Minister’s Directive

To: The Independent Electricity System Operator

I, Todd Smith, Minister of Energy (Minister), hereby direct the Independent Electricity System Operator (IESO) pursuant to section 25.32 of the Electricity Act, 1998 (Act) with regard to procurement of electricity resources to ensure the reliable operation of Ontario’s electricity system in response to ongoing and growing electricity needs expected in the future, as follows:

Background

Ontario has plans to create new infrastructure, expand electrification, unlock opportunities in Northern Ontario and build 1.5 million homes by 2031. This unprecedented growth is also causing rising demand for electricity.

In anticipation of this increase in demand, the IESO has forecasted electricity supply needs that emerge in 2025 and grow through the latter part of the decade.

To meet these needs, the government of Ontario is taking action today to procure electricity products and services from both existing and new resources. The government is committed to a procurement framework that ensures Ontario maintains its reliable, affordable and clean electricity system.

Biomass electricity generation facilities serve an important role in Ontario’s clean electricity system and forestry sector. The government of Ontario also recognizes that these facilities present additional value as industry considers a longer-term transition for alternative uses of waste biomass.

To support these facilities, Ontario’s Forest Biomass Action Plan commits to ensuring that existing biomass electricity generation facilities that are approaching the end of their electricity procurement contracts are provided the opportunity to negotiate new contracts with the IESO for terms of up to five years. These contracts are expected to balance the benefits to the forestry sector with the value for electricity ratepayers and taxpayers.

In line with previous directives, the IESO negotiated and signed new contracts for the Calstock Generating Station, Chapleau Generating Station, and Thunder Bay Condensing Turbine Facility.

Hornepayne Generating Station (Hornepayne GS) is a biomass electricity generation facility whose fuel consists primarily of biomass from an adjacent sawmill. Hornepayne GS is owned by Hornepayne Power Inc. (HPI). The facility’s current contract with the IESO is set to expire on February 14, 2024. This is the only biomass power plant in Ontario with Indigenous ownership.

In the absence of the Hornepayne GS the adjacent sawmill would need to procure steam for process operations from other sources, possibly including natural gas-fired boilers. In addition, there would be a substantial economic impact on the local community. Specifically, the mills that supply biomass to the facility would need to find alternative solutions for wood waste, including the possibility of diverting to landfills or reducing forestry operations.

The IESO is working to negotiate a new contract with HPI. While negotiations continue, it is desirable to extend the facility’s existing contract for three months to allow time for the negotiations to conclude on a new contract that would provide better value to ratepayers.

The IESO and the Ministry of Energy will continue to work together to ensure Ontario’s electricity system remains ready to meet the needs of Ontario’s residents and businesses.

Directive

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

  1. Hornepayne Power Inc. Generating Station
    1. The IESO shall use reasonable efforts to enter into an extension of its existing contract with Hornepayne Power Inc. for the Hornepayne GS, on the same terms except that any such extended contract shall expire on May 14, 2024.

General

This Directive takes effect on the date it is issued.

Order in Council 207/2024