O. Reg. 101/25: ADJUSTMENTS UNDER SECTION 25.33 OF THE ACT"

O. Reg. 101/25: ADJUSTMENTS UNDER SECTION 25.33 OF THE ACT, ELECTRICITY ACT, 1998

ontario regulation 101/25

made under the

Electricity Act, 1998

Made: June 5, 2025
Filed: June 5, 2025
Published on e-Laws: June 6, 2025
Published in The Ontario Gazette: June 21, 2025

Amending O. Reg. 429/04

(ADJUSTMENTS UNDER SECTION 25.33 OF THE ACT)

1. (1) Subsection 5 (1) of Ontario Regulation 429/04 is amended by adding the following definitions:

“binding date”, in relation to an eligible purchase agreement, means the day on which the agreement first becomes binding on the eligible purchase customer and the eligible generator who are parties to the agreement;

“compensated electricity” in relation to an eligible generator, means a volume of electricity described in subsection 10.9 (2);

“eligible electricity” means a volume of electricity that satisfies the conditions set out in section 10.9;

“eligible generation facility” means a generation facility of an eligible generator that satisfies the requirements set out in section 10.12;

“eligible generator” means a generator that satisfies the conditions set out in section 10.11;

“eligible purchase agreement” means an agreement entered into by a market participant with an eligible generator that satisfies the conditions set out in section 10.13;

“eligible purchase customer” means a market participant that satisfies the conditions set out in section 10.10;

“local municipality” has the same meaning as in the Municipal Act, 2001;

(2) Clause (c) of the definition of “cogeneration facility” in subsection 5 (1) of the Regulation is amended by striking out “conveys” in the portion before subclause (i) and substituting “physically supplies”.

2. The definition of “effective date” in subsection 8.1 (1) of the Regulation is revoked and the following substituted:

“effective date” means,

(a) for the purposes of subsections (2) and (3), the day that is 10 business days after the day the IESO receives the notice referred to in clause (2) (d) and any information required under that clause or clause (2) (e), or

(b) for the purposes of subsections (4) to (6), the day that is 10 business days after the day the IESO receives the notice referred to in clause (4) (f) and any information required under that clause or clause (4) (g).

3. Subparagraph 2 iii of subsection 8.1 (3) of the Regulation is revoked.

4. The Regulation is amended by adding the following sections:

Eligible electricity

10.9 (1) A volume of electricity purchased by a market participant from an eligible generator during a base period is eligible electricity of the market participant for that base period if,

(a) it is purchased by the market participant under an eligible purchase agreement entered into by the market participant with the eligible generator in respect of one or more of the market participant’s load facilities that are specified in the eligible purchase agreement;

(b) it is not compensated electricity described in subsection (2);

(c) it is physically supplied by the eligible generator from one or more of its eligible generation facilities that are specified in the eligible purchase agreement into the IESO-controlled grid or the distribution system of one or more licensed distributors without first being temporarily stored in an energy storage device or facility;

(d) the physical supply of the electricity is settled through the IESO-administered markets; and

(e) the market participant is a Class A market participant in respect of any of the load facilities referred to in clause (a) at the beginning of the adjustment period that begins in the calendar year in which the base period ends.

(2) A volume of electricity is compensated electricity if,

(a) it is used by or credited to the eligible generator in respect of any capacity auction or demand response auction or pilot conducted by the IESO;

(b) it is the subject of a contract entered into by the eligible generator with the IESO or the Financial Corporation;

(d) it is the subject of a purchase from the eligible generator under any agreement with the eligible generator other than the eligible purchase agreement referred to in clause (1) (a), including any other eligible purchase agreement, whether the agreement is with the market participant or any other person;

(e) either,

(i) it is used by or credited to the market participant referred to in subsection (1) in respect of any IESO demand response auction or pilot or any capacity auction, or

(ii) the market participant referred to in subsection (1) is otherwise entitled to receive any payment or other consideration on account of the electricity; or

(f) the eligible generator is otherwise entitled to receive any payment or other consideration on account of that electricity other than or in addition to the payment provided under the eligible purchase agreement referred to in clause (1) (a).

Eligible purchase customers

10.10 (1) Subject to subsection (2), a market participant is an eligible purchase customer for an adjustment period if the following conditions are satisfied:

1. The market participant is a Class A market participant for the adjustment period.

2. The market participant has entered into an agreement with an eligible generator in respect of one or more of the market participant’s load facilities that are specified in the agreement.

