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 regard to the procurement of electricity resources to ensure the reliable operation of Ontario’s electricity system in response to ongoing and growing electricity needs expected in the future, as follows:

Background

After more than a decade of stable electricity supply, and at times, a surplus, the IESO has forecasted that Ontario will see electricity needs emerging in 2029 and growing through the 2030s. Amongst other drivers, this is a result of increased demand due to expanding electrification, population growth, increasing business investment in the province and expiring electricity supply and capacity contracts.

Fulfilling the forecasted supply need requires the IESO to procure electricity products and services from a diverse set of both existing and new electricity resources.

The government is committed to a procurement framework that ensures Ontario has an affordable, reliable and clean electricity system. This is achieved when resources are procured largely through competitive processes and in a transparent and cost-effective manner.

The IESO’s Resource Adequacy Framework sets out a long-term strategy to acquire products and services from resources while balancing ratepayer and supplier risks and recognizing the unique characteristics and contributions of different electricity resource types.

The framework consists of competitive procurement mechanisms, as well as special programs and bilateral negotiations with resource providers that are essential to meeting reliability needs while also meeting broader government objectives.

Long Lead-Time Request for Proposals (LLT RFP)

In a November 2024 Directive to IESO, I asked IESO to report back with a design for a long-lead resource procurement and indicated that the government would work with IESO to launch the procurement by the end of 2025. These resources are deemed not well-suited to competing against resources with shorter development timelines and lifespans (e.g., wind, solar and inverter-based battery energy storage systems) but are able to offer unique benefits to Ontario’s electricity system through resource diversification.

Having duly considered the IESO’s report back on the design of the LLT RFP, received on August 29, 2025, I have decided to direct the IESO to launch the LLT RFP with separate procurements for energy and capacity resources.

This LLT RFP will include a requirement that each proponent report to the IESO on a breakdown of the Total Project Supply Chain Costs that are expected to be sourced from Canadian Suppliers. This report will be in the form of a Supply Chain Disclosure Plan (SCDP). In their SCDP, proponents will be required to report the percentage of their Total Project Supply Chain Costs that are expected to be sourced from Canadian Suppliers, and to provide an explanation for why any particular goods or services not expected to be sourced from Canadian Suppliers could not or would not be sourced from Canadian Suppliers.

Proponents will additionally receive an evaluation incentive if they commit to sourcing a minimum percentage of the total cost of their Construction Materials and Construction Labour from Canadian Materials and Canadian Construction Labour Suppliers. Proponents who seek this incentive will be required to specify their minimum sourcing percentage commitment in their bid, and to submit an attestation at commercial operation indicating that at least the committed minimum sourcing percentage was achieved.

These measures will help promote the government’s commitment to protect Ontario by ensuring that in the face of U.S. tariffs and economic uncertainty, ratepayer and taxpayer dollars from our energy resource procurements support Ontario and Canadian workers and use Ontario and Canadian products like steel, lumber, and other products wherever possible.

On May 3, 2018, Ontario entered into an agreement (SNGRDC Agreement) with Six Nations of the Grand River and Six Nations of the Grand River Development Corporation (SNGRDC). Under the SNGRDC Agreement, Ontario agreed to set aside 300 megawatts (MW) of grid connection capacity in certain locations until January 1, 2034 (SNGRDC Set Aside) for new renewable energy projects participating in future energy procurements where those projects are owned by, or have majority equity interest from, the SNGRDC.

To comply with the SNGRDC Agreement, the LLT RFP will reserve grid connection capacity on the 230kV circuits that connect to the Nanticoke Transformer Station and/or the Niagara Reinforcement Line between Allanburg Transformer Station and Middle Port Transformer Station (SNGRDC Set Aside Locations), up to the remaining balance of the SNGRDC Set Aside, for new renewable energy projects participating in the LLT RFP or future renewable energy procurements where those projects are owned by, or have majority equity interest from, the SNGRDC. For greater clarity, any SNGRDC Set Aside allocated under an LLT Contract will reduce the amount of the SNGRDC Set Aside (under this Directive and under the SNGRDC Agreement) accordingly, and any SNGRDC Set Aside not so allocated will be carried forward for future renewable energy procurements until January 1, 2034.

