IESO politely said “no” to many of the stakeholder-requested changes to the design of its proposed Local Generation Program, but noted it will include the raised concerns in its report to the Ontario government in July and signaled it was open to further discussing others before then.

The program is intended to maintain existing distributed energy resources whose contracts are expiring in the next five years and procure new facilities. However, several groups of stakeholders asked the ISO to consider changes to elements of the program before it submits its official recommendations to the minister of energy and electrification. (See Suppliers Call for Changes to IESO Local Generation Proposal.)

In a webinar June 5, IESO programs strategist Greg Bonser explained the ISO’s rationale for the program’s contract length, project size cap and competitive pricing.

Cooperatives and generators, among others, had requested a longer contract term than IESO’s five years for facilities renewing their contracts. While new facilities would be offered longer contracts, and the ISO is considering different terms for resources that need upgrades, “we have found that under our Medium-Term RFP, we recently offered a term for re-contracting for five years, and it worked quite well to re-contract larger, existing facilities that are connected to the transmission system, so we’re going to replicate that,” Bonser said.

Some stakeholders also had asked for generators over the proposed maximum of 10 MW to be included in the program; others asked for those under the minimum of 100 kW.

Bonser said IESO is firmly against raising the size cap.

“Under the current practices and regulations and whatnot, once you go over 10 MW, there’s a whole new set of rules that need to be followed around connection assessments and around the way in which our control room tries to manage those facilities,” he said. He noted there were other ways for participating in the ISO’s markets — a note he made several times throughout his presentation when talking about facilities not eligible for the program.

The ISO, however, is considering lowering the threshold for program participation.

“We’re open to having a discussion about what kind of value those facilities can bring and whether or not they’re a good fit for this program,” Bonser said. “We heard a lot of small facilities say they felt they might not be cost competitive, so we need to have a conversation with” them.

Not up for consideration is including facilities under 10 kW, he said. “We also do have to draw a line somewhere.”

That goes for standard offer pricing as well. Bonser called it “quite a costly and difficult thing to figure out, frankly. It’s hard to keep everybody happy, and it ends up being costly to the ratepayer. We take the position that the facility owners are best positioned to review their own systems, figure out the costs and tell us what you need to keep the facility running, or what you need to build a new facility.”

‘Spirit of Simplicity’

About 220 people attended the webinar. There were several questions seeking clarification about the re-contracting and new-build “streams,” specifically about how different fuel types will be treated in each.

IESO said existing facilities of the same type would be grouped together in the bidding process, which prompted some attendees to question whether the ISO was going against its fuel-agonistic policy. Bonser said the reason for this was to “provide continuity, and they can continue to generate after their contracts expire.”

When asked if this was “definitive,” Jonathan Scratch, IESO senior manager of market and system adequacy, chimed in to say the ISO was presenting only what it will recommend to the minister. He also emphasized that the fuel type grouping would apply only to the re-contracting process; new resources would all bid against each other, regardless of fuel type.

The new-build stream would begin six months after the re-contracting process began, but IESO officials declined to comment on when that would be. The program is expected to begin in 2026.

IESO is requesting more information from stakeholders or will seek guidance from the government on several requests, including:

• • how to integrate DER aggregations into the program in an “administratively simple” way;
  • how to allow behind-the-meter facilities to participate in the program;
  • whether municipal council resolutions or indigenous support should be required for participation;
  • how cooperative or indigenous ownership should be considered; and
  • how refurbishments, upgrades, expansions or repowering should be accommodated.

Officials repeatedly stressed that “simplicity” in the program is a high priority for the ISO. Eric Muller, the Canadian Renewable Energy Association’s director for Ontario, noted that the Medium-Term RFP “did not include rated criteria points and other policy considerations or land-use considerations or partnership factors. … It was a simple, straightforward competition on price. … I would just put forward that, in the spirit of simplicity, something similar be considered for re-contracting under this program.”

Written feedback from the webinar is due June 19.