3. The agreement described in paragraph 2 is an eligible purchase agreement in respect of the applicable base period and is binding on the market participant and the eligible generator throughout the base period.

4. The market participant is a Class A market participant in respect of any of the load facilities described in paragraph 2 for the adjustment period.

5. The market participant has provided the documents and information specified in subsection (3) to the IESO on or before March 30 in the same calendar year in which the applicable base period commences.

6. The market participant has provided to the IESO, in the form specified by the IESO and within the time specified by the IESO, such other documents and information as the IESO may require for the purposes of this section and subsections 11 (4.5) and (4.7).

(2) A market participant is not an eligible purchase customer for any portion of an adjustment period in which the market participant is not a Class A market participant.

(3) The documents and information referred to in paragraph 5 of subsection (1) that must be provided to the IESO on or before the applicable date specified in that paragraph are the following:

1. A letter from the market participant and the eligible generator,

i. attesting to and confirming that they have entered into one or more eligible purchase agreements with each other in respect of the load facility or facilities referred to in paragraph 2 of subsection (1) that are to be binding on them throughout the applicable base period,

ii. attesting to, specifying and confirming the proportion, expressed as a single percentage for the entire base period, of the total volume of electricity supplied by the eligible generation facility or facilities into the IESO-controlled grid or the distribution system of a licensed distributor over the applicable base period that is to be purchased by the market participant under each of the agreements during each hour in the base period, and

iii. attesting to and confirming that the proportion described in subparagraph ii is eligible electricity and not compensated electricity.

2. A letter from the eligible generator attesting to and confirming, for each generation facility supplying electricity under each eligible purchase agreement,

i. in the case of a facility that was in commercial operation before the binding date of the applicable eligible purchase agreement, that this was the case, or

ii. in the case of a facility that was not in commercial operation before the binding date, that the generator has met the requirements of subsection 10.12 (2).

3. A letter from the eligible generator attesting to and confirming, for each generation facility supplying electricity under each eligible purchase agreement, that none of the supplied electricity will first be temporarily stored in an energy storage device or facility.

4. A copy of the eligible purchase agreement.

5. If the generation facility has not been in commercial operation before the binding date of the eligible purchase agreement, a copy of the applicable written resolution from the municipal council or councils referred to in subsection 10.12 (2).

6. Any other information the IESO may require for the purpose of administering this section and sections 10.11, 10.12 and 10.13, in the form specified by the IESO.

(4) Despite paragraph 4 of subsection (3), a copy of the eligible purchase agreement does not need to be provided to the IESO if a copy of that eligible purchase agreement was already provided in respect of an earlier base period that has remained in force since then, has not been subsequently amended and is expected to remain in force throughout the applicable base period.

(5) If the eligible generator becomes aware that documents or information provided to the IESO under subsection (3) are or become incorrect or incomplete in any material way, the eligible generator shall notify the market participant and, to the extent known to the eligible generator, provide the market participant with corrected and complete documents or information within 10 business days after the eligible generator becomes aware that the documents or information are incorrect or incomplete.

(6) If the market participant becomes aware that documents or information provided to the IESO under subsection (3) are or become incorrect or incomplete in any material way, the market participant shall notify the IESO and, to the extent known to the market participant, provide the IESO with corrected and complete documents or information within 10 business days after the market participant becomes aware that the documents or information are incorrect or incomplete.

(7) Any documents or information that must be provided to the IESO under this section, other than the eligible purchase agreement referred to in paragraph 4 of subsection (3), must be provided in the form specified by the IESO.

Eligible generators

10.11 A generator is an eligible generator in relation to a market participant referred to in section 10.10 for a base period if the following conditions are satisfied throughout the base period:

1. The generator is a market participant.

2. The generator has entered into an eligible purchase agreement with the market participant that is binding on the generator and the market participant throughout the base period.

3. The generator has at least one eligible generation facility.

Eligible generation facilities

10.12 (1) A generation facility of an eligible generator is an eligible generation facility in relation to an eligible purchase agreement for a base period if the requirements described in subsection (2), if applicable, have been satisfied before the beginning of the base period and if the conditions described in subsection (3) are satisfied throughout the base period.

