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

This bulletin was updated on February 26, 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.

There will be no early in-service financial incentives. Commencing commercial operation between the 5^th and 7^th year anniversary of the LLT contract date will require prior written IESO consent.

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

The IESO has decided to include eligibility for separately metered expansions, including hydro redevelopments, in both the capacity and energy streams.

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).

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. The IESO is introducing a bespoke independent engineering (IE) certification specific to Class II projects, verifying eligibility.

The IESO is proposing that 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 has indicated that the LLT RFP will include a confidential Reserve Price (but will be shared with the Fairness Advisor ahead of the LLT RFP submission deadline) 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 RFP (Window 1). 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 1.5 rated criteria points for projects that can offer more than 10 hours of continuous energy, and to award 10 rated criteria for more than 12 hours of continuous energy (based on final test capacity check). These rated criteria would have a 5% impact on the overall evaluated LLT project proposal price.
• Rated criteria will also be offered for Indigenous community participation (i.e., up to 3 points can be obtained where the project involves Indigenous economic participation, and up to an additional 3 points where the project is located on traditional Indigenous territories). These rated criteria would have a 15% impact on the overall evaluated LLT project proposal price.
  • 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 mandatory municipal and/or Indigenous community support confirmation.
• No rated criteria points are available for siting projects outside of prime agricultural areas.

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 (i.e., regulation readiness).

Under the LLT(c), this requirement will apply to all transmission-connected facilities with a nameplate capacity of at least 20 MW. A verifying independent engineering certificate will be required. 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.

Supply Chain Disclosure Plan

Pursuant to Ontario government policy, the IESO expects the LLT RFP will incent sourcing of goods and services from within Canada. Minimum requirements currently under consideration include proposal submissions specifying the expected country of origin of goods and services and a rationale for when goods and services are being sourced from outside Canada.

There is no expected minimum content level currently being considered, but the IESO is proposing that proponents may elect to pursue additional incentives (e.g., if 75% domestic-sourced content or total project costs are achieved, then the IESO may apply a 2% reduction in the evaluated proposal price). Liquidated damages could apply if the 75% threshold is in fact unmet as at commercial operation.

Other “Buy Local” provisions remain under development and are subject to final government direction.

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) 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.

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.

Indexation

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.

Next Steps

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

The IESO is currently engaging in deliverability guidance discussions with potential proponents. The IESO expects to issue final LLT RFP and contract documents by April 30, 2026. LLT proposal submissions are estimated to be due October 1, 2026 (with registration beginning July 30, 2026), and LLT contracts to be awarded by March 30, 2027.

Stakeholders are invited to submit written feedback to the IESO on the proposed supply chain disclosure provisions by March 5, 2026, and on the remainder of the LLT RFP by March 12, 2026.

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

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