Minister’s Directive

To: The Independent Electricity System Operator

I, Stephen Lecce, Minister of Energy and Mines, hereby direct the Independent Electricity System Operator (“IESO”), pursuant to sections 25.4, 25.30(1), and 25.32, of the Electricity Act, 1998 in relation to reporting and advising on matters respecting electricity, implementing the integrated energy plan, and undertaking initiatives or activities related to electricity supply or capacity by the IESO, 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 IESO will play an important role in the successful implementation of many of the actions identified in this Plan.

Pursuant to the actions identified in Energy for Generations, the IESO is being asked to implement initiatives in the Plan that support planning for growth, more integrated and streamlined system planning and approvals processes, greater participation in the energy system, enable distributed energy resources, enhance the transmission and generation systems, and increase opportunities for electricity exports. The IESO will be directed to report back on findings over the short-to-medium term to help advance next steps.

Directive

Therefore, pursuant to sections 25.4, 25.30(1), and 25.32, of the Electricity Act, 1998, the IESO is hereby directed as follows:

Planning for Growth

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

  1. Incorporate the following direction for key planning documents, including the Annual Planning Outlook, Integrated Regional Resource Plans, and other planning documents, frameworks and processes that IESO deems appropriate:
    1. Have multiple electricity demand scenarios modelled, including at a minimum the following:

      • In addition to a reference case which reflects current trends and policies in electrification of transportation, space heating, industry, and other areas that impact electricity:

        - A high electricity demand scenario, that reflects a reasonable incremental increase in the foregoing trends.

        - A low electricity demand scenario, that reflects a reasonable incremental decrease in the foregoing trends.

      • Include qualitative and quantitative risk and uncertainty assessments, as appropriate, for each of the scenarios.
      • Discuss appropriate and substantiated assumptions associated with these scenarios for the Annual Planning Outlook, and high-level assumptions for other planning documents that IESO deems appropriate, with stakeholders and the Ministry of Energy and Mines (“Ministry”) before the assumptions are finalized.
      • For the Annual Planning Outlook, every 5 years, or more frequently, at the IESO’s discretion, model two less-probable demand scenarios, including analysis of the associated electricity supply and transmission needs, in addition to the high and low electricity demand scenarios described above. This modelling may be done with less granularity than the high and low electricity demand scenarios described above and be presented in a technical document complementary to the Annual Planning Outlook.
    2. Implement or continue to take the following steps to ensure that electricity system planning is informed by best practices:
      • 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 grid resiliency, where data and models are available to do so.
      • Incorporate forecasts of average, maximum and minimum temperatures that account for changing temperatures.
      • Consider overall costs and savings for affected electricity or fuel systems when looking at investments, policies and programs that affect more than one fuel, where pertinent, and make comparisons to least-cost alternatives publicly available, where relevant.
      • Consider the role of major long-lead energy projects and their importance to Ontario’s electricity system and, when relevant, make recommendations on project development timing to ensure resource development aligns with electricity system development or system needs.
    3. The requirements above shall apply where planning for the applicable document, framework or process commences after January 1, 2026. For clarity, in the development of the Annual Planning Outlook, IESO shall continue to consider input from the electricity regional planning process, including forecasts or demand scenarios from electricity local distribution companies.
  2. Participate in an ongoing forum that supports information sharing on integrated energy planning, beginning with gas-electric coordination, convened by the Ontario Energy Board (OEB).
    1. For information shared by and with the forum, the IESO shall support the OEB in establishing a clear approach for transferring and accessing data.
      • For example, the IESO may share non-confidential technical information and assumptions that are relevant to other energy and energy-related planners such as transportation planners and urban planners.
  3. Report back by December 31, 2025 on planned changes to the processes for regional and bulk electricity planning, to ensure a consistent process for meaningful engagement with the following groups within the applicable planning area, as early in the planning process as possible, including consideration of energy plans developed by these groups and with a focus on fostering collaboration throughout the planning process to support timely implementation of projects:
    1. Municipalities, and
    2. Indigenous communities, and regional Indigenous organizations, including recommendations for the provision of capacity support to these groups to participate in planning
  4. Update the regional and bulk planning processes to better match the pace of electricity demand growth, especially in high growth regions, by undertaking the following actions by December 31, 2025 and subsequently update existing planning documentation accordingly:
    1. Develop a process to include engagement with electricity and natural gas distributors as part of the regional and bulk planning process to ensure, at a minimum, the sharing of information that is necessary to more carefully monitor electricity load growth and the timing of system needs.
    2. Formalize the practice of convening Technical Working Groups at least once a year, including in regions not subject to active regional planning. These meetings will, at a minimum, involve information sharing that is necessary to more carefully monitor electricity load growth and the timing of system needs between planning cycles. The IESO shall publish outcomes or decisions from those meetings for public awareness.
    3. Formalize the practice of Annual Major Project Identification Committee (MPIC) meetings, including in regions not subject to active regional or bulk planning. An MPIC should include entities that are attracting, or involved in developing, major load projects that may significantly change system needs in an area. The purpose of the MPIC is to ensure that IESO is considering major load projects at early stages of their development in the forecasts developed for the purpose of regional and bulk planning. The MPIC shall include, but not be limited to, representatives from the Ministry of Economic Development, Job Creation and Trade (and any related agencies and successors including Invest Ontario), Ministry of Municipal Affairs and Housing (and any related agencies and successors), Ministry of Northern Development (and any related agencies and successors), Ministry of Energy and Mines (and any related agencies and successors), local and regional development agencies, local municipalities, Indigenous communities and organizations, and any other entity that IESO deems to hold information and insights that can support their high growth forecasting and scenario development.
    4. Formalize the practice of identifying transmission projects that would be needed to address bottlenecks or capacity constraints that would arise under high growth forecasts.
    5. Inform the OEB-led work to undertake a review of the regional and bulk planning process to identify other enhancements that can be made to match the pace of load growth, as requested in the Minister’s Directive to the OEB dated June 11 , 2025.