(2) If the generation facility has not been in commercial operation before the binding date of the eligible purchase agreement and the facility is or will be located within one or more local municipalities, the eligible generator must have satisfied the following requirements before the base period for the generation facility to be an eligible generation facility:

1. The eligible generator must have obtained a separate written resolution from the municipal council of each of the local municipalities in which the generation facility is located or will be located that the municipal council supports having the generation facility operate on lands in the local municipality, subject to the eligible generator complying with, and the eligible generation facility being in compliance with, all applicable provincial and municipal laws and regulations.

2. The written resolution must be in the form specified by the IESO and must be signed or confirmed, in writing, by the chief administrative officer of the local municipality or, if there is no chief administrative officer, by a person in an equivalent position.

3. A copy of the written resolution must be provided to the eligible purchase customer under the eligible purchase agreement and to the IESO.

4. Such other documents or information related to the resolution or to each local municipality’s support as may be required by the IESO must be provided to the IESO in the form specified by the IESO and within the time specified by the IESO.

(3) The following conditions must be satisfied throughout the base period for the generation facility to be an eligible generation facility:

1. The generation facility must be specified in the eligible purchase agreement as a facility that will be supplying eligible electricity purchased under the agreement into the IESO-controlled grid or the distribution system of a licensed distributor.

2. The generation facility must generate the electricity that is purchased under an eligible purchase agreement only from wind, water, biomass, biogas, biofuel, solar energy or geothermal energy.

3. The generation facility must not consume more electricity than it generates.

4. Except in the circumstances described in subclause 10.13 (1) (d) (i), during each hour of the applicable base period some volume of eligible electricity must be physically supplied from the eligible generation facility into the IESO-controlled grid or the distribution system of one or more licensed distributors.

5. If the generation facility was not in commercial operation before the binding date of the eligible purchase agreement, the generation facility must not be located, in whole or in part, on lands designated in an official plan of a municipality or planning board as a prime agricultural area, as defined in the Provincial Planning Statement, 2024 issued under section 3 of the Planning Act.

(4) Within 15 days after the end of a base period in which a generator was an eligible generator, the eligible generator shall provide the IESO with an attestation, in the form specified or approved by the IESO, that the condition set out in paragraph 4 of subsection (3) was satisfied by each of the eligible generator’s eligible generation facilities throughout the base period.

(5) If a generator does not, within 15 days after the end of a base period in which it was an eligible generator, satisfy the requirement in subsection (4) in respect of an eligible generation facility of the eligible generator, no volume of electricity physically supplied from that eligible generation facility during that base period will be eligible electricity.

Eligible purchase agreement

10.13 (1) An agreement entered into by a market participant with an eligible generator is an eligible purchase agreement in respect of a base period if,

(a) the agreement is binding on the market participant and the eligible generator throughout the base period;

(b) the agreement specifies the load facility or facilities of the market participant in respect of which eligible electricity is being purchased;

(c) the agreement specifies the eligible generation facility or facilities of the eligible generator that will be physically supplying the purchased eligible electricity into the IESO-controlled grid or the distribution system of a licensed distributor;

(d) the agreement provides for the purchase by the market participant, in respect of the load facility or facilities referred to in clause (b), of,

(i) some volume of eligible electricity from the eligible generation facility or facilities referred to in clause (c) during each hour in the base period, except in the case of,

(A) outages at the generation facility or facilities that are managed in compliance with the market rules and any applicable transmission or distribution connection agreements to which the eligible generator is a party,

(B) in the case of a generation facility that is connected to a transmission system or distribution system not owned or operated by the eligible generator, an inability to physically deliver electricity from the generation facility through the connection point to that system, where the inability is not caused, directly or indirectly, by an act or omission of the eligible generator,

(C) in the case of electricity generated from wind or solar energy, insufficient wind or sunlight, respectively, to generate some volume of electricity during the hour,

(D) the eligible generator complying with any applicable dispatch instructions issued to it by the IESO under the market rules to supply less electricity from the generation facility or facilities than it otherwise would have been dispatched to supply, or

(E) any other circumstances beyond the reasonable control of the eligible generator, and

(ii) the same specified proportion, expressed as a percentage, of the total volume of electricity that the eligible generator physically supplies from the eligible generation facility or facilities referred to in clause (c) into the IESO-controlled grid or a distribution system of a licensed distributor during each hour in the base period;

(e) the agreement includes an acknowledgement that eligible electricity does not include compensated electricity; and

(f) the market participant is a Class A market participant in respect of any of the load facilities referred to in clause (b) at the beginning of the adjustment period that begins in the calendar year in which the base period ends.

