Published plans and annual reports 2023–2024: Ministry of Energy

Ministry overview

Ministry's vision

The Ministry of Energy (ENERGY) is responsible for the provincial energy sector, striving to make Ontario strong, healthy, prosperous, and open for business.

Ministry core commitments and key deliverables

ENERGY sets the legislative and policy framework to ensure all Ontarians have a safe, reliable, clean and affordable energy supply, distribution and transmission, and choices in their energy use. ENERGY develops and advises on all aspects of energy policy for Ontario, including electricity, natural gas, petroleum products and low-carbon fuels.

As Ontario continues to be a top destination for investment and job creation, and our population continues to grow ENERGY works with partners and Indigenous communities to ensure we continue to have cost-effective energy supply, transmission, and distribution systems; to advance innovative solutions and technologies; to promote energy conservation and energy efficiency; and to power the economy so that Ontario remains Open for Business.

At the same time the government is keeping costs down for families by ensuring predictability and affordability when it comes to electricity bills for families, Indigenous communities, farms, and small businesses. As part of this commitment, ENERGY provides electricity rate mitigation to provide direct relief on eligible customers’ electricity bills, in addition to removing the over-market cost of renewable energy contracts.

ENERGY is responsible for Government Business Enterprises whose incomes contribute to the fiscal plan. This reflects contributions from Hydro One Limited and the wholly owned Ontario Power Generation Inc. (OPG). It also oversees the Ontario Energy Board (OEB) and the Independent Electricity System Operator (IESO).

Ministry programs

An affordable, reliable energy system

Following years of excess supply, Ontario’s Independent Electricity System Operator has forecasted an emerging electricity supply need in 2025–26 that grows through the latter part of the decade. This is a result of increased demand due to increasing business investment in the province, expanding electrification and refurbishment schedules at the Bruce and Darlington nuclear facilities, and expiring contracts.

In order to fill this forecasted supply gap, the IESO will need to procure electricity products and services from existing and new resources.

ENERGY 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.

In 2022, the Minister of Energy issued four directives to the IESO on meeting electricity system needs through various resource procurements:

• Competitive Procurements: Electricity resources compete to obtain contracts to supply electricity/provide demand response.
• Bilateral Negotiations and Special Programs: IESO may undertake bilateral negotiations with resources that are deemed as essential to meeting local and regional reliability needs, and resources that are also important to other government policies (e.g., biomass-fired generators in Ontario)
• Unsolicited Proposals: A 3-stage assessment approach for evaluating new unsolicited energy project proposals that aims to balance electricity system benefits and ratepayer cost savings against developer revenue certainty and other requirements for economic feasibility.

In line with these four directives, the IESO successfully:

• Conducted the First Medium-Term Request for Proposals (MT1 RFP),
• Signed bilateral contracts for two biomass-fired generators — Calstock Generating Station (GS), and Chapleau GS,
• Extended the contract for the biomass-fired Thunder Bay Condensing Turbine Facility by six months, and signed a bilateral contract for the 250 MW Oneida Energy Storage Project

In 2022, IESO launched two procurements — the Expedited Process Request for Proposal (RFP) and Same Technology Upgrades Solicitation. The results of these procurements are expected to be announced in Spring 2023. IESO is also finalizing the design for the First Long-Term Request for Proposals (LT1 RFP).

IESO is designing and evaluating potential programs for re-contracting existing hydroelectric facilities, as well as engaging in bilateral negotiations for potentially re-contracting Brighton Beach GS, and three biomass-fired generators including the Thunder Bay Condensing Turbine Facility. Atikokan GS and Hornepayne GS.

Ontario is progressing with refurbishment of four nuclear units at Darlington Nuclear GS and six at Bruce Nuclear GS which are on track to be complete in the next 10 years. In September 2022, the province announced its support for OPG’s plan to safely extend the operation of the Pickering Nuclear GS through September 2026 and asked OPG to update its feasibility assessment for Pickering “B” refurbishment in light of projected increases in electricity needs due to electrification and economic growth.

Ontario is leading the way on the development of next-generation small modular reactors (SMRs) in collaboration with partner provinces (i.e., Saskatchewan, New Brunswick, and Alberta). SMRs will provide clean energy and economic opportunities for Ontario’s nuclear supply chain. In December 2022, Premier Ford and Minister Smith joined OPG to break ground to prepare for the deployment of Canada’s first grid-scale SMR at the Darlington nuclear site before the end of the decade.

In order to ensure an affordable supply of gasoline, diesel and propane, Ontario has supported the continued operation of Enbridge’s Line 5, which is a key artery that connects North American crude oil and natural gas liquids to Ontario. We are continuing to work with the Government of Canada, our provincial partners, U.S. States and Enbridge to ensure that Line 5 remains in operation while Enbridge pursues enhancements (i.e., tunnel project in Michigan and re-route in Wisconsin).

In April 2022, Ontario released its Low-Carbon Hydrogen Strategy which sets out a vision to accelerate the development of a low-carbon hydrogen economy in the province that will create jobs and reduce emissions. The strategy leverages the province’s strengths, including a highly skilled workforce, clean and affordable electricity, existing storage and pipeline infrastructure and an innovative industrial sector that is poised to collaborate on hydrogen.

