The 18-month Outlook released today by the Independent Electricity System Operator (IESO) in Toronto, Canada, underlines the need to address reliability issues that severely strained the Ontario power system this past summer.

Record demand, limited hydroelectric resources, environmental restrictions, transmission constraints and intertie failures contributed to a strained power system that forced 12 days of public appeals, 23 emergency alerts and the implementation of five per cent voltage reductions for 13 hours during two days in August.

"This is clearly a situation that we cannot afford to repeat in the summer of 2006," said Paul Murphy, IESO chief operating officer. "In order to avoid persistent use of emergency control actions the IESO is pursuing a number of initiatives, targeted to be in place before the summer of 2006. When implemented, these arrangements will provide greater certainty of intertie transactions and internal resources and provide the IESO with improved planning capability with respect to potential energy limitations," added Murphy.

This latest Outlook indicates that under normal weather conditions Ontario is expected to be able to meet its capacity and energy needs. It is important to note however that Ontario demand exceeded the 2006 normal weather summer peak forecast value of 24,234 MW on 18 days this past summer. During extreme weather conditions Ontario will need good performance from generation within Ontario and will rely on imports from neighbouring markets. This is also the case during periods when the supply and demand situation is tight, such as conditions experienced this past summer.

A number of new supply additions are scheduled to come into service over the 18-month timeframe of this Outlook. Ontario Power Generation's plans to return Pickering A, Unit 1 to service in the fourth quarter of 2005 will result in an increase of 515 MW to Ontario's electricity system. In addition, eight of the 10 projects from the provincial government's Request for Proposals for Renewable Generation are expected to be available.

The IESO publishes quarterly assessments of the reliability of the Ontario electricity system over the next 18 months. These assessments report on the resource and transmission reliability of the Ontario electricity system and identify any potentially adverse conditions.