(2) If an eligible purchase agreement that has been provided to the IESO is amended, restated, assigned, transferred or terminated, the market participant shall, no later than five days after the amendment, restatement, assignment, transfer or termination takes effect, notify the IESO in writing, and,

(a) in the case of a termination, specify the effective date of the termination;

(b) in the case of an assignment or transfer, provide a copy of the document under which the assignment or transfer is made; or

(3) For greater certainty, an agreement entered into by a market participant with an eligible generator is not an eligible purchase agreement for any part of a base period if, during the base period, the agreement,

(a) is assigned or transferred by the market participant or the eligible generator; or

(b) expires or is terminated.

5. (1) Paragraph 1 of subsection 11 (2) of the Regulation is amended by striking out “Subject to paragraph 1.1” at the beginning of the portion before subparagraph i and substituting “Subject to paragraphs 1.1, 1.2 and 1.3”.

(2) Paragraph 1.1 of subsection 11 (2) of the Regulation is revoked and the following substituted:

1.1 In the case of a Class A market participant that is an eligible cogeneration customer but not an eligible purchase customer in respect of the adjustment period, the Class A market participant’s peak demand factor for the adjustment period shall be determined under subsection (4.2) instead of under subsection (4) for the purposes of applying paragraph 1.

1.2 In the case of a Class A market participant that is an eligible purchase customer but not an eligible cogeneration customer in respect of the adjustment period, the Class A market participant’s peak demand factor for the adjustment period shall be determined under subsection (4.4) instead of under subsection (4) for the purposes of applying paragraph 1.

1.3 In the case of a Class A market participant that is both an eligible purchase customer and an eligible cogeneration customer in respect of the adjustment period, the Class A market participant’s peak demand factor for the adjustment period shall be determined under subsection (4.6) instead of under subsection (4) for the purposes of applying paragraph 1.

(3) Subsections 11 (4.2) and (4.3) of the Regulation are revoked and the following substituted:

(4.2) For the purposes of paragraph 1.1 of subsection (2), the peak demand factor of a Class A market participant that is an eligible cogeneration customer but not an eligible purchase customer in respect of the adjustment period is calculated to eight decimal places using the formula,

(V – V.1) / W

in which,

“V” has the same meaning as in subsection (4),

“V.1” is, subject to subsection (4.3), the volume of electricity physically supplied into the IESO-controlled grid by one or more cogeneration facilities during the peak hours in the applicable base period, pursuant to one or more cogeneration capacity agreements between the owners or operators of cogeneration facilities and the Class A market participant, and

“W” has the same meaning as in subsection (4).

(4.3) The following rules apply for the purposes of determining the value of “V.1” in the formula set out in subsection (4.2):

1. If the value of “V.1” is greater than the value of “V” during a peak hour, the value of “V” shall be substituted for the value of “V.1” for that peak hour.

2. If the aggregate volume of electricity physically supplied into the IESO-controlled grid by one or more cogeneration facilities during a peak hour in the applicable base period pursuant to one or more cogeneration capacity agreements between the owners or operators of cogeneration facilities and the Class A market participant exceeds the aggregate volume of electricity withdrawn during that peak hour by the load facility or facilities of that Class A market participant to which the cogeneration capacity agreements relate, that excess volume shall not be included in determining “V.1”.

3. For the purposes of determining “V.1”, a volume of electricity shall only be included if the IESO is satisfied that the same volume of electricity was generated using capacity that is not the subject of a procurement contract entered into with the IESO or a capacity auction conducted by the IESO.

4. For the purposes of determining “V.1”, the IESO shall rely on,

i. the information provided in the applicable cogeneration capacity agreement provided as described in section 10.7 to the IESO by the Class A market participant, and

ii. such other information as the IESO may require under section 10.8 for the purposes of this subsection.

(4.4) For the purposes of paragraph 1.2 of subsection (2), the peak demand factor of a Class A market participant that is an eligible purchase customer but not an eligible cogeneration customer in respect of the adjustment period is calculated to eight decimal places using the formula,

(V – V.2) / W

in which,

“V” has the same meaning as in subsection (4),

“V.2” is, subject to subsection (4.5), the volume of eligible electricity physically supplied into the IESO-controlled grid or the distribution system of a licensed distributor during the peak hours in the applicable base period pursuant to any eligible purchase agreements entered into by the Class A market participant, and

“W” has the same meaning as in subsection (4).