Electricity price mitigation programs

The government is ensuring a reliable, affordable and clean electricity supply for the province. Eligible consumers can receive support on their electricity bills through the following programs:

• The Ontario Electricity Rebate (OER) is a transparent on-bill rebate, provided to eligible residential, farm and small business consumers. Effective November 1, 2022, the OER is providing eligible consumers with an 11.7% rebate from the province on the subtotal of their electricity bill.
• As of January 1, 2021, large and mid-sized industrial and commercial consumers are automatically benefitting from lower electricity bills. Through the Comprehensive Electricity Plan (CEP), the government is funding the above-market costs associated with more than 33,000 non-hydro renewable energy contracts. In 2023, industrial consumers are forecast to see savings of about 14% on their bills, while mid-sized commercial consumers could see savings of about 17% on their bills. Actual savings depend on location and consumption.
• The government is keeping costs down for eligible rural customers who face higher electricity delivery charges through the Distribution Rate Protection (DRP) and Rural or Remote Electricity Rate Protection (RRRP). These programs provide delivery charge relief for eligible customers of certain prescribed local distribution companies (LDC).
• The Ontario Electricity Support Program (OESP) helps eligible low-income consumers by providing a monthly on-bill credit. Credit amounts range from $35 to $75 per month based on household size and income. Enhanced credit amounts, from $52 to $113 per month, are available for customers who are Indigenous, use electric heat or rely on an approved energy-intensive medical device.
• The Northern Ontario Energy Credit (NOEC) helps eligible low-to-middle-income northern residents manage energy costs. For the 2023 benefit year, qualifying individuals can receive up to $172 annually and qualifying families (including single parents) can receive up to $265 annually.
• The First Nations Delivery Credit (FNDC) provides a 100% credit for delivery or service charges for eligible on-reserve First Nations residential customers of licensed electricity utilities.

Energy development and management programs

Energy conservation programs

Energy conservation helps to cost-effectively meet energy system needs and to make energy bills more affordable for Ontarians. The ministry provides policy guidance or direction and oversees a suite of cost-effective conservation, demand-management/load management and energy efficiency programs — funded by electricity and natural gas ratepayers — which have evolved in the province over the last 30 years.

Electricity conservation and demand management (CDM) programs are delivered by the IESO and funded through the electricity rate base through the Global Adjustment. Natural gas conservation demand side management (DSM) programs are delivered by Enbridge Gas Inc., with oversight of the OEB, and funded through the respective electricity and natural gas ratepayers.

A 2021–2024 electricity CDM Framework is in place.

As part of the government’s plan to meet increasing demand from new investments and population growth, the Minister of Energy issued a Directive to the IESO in September 2022 to, among other things, increase the total Framework budget by $342M, bringing the total to $1.034B, which would enable IESO to launch new and enhanced CDM programs that will help families, Indigenous communities, businesses, and institutions save money by reducing their energy consumption. Once fully implemented, it is estimated that these programs:

• Will deliver a total provincial peak demand reduction of 285 megawatts (MW) and annual energy savings of 1.1 terawatt hours (TWh) by 2025.
• Will deliver regional peak demand savings in Southwest Ontario of 225 MW to alleviate constraints and foster allow for additional economic development.

Separately, the OEB approved in November 2022 Enbridge’s delivery of its suite of DSM programs offered from 2023–2025, with a total three-year budget of $525.5M. This approval will continue programs that provide incentives for residential, business, industrial and institutional customers to increase the energy efficiency of their buildings, equipment, and processes, including incentives for electric heat pumps.

• In 2023, up to 114.06 million m³ of natural gas is expected to be saved by customers, reaching up to approximately 350 million m³ of annual savings over the three-year term.
• This is anticipated to result in the reduction of up 0.21 Mt CO₂e tonnes of greenhouse gas emissions in 2023 and up to approximately 0.66 Mt CO₂e tonnes annually over the three-year term.

Green Button

The government provided families and businesses with more control over their electricity bills by introducing the Energy Data Regulation (O.Reg. 633/21) which requires electricity and natural gas distribution companies in Ontario to implement the Green Button standard and provide energy usage data in Green Button format to their customers by November 1, 2023.

Green Button lets customers download their natural gas and hourly electricity data in a standardized format from their utility and authorize the secure transfer of this data to applications of their choice. These apps can analyze energy data, help identify conservation and energy efficiency opportunities and provide customers with helpful energy-saving tips to reduce their energy bills including personalized retrofit options.

Other conservation and demand management initiatives

The Industrial Conservation Initiative (ICI) allows all electricity consumers with average peak monthly electricity demand over one MW, as well as manufacturers and greenhouses over 500 kilowatts (kW), to lower their electricity costs by reducing their demand during the top five peak hours of the year. The outcome benefits companies financially and benefits the electricity system by deferring the need for new peak generation.

2023–24 Strategic plan

A. Investment in the system

Current and upcoming electricity resource procurements

In 2022, IESO launched two procurements — the Expedited Process RFP and Same Technology Upgrades Solicitation, to acquire new capacity from new-build facilities as well as expansions and upgrades at existing facilities that could come online by 2026. IESO also designed a third procurement — the LT1 RFP, that would, if approved, acquire new capacity from new-build facilities as well as expansions at existing facilities that could come online by 2027.

