On June 12, 2025 the Government of Ontario published Energy for Generations. The document represents the province’s first steps in initiating a regular five-year cycle of developing comprehensive, co-ordinated, economy-wide integrated energy plans (IEP) that cover electricity, natural gas, hydrogen, biofuels, and emerging fuels.
The IEP builds on Ontario's Affordable Energy Future: The Pressing Case for More Power (see our Commentary) published in October 2024, that set out the government’s vision for the energy sector: “A pro-growth agenda that takes an all-of-the-above approach to energy planning.”
The IEP lays out at a high-level the government’s energy sector priorities and main actions for the 2025-2050 period:
The primary goal of the IEP is to strengthen Ontario’s energy system to drive economic growth. This theme is present repeatedly throughout the document, which states the IEP is intended “to make [Ontario’s] economy more competitive, resilient and self-reliant over the long term.” It further remarks that “Ontario’s economic success depends on energy that is affordable, secure, reliable, and ready to power growth. In an increasingly competitive global economy, jurisdictions that can deliver secure and cost-effective energy will power people’s lives and attract investment, create jobs, and lead the next wave of innovation.”Accompanying the publication of the IEP were three additional documents:
Additionally, prior to the release of the IEP, on June 3, 2025 the government introduced Bill 40, Protect Ontario by Securing Affordable Energy for Generations Act, 2025, which, among other things, proposes to add “economic growth” to the statutory mandates of the OEB and IESO.
Commentary
The release of the IEP represents a key milestone in Ontario’s ambition to begin integrated, holistic, economy-wide energy planning going forward. Past planning cycles have been primarily electricity-centric.
The IEP consolidates within a single document the many energy initiatives previously announced by the government, such as those related to a new energy efficiency framework, transmission expansion, small modular nuclear generation, hydrogen, pumped storage, hydro-electric generation, and a long-term commitment to the natural gas network for industrial processes, space heating, and electricity generation. The IEP also provides further details regarding the government’s approach to advancing distributed energy resources and grid modernization as articulated in Ontario’s Affordable Energy Future.
Overall, the IEP, associated directives, and the proposed Bill 40 reinforce a decades long increase of formal government intervention and control over the evolution of the different components of the province’s energy sector.
The IEP and its associated directives also contain new and detailed policy direction related to building the foundation for future comprehensive energy plans. This is primarily accomplished through setting out formal co-ordination of natural gas and electric network planning. For example, OEB is directed to establish a “gas-electric coordination information sharing forum” that is intended “to facilitate sharing of technical information and data and other co-ordination to support energy planning processes,” and will include the forum working to “develop coordinated, best-practice scenario modelling to assess future energy needs across fuels.”
Further, the OEB is directed to “[e]ncourage and, where the OEB deems appropriate, require, both rate-regulated natural gas distributors (EPCOR and Enbridge) and non-rate-regulated natural gas distributors (Kingston and Kitchener) to participate in the electricity system planning processes where study regions overlap with their service territories.” Also, the IESO is directed to “[d]evelop a process to include engagement with electricity and natural gas distributors as part of the regional and bulk planning process.”
While the establishing of formal gas-electric planning co-ordination is needed and important for integrated energy planning, the most critical new policies in the IEP pertain to creating formal integration of economic and energy planning.
One of the primary means of establishing this economy-energy policy nexus is through directing the IESO to create a Major Project Identification Committee (MPIC) for each planning region, “including in regions not subject to active regional or bulk planning.” The MPIC is to meet on an annual basis and “include entities that are attracting, or involved in developing, major load projects that may significantly change system needs in an area. The purpose of the MPIC is to ensure that IESO is considering major load projects at early stages of their development in the forecasts developed for the purpose of regional and bulk planning.” The directive states that the MPIC must include, among others, representatives from government ministries and agencies (e.g., Economic Development, Job Development and Trade, and Invest Ontario), local/regional development agencies, and Indigenous communities.
