Minister’s Directive

To: The Ontario Energy Board

I, Stephen Lecce, Minister of Energy and Mines, hereby direct the Ontario Energy Board (“OEB” or “Board”) pursuant to section 25.30(2) of the Electricity Act, 1998 with regard to the implementation of the integrated energy plan entitled Energy for Generations: Ontario’s Integrated Plan to Power the Strongest Economy in the G7, in respect of matters falling within the Board’s jurisdiction, as follows:

Background

The Ontario government is focused on ensuring the province has the energy it needs to power a more competitive, self-reliant and resilient economy – energy that is affordable, secure, reliable and clean.

Over the next 25 years, Ontario’s electricity demand is expected to increase by 75 per cent or more - driven by strong economic growth, the electrification of transportation and industry and a population forecasted to increase to nearly 21 million people. At the same time, demand for other energy sources – including natural gas – remains strong, while emerging fuels like hydrogen and renewable natural gas will play a growing role as the province builds a more diverse energy system.

To stay competitive in a rapidly changing global economy, Ontario must ensure its entire energy system is focused on meeting growing demand – across all energy sources and sectors. This means building out infrastructure, attracting investment and streamlining regulatory approvals. It will also require the end of siloed planning – Ontario’s energy system must plan and operate as one.

Over the past seven years, Ontario has taken decisive action to restore energy affordability, stability, and predictability. This is the result of an approach that leverages a diverse mix of sources to power homes, businesses, and industries across the province. It is also informed by a series of major reports, including: Pathways to Decarbonization, Powering Ontario’s Growth, and the Electrification and Energy Transition Panel’s final report – Ontario’s Clean Energy Opportunity – that have laid the groundwork for a more coordinated and integrated energy future.

In fall 2024, the government introduced Ontario’s Affordable Energy Future: The Pressing Case for More Power, a vision paper on how the province could undertake a more integrated approach to energy planning, ensure Ontario can meet its growing energy needs, and advance economic growth while reducing emissions. That vision was enacted through the Affordable Energy Act, 2024 which amended the Electricity Act, 1998 to bring electricity and other fuels under a single, integrated planning framework.

Ontario’s first Integrated Energy Plan (“Plan”) – Energy for Generations: Ontario’s Integrated Plan to Power the Strongest Economy in the G7 – responds to that legislative mandate. It outlines the province’s long-term strategy to align energy system development with economic growth, affordability and energy security. The OEB will play an important role in the successful implementation of many of the actions identified in the Plan.

Pursuant to the actions identified in Energy for Generations, the OEB is being asked to implement initiatives in the Plan that support planning for growth, more integrated and streamlined system planning and approvals processes, appropriate consideration of the future role of natural gas in Ontario’s economy, and greater participation in the energy system, including enabling the cost-effective deployment of distributed energy resources. The OEB will be directed to report back on findings over the short-to-medium term to help advance next steps.

Directive

Therefore, pursuant to section 25.30(2) of the Act, and pursuant to section 35 of the Ontario Energy Board Act, 1998, the OEB is hereby directed as follows:

Planning for Growth

With respect to the Government of Ontario’s objective of planning for growth and electrification, the OEB shall:

