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Glossary of Terms

Adjustment Factor

A measure of the volume of electric flow (as opposed to the "pressure" of flow, which is measured in volts). The product of volts times amperes is equal to power which is measured in watts. One ampere flowing at 100 volts equals 100 watts. Similarly, 10 amperes flowing at 10 volts equals 100 watts. Amperes are commonly referred to simply as "amps."

Ancillary Services
These are services such as operating reserves, frequency control, voltage control, black-start capability and load following that are needed to properly run an electrical system. The former Ontario Hydro provided all these itself. Now the Independent Electricity System Operator (IESO) contracts with various suppliers to supply these services.

Black - Start Capability
The property of a generator that can start when no electricity is available on the system. Most generating units don't have this capability because they need electricity to power the electromagnets in their generators. Clearly, it is important to have some black-start capability available so that you can restore power after major blackouts.

Bilateral Transactions
These are contracts to sell and buy electricity that are made directly between generators and customers, bypassing the spot market. An example of a bilateral transaction would be a retailer that signed a contract with a particular generator to provide a certain amount of power at a fixed price, at specified times.

Bruce Power
A company that has taken a long-term lease on Ontario Power Generation's Bruce Nuclear Generating stations located on Lake Huron.

CFCs (chlorofluorocarbons)
These are chemical compounds that are used as aerosol propellants, solvents and refrigerants. CFCs contribute to the depletion of the ozone layer and to the build-up of greenhouse gases.

Congestion occurs when the constraints on the transmission system make it impossible to carry out a transaction. For example, if a utility in New York wanted to buy electricity from Hydro One, and the tie lines to New York were already at capacity, this is an example of congestion.

A constraint is any restriction on a transmission system that limits the ability to transmit power. Constraints can be caused by physical limits such as the thermal capacity of a line. They can also be caused by the need to maintain voltage and stability at various points in the electrical system or the need to be prepared for unexpected failures of generation or transmission facilities.

Debt Retirement Charge (Line item on your Bill)
A charge per kilowatt hour of electricity consumed that is added to electricity bills to help pay down the stranded debt of the former Ontario Hydro. Learn more about the Debt Retirement Charge.

Delivery (Line item on your Bill)
These are the costs of delivering electricity from generating stations across the Province to Hydro One then to your home or business. This includes the costs to build and maintain the transmission and distribution lines, towers and poles and operate provincial and local electricity systems.


The process of directing generators to connect or disconnect to the system or to increase or decrease their output. This used to be done on "merit order" in which the cheapest to run generators would be dispatched first and the most expensive last. This is now done by the Independent Electricity System Operator (IESO) through the operation of a market in electricity that matches bids by generators with the needs of the electricity system.

Dispatchable Load
Dispatch usually refers to generation, but it can also refer to load. For example, large industrial customers can notify the Independent Electricity System Operator (IESO) that they would be willing to reduce their electrical load by a certain amount for a fee. The IESO can then match supply with demand by accepting generation bids and also accepting bids to reduce load.

Distribution Tariffs or Charges
These are the fees that Local Distribution Companies charge to deliver electricity to customers. In Ontario, these are regulated by the Ontario Energy Board (OEB).

Distribution Lines
Low-voltage power lines used to transport small amounts of power from a distribution station or a regional supply centre to the customers' local transformer.

Distribution Station
An electrical component that receives electrical power at a high voltage (usually 50,000 volts or less) and then transforms that high voltage to a lower voltage, suitable for distributing power to the local customers.

Any company that owns, operates and maintains local distribution lines. In Ontario, there are about 90 distributors including Hydro One Networks, Toronto Hydro, Hydro Ottawa, Cornwall Electric and Great Lakes Power. Distributors are usually defined as using voltages less than 50,000 volts.

Electric and Magnetic Fields (EMF)
EMF are invisible lines of force surrounding any electrical wire or device. They consist of two components — the electric field, which is the result of voltage, and the magnetic field, which is the result of current flow.

Electrical Safety Authority
One of Ontario Hydro's successor companies that is responsible for electrical inspections and administering the Ontario Electrical Safety Code. This work was formerly done by Ontario Hydro's Inspection Division.

