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On January 7, 2026, the Ontario government announced that it approved the recommendation of the Independent Electricity System Operator (IESO) to build a new underwater electricity transmission line from near the Darlington Nuclear Generating Station to the downtown core and eastern portion of the City of Toronto ("Toronto Third Line").
Electricity demand in Toronto is expected to double by 2050 and the City is supplied by two transmission lines that will begin to reach their capacity in the 2030s.
The government's decision to proceed with a third transmission line comes after extensive IESO analysis of options to meet growing electricity demand in Toronto. The IESO's recommendation to proceed with the Toronto Third Line option is detailed in its 2025 Toronto Integrated Regional Resource Plan.
The development, construction and commissioning of the Toronto Third Line could take seven to ten years to complete. The line is expected have the capacity to deliver 900 MW of additional power to Toronto, being enough to supply 900,000 new homes.
While high-voltage underwater transmission lines have been used in other provinces, the Toronto Third Line project will be a first-of-its-kind for Ontario.
Proposed Minister's Directive
The Ministry of Energy and Mines ("Ministry") is proposing to issue an Order in Council and Minister's Directive under the Electricity Act, 1998 directing the IESO to conduct a competitive procurement process to select a transmitter and enter into a contract with an in-service date of 2037 or sooner.
A competitive approach is being undertaken with the government's stated objectives to drive value for ratepayers while accelerating construction and creating opportunities for Indigenous participation and good-paying jobs across the province. Expanding transmission infrastructure is a key pillar of Energy for Generations, the province's integrated energy plan that was released in June 2025.
Eligibility & Evaluation Criteria
The Ministry is proposing that the procurement be limited to applicants that can demonstrate experience with underwater transmission projects and engagement with Indigenous communities.
The Ministry's proposed evaluation criteria for the IESO's transmitter selection would consider the following:
- Applicant's plans for Indigenous engagement and economic participation.
- Incentives to maximize participation and support for Ontario and Canadian businesses.
Requirements for Procurement Contract
The Ministry is proposing to direct the IESO to enter into a contract with the selected transmitter which includes the following contract terms:
- accountability mechanisms with respect to the transmitter's economic participation commitments to Indigenous communities, as well as commitments to supporting Ontario and Canadian businesses.
- Incentive for schedule adherence to an in-service date.
- Cost containment mechanisms that will be incorporated into the Ontario Energy Board's rate regulation process
- Completion of all applicable environmental approvals and other permits, including fulfilling any Duty to Consult in respect of the approval or permit.
The Ministry's consultation is open for public feedback until February 21, 2026.
IESO Transmitter Selection Framework
The Toronto Third Line project will be the first IESO-led competitive procurement process to select a transmitter. It is expected that the core objectives and principles of the IESO's new competitive Transmitter Selection Framework (TSF), which have been developed through IESO stakeholder engagement since 2023, will be relevant.
The IESO is holding its next TSF engagement session on January 28, 2026 which will include considerations for an Indigenous participation framework and design of a competitive procurement process for the Toronto Third Line.
Clients that are interested in participating in the Toronto Third Line procurement should consider applying to the IESO's qualified transmitter registry (TSF Registry) which is likely to be a prerequisite for participation in the procurement. According to the IESO, the TSF Registry is intended to ensure a pool of experienced and capable proponents are in place which will allow procurement processes to move forward efficiently as transmission projects are identified.
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