Minister’s directive

To: the independent electricity system operator

I, Stephen Lecce, Minister of Energy and Mines (“Minister”), hereby direct the Independent Electricity System Operator (“IESO”) pursuant to section 25.32 of the Electricity Act, 1998 (the “Act”), in respect of electricity services that support enhanced demand management, to ensure the continued reliable and efficient operation of Ontario’s electricity system while supporting cost predictability for participating consumers, and require the IESO, pursuant to section 25.4 of the Act, to provide such information as is contemplated in this Directive, as follows:

Background

In February 2023, the Minister of Energy issued a directive (“IRP Directive”) to the IESO to design and administer an Interruptible Rate Pilot (“Pilot”) to explore opportunities to enhance demand management on the electricity system while providing innovative pricing options to participating consumers.

The IRP Directive required the Pilot to commence on July 1, 2023 and conclude on June 30, 2026 (“Pilot Term”). The Pilot has enabled the IESO and the government to assess the operational, system, and customer impacts of an interruptible rate construct, including its ability to support system reliability and provide participants with a more predictable cost framework relative to the status quo.

The government continues to engage with industrial electricity consumers and stakeholders on longer-term approaches to industrial rate design, demand flexibility, and electricity system competitiveness.

Directive

Therefore, pursuant to my authority under sections 25.32 and 25.4 of the Act, I hereby direct the IESO as follows:

  1. Notwithstanding paragraph 2 of the IRP Directive, the IESO shall extend the Pilot Term for two years (“Extension”), such that the Pilot shall conclude on June 30, 2028, unless terminated earlier as contemplated in paragraph 5 below.
  2. The IESO shall continue to administer the Pilot during the Extension without material changes to its existing design, eligibility criteria, performance requirements, or settlement mechanics. For greater clarity, the existing design includes allowing Existing IRP Facilities who wish to continue participating in the Pilot during the Extension to opt to exit the Pilot as of June 30, 2026 or June 30, 2027 by notifying the IESO in writing in accordance with the terms of the Pilot contract.
  3. The Extension shall only be available to facilities that are participating in the Pilot as of the date this Directive is issued (“Existing IRP Facilities”).
    1. No other facilities shall be allowed to participate in the Pilot during the Extension; and
    2. Existing IRP Facilities that continue their participation in the Pilot during the Extension may only do so on the same terms as their participation during the original Pilot Term.
  4. The IESO shall take all necessary steps to facilitate the continued participation in the Pilot, subject to paragraph 5, by Existing IRP Facilities who wish to participate during the Extension, including executing any amendments or extensions to existing Pilot contracts and related documentation, as may be required to give effect to such participation.
  5. If a new interruptible rate program or framework is established by the IESO during the Extension, then the IESO shall terminate the Pilot effective as of the day immediately preceding the commencement of such program or framework.
  6. The IESO shall continue to monitor and report to the Ministry of Energy and Mines (“Ministry”) on Pilot performance during the Extension, including but not limited to:
    1. Participant performance and compliance with interruption obligations;
    2. System reliability and operational impacts; and
    3. Cost and settlement outcomes associated with the Pilot.
  7. The IESO shall support the Ministry, as requested, in providing information and analysis to inform the government’s consideration of longer-term approaches to interruptible rate structures and industrial electricity pricing.

General

For greater clarity, except as set out in this Directive, all other terms of the IRP Directive shall remain in full force and effect.

This Directive is effective on the date it is issued.

Order in Council 756/2026