The IEP advises the IESO to expand the membership of its Strategic Advisory Committee (SAC) to include representatives from housing and real estate development, transportation and transit agencies, and industrial and advanced manufacturing sectors. The IESO is also encouraged to expand the mandate of the SAC to include Ontario’s broader economic and community priorities.
Also, the IESO is directed to examine opportunities to streamline its connection process The OEB is directed to review opportunities to streamline transmitter and distributor connection procedures. Both agencies are required to report back to the Ministry of Energy and Mines by December 31, 2025 with streamlining proposals. The IEP states these reviews are needed because “The existing connection frameworks have not kept pace with the changes in the sector. Cost structures, limited planning coordination, and slow approval processes have created barriers for housing developments and job-creating projects.”
Last, the IEP references the Special Economic Zones Act, 2025, which was part of the recently passed Bill 5, Protect Ontario by Unleashing our Economy Act, 2025 (Schedule 9). Designating an area a Special Economic Zone (SEZ) would mean that “selected projects could move faster as a result of simplified rules, faster approvals, and one-window access to services.” The IEP states SEZs “could serve to enable the energy infrastructure needed to support the development and operationalization of these zones, including new transmission capacity.”
From the initiatives described above, the policy direction is clear: The availability of energy infrastructure will not be an impediment to economic growth. This objective is repeated consistently throughout the IEP, such as the need to review connection frameworks noted above, as well as references to energy planning needing to “match the pace of growth,” that planning should the provide the benefit of “[r]educing the risks of energy shortages, and associated loss of economic opportunities,” and directing the IESO to “proactively identify transmission and distribution bottlenecks that could delay major housing, industrial, or economic development projects.”
Viewing the decisions and policies contained within the IEP and its directives through the prism of ensuring energy security and availability in order to achieve economic competitiveness and growth clarifies the rationale for what is (and what is not) in the IEP. For example, while decarbonization, electrification, and lowering emissions are all mentioned in the IEP, there are no economy-wide or sectoral emissions targets, no plans to phase-out natural gas for space heating, and there are no references to achieving a “net zero” economy.
Further, the mandate changes proposed in Bill 40 as well as the IEP’s high volume of detailed directives to, and end of 2025 report backs required by, the IESO and OEB indicate that the government sees the agencies as needing strong direction to facilitate the energy system build out at the pace necessary to meet the province’s economic and industrial strategy objectives.
Conclusion
The IEP can be viewed as the culmination of the current provincial government’s growing determination to aggressively build out Ontario’s energy network such that it actively facilitates (and does not hinder) economic development and growth. This has taken on increasing importance in the face of uncertainty regarding tariffs and the future of Canada’s trading relationship with the United States.
Power Advisory has previously noted that the Ontario is seeking to significantly and quickly expand the size of the province’s energy system to meet numerous objectives, including housing growth, economic growth, and industrial expansion; and that it was unclear whether the realization of these objectives could be accommodated effectively within Ontario’s existing energy institutional arrangements (i.e., between the Ministry, OEB, and IESO). The IEP, Bill 5 and Bill 40 put into motion the formal establishment of a new energy planning paradigm and institutional framework. It is a model based on achieving energy independence and economic competitiveness with government as the primary decision maker.
Indeed, the evolving division of roles and responsibilities between the government, OEB, and IESO will require even greater clarification and guidance from the government going forward, especially on how trade-offs and resolving conflicts between economic growth and other objectives are to be made. For example, proactively building out transmission, distribution, and/or generation to meet forecast demand growth, achieve energy security, and not miss potential economic opportunities, will require a fundamental re-evaluation of traditional views of what constitutes “overbuilding” infrastructure. Similarly, the IEP’s statement that integrated planning should result in “[f]ocusing on customers’ total energy bills, instead of electricity and other fuel bills separately,” will also likely require additional direction from the government to the OEB and IESO.
Power Advisory strongly advises clients and interested parties to read the letters of direction in detail given the volume and breadth of issues (i.e., planning, loads, connections, transmission, distribution, stakeholder participation, and supply resources) as well as the report backs required from the OEB and IESO by the end of 2025
Please contact Power Advisory if you have any questions or would like any additional information.