Long Term Energy Procurement (LT2)
Ontario’s electricity sector today is seeing growing demand, an evolving supply mix and a drive toward grid decarbonization. Combined, these factors are spurring the IESO’s ongoing large-scale resource acquisition effort to ensure sufficient supply will be available into the 2030s and beyond.
While recent procurements have focused on capacity, which seeks forms of supply that are capable of meeting demand specifically during system peak hours, planning forecasts indicate both energy and capacity needs emerging in 2029 and beyond. Over the next few years, the IESO expects to run multiple RFP submission windows, each under a distinct request for proposals, under the umbrella of the LT2 RFP, to procure resources to meet system needs.
As part of the proposal submission, proponents are required to include a Municipal Support Confirmation.
Municipal Support Confirmations
Per the Ministerial Directive, all projects coming forth under the LT2 RFP that are being proposed on Municipal Project Lands must include an MSC as part of the Proposal submission. The MSC is the instrument used by the IESO to confirm that the developer has undertaken (or is committed to undertake) engagement activities to the satisfaction of the Local Municipality and that the Local Municipality supports the submission of the Proposal.
During this stage, municipalities and developers can negotiate community engagement requirements and community benefit agreements.
Developing a decommissioning plan is a key component of the Ministry of Environment, Conservation and Parks’ Renewable Energy Approval (REA) process under O. Reg. 359/09 of the Environmental Protection Act. While the REA, which applies to most facility types, must be obtained prior to a facility injecting electricity into the grid, the decommissioning activities themselves would take place after the LT2 Contract has concluded. Accordingly, while no conditions have been included in the LT2 RFPs regarding decommissioning, under the LT2 Contracts: (a) all applicable laws and regulations, including those pertaining to decommissioning, must be adhered to by a Supplier in order for the Contract to remain in good standing; and (b) the proponent must agree to assume all risk and provide an indemnity in respect of all damages or costs arising out of (among other things) any legal requirements relating to decommissioning.
The MSC does not guarantee that the project will be awarded an IESO Contract and does not supersede any applicable permits or approvals (zoning, etc.) under applicable Laws and Regulations. The MSC can be in the form of a Municipal Resolution in Support of Proposal Submission or a Blanket Municipal Support Resolution provided together with a Blanket Municipal Support Confirmation Letter.