The IESO accepted proposals under the Expedited Process RFP and Same Technology Upgrades Solicitation until February 2023.

The results for these procurements are expected to be announced in Spring 2023 and Summer 2023.

Subject to necessary approvals and receiving a directive from the Minister of Energy, IESO is also expected to release the draft LT1 RFP and the draft contract for stakeholder consultation in Fall 2023. If approved and implemented, the results for this procurement are expected to be announced in early 2024.

In addition, IESO is designing and evaluating potential programs for re-contracting existing hydroelectric facilities, as well as engaging in bilateral negotiations for potential re-contracting of Brighton Beach GS and three biomass-fired generators: Thunder Bay Condensing Turbine Facility. Atikokan GS, and Hornepayne GS.

Subject to necessary approvals and receiving a directive from the Minister of Energy. IESO is expected to launch the Small Hydro Program (for facilities <10 MW in size) by Fall 2023. IESO will continue to work on options for potentially re-contracting existing large hydroelectric facilities (>10MW).

Transmission expansion

• Ontario is in the process of reinforcing and expanding its transmission network in the province to ensure businesses and residents, including remote First Nation communities, have access to a reliable power supply. Bolstering transmission infrastructure will also support the province’s emerging electric vehicle (EV) battery industry and expanding mining sector to leverage our critical mineral wealth. Continuing from the success of the East-West Tie project, a 450 km line between Thunder Bay and Wawa that was placed in service in April 2022, several projects are currently in various stages of development and construction.
• For instance, the Wataynikaneyap (Watay) Power Project is currently under construction and will add 1800 km of new lines from Dinorwic to Pickle Lake and further north to connect 16 First Nation communities to the grid. This project will eliminate reliance on costly and unsustainable diesel generation for all communities that are connected. ENERGY is responsible for Ontario’s construction loan to Wataynikaneyap of up to $1.34B that is part of a negotiated funding framework with the Federal Government. Working with the Ontario Financing Authority as a loan administrative agent, ENERGY issues advance requests to fund the project and works to protect the provincial interest under the funding agreements. As of April 2023, Ontario has advanced over $830M to support the project’s construction.
• As of January 2023, the Wataynikaneyap Project has made substantial construction progress. This includes the clearing of 1,362 km of transmission corridor, installation of 2,612 transmission towers and the stringing of 823 km of transmission lines. Significant milestones were reached in 2022 when the Line to Pickle Lake and two First Nation communities were connected to Ontario’s electricity grid. The remaining communities are expected to be connected in 2023 and 2024. The Wataynikaneyap Project is transformational because it is majority-owned by a partnership of 24 First Nations who have the goal of 100% First Nation ownership as the project builds revenues over time.
• Development work is underway by Hydro One to support the construction of the Waasigan transmission line, a project that will reinforce the transmission system between Thunder Bay, Atikokan, and Dryden. The line is needed to support demand growth, expand access to renewable electricity and maintain a reliable electricity supply. The IESO has recommended that the project be in service by the end of 2025.
• Investments in transmission have also been made in southwest Ontario to support strong economic growth, including the expansion of the greenhouse sector and new EV manufacturing opportunities. To address this growth the government issued two Orders Council and a Minister’s Directive in April 2022 to kickstart and streamline development work on five transmission projects, helping to ensure this critical transmission infrastructure is in place to meet the growing needs of the region. 
• Progress on the five transmission projects is well underway. Hydro One is working closely with First Nations impacted by the lines on community consultations and economic partnerships. For the Chatham to Lakeshore line, Hydro One completed its Class environmental assessment and obtained Leave to Construct approval from the Ontario Energy Board in late 2022, and the project is on track to be in-service by 2026. The St. Clair line is currently undergoing an environmental assessment and is on track to be in-service by 2028. In March 2023, Hydro One initiated public consultations on the two Longwood to Lakeshore lines. The first phase of this project is on track for its 2030 in-service date. IESO continues to assess the scope and need date of the second phase, as well as the Windsor to Lakeshore line. These actions have helped enable ~$11.1 billion in new investments in the region, including NextStar’s large-scale EV battery manufacturing plant in Windsor and Volkswagen’s first North American EV battery plant in St. Thomas.
• ENERGY will continue to find ways to strengthen the electricity system in Ontario to provide confidence to potential investors considering siting in Ontario and to attract new jobs in industries of the future.

Natural gas expansion

ENERGY continues to implement Phase 1 and Phase 2 of the Natural Gas Expansion Program (NGEP). NGEP facilitates expansion of natural gas by charging existing gas customers $1 per month to help improve the economic viability of prescribed natural gas projects that would otherwise be uneconomic to build.

• Phase 1 is comprised of eight projects spanning 16 communities, with $54.91M in funding. Six of the eight projects are under construction and/or complete. 
• Phase 2 is comprised of 28 projects spanning 43 communities, with $226.54M in funding. As of March 2023, five of the 28 projects started and completed construction.
  • All projects are required to have applied for leave to construct (where necessary) no later than December 31, 2025.