The government recognizes that further actions will be required beyond those outlined in this Directive. The IESO and the Ministry of Energy and Mines (Ministry) will continue to work together to ensure Ontario’s electricity system continues to be ready to meet the needs of Ontario’s residents and businesses.

Directive

Therefore, in accordance with the authority under section 25.32 of the Electricity Act, 1998, the IESO is hereby directed as follows:

  1. The Long Lead-Time Requests for Proposals (LLT RFP)
    1. The IESO shall undertake a procurement initiative, known as the Long Lead-Time Request for Proposals, which shall be structured to include distinct energy and capacity procurements (each under separate requests for proposals) to ensure eligible resources enter the electricity system to meet system needs identified by the IESO’s electricity system planning documents.
    2. The IESO shall enter into procurement contracts with successful LLT RFP proponents for the acquisition of energy and capacity from eligible facilities that are able to commit to the commercial operation dates set out below, subject to the appropriate contractual provisions and adjustments, in order to meet system needs identified by the IESO’s electricity system planning documents.
    3. The IESO shall endeavour to launch the LLT RFP by issuing the final procurement documents no later than April 30, 2026. At such time, the IESO shall outline the expected timing of each of the two procurements and expected contract award milestones, which timing (and any deadlines within each procurement) may be extended or abridged by the IESO as it deems necessary and appropriate. The IESO shall endeavour to conclude both procurements constituting the LLT RFP by offering the last contracts on or before June 30, 2027.

    4. The IESO shall set the expected targets for each procurement such that:

      1. The energy procurement will target the production of up to 1 terawatt-hour (TWh) of total annual generation through the execution of contracts with eligible energy-producing resources; and
      2. The capacity procurement will target up to 800 MW of total capacity through the execution of contracts with eligible capacity resources.

      However, the IESO may execute contracts with eligible energy and capacity resources totalling more than the respective total procurement targets set out above, if such resources are cost-effective.

