This bulletin was updated on December 24, 2025.
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 (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 exceeding 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 and instead encourages such projects to participate in the LT2 RFP.
The capacity stream will be open to projects equal to or larger than 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 IESO is currently proposing that LLT(c) and LLT(e) project proponents must have at least two team members with experience in 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 has indicated that the LLT RFP will include a confidential Reserve Price to ensure successful projects remain cost-effective. The Reserve Price will be calculated by the IESO, in part, by reference to the results of the LT2 Window 1 procurements. The IESO will also not permit a second round of bid submissions where an initial bid exceeds the Reserve Price.
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 hours of continuous energy.
- The IESO is considering adding a mandatory requirement or rated criteria for the installation of equipment to provide regulation services in the future. Under the LLT(e), this requirement is generally being considered for hydro facilities with a maximum contract capacity greater than 20 MW.
- The IESO expects a similar rated criteria approach for 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.
Contract Provisions
The IESO has decided not to add a real-time must offer requirement in the LLT(c). The IESO continues to evaluate the merits and potential costs of expanding the qualifying hours to include weekends and holidays.
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 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. However, the IESO is considering one long-term outage of the contract term up to a maximum of 12 months.
The same environmental attributes regime as in the LT2 contracts (i.e., supplier benefits from revenue) is proposed for the first half of the 40-year contract. The IESO has confirmed that a revenue-sharing mechanism between the supplier and the IESO will apply for the last 20 years of the LLT contract term.
The IESO has decided not to include optional termination as part of the LLT contract.
The IESO is proposing to include a provision that would permit suppliers to revise their proposal price based on post-proposal import tariffs, similar to the LT2 RFP. The IESO has indicated that escalation for the first 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 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 remain in flux, including early in-service provisions and the rolling average period over which non-performance charges will be determined.
Next Steps
Drafts of the LLT RFPs and contracts can be found here.
The IESO is offering early deliverability discussions with LLT RFP proponents between December 2025 and January 2026 and issue 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 January 15, 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.