Electricity (Line item on your Bill)
This is the cost of the electricity supplied to you during this billing period and is the part of the bill that is subject to competition. The electricity consumed is multiplied by the adjustment factor. Hydro One collects this money and pays this amount directly to our suppliers.

Electricity Act
Legislation passed by the Ontario Legislature in 1998 that divided the former Ontario Hydro into Hydro One, Ontario Power Generation, the Independent Electricity Market Operator (now called the Independent Electricity System Operator, or IESO) and the Electrical Safety Authority. This is sometimes referred to as "Bill 35."

Electricity Restructuring Act (Bill 100)
Legislation passed by the Ontario government in 2004 which will reorganize Ontario's electricity system to more effectively address the critical need for new supply, increased conservation and price stability for consumers across the province. This is also known as Bill 100.

Environmental Impact Assessment
An activity designed to identify, predict, interpret and communicate information about the impact of human actions (Hydro One Networks) on human health and well-being, including the well-being of the ecosystems on which human survival depends.

Environmental Management System (EMS)

Acronym that stands for Federal Energy Regulatory Commission. This is the agency that regulates interstate movement of electrical power and natural gas in the United States.

Fall Protection Device
An approved device designed to arrest the fall of the worker.

Global Adjustment
The price of generation in Ontario is set by a competitive market. Certain generators receive payments through regulation or contract that differ from the market price. Your portion of the net adjustment arising from these different payments is now included on your bill as the Global Adjustment.

Hydro One
Ontario Hydro successor company that commenced operations with all of the former Ontario Hydro's electrical transmission and distribution facilities. It has since increased its size by purchasing 88 Ontario local electricity distribution companies. It has also moved into the telecommunications business.

ISO 14000
A series of international standards for environmental management systems, life-cycle assessment, environmental auditing of processes, environmental labeling and environmental performance evaluation. The International Organization for Standardization (ISO) was founded in Geneva in 1946 and is concerned with standardization in a number of technical and non-technical fields.

Independent Electricity System Operator (IESO)
One of Ontario Hydro's successor companies, formerly known as the Independent Electricity Market Operator (IMO), operates the electricity spot market and manages the electricity system. In some other jurisdictions, these two functions are split between a market operator and a system operator.

Interval Meters
Meters that can record the amount of electricity used in specific time periods such as every fifteen minutes or every hour. These are sometimes called "time-of-use" or "smart" meters.

Kilowatt (kW)
A common measure of power equal to 1000 watts.

Kilowatt Hour (kWh)
This is the most common unit for measuring electric energy. It is the use of 1000 watts for one hour. Electricity rates are most commonly expressed in cents per kilowatt hour.

Kilowatt Hour Meters
These are the traditional meters found in most homes. They record total use of electricity, but can't say how much was used at any given time.

Local Distribution Company (LDCs)
LDCs are companies that own and operate electricity distribution systems. They are also known as distributors.

Loop Flow
Loop flows are unscheduled flows of electricity that result because electricity obeys the laws of physics and doesn't strictly obey system operators. A well-known loop flow that affects Ontario occurs around Lake Erie, entering Ontario at Niagara and exiting Ontario through our ties to the United States at the Michigan border. Hydro One and Detroit Edison are presently upgrading the electrical interconnection between Ontario and Michigan. This project includes equipment designed to control this loop flow.

Lost-time injury
Injury where a worker is away from work beyond the date on which the injury occurred.

Market Clearing Price
In a competitive electricity market, the price needed to attract enough capacity to meet the load at any given time. Here is a simplified example: suppose the IESO needs 4,000 megawatts and has these four bids:

Generator A: 2,000 megawatts at $25 a megawatt hour
Generator B: 1000 megawatts at $31 a megawatt hour
Generator C: 1000 megawatts at $27 a megawatt hour
Generator D: 1000 megawatts at $26 a megawatt hour

The IESO would choose the lowest bids that would satisfy the need for the predicted 4,000 megawatts. In this case, it would choose the bids from Generators A, C and D and reject the bid from Generator B. However, each of the successful bidders would receive the highest price bid by one of the successful bidders. In this case, this would be $27 a megawatt hour. This is what is known as the "market clearing price". It is the highest price that must be paid to meet a given load at any given time.

Market Operator
See Independent Electricity System Operator.

Market Rules
The rules that govern the competitive electricity market in Ontario.

