Since May 1, 2002, Ontario has opened its electricity market to competition. The former Ontario Hydro which was a monopoly generator, power transmitter and rural distributor was broken up into successor companies. These entities include two commercial companies: Ontario Power Generation Inc. (OPG), which generates a significant portion of the electricity in the province, and Hydro One Networks Inc. which transmits power and distributes electricity to about 1.2 million customers, mostly in rural and remote communities. There is also the Independent Electricity System Operator (IESO), a not-for-profit crown corporation that runs the electricity exchange for the sale and purchasing of power and arranges for the dispatch of electricity to regulated distribution companies.

The Ontario Energy Board is responsible for regulating electricity utilities and natural gas marketers. It also establishes the commodity price for electricity payable by low volume customers.

The recently created Ontario Power Authority (OPA) is responsible for ensuring an adequate, long-term supply of electricity in Ontario to achieve the targets set by government for an integrated system plan for generation, transmission, conservation and renewable energy development.

The Ontario government is restructuring the regulated electricity sector to ensure adequate supplies of electricity as well as stable prices. The government is taking measures promoting a more responsible approach to electricity pricing that better reflects the true cost of electricity, ending subsidies of electricity prices, encouraging new private sector investment, phasing out coal-fired generation facilities, promoting clean and renewable energy, and fostering a culture of conservation and demand-side management.