Funds for the program are collected from existing natural gas ratepayers and do not impact the province’s finances.

In Budget 2022, the government committed to public engagement on a potential Phase 3 of the program The engagement is expected to take place in Spring 2023 and will gather information and feedback about home heating costs and different options for residential customers in rural, northern, and Indigenous communities, including those without natural gas access. This engagement will inform any future decision about potential further phases of NGEP.

B. Planning and development

Pathways to decarbonization consultation

On December 15, 2022, the IESO released the “Pathways to Decarbonization” (P2D) study. In the study, the IESO indicates that most of the projected Ontario demand in 2035 can be met with the build out of non-emitting sources, but some natural gas generation will still be required post-2035 to address local needs and provide the services necessary to operate the system reliably.

The pathway assessment illustrates a system designed to meet projected demand peaks almost three times the size of today by 2050. To achieve this, the pathways assessment includes 69,000 megawatts of non-emitting supply and 5,000 megawatts of conservation efforts, at an estimated capital cost of $375 billion to $425 billion, in addition to the current system and committed procurements.

While the IESO’s report is not a power system plan, the assessments provide insights into potential opportunities and challenges that Ontario faces in addressing future electricity system planning.

The report also recommended “no-regret actions” which should occur in short-order, such as acceleration of current efforts to acquire new non-emitting supply and beginning the planning and siting work for long-lead-time projects like new nuclear, long-duration storage and waterpower facilities.​​

On February 13, 2023, ENERGY launched a 90-day consultation on IESO’s Report through the Environmental Registry of Ontario focused on “no-regret” actions and targeted questions. This posting closes on May 14th.

Integrated long-term planning

In 2022, ENERGY moved forward with two key initiatives in support of integrated long-term planning:

1. Established an Electrification and Energy Transition Panel (Panel) that will provide essential expertise and advice to the Minister on how to coordinate long-term energy planning, considering growing energy demand, emerging technologies, environmental considerations, and affordability. The Panel is engaging with stakeholders and Indigenous partners throughout spring 2023 and will be finalizing a report with recommendations for the Minister before the end of 2023.
2. Commissioned an independent, cost-effective pathways study (Study) that will identify cost-effective pathways to support the province’s energy transition. A competitively procured contract was awarded in late 2022. The study is expected to be completed in early 2024.

Together, the Panel and the Study will help the government make strategic decisions to reform our long-term energy planning process to prepare the province for the energy system of the future. Integrated planning will benefit both ratepayers and energy companies by creating a more predictable investment environment, making life more affordable and Ontario more competitive.

Climate change adaptation

Energy infrastructure, and electricity in particular, is a critical resource, playing a key role in enabling infrastructure that protects our most vulnerable, including healthcare, telecommunications, water, and food. In recent years Ontario has seen major storms including in May 2022 when a powerful derecho swept through southern Ontario causing widespread power outages and in December 2022, when severe winter storms impacted electricity supply for thousands of Ontarians.

At the Minister’s direction, the Ontario Energy Board has launched consultations to improve the resiliency and reliability of Ontario’s electricity grid.

The OEB, will provide advice to the Minister later this year on “Distribution Sector Resilience, Responsiveness and Cost Efficiency”, including best practices to ensure Ontario families, Indigenous communities and businesses have access to reliable electricity despite the increase in extreme weather events.

Following Minister Smith’s direction to the OEB in 2022, the OEB has released a draft report that outlines resiliency measures and is now working with local utilities and other electricity service providers on potential next steps to improve resilience and responsiveness with an eye to cost efficiency. Some measures outlined in the draft report include increasing redundancies in the grid, ensuring replacement equipment is on hand, reinforcing poles in areas prone to damage and the deployment of automated components to instantly pinpoint where crews are needed.

Future Clean Electricity Fund

To support the growth of Ontario’s clean electricity supply, the government established a Future Clean Electricity Fund. Proceeds from the sale of Clean Energy Credits (CECs) held by the IESO and Ontario Power Generation Inc. (OPG) will be directed to this new fund. The fund will help keep costs down for electricity ratepayers by supporting the development of new clean energy projects as the province builds out our grid to meet the demands of a growing population and economy, as well as the electrification of transportation and industry. It will also help to preserve and grow the province’s clean energy advantage.

Hydrogen Innovation Fund

On January 26, 2023, ENERGY directed the IESO to develop and implement a Hydrogen Innovation Fund (HIF) to integrate hydrogen technologies in Ontario’s electricity grid for the purposes of balancing and strengthening the electricity system and contributing to broader decarbonization.

The HIF is a $15 million program over three years. The Hydrogen Innovation Fund will support projects in three streams:

• Existing facilities that are already built or operational and ready to participate in projects to demonstrate and/or evaluate reliability services (in-service deadline of June 2024).
• New hydrogen facilities that are not yet constructed but could be in service by a specified date (in-service deadline of December 2025); and
• Research studies that could investigate the feasibility of different hydrogen approaches and/or support future hydrogen project decision making. (Submission deadline of June 2024).

Projects and studies procured through the HIF could support electricity supply, capacity, storage and demand management, and support growth in Ontario’s hydrogen economy.

