Minister’s directive

I, Greg Rickford, Minister of Energy, Northern Development and Mines (“Minister”), with the support of Bill Walker, Associate Minister of Energy, hereby direct the Independent Electricity System Operator (“IESO”) pursuant to section 25.32 of the Electricity Act, 1998 (the “Act”) in regards to the wind down of the Hydroelectric Contract Initiative (“HCI”) program, which was undertaken by the IESO in accordance with the May 7, 2009 Direction, as follows:

Background

Our Government has made the shift away from signing contracts for electricity that Ontario does not need at prices that Ontarians cannot afford. We are committed to ensuring the reliability of Ontario’s electricity system, while not adding unnecessary costs to the electricity bills of Ontario ratepayers.

The HCI program is the IESO’s last active electricity generation procurement program. The HCI program allowed existing hydroelectric facilities without electricity contracts to obtain 20-year contracts, as well as those facilities which may have already operated for a number of years and wanted to continue their operations.

As of 2018, approximately 94 per cent of Ontario’s electricity was generated from emissions-free sources and the IESO has sufficient options to satisfy electricity demand needs for the near term. While there will be a need for new capacity in the future, we believe that this need can be met through existing and available resources.

In June 2020, the IESO will run its first Capacity Auction to enable competition between additional resource types to meet Ontario’s near-term capacity needs, in a cost-effective manner. Hydroelectric facilities that are no longer under contract would be eligible to participate in IESO Capacity Auctions going forward provided that they meet all eligibility requirements. This approach will also allow the IESO to transparently adjust to changing system capacity needs as they emerge.

Directive

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

  1. To immediately cease accepting applications and to cease any negotiations currently underway with respect to the HCI program and to begin taking all steps necessary to discontinue and wind-down the HCI program on a go forward basis.
  2. To take all other steps which are necessary or desirable in order to facilitate the full and complete implementation of this Directive, on or before March 1st, 2020.

This Directive does not affect the rights and obligations of the parties to the contracts already entered into under the HCI program.

This Directive takes effect on the date it is issued.

Order in Council 231/2020