  1. Take the following steps to establish an ongoing gas-electric coordination information sharing forum in support of integrated energy planning:
    1. Set the framework for an ongoing forum to facilitate sharing of technical information and data and other co-ordination to support energy planning processes.
      • Through this forum, the OEB shall set expectations for information sharing, including supporting information sharing in the short-term and establishing the use of consistent assumptions and scenarios in the medium-term.
      • The OEB shall encourage and, where the OEB deems appropriate, require key energy planners and energy-related planners at the local, regional and bulk level to participate in the forum. Key energy planners and energy-related planners include the IESO, electricity and natural gas transmitters and distributors, municipalities, Indigenous communities, transportation planners and urban planners.
      • For information shared by the forum, the OEB, in consultation with energy and energy-related planners, shall establish a clear approach for transferring and accessing data. This could include general best practices for file formats; procedures; consideration of confidentiality, for example clarifying what information should be shared with which entities and whether information should be public or non-disclosure agreements are needed; and potentially working towards harmonization of software.
    2. Initiate the forum no later than January 31, 2026 and report back on the progress, outcomes and modelling best practices of the information sharing forum by September 30, 2026.
      • The subsequent frequency, format and parameters of meetings shall be set by the OEB given the diverse planning needs of the participants. Further expectations on reporting will be communicated through future Letters of Direction, as needed.
      • For clarity, meetings of the forum or its subcommittees may satisfy other stakeholder engagement requirements, where the OEB deems appropriate.
  2. Take the following steps to ensure planning is informed by multiple demand scenarios and best practices in modelling:
    1. The OEB shall set the expectation for natural gas and electricity distributors to begin incorporating multiple demand scenarios for their planning frameworks and processes by June 30, 2026 on a best effort basis. The OEB shall encourage and, where it deems appropriate, require this for relevant applications filed after April 1, 2027. This shall include, at a minimum:
      • A reference case that reflects current trends and policies in electrification of transportation, industry, and other areas that impact electricity and natural gas, along with both high and low demand scenarios that reflect reasonable incremental increases or decreases in demand with appropriate and substantiated assumptions.
      • Qualitative and quantitative risk and uncertainty assessments, as appropriate, for each of the scenarios.
      • For clarity, where existing modelling of scenarios already meet or exceed the above requirements, no additional action is required.
      • For clarity, natural gas and electricity distributors may use modelling done by others to satisfy the requirement to assess multiple scenarios.
    2. Encourage and, where the OEB deems appropriate, require natural gas and electricity distributors to implement or continue the following in their planning frameworks and processes for relevant applications filed after April 1, 2027, and set the expectation for utilities to begin incorporating this requirement by June 30, 2026 on a best effort basis, as the OEB deems relevant:
      • Incorporate economic growth projections, including employment, population and housing.
      • Incorporate cost projections for future investments that reflect reasonable assumptions for cost trends, where appropriate.
      • Consider frequent and extreme weather impacts on energy infrastructure resilience and ensure future average, minimum and maximum temperatures are incorporated into demand modelling.
      • Where pertinent and practical, if a system investment, policy, or program is intended to facilitate fuel switching, consider costs and benefits across impacted energy systems.
  3. Encourage and, where the OEB deems appropriate, require, both rate-regulated natural gas distributors (EPCOR and Enbridge) and non-rate-regulated natural gas distributors (Kingston and Kitchener) to participate in the electricity system planning processes where study regions overlap with their service territories.
  4. Take the following steps to update the regional and bulk planning process to be more responsive to the pace of electricity demand growth, especially in high growth regions:
    1. Identify and, as OEB deems necessary, undertake steps to support process improvements to the regional and bulk planning process as set out in items 4.1, 4.2, 4.3 and 4.4 in the Minister's Directive to the IESO dated June 11, 2025 to better match the pace of demand growth.
    2. Identify and, as OEB deems necessary, undertake steps to require electricity distributors to provide their latest demand forecasts and any information pertaining to new demand growth to support regional planning each time the Technical Working Group meets. For clarity, this item supports item 4.2 in the Minister's Directive to the IESO dated June 11, 2025.
    3. Undertake a review, informed by the IESO, of the regional and bulk planning process to identify other enhancements that can be made to match the pace of load growth, including recommendations for:
      • More closely aligning the regional and bulk planning process with load growth, and how load forecasts are determined for the purpose of identifying solutions and recommending system upgrades;
      • Ways to achieve time savings and to ensure recommendations are responsive to major needs that emerge during a planning cycle, including ways to increase flexibility in the process; and
      • Whether to formalize the bulk planning process consistent with the formalization of the regional planning process while ensuring flexibility to allow for time savings and responsiveness in the planning process.
    4. Report back to the Ministry of Energy and Mines (“Ministry”) on the above review of the regional and bulk planning process, including recommendations for any actions by the OEB (for example, proposed amendments to licences) or the Ministry to implement these improvements, by March 31, 2026.

Streamlined Processes

With respect to the Government of Ontario’s objective of streamlining processes, the OEB shall:

  1. In support of the rapid development of energy and capacity projects that are critical to broader government objectives, report back by December 31, 2025 on opportunities to streamline OEB-led processes.
  2. In support of a more efficient grid-connection process for load customers, conduct a review of transmitter connection procedures and report back by December 31, 2025 on the reasonableness of timelines for steps within the connection procedures and opportunities to streamline and reduce overall connection timelines, including efficient coordination between transmitters and IESO, with consideration for potential transmitter performance standards.
  3. Building on the work the OEB conducted to support the development of Electric Vehicle Charging Connections Procedures, conduct a review of other electricity distributor connection procedures and report back by December 31, 2025 on the reasonableness and timeliness of LDC procedures to connect customers, and opportunities to streamline processes.
  4. Assess, in consultation with the IESO where appropriate, how best to provide additional clarity to customers and transmitters on transmission asset classification (e.g. network versus connection) for transmission projects, including those that are identified in regional or bulk plans and provide such guidance as the OEB deems appropriate.

Natural Gas Policy Statement

With respect to the Government of Ontario’s objective of providing clarity on the future role of natural gas, the OEB shall:

  1. Consider the government’s Natural Gas Policy Statement to ensure the OEB appropriately considers the future role of natural gas in Ontario’s economy. There is a need for an economically viable natural gas network – as the province builds a more diverse energy system – to attract industrial investment, to drive economic growth, to maintain customer choice and ensure overall energy system resiliency, reliability and affordability.