The IESO issued a Request for Proposals in April 2023 and anticipates executing contribution agreements with selected proponents by Q3 2023.

C. Affordable energy

Keeping energy costs low for families, small businesses and farmers

ENERGY continues to deliver the OER program, which provides direct relief on eligible residential, farm and small business electricity bills. Additionally, as part of the CEP, the government is removing a portion of the cost of renewable energy contracts from consumers’ electricity bills.

In 2023, the IESO launched a three-year interruptible rate pilot that is designed to appeal to electricity consumers that find participation in the ICI program challenging. The pilot is expected to be in service in July 2023, and learnings from the pilot are intended to inform the development of a potential permanent program.

The government is exploring giving small and medium-sized commercial and industrial businesses more choice when it comes to their electricity bills by supporting dynamic pricing pilots for Class B consumers that do not participate in the Regulated Price Plan. The pilots will test alternate pricing structures that encourage participants to shift electricity consumption to off-peak hours, helping to reduce costs for businesses while providing a benefit to the provincial grid.

Clean Home Heating Initiative (CHHI)

Following approval of the 2022 Ontario Budget, ENERGY allocated up to $4.5 million in 2022–23 to fund a Clean Home Heating Initiative (CHHI), that would help families in London, St. Catharines, Peterborough, and Sault Ste. Marie to keep energy costs down. This provincial initiative delivered in collaboration with Enbridge, built on a 100-home Hybrid Heating Pilot Program which was launched in August 2021 in the City of London.

On May 2, 2023, the Ontario government announced a budget increase of $3.7 million to bring the total investment in this program to $8.2 million and expand the program to more communities. This expansion will bring the total number of households eligible to more than 1,500.

Electric heat pumps operate like an air conditioner in the summer but can also operate in reverse in cooler seasons to provide home heating. With the addition of smart controls, a hybrid heating system automatically switches between the heat pump and a home's existing natural gas furnace, depending on which source is least expensive while also achieving greenhouse gas emission reductions.

Today, buildings remain the third largest source of emissions in Ontario, after transportation and industry. This initiative is expected to reduce a household’s energy bills by up to $280, and their greenhouse gas emissions by a third.

Ultra-low overnight Time-of-Use (TOU) price plan

The government has launched a new Ultra-Low Overnight (ULO) price plan as part of its plan to provide consumers with more ways to keep costs down, save money and take control of their energy bills. Starting May 1, 2023, customers of Toronto Hydro, London Hydro, Centre Wellington Hydro, Hearst Power, Renfrew Hydro, Wasaga Distribution, and Sioux Lookout Hydro can opt-in to this new optional electricity price plan, with all utilities required to offer it to customers within six months.

The OEB has projected that:

• Up to 318,000 RPP consumers could enroll in the ULO price plan in the first year, including a significant number of EV users. The collective shift in demand from on-peak to overnight hours could lead to a peak demand reduction, helping to reduce system costs by up to $5.7 million per year.
• The ULO price plan would help consumers who use more electricity at night — such as EV users — find savings of up to 5% on their bills, equivalent to savings of up to $90 per year.
• The ULO price plan would make better use of Ontario’s clean electricity supply when province-wide demand is lower, supporting decarbonization efforts and resulting in potential capacity cost savings for the electricity system of up to $5.7 million per year.

Detailed financial information

Table 2: Combined Operating and Capital Summary by Vote

For additional financial information, see:

• Expenditure Estimates
• Ontario Budget
• Public Accounts
• Ministry of Energy

Agencies, Boards and Commissions (ABCs)

Independent Electricity System Operator (IESO)

The IESO manages real-time operations of Ontario’s power grid system by balancing supply of and demand for electricity, designing and procuring delivery of conservation and demand management programs, planning for the province’s future energy needs and designing a more efficient electricity marketplace to support sector evolution.

The IESO's is a not-for-profit corporate entity established in the Electricity Act, 1998. Its fees and licences to operate are set by the Ontario Energy Board.

The IESO's expenses are consolidated onto the Ministry’s financial accounts.

Ontario Energy Board (OEB)

The OEB is the independent regulator of the province’s electricity and natural gas sectors. It oversees Ontario’s energy utilities to ensure the public interest is served.

The OEB's mandate and powers are set out primarily in three statutes — the Ontario Energy Board Act, 1998; the Electricity Act, 1998 and the Energy Consumer Protection Act, 2010, and the regulations made under these statutes. Other statutes, such as the Statutory Powers and Procedure Act, 1990, also inform the OEB's authority.

The OEB's annual operating expenses are consolidated onto the ministry’s financial records. Its operations and activities are fully funded by its regulated stakeholders in the gas and electricity sectors, under the cost-assessment authority in Ontario Regulation 16/08 (Assessment of Expenses and Expenditures) of the Ontario Energy Board Act, 1998.

