Although neither side indicated any wrongdoing, the energy trading affiliate of Shell Oil Co., Coral Energy Inc., agreed Wednesday to pay Ontario’s Independent Electricity Market Operator (IMO) US$1 million for conducting some cross-border electricity trades.

Coral officials in Houston, who could not comment, apparently told Toronto media that Coral did not manipulate the market and that the financial transactions provided no financial benefit to the company. Also refusing to discuss the payment was IMO, which issued a statement indicating that Coral had “made no admission of a breach of the market rules.” IMO’s statement noted that the deal was the largest settlement to date with an energy trader.

IMO is responsible for matching power supply and demand in Ontario, Canada’s most populated province. Generators and traders both in and outside of the province supply power during the peak months, and Ontario also imports power during non-peak months. Following the failure of several hundred transactions last summer, IMO staff launched an investigation last October into cross-border trades that failed to materialize and have been scrutinizing nearly 100 of them. No official penalties have thus far been issued, and 41 cases have been closed, according to IMO.

Ontario opened its markets to competition last May. However, high energy prices in the province’s deregulated market forced the provincial government to freeze prices until May 2006 (see Power Market Today, Nov. 12, 2002).

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