A study by the Canadian think-tank The Fraser Institute has found that industrial electricity consumers in the Province of Ontario have not become more responsive to prices since the wholesale market was opened in 2002.

The study, which updates an analysis done in 2003, reveals that most industrial electricity consumers did not reduce consumption when wholesale prices rose. The blame is laid on subsidies and rebates which overlay the wholesale market, insulating industrial consumers from price increases.
 
"It's not surprising there's been little improvement in demand responsiveness given that a series of special rebates, the availability of fixed-term contracts, and the rules governing the behavior of the Independent Market Operator combined to shield market participants from electricity price increases," said the author, Gerry Angevine, senior economist with The Fraser Institute's Centre for Energy Policy Studies.
 
According to the study, if electricity consumers reacted to higher prices by reducing consumption, it could defer the need for expanding generation capacity. It would also carry environmental benefits, as electricity consumers become more aware of consumption and the need to conserve energy.

The study is available on-line at: http://www.fraserinstitute.ca/shared/readmore.asp?sNav=pb&id=936