Ministry organization chart

• Minister of Energy
  • Deputy Minister Energy
    • Communications Service Branch
    • IT Services
    • Legal Services
    • Energy Supply Policy Division
      • Electricity Policy, Economics & System Planning Branch
      • Fuels Policy & Liaison Branch
      • Nuclear Supply Branch
    • Strategic, Network & Agency Policy Division
      • Distribution & Consumer Assistance Policy Branch
      • Energy Networks & Indigenous Policy Branch
      • LDC Outreach & Network Branch
      • Governance, Strategy & Analytics Branch
    • Conservation & Renewable Energy Division
      • Conservation & Energy Efficiency Branch
      • Conservation Programs & Partnerships Branch
      • Renewables Integration & Distributed Energy Resources Branch
    • Corporate Management Division ^[*]
      • Corporate Services
      • Controllership Office & Service Management
      • Human Resources Business Branch

[*] CMD supporting the Ministry of Energy, the Ministry of Northern Development, and the Ministry of Mines.

2022–2023 Annual report

1. Ensuring there is a reliable source of energy for all

Meeting system needs

As Ontario continues to attract significant new investments, and as the province’s population is expected to grow by more than two million over the next decade, ENERGY is ensuring Ontario continues to have the energy it needs to power this growth.

Following years of excess supply, the IESO’s Annual Planning Outlooks (APOs) have forecasted that Ontario’s electricity demand is forecasted to grow significantly in this decade and the next. Electricity needs are being primarily driven by increasing business investment in the province, expanding electrification and the refurbishment of Ontario’s nuclear facilities.

In order to fill this forecasted supply gap, the IESO will need to procure electricity products and services from existing and new resources.

ENERGY is committed to a procurement framework that ensures Ontario has an affordable, reliable, and clean electricity system. ENERGY is meeting this commitment by ensuring resources are procured largely through competitive processes and in a transparent and cost-effective manner.

Following the issuance of a Minister’s directive to IESO in January 2022, as approved by the Lieutenant Governor in Council pursuant to Order-in-Council No. 137/2022, IESO launched a competitive procurement to enter into new contracts with 5-year terms with certain existing resources. This procurement — the first Medium-Term Request for Proposals (“MT I RFP”) — concluded in August 2022 and contracted 750 megawatts (MW) of nameplate capacity at a cost about 30% lower than the average price under their existing or most recent contracts, providing savings to ratepayers.

The January 2022 directive also directed the IESO to continue to procure existing resources through future Medium-Term Requests for Proposals. This will provide the IESO with the flexibility to acquire electricity products and services in response to changes in system needs, while allowing an opportunity for resources with expiring contracts to compete for new contracts in order to continue contributing to Ontario’s reliability.

Additionally, the January 2022 directive asked IESO to design procurements for re-contracting existing hydroelectric resources and to enter into a procurement contract with Calstock GS, a biomass facility, for 5 years, ending on December 31, 2027, in line with the government’s commitment in the 2021 Fall Economic Statement and Ministry of Natural Resources and Forestry’s (MNRF) Biomass Action Plan.

Based on IESO’s recommendations in the Resource Eligibility Interim Report, a Minister’s directive was issued in October 2022 to direct IESO to acquire approximately 4,000 MW of new electricity generation and storage resources to ensure the province has the electricity it needs to support a growing population and economy. This includes the Expedited Process RFP, Same Technology Upgrades Solicitation, and the planned LT1 RFP, with standalone energy storage accounting for a minimum of 1,500 MW of the overall target, and natural gas capacity accounting for a maximum of 1,500 MW.

This direction was consistent with the expert advice of the province’s Independent Electricity System Operator, whose Resource Eligibility Interim Report said: “Without a limited amount of new natural gas in the near term the IESO would be reliant on emergency actions such as conservation appeals and rotating blackouts to stabilize the grid.”

The October 2022 directive also asked the IESO to finalize the design for LT1 RFP and to enter into a procurement contract with Chapleau GS, a biomass facility, for 5 years, ending on December 31, 2027, in line with the government’s commitment in the 2021 Fall Economic Statement and MNRF’s Biomass Action Plan.

The Expedited Process RFP and the Same Technology Upgrades Solicitation launched in December 2022 and the deadlines for submissions closing in February 2023.

In November 2022, another Minister’s directive was issued that authorized the IESO to enter into a contract for the Oneida Energy Storage, the largest battery storage project in Canada. The directive also asked the IESO to extend the existing contract for the Thunder Bay Condensing Turbine biomass facility for a period of six months to allow the facility’s sale process to conclude and provide more time for the IESO to negotiate a 5-year contract.

Nuclear refurbishments and continued Pickering operation

ENERGY provides policy oversight of Ontario’s nuclear refurbishments. Ontario is on track to complete the refurbishment of four nuclear units at Darlington Nuclear GS and six at Bruce Nuclear GS in the next 10 years. The refurbishments will secure a long-term supply of reliable and low-cost baseload power for decades to come.

In June 2020, OPG successfully completed the first Darlington refurbishment (i.e., Unit 2) on budget and put it back into service. The second Darlington refurbishment (i.e., Unit 3) commenced in September 2020 and is nearly finished. Unit 3 reactor ‘re-assembly’ is complete, new fuel has been loaded and the unit is on track to return to service in Q3-2023, ahead of schedule. In February 2022, OPG commenced the third Darlington refurbishment (i.e., Unit 1), marking the first time that two Darlington units were undergoing refurbishment at the same time. Unit 1 has been defueled and work has commenced on the replacement of key reactor components. The final Darlington unit (i.e., Unit 4) is expected to commence refurbishment in Q3-2023. Overall, the four-unit project is on track to be complete on time and on budget.