Megawatt (MW)
Unit of electrical power equal to one million watts.

Megawatt hour (MWh)
A measure of energy production or consumption equal to one million watts produced or consumed for one hour.

Acronym that stands for North American Electric Reliability Council that publishes standards designed to maintain reliable electric service in North America. This was established in 1968 in response to the famous 1965 blackout in Northeastern United States and Ontario.

Ontario Energy Board (OEB)
This body licences market participants and regulate rates for transmission and distribution. It also regulates Ontario's natural gas industry.

Ontario Hydro
A large crown corporation that used to own almost all electrical generation and transmission in Ontario and also most of Ontario's rural electrical distribution system. Ontario Hydro was broken up in April 1999 into Hydro One, Ontario Power Generation, the Independent Electricity Market Operator (now known as the Independent Electricity System Operator) and the Electrical Safety Authority.

Ontario Power Authority
The Ontario Power Authority (OPA) is an agency established in January 2005 as a result of Bill 100. One of its functions is to manage the contracts for future generation and demand management procured through the Request for Proposal (RFP) process.

Ontario Power Generation
The successor company to Ontario Hydro that controls most of Ontario's electrical generating capacity. It is required to reduce its market share from its present 85% to no more than 35% over the next 10 years.

Ozone Depleting Substance
Chemicals such as CFCs which react with the ozone in the earth's protective ozone layer in the upper atmosphere.

Polychlorinated biphenyls (PCBs)
A group of biologically persistent organic compounds containing chlorine, previously used in electrical transformers and capacitors because of their insulating capacity and fire resistance. Due to their persistence, they are being phased out and destroyed.

Regulatory Charges (Line item on your Bill)

The process of giving appropriate treatment to bring an injured employee gradually back to their pre-injury condition. It may involve modified work.

Spot Market
This is the market administered by the IESO where electricity is traded.

Stranded Debt
This is the debt of a monopoly utility that can not be serviced after the switch to a commercial electricity market. In Ontario, the stranded debt of the former Ontario Hydro is administered by the Ontario Electricity Financial Corporation.

System Operator
The organization that monitors and controls the operation of the electric system. In Ontario, the IESO is both system operator and market operator. In some other jurisdictions these functions are separate.

A device that changes electric voltage. In Ontario, electricity typically leaves the generator at 20,000 volts or less, is stepped up to 115,000, 230,000 or 500,000 volts to be transmitted long distances and then stepped down to lower voltages to be distributed to customers ending up at a mere 110 volts in our homes. Each change in voltage is accomplished with a transformer.

A company that moves large amounts of electricity over long distances at high voltages. In Ontario, transmission lines are usually defined as 50,000 volts and higher. By comparison, distribution lines generally are defined as operating below 50,000 volts.

Transmission Tariffs or Charges
These are the fees that Hydro One and other transmission owners charge to transmit electricity through the transmission system. These are regulated by the OEB.

A common measure of electrical power. One watt equals the power used when one ampere of current flows through an electrical circuit with a potential (electrical pressure) of one volt. Commonly quoted as kW (kilowatts or 1,000 watts) or MW (megawatts or million watts)

Watt hour
Is a measure of energy production or consumption equal to producing or consuming one watt of power for one hour or two watts for one half hour, etc. Often quoted a kilowatt-hours (1,000 watt hours) or megawatt hours (one million watt hours).

A service provided by a transmission system between a buyer or a seller in different jurisdictions. For example, if a utility in Michigan wanted to sell to Quebec, it could request that Hydro One wheel the power to Quebec. Hydro One would then receive a wheeling fee for doing this.

White Paper
The government publication — Direction for Change: Charting a Course for Competitive Electricity and Jobs in Ontario — that set the policy for reform of Ontario's electricity industry. In was published in November 1997.

WSIB Workplace Safety and Insurance Board
The WSIB, formerly the Workers' Compensation Board, oversees Ontario's workplace safety education and training system. The WSIB also administers the province's no-fault workplace insurance for employers and their workers. As part of this system, the WSIB provides disability benefits, monitors the quality of health care, and assists in early and safe return to work for workers who are injured on the job or contract an occupational disease. The WSIB is funded entirely by employer premiums and receives no funding from the Ontario provincial government.

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