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IESO Directed to Move Forward on Long-term Procurement and Small Hydro Program

August 31, 2023

The IESO’s progress towards meeting the need for new electricity resources in the near and long term will continue this fall with the launch of the Long-Term RFP (LT1 RFP) and the Small Hydro Program to acquire resources to meet Ontario's future needs.

As outlined in a Directive from the Minister of Energy, the LT1 RFP will acquire capacity from new build resources to be online no later than May 2028, and includes incentives to encourage early operation. The LT1 RFP will build on the results of the recent Expedited Long-Term RFP (E-LT1 RFP) - which acquired over 1,100 MWs of new capacity to help meet system needs – and the results of the Same Technology Upgrades solicitation, which committed a further 286 MWs of new capacity. The LT1 RFP expects to procure over 2,500 MW of new capacity to continue to meet system needs in the latter half of the decade.

Draft RFP and contracts are now posted for feedback, and the IESO intends to post the final LT1 RFP and Contract by the end of September, with a proposal submission deadline near the end of 2023.

The Small Hydro Program will provide new contracts for existing hydroelectric facilities with installed capacities of 10 MW and below. The program aims to provide a reasonable revenue stream for facilities to continue operating while delivering value for ratepayers by retaining roughly 200 MW of supply from about 80 existing facilities for Ontario’s grid. The Small Hydro Program is intended to launch by the end of 2023.

The Directive also asks the IESO to work with the Ontario Financing Authority to assess the feasibility of the transfer of hydroelectric Non-Utility Generator contracts to the IESO. An IESO report back to the Minister is due March 31, 2024.

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