The IESO continues to oversee implementation of the Bruce refurbishment agreement, including ongoing investments in the life extension of the Bruce nuclear units. The first Bruce unit refurbishment (i.e., Unit 6) commenced in January 2020 and is nearing completion. Reactor ‘re-assembly’ is underway, and Unit 6 is on track to return to service before the end of 2023, as planned. The second Bruce unit refurbishment (i.e., Unit 3) commenced in March 2023. Overall, the project is progressing on time and on budget.

Pickering is currently authorized to operate until 2024 by the Canadian Nuclear Safety Commission (CNSC). In September 2022, the Ontario government announced that it is supporting OPG’s plan to safely operate Pickering Nuclear Generating Station through September 2026, subject to regulatory approval from the CNSC. OPG is planning to shut down Pickering “A” (i.e., units 1 and 4) in 2024 and operate Pickering “B” (i.e., units 5 to 8) until September 2026. Continued operation of Pickering will help ensure Ontario has reliable, clean, and affordable energy while reducing CO₂ emissions by 2.1 megatonnes in 2026, equivalent to taking up to 643,000 cars off the road annually. It will also protect thousands of jobs across Ontario and increase North America’s supply of Cobalt-60, a medical isotope used in cancer treatments and medical equipment sterilization, by about 10 to 20%.

Operating Pickering beyond 2026 will require a complete refurbishment. With strong economic growth and significant electrification forecasted over the coming decades, the province has also asked OPG to update its feasibility assessment for refurbishing Pickering “B” by the end of 2023. Updating the feasibility assessment, which was last conducted between 2006 and 2009, is a prudent due diligence measure to support future electricity planning decisions.

Small Modular Reactors (SMRs)

ENERGY is responsible for developing and implementing Ontario’s SMR policies, programs, and initiatives. As the representative of OPG's sole shareholder (i.e., Ontario government), the Ministry (under the direction of the Minister, which is the legal representative of the shareholder) is also responsible for providing policy oversight of OPG's Darlington SMR Project.

In December 2019, Ontario signed a Memorandum of Understanding (MOU) with Saskatchewan and New Brunswick, committing to collaborate on the development and deployment of SMRs. In April 2021, the three provinces released a Feasibility Study and business case for SMRs and welcomed Alberta as the latest signatory to the SMR MOU. In March 2022, Ontario along with its SMR MOU partner provinces released a Strategic Plan to build on the Feasibility Study and outline the path forward on SMRs. The Strategic Plan highlights how SMRs can provide safe, reliable and zero-emissions energy while creating new economic opportunities. The report identifies five key priority areas for SMR development and deployment.

In December 2021, following government approval, OPG announced the selection of GE Hitachi’s BWRX-300 SMR technology for the Darlington SMR project. In October 2022, OPG submitted a construction licence application to the CNSC and, in December 2022, a “ground-breaking” ceremony was held with Premier Ford and Minister Smith to mark the commencement of site preparation activities. In January 2023, OPG announced an Integrated Project Delivery (IPD) agreement with key project partners GE Hitachi, SNC Lavalin and Aecon for the construction of the first Darlington SMR. The SMR is expected to be constructed in the 2025–2028 period, pending the issuance of a CNSC construction licence and final government approvals.

Ontario’s low-carbon hydrogen strategy

In April 2022, ENERGY released Ontario’s Low-Carbon Hydrogen Strategy. The strategy included eight specific actions to enable production and expand the low-carbon hydrogen economy. These actions are expected to help increase the amount of annual provincial production capacity of low-carbon hydrogen eight-fold and support the nascent market to meet its potential.

Key initiatives advanced under the hydrogen strategy for 2022–23 included:

• Launching the Niagara Falls Hydrogen Production Pilot
  • Atura Power (a wholly owned subsidiary of OPG) proposes to build a 20 MW electrolyzer adjacent to the Sir Adam Beck hydroelectric complex on the Niagara River.
  • In November 2022, Atura selected Cummins to build the electrolyzer.
  • In January 2023, the IESO and OPG entered into a contract for grid regulation services that will support the project.

• Supporting Hydrogen Storage and Grid Integration Pilot Projects
  • In January 2023, the ENERGY directed the IESO to develop and implement a Hydrogen Innovation Fund (HIF) to integrate hydrogen technologies in Ontario’s electricity grid for the purposes of balancing and strengthening the electricity system and contributing to broader decarbonization.
  • The IESO anticipates executing contribution agreements with selected proponents by Q3 2023.

2. Providing support for Ontario’s job creators

Electricity price mitigation for industrial and commercial consumers

Effective January 1, 2021, as part of the CEP the government is funding a portion of Global Adjustment (GA) associated with the above-market cost of non-hydro renewable energy contracts (i.e., wind, solar and bioenergy), reducing costs for all electricity consumers. This measure helps provide people and businesses will keep Ontario open for business by making electricity prices more competitive. In 2023, industrial consumers could see savings of about 14% on their bills, while mid-sized commercial consumers could see savings of about 17% on their bills as a result of the CEP Actual savings depend on location and consumption.

