Welcome to the latest edition of the Shepherd Rubenstein Energy Regulatory Update, our quarterly roundup of key developments in Ontario’s energy sector. This edition covers developments from January through March 2026.
Ontario Energy Board
The OEB issued a number of notable decisions over the last few months, including:
- Approving a settlement proposal for Phase 3 of Enbridge Gas’s 2024–2028 rebasing proceeding, which addresses the harmonization of rates across Enbridge Gas’s legacy Union Gas and Enbridge Gas Distribution service territories. The settlement, among other matters, reduces 42 rate classes to 16, establishes one distribution rate zone and three gas supply, storage, and transportation zones, and introduces a rate mitigation plan that phases in bill impacts for some customers.
- In Elexicon Energy’s Incremental Capital Module (ICM) application, the OEB approved incremental funding of $6.55 million of the proposed $9.7M for the Sandy Beach Transformer Station project, but denied the requested $18.38M for the Dual Element Spot Network project at Belleville TS, finding that it was not prudent for customers to pay for the project beginning January 2027, when the forecast in-service date is not until December 17, 2026.
- Approving for recovery, in part, Greater Sudbury Hydro’s request for certain amounts for Other Post-Employment Benefits (OPEBs) resulting from a previous transition from cash to accrual accounting. Greater Sudbury Hydro had proposed to recover a net amount of $18.19M from ratepayers over ten years. The OEB approved only $9.5M of the OPEB Transitional Amount DVA balance.
- Granting Enbridge Gas leave to construct approximately 3.1 kilometres of natural gas pipeline in the Town of Oakville and the City of Mississauga, to serve three existing industrial customers. Commissioner Dodds dissented in part, opposing a condition imposed by the majority requiring Enbridge Gas to provide copies of the Stage 2 Archaeological Assessment and Cultural Heritage Assessment Report to affected First Nations for review and comment before submitting them to the Ministry of Citizenship and Multiculturalism.
Draft updates to the Non-Wires Solutions Guidelines were issued for comment, including a new appendix providing guidance on Stream 2 local electricity demand-side management (eDSM) programs. The OEB also released draft revisions for Phase 2 Revisions to the BCA Framework
The OEB CEO issued the first policy direction under the new section 13.1 of the Ontario Energy Board Act, directing OEB staff to identify portions of Integrated Energy Plan that are relevant to matters at issue in a proceeding.
The OEB issued a Notice of Hearing commencing a generic review of the Model Franchise Agreement for Natural Gas. The review will examine provisions relating to alternative easements, pipeline relocation cost-sharing, disposition of decommissioned gas systems, and non-substantive administrative updates.
Through its Innovation Sandbox, the OEB announced funding for five energy projects that empower Indigenous innovation and leadership.
The OEB launched its Centralized Capacity Information Map (CCIM), a new tool providing transparent grid capacity data for both load and distributed energy resource connections across Ontario.
Updated filing requirements for natural gas rate applications were released.
The OEB issued its 2026 annual updates to the Electricity Reporting and Record Keeping Requirements (RRR).
An Assurance of Voluntary Compliance was entered into with Entegrus Powerlines Inc. regarding the incorrect application of the Ontario Electricity Support Program (OESP) credits to water and wastewater.
The OEB entered into a Memorandum of Understanding with the Technical Standards and Safety Authority (TSSA) regarding hydrocarbon pipelines in Ontario, clarifying the respective regulatory roles and responsibilities of the two organizations.
As part of its 10-Point Action Plan, the OEB released an implementation update on Item 2, establishing budgets for intervenors in certain applications, and Item #3 categorizing intervenors by interests and developing approaches for increasing collaboration. It also released its Active Adjudication Information Sheet.
Independent Electricity System Operator
The IESO released its 2026 Annual Planning Outlook (APO), projecting a 65% increase in electricity demand over the next 25 years, down from the 75% growth projected in the 2025 APO. The revised forecast reflects lower expected demand from electric vehicles and data centres, partially offset by continued growth in electrification and economic activity.
The IESO continued engaging and preparing for the Long Lead-Time (LLT) RFP, including updates to the draft RFP and contracts, and the introduction of incentives in the RFP evaluation for commitment to use Canadian content. As a procurement directive was not expected by the end of March, the IESO indicated that the launch of the RFP in April.