    5. The final LLT RFP procurement documents (LLT Documents) and associated procurement contracts (LLT Contract) shall reflect the following requirements:
      1. The LLT RFP procurements shall only be open to projects that have development timelines that can reasonably be expected to be 5 years or longer from the date of contract execution, subject to the appropriate contractual provisions and adjustments, and that can meet the mandatory criteria established by IESO as described below.
      2. The LLT RFP shall only be open to projects employing the following resource types:
        1. For the energy procurement, only new hydroelectric projects, other than pumped hydroelectric storage.
        2. For the capacity procurement, only new long duration (8 hours or more) energy storage projects, including pumped hydroelectric storage.
      3. To meet system needs identified by the IESO’s electricity system planning documents, the mandatory criteria established by IESO shall include, subject to appropriate contractual provisions and adjustments:
        1. An expected commercial operation date of no later than May 1, 2035; and
        2. A contract that will expire 40 years after the commercial operation date (unless terminated earlier in accordance with the LLT Contract).
      4. The IESO shall ensure that the LLT RFP takes into account the impact on electricity affordability for consumers while supporting reliability. This includes but is not limited to:
        1. For the LLT RFP energy procurement, utilizing an energy style contract and a revenue model that is substantially in the form of the contract and revenue model used in the Long-Term 2 energy procurement, referred to as the Enhanced Power Purchase Agreement form of contract, subject to appropriate adjustments; and
        2. For the LLT RFP capacity procurement, utilizing a capacity style contract and a revenue model that is substantially in the form of the contract and revenue model used in the Long-Term 2 capacity procurement, subject to appropriate adjustments.
      5. The IESO shall require each proponent to:
        1. Provide to the IESO, at the time when their project proposal is submitted, a SCDP;
        2. Include in their SCDP:
          1. A breakdown of the proponent's Total Project Supply Chain Costs, based on whether the goods (including Construction Materials) and services (including Construction Labour) are expected to be sourced from Canadian Suppliers.
          2. A reporting of the percentage of their Total Project Supply Chain Costs that are expected to be sourced from Canadian Suppliers, and an explanation for why any particular goods or services not expected to be sourced from Canadian Suppliers could not, or would not, be sourced from Canadian Suppliers.
      6. For greater clarity, for purposes of the SCDP:
        1. Despite the definition of “Canadian Supplier” in s. 6, goods will only be considered to be supplied by a Canadian Supplier if they have been or will be manufactured within Canada. For greater clarity, goods manufactured in Canada from components sourced from outside of Canada will be considered to be supplied by a Canadian Supplier.
        2. Services will only be considered to be provided by a Canadian Supplier if:
          1. all of the natural persons physically performing the particular services are performing the services in Canada and are ordinarily resident in Canada; or
          2. the supplier satisfies the definition of “Canadian Supplier in s. 6.
      7. The IESO shall require each proponent that enters into an LLT Contract to consent to the IESO sharing the proponent’s SCDP Package with the government of Ontario, subject to the government of Ontario first agreeing to the confidentiality and disclosure terms that apply to the IESO as outlined in paragraph h. below (with necessary changes).
      8. The SCDP Package shall be considered Confidential Information (as defined in the LLT Contract.
      9. Where the Project Site is proposed to be located in one or more local municipalities, the IESO shall require the proponent to provide to the IESO, at the time when the project proposal is submitted to the IESO, a written resolution from the municipal council of each of those local municipalities that provides that the municipal council supports the submission of a proposal in respect of the project for the purpose of the LLT RFP (Municipal Support Resolution). This requirement is solely for purposes of the LLT RFP proposal submission, and is separate from and in addition to the proponent complying with, and the project being in compliance with, all applicable provincial and municipal laws and regulations (including obtaining all necessary municipal permits and regulatory approvals), whose associated requirements and deadlines remain unaffected by this Directive.
      10. Where the Project Site is proposed to be located outside of any local municipality and on public land managed by the Ministry of Natural Resources (MNR), the IESO shall require the proponent to obtain and provide to the IESO, at the time when the project proposal is submitted to the IESO, MNR’s written confirmation of completeness of the proponent’s Crown Land Site Report, or any document identified by the MNR as replacing the Crown Land Site Report. Please note that the beds of most lakes and rivers are public land managed by the MNR.
      11. Where the Project Site is proposed to be located both within one or more local municipalities and on public land managed by the MNR, the requirements set out in paragraph i. and j. above shall both apply.
      12. The following restrictions shall apply to the siting of projects for the LLT RFP:
        1. The Project Site for otherwise eligible projects may not be located, in whole or in part, in a speciality crop area, as defined in the Provincial Planning Statement, 2024 issued under section 3 of the Planning Act.
        2. The Project Site for otherwise eligible projects may not be located, in whole or in part, on lands in a local municipality that are designated in an official plan of that local municipality or a northern planning board as a prime agricultural area, as defined in the Provincial Planning Statement, 2024 issued under s. 3 of the Planning Act (Prime Agricultural Area), unless the proponent provides to the IESO, at the time when the project proposal is submitted to the IESO, a written confirmation from such local municipality that the proponent has evaluated alternative locations, to the satisfaction of such local municipalities or northern planning board.
        3. Successful proponents whose projects will be located, in whole or in part, in a Prime Agricultural Area of a local municipality or municipalities must also complete an Agricultural Impact Assessment to the satisfaction of such local municipality or municipalities prior to commencing construction.
