IESO officials have delayed the second window of the grid operator’s second long-term (LT2) resource procurement to the second quarter of 2027 and postponed the required milestone commercial operation date to 2032, in response to stakeholder feedback.
In a stakeholder engagement webinar Feb. 24, officials said they agreed with the majority of stakeholders that it would make sense to delay the second window to next year, considering that awards for the first window and the Long-Lead Time procurement will be awarded this year and would affect transmission availability. (See IESO Expands Hydro Eligibility in Long Lead-Time Procurement.)
Officials also noted that Ontario municipalities will hold elections in October, which could affect certain projects obtaining the necessary municipal support resolutions.
LT2 is targeting 14 TWh/year of new energy and 1.6 GW of new capacity by the mid-2030s. The ISO’s first long-term procurement focused on resources that could be online more quickly, by mid-2028. Both award 20-year contracts, as opposed to the medium-term (MT) procurements, which award five-year contracts.
The February engagement was intended to lay out IESO’s proposed requirements for repowered facilities to participate in LT2, the most significant of which is the completion of an MT contract before beginning the 20-year term. The ISO is considering allowing MT contracts for up to 10 years, but it needs to discuss that with the provincial government. Regardless, the minimum term would be five years.
“While we don’t want to get into a technical analysis about how much useful life a facility has in it, at this point we feel everyone should have another five-year term in them,” said Dave Barreca, IESO’s supervisor of resource acquisition.
Eligibility for the MT will be based on how close a facility is to the end of its existing contract. The facility would have to demonstrate an extension of its useful life through the replacement of its generating equipment and be able to have completed both its original 20-year contract and its MT contract by May 1, 2032.
IESO would not institute technical requirements on what constitutes repowering; a facility would need only an independent engineer’s certification that it complies with the performance obligations of all LT2 resources.
Bruce Kolesnik, of Sunspring Energy Consulting, said he agreed existing facilities should have at least another five years of useful life to participate in LT2, but he questioned why they will need to complete an MT first. “That basically implies that repowering can’t participate in LT2 window 2 and presumably not LT2 window 3,” he said. “Why not just allow them to participate in LT2 for another 20-year contract? It basically still uses up their five years of useful life.”
Barreca said that based on previous MT procurements, “those five years of useful life would come at a lower rate than a new build certainly and [most likely] a repowered facility. … There is a desire to see maximal ratepayer value.” He also noted there are facilities procured in MT2, which was concluded in June 2025, that would be eligible shortly.
Repowered facilities would compete directly against new builds, despite some stakeholders arguing that they should compete against each other in a separate pool. “The IESO believes that having new builds compete with repowered facilities will result in the most cost-effective outcomes for ratepayers,” Barreca said. But he noted it is considering including a specific new build target and a cap on repowered facilities in the procurement.
Stakeholder feedback on the proposed requirements is due March 13.
