Latest Updates on Ontario’s Long Lead-Time Request for Proposals

This bulletin was updated on January 30, 2026.

This is the latest on the Independent Electricity System Operator (IESO) Long Lead-Time Request for Proposals (LLT RFP). The LLT RFP aims to address growing demand in Ontario’s electricity sector by securing energy and capacity resources with longer lead times for project development.

Background

The IESO began engaging with stakeholders on the design of the LLT RFP in April 2025, following the issuance of the Long Lead-Time Request for Information (LLT RFI) in 2024. The IESO submitted the LLT RFI results to the Ministry of Energy and Mines (Ministry) on August 29, 2025.

Eligibility

The LLT RFP is a reliability-based procurement intended to secure incremental energy and capacity from new-build resources with a lead time of five or more years that will contribute to system needs over a 40-year term.

The LLT RFP will be bifurcated into an energy stream (LLT(e)) of up to 1 TWh and a capacity stream (LLT(c)) of 600 MW to 800 MW. Both streams will be administered in a single procurement window.

The energy stream will be open to new hydroelectric resources of at least 1 MW (i.e., reservoir hydro with storage capability, excluding pumped hydro). Despite the new-build eligibility requirement, the IESO has decided to preclude LLT RFP eligibility for hydro redevelopments, including separately metered expansions, and instead encourages such projects to participate in the LT2 RFP.

The capacity stream will be open to projects of at least 10 MW that use a long-duration energy storage (LDES) technology, including pumped hydro storage and compressed air energy storage (Class I) and liquid air energy storage and pumped thermal energy storage (Class II). The instantaneous maximum withdrawal capability of the facility must be at least the project’s nameplate capacity.

LLT(c) and LLT(e) project proponents must have at least two team members with experience in each of planning, developing, financing, constructing and operating at least one “Qualifying Project” (i.e., nameplate capacity of at least 1 MW for LLT(e) and 10 MW for LLT(c) that achieved commercial operation in the last 15 years). The IESO has expanded the definition of “Qualifying Projects” for the LLT RFP beyond North America to include projects that have reached commercial operation in Japan, Australia and parts of Europe (U.K., Italy and France).

For the LLT(c) only, where a proponent is proposing a project utilizing a Class II LDES technology, they must also have at least two team members with experience in planning and developing a Same Technology Qualifying Project (i.e., one that uses the same storage technology, has a nameplate capacity of at least 1 MW and is expected to reach commercial operation in Canada, the U.S., the U.K., Italy, France, Australia, Germany or Japan on or before December 31, 2029). The IESO is also considering other reporting requirements.

The IESO is proposing that the LLT RFP include a confidential Reserve Price to ensure successful projects remain cost-effective. The Reserve Price would be calculated by the IESO, in part by reference to the results of the LT2 RFP. A second round of bid submissions where an initial bid exceeds the Reserve Price would not be permitted.

Rated Criteria 

Rated criteria will be finalized by the Ministry in a future directive. For now, the IESO is proposing to award rated criteria points for:

• Projects that can offer more than the minimum eight (8) hours of continuous energy
• Indigenous community participation (i.e., more points can be obtained where the project involves Indigenous equity participation, and even more where the project is located on traditional Indigenous territories). The IESO is awaiting formal policy direction from the Ministry on this. For project sites on Indigenous lands and/or municipal project lands, a pre-engagement confirmation notice will be required. This notice must be delivered to the IESO at least 60 days before the date of the municipal and/or Indigenous community support confirmation

Contract Provisions

Regulation Service Equipment Installation

There is a new mandatory requirement for the installation of equipment to enable the provision of regulation services under a subsequent procurement or contract.

Under the LLT(c), this requirement will apply to all transmission-connected facilities with a nameplate capacity of at least 20 MW. The IESO will have associated equipment testing and audit rights.

Tarriff Impacts 

The LLT will also include a provision that would permit suppliers to revise their proposal price based on post-proposal import tariffs, similar to the LT2 RFP. However, the IESO will have sole and absolute discretion to terminate the LLT contract based on the revised proposal price with no reimbursement of costs already incurred by the proponent.

Outages

For LLT(e) contracts, the IESO recommends that proponents incorporate planned outages in their imputed production factors to avoid availability non-performance charges. For capacity stream contracts, planned outages will similarly be considered as part of the calculation for availability non-performance charges and will be permitted over a single month or two months during a contract year.

The LLT will also permit mid-term extended outages of one or more units for up to a maximum of 12 months at the facility level. Such mid-term outages may be requested to take place beginning in the 11^th contract year. During such mid-term outages, partial contract payments will be made for any units that continue to operate.

Environmental Attributes

The same environmental attributes regime as in the LT2 contracts (i.e., supplier benefits from revenue) will apply to the first half of the 40-year contract, but a revenue-sharing mechanism between the supplier and the IESO will apply for the last 20 years.

Reimbursement Reference Efficiency

The IESO has reduced the Reimbursement Reference Efficiency included in the calculation of the Regulatory Charge Credit for the LLT(c) from 75% to 60% to reflect lower expected round-trip efficiency for energy storage facilities.

Indexation

The escalation for the first LLT contract year will be equal to the Indexed Fixed Capacity Payment (IFCP) or Indexed Fixed Price (IFP) multiplied by the Pre-COD Indexing Factor (based on Consumer Price Index (CPI)). For each subsequent LLT contract year, 20% of the IFCP or IFP will be escalated by the index factor, which is based on the year-over-year changes to the CPI.

Other items

Other items remain in flux including relating to early in-service incentives, site access rights requirements and the calculation of LLT(e) contract revenues during periods of reduced water availability (using the E-PPA model similar to the LT2(e)).

The IESO is also awaiting further direction from the Ministry as to whether LLT proponents will be required to align their submissions with the recently enacted Buy Ontario Act by including a “Local Supply Plan” demonstrating a prescribed level of Ontario and/or Canadian-sourced goods, services and workforce resources.

Next Steps

Drafts of the LLT RFPs, contracts and prescribed forms can be found here.

The IESO intends to issue final LLT RFP and contract documents by the end of Q1 2026 and provide deliverability guidance to proponents in Q2/Q3 2026. LLT proposal submissions are estimated to be due in Q4 2026, with LLT contracts to be awarded in Q1/Q2 2027.

Stakeholders are invited to submit written feedback to the IESO by February 11, 2026.

Our team is closely monitoring developments related to the LLT RFP and will provide updates when more details are available.

For more information, please contact the authors or any other member of our Energy Regulatory or Power groups.