Streamlined Processes

With respect to the Government of Ontario’s objective of streamlining processes the IESO 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 energy related IESO-led procurement processes.
  2. Report back on opportunities to streamline and enhance the transparency of the IESO’s connection process, including through establishing clear timing expectations for review of complete applications and consideration of performance standards. The IESO shall report back to the Ministry with proposed improvements, including any necessary amendments to its licence, by December 31, 2025.
  3. Support the OEB in determining 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 work with OEB to implement this guidance, including through changes or additions to existing guidance and documentation, as appropriate.

District Energy Systems

With respect to the Government of Ontario’s objective of expanding district energy systems, the IESO shall:

  1. Identify opportunities within current and upcoming policies, programs, and procurements for new and existing district energy systems that support forecasted electricity system needs.

Indigenous Leadership and Participation

With respect to the Government of Ontario’s objective of creating and further enabling opportunities for Indigenous leadership and participation in the growth of Ontario’s electricity system, the IESO shall:

  1. Work towards ensuring that reasonable capacity funding is available to Indigenous communities and organizations to support their input into the IESO’s procurement design processes and participation in related engagements by:
    1. Reporting back by December 31, 2025, on any planned and / or recently implemented enhancements to support meaningful Indigenous engagement in the design of its procurements, including recommendations for the provision of capacity support to Indigenous communities and regional Indigenous organizations, to participate in procurement design. This can be included as part of the report back on planned enhancements or changes to ensure early and meaningful Indigenous engagement in regional and bulk planning, per item [3] above.

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 IESO shall:

  1. Enable broader DER eligibility in IESO procurements and programs undertaken to meet system reliability needs in consideration of the following:
    • Expanding near-term opportunities for DER, including DER aggregations and distributed storage, in the IESO’s future programs and procurements.
    • Maximizing demand response and leveraging existing DER where cost effective.
  2. Provide support to the OEB’s review of DER valuation by March 31, 2026 that will identify recommendations for the overall regulatory and compensation frameworks to appropriately reflect the value DER provides to the system.
  3. With the OEB’s lead, work with the OEB to identify the responsible parties to implement DER valuation recommendations and explore opportunities for electricity distributor-led DER procurements by June 30, 2026.
  4. By June 30, 2026, ensure planning processes consider cost-effective DER deployment to meet needs through the following:
    1. Lead the review of the bulk system planning process to ensure alignment and consistent DER consideration across all planning levels;
    2. Support OEB’s review of regional and local planning processes to ensure DER are considered as viable options to meet needs;
    3. Based on the outcomes of the above reviews, support the OEB in identifying, through the planning processes, areas that would benefit from targeted DER deployment (e.g., areas with high growth, distribution system constraints, or reliability issues); and
    4. Accompany the next APO with a technical paper to clarify current DER considerations in bulk system planning, existing planning processes and explore future DER treatment to inform updates for subsequent APOs.
  5. Support the OEB’s work to enhance data sharing practices between the IESO, electricity distributors, and DER providers through the following:
    1. By March 31, 2026, the IESO shall report back to the Ministry on opportunities to advance DER data sharing in Ontario. The report should:
      • Identify high priority, near-term operational and planning related data sharing needs and include proposals for how to address them.
      • Articulate a plan for data sharing within the IESO’s Enabling Resources Program.
      • Be informed by input from electricity distributors and other stakeholders, as appropriate.
    2. Support the OEB, as appropriate, in its work to establish standard data collection and sharing protocols for DER data more broadly, beyond those covered by the IESO’s report back noted above, to inform cost-effective DER deployment, including but not limited to, system planning, forecasting, valuation, developer investments, and customer uptake.
    3. Support the OEB, as appropriate, in its work to 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 describes both available capacity to accommodate new customer loads, as well as hosting capacity to integrate new generating facilities.
    4. Based on the outcomes of the above work, support the OEB, as appropriate, in its work to consider a future expansion of the consolidated mapping platform to a centralized DER data hub and consider approaches for sharing electricity distributor interconnection queue data.
  6. By May 31, 2026, work with the Ministry to review the Grid Innovation Fund (GIF) to enhance governance and determine future innovation focused funding, including identifying barriers to the commercialization, market integration and/or community adoption (including Indigenous and remote communities) of DER that could be explored with the support of the GIF.

