Ontario’s first-ever integrated energy plan includes a long “to do” list for grid operator IESO. 

Unlike single-state ISOs in the U.S., which maintain some independence from their state governments and are regulated by FERC, IESO is a wholly government creation, answering to Ontario through the Ministry of Energy and Mines and the Ontario Energy Board (OEB).

The difference is stark. In support of its 152-page energy plan, the ministry on June 12 also issued a prescriptive 12-page directive spelling out in detail how the ISO is to carry out its policy, with sections on planning, district energy systems, distributed energy resources, transmission, low-carbon hydrogen strategy, hydro and nuclear generation, and export opportunities.

It listed 11 “report-backs” e.g., a Dec. 31 deadline for a report on “opportunities to streamline energy related lESO-Ied procurement processes.”

Although the ministry’s plan says IESO will continue to lead the development of electricity demand forecasts, it said it must work with the OEB to develop “a formal process to engage natural gas distributors in regional electricity planning activities.” (See related story, Ontario Integrated Energy Plan Boosts Gas, Nukes.) 

“IESO, electricity utilities and natural gas distributors — under the direction of the OEB — will be required to develop coordinated, best-practice scenario modeling to assess future energy needs across fuels as appropriate,” the ministry said. “This will improve systemwide consistency on planning assumptions and investment priorities.” 

The plan directs IESO to ensure its planning supports “long-lead” energy projects such as long-duration storage and new nuclear and hydro projects. 

It also requires IESO to expand the mandate of its Strategic Advisory Committee to “reflect the province’s broader economic and community priorities” and to increase the panel’s membership to include real estate developers, transit agencies and manufacturers. The ministry said technical standards and safety organizations in the province, such as the Electrical Safety Authority and the Technical Standards and Safety Authority, also will participate in SAC meetings. (See What to Know About IESO.) 

In a statement at the plan’s release, IESO said it “appreciates the opportunity to be tasked with leading a number of key components that will help meet the province’s growing needs.”

In a June 23 speech to the Ontario Energy Network, IESO CEO Lesley Gallinger said the grid operator was responding to the plan by “moving faster to build bigger, leveraging the ‘no regrets’ actions already in motion to make smart investments in new infrastructure.”

The ISO also is “implementing a customer-oriented and affordability-minded approach to drive down costs and make it easier for businesses to connect to the grid,” she added. “One of the changes I am most excited about is the ‘concierge-style’ approach we are implementing to ensure customers understand where and how to connect, while streamlining and simplifying our processes so that we can guide customers from start to finish.”

Economic Development

Economic development is a recurrent theme in the plan, which calls for making the province “a global clean energy superpower” that exports electricity, nuclear technology, medical isotopes and engineering expertise. 

The ministry has proposed legislation requiring IESO and the OEB to “embed economic growth as a priority.” 

“Integrated planning will be supported by independent, external advice on how best to align energy decisions with broader government priorities — such as housing, economic development and competitiveness,” it said. 

The government also ordered IESO to create a Major Project Identification Committee for each planning region as “an early warning system … [to] ensure that major housing, industrial and infrastructure projects that could impact electricity demand are identified early and fully accounted for in high-growth demand forecasts.” 

The committee will include the ministries of energy, economic development and housing, in addition to local and regional economic development agencies and municipalities and Indigenous communities. 

“Municipal governments — who plan for land use, housing and economic development — must be better connected to the province’s electricity and fuels planning processes,” the plan says. 

The government also directs OEB, IESO and other stakeholders to identify improvements to regional and bulk planning processes to “better match the pace of load growth.” 

Export Potential

Between 2021 and 2023, Ontario exported more than 40 TWh of electricity to the U.S., about 9% of Ontario’s total annual generation. In addition to displacing higher-emitting generation in the U.S., the exports have generated $400 million to $700 million annually. 

Noting that both NYISO and MISO have warned of growing capacity deficits as fossil fuel plants are shuttered, the plan calls for increasing those exports “once Canadian-American relations normalize.” To that end, Ontario and IESO are evaluating transmission upgrades to move power from generators to existing and potential new interties.  

Costs

The plan makes frequent reference to the government’s efforts to control electric costs, which it says are at or below the rates in the U.S. Great Lakes states. (See related story, IESO Purchasing 3,000 MW of Energy and Capacity.) 

On April 1, the Canadian government eliminated the previous government’s consumer carbon tax on natural gas and gasoline, which is expected to save Ontario households more than $700 annually. 

“Ontario’s plan to meet growing energy demand while reducing emissions does not and will not include a carbon tax,” the plan says.