The Technical Panel approved a market rule amendment addressing adjustments to real-time make-whole payments (subsequently approved by the IESO Board of Directors).
The IESO launched its Corporate Power Purchase Agreement (C-PPA) framework for industrial, commercial, and institutional (ICI) participants for the 2026–2027 base period, pursuant to the amended O. Reg. 429/04. The framework allows eligible ICI participants to enter into C-PPAs with renewable generators. The submission window was open from February 1 to March 30, 2026.
The IESO finalized the membership of the Renewed Market Advisory Forum (RMAF).
The Q1 2026 Reliability Outlook was released.
Legislative and Regulatory
OPG and the Municipality of Port Hope announced an agreement to advance a new nuclear generating station at Wesleyville, with potential capacity of up to 10,000 MW. OPG filed an Initial Project Description with the Impact Assessment Agency of Canada on January 12, 2026, initiating the federal impact assessment process.
The Ontario Government approved the construction of a new transmission line to downtown Toronto, the first project to proceed through an IESO-led competitive transmitter selection process. The project involves an approximately 900 MW underwater high-voltage direct current (HVDC) cable from the Darlington area to downtown Toronto, with construction expected to take seven to ten years.
Late last year, the Ontario Government declared the Greenstone Transmission Line was a priority project, a 230 kV single-circuit line, between Nipigon Bay and Aroland First Nation. In January, the Ministry of Energy and Mines directed that Hydro One be designated as the transmitter. The Ontario Government also declared the Barrie to Sudbury Transmission Lines a priority project, consisting of two 500 kV lines between Essa Transformer Station and Hanmer TS, the Minister directed the designation of Hydro One as the transmitter for the project.
The Ministry of Energy and Mines launched a study to identify and protect a corridor of land for future transmission infrastructure within and adjacent to the Parkway Belt West Plan lands.
Initiated by Ontario, ten provinces and territories signed a National Energy Corridor Agreement on March 4, 2026, committing to expand interprovincial transmission and energy infrastructure.
Federal Government
Bill C-15, the Budget Implementation Act, 2025 received royal asset, bringing the Clean Electricity Investment Tax Credits into force. The Department of Finance also held a consultation regarding the possible introduction of domestic content requirements as part of the Clean Technology and Clean Electricity Investment Tax Credits.
The Government of Canada announced investments to unlock Canada’s critical minerals, including up to $17.8 million under the Energy Innovation Program for four projects to advance clean energy technologies. Separately, the Government of Canada announced $28.9 million for 12 clean energy technology projects under the Energy Innovation Program, including $16.9 million for carbon capture, utilization and storage projects, $9.2 million for renewable energy projects, and $2.8 million for smart grid regulatory innovation and capacity-building projects.
Judicial
In Environmental Defence Canada Inc. v. Ontario Energy Board, the Ontario Divisional Court dismissed an appeal by Environmental Defence (ED) of OEB decisions granting Enbridge Gas leave to construct four natural gas pipelines under the National Gas Expansion Program (NGEP). ED argued that the OEB erred in law and breached procedural fairness by denying its requests to file evidence on the cost-effectiveness of heat pumps relative to natural gas and to convene a technical conference. The Court held that the OEB did not apply the incorrect legal test in refusing the proposed evidence and that the OEB properly considered whether its probative value outweighed the need for expeditious resolution. Applying the five Baker factors, the Court found that ED’s procedural rights as an intervenor were at the lower end of the spectrum and that the OEB’s discretion to control its own process was entitled to considerable deference.
Shepherd Rubenstein News
Mark Rubenstein will be a panelist at the Ontario Bar Association’s Energy Law 2026: Corporate, Regulatory & Policy Changes virtual program. No need to be an OBA member (or even a lawyer) to attend.
Things We Are Reading
OpenGridWorks, an incredibly cool visualization of electricity generation sources and transmission lines across Canada and the United States, the Ontario Energy Association’s Ontario DSO Roadmap, the Lawrence Berkley National Laboratory’s, United States 2026 Retail Electricity Price Trends and Drivers Update, Professor Paul Daly’s annual tour de force article on administrative law developments relevant to energy law and regulation.
As always, if you have any questions, or think we can be of assistance to you or your organization, please do not hesitate to reach out to Mark Rubenstein at mark@shepherdrubenstein.com.