricity.

“We have a need to be able to ramp energy up and meet peaking requirements. And the way the NUGs have been incentivized is to work flat-out. But that’s not what the system needs anymore,” said Farmer. “We want them to run when the system needs them to, and not run when it doesn’t.

Those kinds of changes will require renegotiated contracts with several small generators, which is something that the system operator is working on doing.

The curtailment given to the plant in Iroquois Falls doesn’t prevent from producing electricity if it wants to, said Farmer, but it is part of a transition effort taking place at several small generating facilities to try to get them to work on-demand.