Public Policy Considerations of the Treatment of Efficiency and Consumer Impacts in Cost Benefit Analysis (SE-77)

A Cost Benefit Analysis (CBA) is conducted to assess the economic efficiency impacts and reliability impacts of a proposed policy change or project decision. By quantifying all costs and benefits in monetary terms, it is possible to determine the net benefits (costs) of an option in today’s dollars. CBA may not take into account all factors that bear on the social benefits of a project.

A paper will be produced which will provide an explanation of how distributional issues can be factored into a CBA and how efficiency improvements can ultimately affect consumers.

The IESO is seeking stakeholder input on what is the appropriate decision criterion to apply when comparing the costs and benefits of proposed changes to market rules, market procedures, or market design.

This stakeholder plan has been developed to define the opportunity for stakeholder involvement in the appropriate CBA decision criteria to apply to proposed changes.

Stakeholder Plan
Stakeholder Plan (Revised, December 11, 2008)
Stakeholder Plan (Revised, February 18, 2009)

Proposed Activities

Date Agenda/Minutes	Supporting Material	Expected Actions
March 10, 2009	Final Evaluation of Stakeholder Engagement Effectiveness
February 4, 2009	Final outcome – Stakeholder Advisory Committee meeting	Final outcome
December 18, 2008	Deadline for additional stakeholder input • APPrO	Deliberation – Stakeholders to provide input
December 3, 2008	Feedback from Stakeholder Advisory Committee members	Deliberation – Stakeholders to provide input
December 2, 2008	Presentation made to Market Pricing Working Group	Dialogue – stakeholder input
November 27, 2008	Posting of revised stakeholder plan incorporating feedback from stakeholders • No comments received	Dialogue – IESO to gather feedback from stakeholders
November 27, 2008	IESO to provide written response to comments on appropriate decision criteria and to post updated discussion paper • Towards the Choice of an IESO Decision Criterion • IESO Response to Stakeholder Comments	IESO to post written response to comments
November 20, 2008	Deadline for written input from stakeholders on the stakeholder plan • No comments received	IESO to post feedback from stakeholders
November 13, 2008	Deadline for stakeholders to provide written position on appropriate decision criteria Stakeholder Feedback • John Witjes Representing Public Service Consumers • Julie Girvan Representing Residential Consumers • Mike Humphries Representing Embedded Industrial Customers • Ontario Power Generation • RJ Hunt Management Services Limited • Gary Wight Representing Brokers/Marketers	Dialogue - IESO to post feedback from stakeholders
November 6, 2008	Post and communicate stakeholder engagement plan	Stakeholders to provide written feedback.
October 30, 2008	Discussions with the Stakeholder Advisory Committee regarding the appropriate decision criteria in cost benefit analysis	Dialogue – stakeholder input
October 29, 2008	Discussions with the Market Pricing Working Group regarding the appropriate decision criteria in cost benefit analysis	Dialogue – stakeholder input
October 20, 2008	Post discussion paper on public policy issue of market efficiency and cost benefit analysis decision criteria • Discussion paper	IESO to publish discussion paper