(4.5) The following rules apply for the purposes of determining the value of “V.2” in the formula set out in subsection (4.4):

1. If the aggregate volume of eligible electricity physically supplied into the IESO-controlled grid or the distribution system of a licensed distributor during a peak hour pursuant to any eligible purchase agreements entered into by the Class A market participant exceeds the aggregate volume of electricity withdrawn during that peak hour by the load facility or facilities to which the eligible purchase agreement relates, that excess volume shall not be included in determining “V.2”.

2. For the purposes of determining “V.2”, a volume of electricity shall only be included if the IESO is satisfied that,

i. the volume of electricity is not compensated electricity, and

ii. the requirements of clause 10.13 (1) (d) have been met throughout the applicable base period.

3. If any eligible purchase agreement used to determine “V.2” is amended or restated during a base period and the volume or proportion of eligible electricity contemplated in clause 10.13 (1) (d) is changed, then, for the purposes of determining “V.2” from and after the effective date of the amendment or restatement, the lesser of the volumes or proportions from before or after the change shall be used.

4. If the value of “V.2” is greater than the value of “V” during a peak hour, the value of “V” shall be substituted for the value of “V.2” for that peak hour.

5. For the purposes of determining “V.2”, the IESO shall rely on,

i. the information set out in the applicable eligible purchase agreements provided to the IESO by the Class A market participant, and

ii. such other documents and information as the IESO may require under paragraph 5 of subsection 10.10 (1) for the purposes of this subsection.

(4.6) For the purposes of paragraph 1.3 of subsection (2), the peak demand factor of a Class A market participant that is an eligible purchase customer and an eligible cogeneration customer in respect of the adjustment period is calculated to eight decimal places using the formula,

(V – (V.1 + V.3)) / W

in which,

“V” has the same meaning as in subsection (4),

“V.1” has, subject to subsection (4.7), the same meaning as in subsection (4.2),

“V.3” is, subject to subsection (4.7), the volume of eligible electricity physically supplied into the IESO-controlled grid or the distribution system of a licensed distributor during the peak hours in the applicable base period pursuant to any eligible purchase agreements entered into by the Class A market participant, and

“W” has the same meaning as in subsection (4).

(4.7) The following rules apply for the purposes of applying the formula set out in subsection (4.6):

2. If any volume of electricity in “V.3” is also a volume of electricity in “V.1” during a peak hour, that volume shall not be included in determining the “V.3” for that peak hour.

3. If any eligible purchase agreement used to determine “V.3” is amended or restated during a base period and the volume or proportion of eligible electricity contemplated in clause 10.13 (1) (d) is changed, then, for the purposes of determining “V.3” from and after the effective date of the amendment or restatement, the lesser of the volumes or proportions from before or after the change shall be used.

4. If the value of the sum of “V.1” and “V.3” is greater than the value of “V” during a peak hour, the value of “V” shall be substituted for the value of the sum of “V.1” and “V.3” for that peak hour.

5. For the purposes of determining “V.3”, a volume of electricity shall only be included if the IESO is satisfied that,

i. the volume of electricity is not compensated electricity, and

ii. the requirements of clause 10.13 (1) (d) have been met throughout the applicable base period.

6. For the purposes of determining “V.3”, the IESO shall rely on,

i. the information set out in the applicable eligible purchase agreements provided to the IESO by the Class A market participant, and

ii. such other documents and information as the IESO may require under paragraph 5 of subsection 10.10 (1) for the purposes of this subsection.

6. (1) The definition of “X.1” in subsection 11 (5.1) of the Regulation is amended by striking out “conveyed” and substituting “physically supplied”.

(2) Paragraph 1 of subsection 11 (5.2) of the Regulation is revoked and the following substituted:

1. If the value of “X.1” is greater than the value of “X” for a peak hour, the value of “X” shall be substituted for the value of “X.1” for that peak hour.

7. (1) The definition of “LL.1” in subsection 14 (5.1) of the Regulation is amended by striking out “conveyed” and substituting “physically supplied”.

(2) Paragraph 1 of subsection 14 (5.2) of the Regulation is revoked and the following substituted:

1. If the value of “LL.1” is greater than the value of “LL” during a peak hour, the value of “LL” shall be substituted for the value of “LL.1” for that peak hour.

Commencement

8. This Regulation comes into force on the later of July 1, 2025 and the day this Regulation is filed.