Transmission

With respect to the Government of Ontario’s objective to develop new transmission infrastructure rapidly and responsibly, the IESO shall:

  1. Continue public, stakeholder and Indigenous engagement on the development of a competitive process for transmitter selection that will apply to certain transmission projects and launch a Transmitter Registry by August 15, 2025 that will pre-register transmitters that may be eligible to participate in future requests for proposals.

With respect to the Government of Ontario’s objective to support rapid growth in electricity demand in downtown Toronto, the IESO shall:

  1. Report back to the Ministry by August 31, 2025 with a preferred option for a new major transmission line into downtown Toronto that will reliably support growth, with minimal impacts on land-use while enhancing supply diversity and system resilience.

Low Carbon Hydrogen Strategy

With respect to the Government of Ontario’s Low-Carbon Hydrogen Strategy and renewal of this Strategy to prioritize economic security and job creation, energy security, and Ontario’s clean energy advantage, the IESO shall:

  1. Report back to the Ministry by September 8, 2025 on recommendations for a Hydrogen Interruptible Rate Pilot (H2 IRP) that builds off the IESO's IRP design for non-hydrogen loads by leveraging a similar rate structure. The report back should also include:
    • Robust analysis and considerations of the pilot cost, benefits and potential risks.
    • Overview of stakeholder interest with intent to participate in the pilot based on updated IESO stakeholder engagement.
    • Recommendations regarding pilot length, including the potential for a mid-term review summarizing key learnings and recommended pilot adjustments for potential new pilot applicants based on the findings.
    • Locational and geographic considerations for high potential hydrogen sites, taking into account system constraints.
    • A capacity recommendation for the pilot considering stakeholder interest and system forecasts.

Northern Hydro Program

With respect to the Government of Ontario’s objective to support the role of the hydroelectric fleet in Ontario’s electricity system, IESO shall:

  1. Undertake the following actions related to hydroelectric facilities:
    1. Launch a procurement initiative, known as the Northern Hydro Program, to provide contracts for existing large hydroelectric facilities whose installed capacity, as determined on a facility-specific basis, is above 10 megawatts, and who either: (i) do not have any existing contracts with the IESO or the Ontario Electricity Financial Corporation (“OEFC”) and who are not “hydroelectric facilities” as defined in O. Reg. 53/05; or (ii) have existing contracts with the IESO or the OEFC that will expire on or before April 30, 2050.
    2. Endeavour to launch the Northern Hydro Program by March 31, 2026, and ensure that all procurement contracts entered into by the IESO under the Northern Hydro Program expire on April 30, 2050.
    3. Subject to appropriate adjustments, ensure the program rules and commercial model for the Northern Hydro Program are substantially similar to the program elements recommended in IESO’s report back dated December 20, 2024, including implementing a contract model consistent with the model developed for the Long-Term 2 Energy Supply Request for Proposals (Window 1)(LT2(e)) and Medium-Term 2 Energy Supply Request for Proposals (MT2(e)), in each case as applicable to hydroelectric facilities and referred to as the Enhanced Power Purchase Agreement (E-PPA).

Nuclear Generation

With respect to the Government of Ontario’s objective of additional nuclear generation, the IESO shall:

  1. Support next steps in the Ontario New Nuclear Feasibility Study and work with Ontario Power Generation and Bruce Power to continue evaluation and early planning for additional nuclear generation in the province, including large-scale reactors and small modular reactors and with Bruce Power explore the feasibility and cost-effectiveness of a second refurbishment of Bruce Units 1 and 2 within the framework of the Amended and Restated Bruce Power Refurbishment Implementation Agreement.
  2. Ensure prospective sites for new nuclear generation are considered in electricity system planning studies, to identify possible future transmission system expansions that would be required to bring those resources into the system.

Export Opportunities

With respect to the Government of Ontario’s objectives to explore the potential for cost-effective opportunities to export non-emitting electricity to Canadian jurisdictions and mutually beneficial trade opportunities, IESOshall:

  1. In coordination with the Ministry, engage with neighbouring Canadian jurisdictions to gauge interest in potential electricity trade opportunities, including firm long-term agreements.
  2. Drawing upon the outcomes and any options identified through engagement, report back by October 31 2025 with an assessment of potential new interconnections with these jurisdictions. The assessment should focus on how Ontario can increase its interprovincial electricity trade capability, including the following considerations:
    • Identify the export and trade opportunities with neighbouring Canadian provinces with the most potential for further detailed investigation, including consideration for anticipated resource adequacy needs.
    • Discuss the scope of investments that are needed to build out Ontario’s electricity system, including generation and transmission infrastructure, to support an expansion of exports and trade capacities.
    • Review the economic, cost and emissions considerations of export and trade opportunities, including a review of best practices from other jurisdictions.
    • Provide any relevant implementation considerations.
  3. Working with the Ministry, continue to assess and monitor potential future cost-effective and beneficial trade opportunities for non-emitting electricity exports into U.S. jurisdictions.

General

This Directive takes effect on the date it is issued.

Order in Council 803/2025