      13. The evaluation provisions of the LLT RFP shall consider appropriate incentives, including but not limited to:
        1. Recognition for proponents that have and retain certain levels of Economic Interest (as defined in the LLT Documents) by an Indigenous Community or Indigenous Communities (as defined in the LLT Documents); and
        2. Additional recognition for proponents contemplated in paragraph 5. m. i. whose projects are proposed to be sited:
          1. On the Indigenous Lands (as defined in the LLT Documents) of the participating Indigenous Community or Indigenous Communities (as defined in the LLT Documents), or
          2. Within the treaty area, or the established or asserted traditional territory or homeland, of the participating Indigenous Community or Indigenous Communities, provided that such proposed siting is confirmed by an attestation from a natural person with authority to bind each applicable Indigenous Community in this regard and the attestation is submitted with the project proposal.
      14. The evaluation provisions of the LLT RFP shall also provide appropriate incentives for proponents that commit to sourcing a minimum percentage of the total cost of their Construction Materials and Construction Labour from Canadian Materials and Canadian Construction Labour Suppliers. The incentive shall be in the form of an evaluation discount, being a percentage reduction in the proponent’s bid price that is applied solely in evaluating their bid against other bids (and not to reduce the price they would be paid). The evaluation discount shall be 1% where a proponent commits to sourcing at least 60%, and the evaluation discount percentage shall increase on a graduated basis to a maximum 3% where a proponent commits to sourcing 100%. Where such an incentive is sought by a proponent, the proponent shall be required to: (i) specify its minimum sourcing percentage commitment in its proposal, and (ii) submit an attestation to the IESO at the time the project reaches commercial operation, confirming that at the committed minimum sourcing percentage was achieved.
      15. Where a project is proposed to be sited on Indigenous Lands (as defined in the LLT Documents), the IESO shall require the proponent to demonstrate support for the proposed project from the Indigenous Community (as defined in the LLT Documents) with authority over the applicable lands.
      16. For project resource types that are not subject to a provincial environmental approvals framework that the Crown may rely on to fulfill its Duty to Consult, the Ministry will determine where consultation with Indigenous communities would be appropriate. For any permits or approvals issued by another ministry, that ministry will determine whether the Duty to Consult and, where appropriate, to accommodate Indigenous communities may arise. The LLT Contract shall require, with respect to applicable projects, that:
        1. Where the Ministry has determined that consultation on a project would be appropriate in the circumstances described above, the proponent provide to the IESO, prior to commencing such project phase as may be specified by the Ministry and communicated by the IESO to the proponent, written confirmation from the Ministry that any procedural aspects of consultation delegated to the proponent have been undertaken to the satisfaction of the Ministry, or
        2. Where the Ministry has determined that consultation on a project would not be appropriate, the proponent provide, to the IESO, written confirmation from the Ministry that it has made such determination.
      17. The IESO shall reserve grid connection capacity on the SNGRDC Set Aside Locations, up to the remaining balance of the SNGRSC Set Aside, for any new hydroelectric generation projects (other than pumped hydroelectric storage projects) participating in the LLT RFP that are owned by, or have majority equity interest from, SNGRDC (SNGRDC LLT RFP Projects), as applicable under the SNGRDC Agreement. This SNGRDC Set Aside capacity can be allocated by the IESO to one or more SNGRDC LLT RFP Projects provided they meet all procurement requirements, and any such allocation under an LLT Contract shall reduce the amount of the SNGRDC Set Aside (under this Directive and under the SNGRDC Agreement) accordingly. Any SNGRDC Set Aside not so allocated shall be carried forward for future renewable procurements until January 1, 2034.
    6. In this Directive, the following terms shall have the following meanings:
      1. “Canadian Construction Labour Supplier” means a person or entity that:
        1. Is a Canadian Supplier, and
        2. Provides Construction Labour using only employees and/or contractors that are ordinarily resident in Canada.
      2. "Canadian Materials” means Construction Materials that have both:
        1. Undergone their initial transformation from raw materials into basic industrial forms within Canada, and
        2. Undergone their fabrication within Canada by taking those basic industrial forms and turning them into specific components.
      3. “Canadian Supplier” means a person or entity that meets the following requirements (as applicable):
        1. In the case of a natural person, the person is ordinarily resident in Canada;
        2. In the case of an entity that is neither a natural person nor Controlled by any other Person (as “Control” and “Person” are defined in the Contract), the headquarters or main office of the entity is located in Canada; or
        3. In the case of an entity that is not a natural person and is Controlled by another Person (as “Control” and “Person” are defined in the Contract), the Person that ultimately Controls the entity meets the requirements described in sub-clause i. or ii. above, as applicable.
      4. “Construction Labour” means the fully burdened labour costs associated with on-site project engineering, site and land preparation, physical construction (including building construction), and equipment installation, but does not include any labour associated with any off-site work.
      5. “Construction Materials” means any structural materials used on the Project Site (as defined in the LLT Documents) that are comprised of steel or aluminum.
      6. “Project Site” has the meaning given to that term in the LLT Documents.
      7. “SCDP” means the report that each LLT RFP proponent will be required to provide to the IESO under this Directive with respect to the Total Project Supply Chain Costs for their project.
      8. “SCDP Package” means the SCDP and any attestation required under clause 5 n. above.
      9. “Total Project Supply Chain Costs” means the capital costs for goods (including Construction Materials) and services (including Construction Labour) reasonably expected to be used for the purposes of developing a LLT RFP project up to commercial operation.

General

This Directive takes effect on the date it is issued.

Order in Council 619/2026