In addition, with the support of ENERGY, IESO is developing a three-year interruptible rate pilot that may appeal to electricity consumers that find participation in the ICI program challenging. The pilot will use a competitive process to select participants, which employs multiple criteria in addition to price, including, for example, location, sector, and quality of plan for load reduction. The pilot is expected to launch in July 2023.

ENERGY is also exploring giving small and medium-sized commercial and industrial businesses more choice when it comes to their electricity bills by supporting dynamic pricing pilots for Class B consumers that do not participate in the Regulated Price Plan. The pilots will test alternate pricing structures that encourage participants to shift electricity consumption to off-peak hours, helping to reduce costs for businesses while providing a benefit to the provincial grid.

3. Strengthening trust in the OEB

Through the Fixing the Hydro Mess Act, 2019, the government reformed the OEB’s governance structure, starting the OEB’s journey to become a best-in-class energy regulator. In October 2020, new leadership was appointed to the OEB. This included appointment of a new Board of Directors responsible for governance and management oversight, a Chief Executive Officer to provide leadership for operations and policy, and a Chief Commissioner responsible for the OEB’s adjudicators, called Commissioners, and its adjudicative responsibilities.

In December 2021, further amendments to the Ontario Energy Board Act, 1998 gave the OEB additional tools to ensure it could attract and retain the highly qualified Commissioners.

On September 30, 2022, the two-year transition period under the new governance structure concluded and the OEB Board of Directors assumed the authority and responsibility for appointing the OEB’s CEO and Commissioners.

The OEB is also implementing emerging priorities outlined in the Minister’s October 21, 2022, Letter of Direction, such as supporting the Electrification and Energy Transition Panel, determining how to enable electrification related investments, reducing regulatory burdens, and providing advice and proposals for improving distribution sector resiliency, responsiveness, and cost efficiency. The new leadership at the OEB continues to make improvements for the benefit of Ontario’s ratepayers in its operations, including regulatory processes and stakeholder engagement approaches.

4. Empowering Ontarians to reduce their energy bills

Third-Party net metering ownership arrangements

In order to cut red tape and increase access to clean, affordable energy the government updated the net metering regulation (O. Reg. 541/05: Net Metering) to make it easier for homeowners, farms, and businesses to use renewable generation systems, like rooftop solar, to help lower the cost of their electricity bills.

A customer who is billed on a net-metered basis can lower their electricity bill by generating renewable electricity for their own use to offset their consumption from the grid and receive a credit on their bill for electricity they send to the grid when they are generating more than what they need at any given time.

The government’s changes allow interested customers to enter into agreements with a third-party to install renewable generation systems, like rooftop solar. This new option will expand access to net metering, which allows customers to generate electricity on their property for their own use, while sending excess power to the grid for a credit on their bill, lowering their electricity bill.

As a result of the change more families can benefit from savings without the substantial up-front capital costs of building these generation systems. The changes will also support farmers, allowing them to install these systems without deferring other important capital investments that would grow their business.

Conservation and Demand Management (CDM) enhancements

To help address electricity system needs both Ontario-wide and specifically in Southwest Ontario, the Minister of Energy issued a Directive to the IESO in September 2022 to invest $342M in new and enhanced CDM programs that will help families, businesses, and institutions save money by reducing their energy consumption.

Once fully implemented, it is estimated that these programs:

• Will deliver a total provincial peak demand reduction of 285 megawatts (MW) and annual energy savings of 1.1 terawatt hours (TWh) by 2025.
• Will deliver regional peak demand savings in Southwest Ontario of 225MW to alleviate constraints and foster allow for additional economic development.

5. Clean Energy Credit (CEC) registry

Ontario is leveraging its world-class clean electricity grid by launching a clean energy credit (CEC) registry to boost competitiveness and attract jobs. The CEC registry provides businesses with a tool to meet environmental and sustainability goals by demonstrating that their electricity has been sourced from clean resources. The registry, administered by the IESO, will simplify the creation, trading, and retirement of CECs in Ontario.

The registry was enabled and implemented through legislative amendments to the Electricity Act, 1998, introduction of a new regulation under the Act (O. Reg. 39/23: Clean Energy Credits), as well as changes to the existing Definitions and Exemptions regulation under the Act (O. Reg. 160/99).

It is the government's intention that proceeds from certain IESO- and OPG-owned environmental attributes will be directed to the government’s newly created Future Clean Electricity Fund (FCEF) and will support the development of new clean energy projects in the province. The FCEF will help to preserve and grow the province’s clean energy advantage.

6. Clean Home Heating Initiative (CHHI)

On September 27, 2022, ENERGY launched the Clean Home Heating Initiative with an investment of up to $4.5 million in 2022–23 by the Government of Ontario to expand hybrid heating solutions in four selected municipalities (London, Peterborough, Sault Ste. Marie, and St. Catharines).

The program provided every participant with a limited-time incentive for an electric standard air-source heat pump (ASHP) or a cold-climate air-source heat pump (ccASHP). Phase I of CHHI was intended to help families save money on their energy bills and reduce their greenhouse gas emissions, as well as build capacity within Ontario’s heat pump and smart control manufacturers, distributors, and contractors.