This bulletin was updated on October 20, 2026.
This is the latest on the integration of repowered facilities in the second window of the Independent Electricity System Operator’s (IESO) Long-Term 2 (LT2) Request for Proposals (RFP) and Medium-Term 3 (MT3) RFP.
Eligibility
In late 2025, the IESO advised that repowered facilities would be ineligible to participate in the first window of the LT2 RFP (i.e., LT2(e-1) and (c-1)), but that steps would be taken to integrate participation by repowered facilities in the second window of the LT2 RFP (i.e., LT2(e-2) and (c-2)).
The IESO has since announced it will indeed be offering an LT2(e-2) and (c-2) RFP stream for repowered facilities with a cap of one terawatt (TW). This is in addition to the procurement targets for new-build facilities (3.6 terawatt-hours (TWh) energy and a minimum of 400 megawatts (MW) capacity), which will proceed by way of its own separate stream to ensure they remain competitive against the project development cost advantages that already existing facilities may have. The MT3 will also be proceeding by separate energy and capacity streams, each with its own procurement target.
Non-market participant distribution-connected resources, and other resources with a nameplate capacity of less than one MW continue to be ineligible to participate in the LT2 and are instead encouraged to participate in the IESO’s pending Local Generation Program.
The IESO expects the final LT2(c-2) contract will include an off-ramp for thermal generation facilities to exit LT2(c-2) contracts early if future legislation (e.g., Canada Electricity Regulations) prevents continued compliance.
Alignment
In order to align with what is now an expected milestone commercial operation date (MCOD) of May 1, 2032 for LT2(e-2) and (c-2) facilities, the IESO intends for already existing facilities with soon-to-be-expiring 20-year contracts to have successfully bid for an MT2 contract or to otherwise bid into the pending MT3 procurement (proposal submission in Q2 2027 and final contract awards in Q3 2027).
MT3 facilities can commence commercial operation on May 1 between 2028 and 2032, with up to six-month bridging extensions as needed. The IESO is considering allowing MT3 proponents to elect between three- to 10-year contract terms with multiple proposal prices, but limiting the number of contracts with longer than five-year terms. Upon completion of the first three years of the applicable MT contract, existing facilities may elect to compete as repowered bids in the LT2(e-2) and (c-2) RFP in parallel with the new-build facilities stream. Such proponents must specify whether they intend to complete all repowering work after terminating their respective MT contract, or otherwise complete some portion of the repowering work while still operating under the MT contract.
In other words, the IESO is seeking to extract more competitive pricing for existing facilities to continue operations until closer to their natural end-of-life before effectively reimbursing such facilities under LT2(e-2) and (c-2) contracts to undergo repowering.
In the alternative, existing uncontracted facilities may also be eligible to participate in the LT2(2) if they have been operating for at least 23 years by May 1, 2032, i.e. have an original in-service date of May 1, 2009 or earlier.
A further separate one-on-one commercial negotiation approach continues to exist for potential LT2(e-2) and (c-2) facilities that have never had an IESO procurement contract.
Mandatory Requirements
Recognizing that existing facilities are already sited and operational, the IESO intends to take a less prescriptive approach to certain regulatory approvals and permitting requirements under the LT2(e-2) and (c-2) stream for repowered facilities as compared to the new-build facilities stream. For instance, similar to the MT1 and MT2 procurements, repowered facilities competing in the LT2(e-2) and (c-2) may only be required to submit an independent engineer (IE) certificate confirming it is reasonable to assume there is at least an additional 20-year useful life for the repowered facility.
Notwithstanding, and subject to further government direction, LT2(e-1) and (c-1) municipal support and agricultural land use restrictions will continue to apply to the LT2(e-2) and (c-2) repowered facilities stream and to the new-build facilities stream.
The IESO is adding a mandatory requirement for LT2(c-2) facilities able to provide at least 20 MW to install required equipment to be ready to provide regulation services in the future (i.e., regulation readiness). The minimum regulation capacity is 10 MW above or below the minimum loading point with an associated ramp rate of at least five MW per minute.
Contract Provisions
In response to stakeholder engagement, the IESO has agreed to retain the day-ahead to real-time adjustment (DARTA) in the LT2(2-e), but will be reducing the protection threshold from 85% to 60%. The IESO is considering a similar reduction for the MT3.
Rated Criteria
Rated criteria points will be offered for both LT2(e-2) and (c-2) streams for Indigenous participation (up to six points); project location (up to two points) with up to an additional three points for not being located in a prime agricultural area; non-wires alternatives, i.e. deferring or avoiding a transmission investment (one point); and duration (capacity only) (up to three points).
Because repowered facilities are already sited, they will not be eligible for location-based rated criteria points.
Deliverability Guidance
Deliverability testing and assessment will be required for repowered facilities only where there is an increase in the original nameplate capacity, and for all new build facilities.
Preliminary connection guidance for the LT2(2) has been issued by the IESO, and incorporates planned transmission upgrades as well as results from LT2(e-1) and (c-1). This includes the recently procured 640 MWs through the LT2(c-1) RFP and 2,370 gigawatt-hours (GWh) through the LT2(e-1) RFP.
Final deliverability guidance for the LT2(2) is to be issued by July 2027 that builds on the initial draft by incorporating results from the IESO Long-Lead Time (LLT) RFP (see our September 2026 Blakes Bulletin: Updates on Ontario’s Long Lead-Time Request for Proposals).
The IESO will also be issuing an update to its Capacity and Energy Qualification Guidance document for the MT3.
Design Incentives
IESO expects the LT2(2) RFP to include domestic content incentives including a Supply Design Disclosure Plan, similar to those introduced in the LLT RFP.
Next Steps
We expect further developments concerning the above and other aspects as stakeholder engagement continues and before the final LT2(e-2), (c-2) and MT3 RFP launches in Q1 2027. Stakeholders are invited to submit written feedback to the IESO by October 30, 2026.
Our team is closely monitoring developments related to the LT2(2) and MT(3) and will provide updates when more details are available.
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