Emerging Energy Resources

With respect to the Government of Ontario’s objective that the evolving energy landscape be well regulated, the OEB shall:

  1. Report back by October 31, 2026 on the scope, timing and resourcing considerations for potential expansion of the OEB’s mandate to reflect the evolving energy landscape. The report should consider the overall suitability and potential challenges of a mandate expansion that addresses the specific opportunities of:
    • Pipeline distribution of 100% gaseous hydrogen as an energy resource.
    • Carbon dioxide pipelines.
    • District energy systems.
    • Rate regulation for long-life electricity projects, such as pumped storage and other long-duration storage technologies, beyond those already prescribed by regulation.

Distributed Energy Resources

With respect to the Government of Ontario’s objective of making energy affordable and empowering customers to participate in the energy system through distributed energy resources (DER), the OEB shall:

  1. Review the valuation of DER, in consultation with the IESO, as appropriate, to identify recommendations or provide an update on actions by the OEB regarding the overall regulatory and compensation frameworks to appropriately reflect the system value of DER. This report back should be completed by March 31, 2026 and could include, but is not limited to, consideration of:
    • Compensation mechanisms that reflect the value of DER (e.g., value of DER (VDER) tariff, adders to reflect differences in regional and temporal value).
    • Demand/delivery charges for resources that provide grid services (e.g., DER and storage).
    • Procurement and program mechanisms that support cost-effective DER deployment at local and bulk levels.
  1. Consult with the IESO, as appropriate, to identify roles and responsibilities for implementing DER valuation recommendations and explore opportunities for electricity distributor-led DER procurements. This report back should be completed by June 30, 2026.
  2. Explore further opportunities to enable electricity distributors to recover investments in DER and non-wires solutions across electricity distributor boundaries where these investments yield broader benefits, in alignment with the DER valuation review noted above.
  3. By June 30, 2026, ensure planning processes adequately consider cost-effective DER deployment, in consultation with the IESO as appropriate, through the following:
    1. Lead the review of local and regional planning processes to ensure DER are considered as viable options to meet needs.
    2. Consult with the IESO, who will lead the review of bulk system planning processes, to ensure alignment and consistent DER consideration across all planning levels.
    3. Based on the outcomes of the above review, identify through the planning processes areas that would benefit from targeted DER deployment (e.g., areas with high growth, distribution system constraints, or reliability issues).
  4. Continue the effort to update DER connections processes by December 31, 2025 with consideration of the following objectives (among others):
    • Improve transparency on connection data and costs.
    • Improve DER connection timelines and connection costs, including the potential for simplified reviews and standardized fees for small projects.
    • Provide clearer guidance for electricity distributors on making upgrades to distribution infrastructure in areas with restricted hosting capacity for DER connections.
    • Establish clearer process for electricity distributors to work with DER developers to consider innovative solutions to address DER hosting capacity constraints (e.g., flexible hosting capacity arrangements).
  5. Enhance data sharing practices between IESO, electricity distributors, and DER providers in a phased approach, which would consider the following:
    1. Establish standard data collection and sharing protocols for DER data (such as the type of installation, location, capacity, energy generated) to inform cost-effective DER deployment, including but not limited to, system planning, forecasting, valuation, developer investments, and customer uptake by June 30, 2026.
    2. OEB should incorporate, as the OEB considers appropriate, IESO’s report back (expected by March 31, 2026) on high priority, near-term operational and planning related data sharing needs and IESO’s plan for data sharing within the IESO’s Enabling Resources Program.
    3. Continue to advance the OEB’s ongoing work on distribution system capacity mapping to include the development of a consolidated provincial mapping platform across electricity distributors that, by December 31, 2025, describes both available capacity to accommodate new customer loads as well as hosting capacity to integrate new generating facilities.
    4. Based on outcomes of the above work, the OEB should consider a future expansion of the consolidated mapping platform to a centralized DER data hub and consider approaches to share electricity distributor interconnection queue data.
  6. Define a roadmap by December 31, 2025 for the potential development and implementation of Distribution System Operator (DSO) capabilities, commensurate with need, value, and the flexibility to adapt to evolving circumstances.
  7. By December 31, 2025, explore and, where appropriate, move expeditiously to provide enhanced guidance to electricity distributors on incentive mechanisms for the use of DER as NWS.

  8. Work with the Ministry and IESO to drive, through new and ongoing initiatives, prudent electricity distribution grid modernization that improves operational efficiencies, affordability and cost-effectiveness, increases reliability, cyber security and resilience to severe weather events, and supports increasing electricity demand on the distribution grid. The goal of this work is to facilitate electricity distributor investment in new cost-effective technology that benefit customers and modernize the operation of the distribution grid, so that the sector could be better positioned to explore new and innovative ways to deliver on their mandate and broader government priorities.

    General

This Directive takes effect on the date it is issued.

Order in Council 802/2025