In the previous issue of Energy Regulation Quarterly, our article, “Connecting Data Centres in Ontario: Key Considerations and Challenges” explored the various regulatory requirements and considerations for developing and connecting data centres in Ontario. The article highlighted the importance of parties staying vigilant to regulatory and legislative changes impacting connection processes and cost responsibility and understanding the implications of the Market Renewal Program’s (“MRP”) changes to the Ontario wholesale electricity market administered by the Independent Electricity System Operator (“IESO”). Since its publication, several announcements have been made which will affect data centre connectivity in Ontario. This addendum highlights the key policy and legislative changes energy sector should be aware of.

On June 3, the government introduced Protect Ontario by Securing Affordable Energy for Generations Act, 2025 (“Bill 40”) which explicitly addresses data centre connectivity.^[1] While Ontario’s electricity grid is based on the foundational requirement to provide non-discriminatory access (i.e. that any participant may connect regardless of its identity or features), Bill 40 creates an exception to this access right for “specific load facilities” connecting to Ontario’s electricity grid.^[2] The proposed section 28.1 of the Electricity Act, 1998 outlines that transmitters or distributors shall not connect (or reconnect) a “specified load facility” onto the electricity system unless connection requirements that are specified in the regulations are met.^[3] A “specified load facility” is defined as a facility or class of facilities “that is a data centre” and meets criteria set out in regulation.^[4] At time of publication, this bill has only passed first reading and no regulation has set out any specified connection requirements. However, if Bill 40 passes, data centre proponents looking to connect to Ontario’s grid could be subject to additional requirements soon.

On June 12, the government published its first Integrated Energy Plan, “Energy for Generations: Ontario’s Integrated Plan to Power the Strongest Economy in the G7” (the Plan).^[5] The Plan, which is statutorily required under the new Affordable Energy Act, 2024, articulates several new programs and initiatives to deliver “affordable, secure, reliable and clean” energy. ^[6] In relation to data centres, the Plan references the forecasted increase in demand from the data centre industry and well as newly introduced Bill 40. Specifically, the Plan highlights the proposed Bill 40 and how it “would allow Ontario to manage electricity connection requests and prioritize data centres that deliver real local, strategic and economic benefits — not just power consumption”. ^[7] This objective aligns with Bill 40’s proposal to introduce new purposes of the Ontario Energy Board Act and Electricity Act to support economic growth, and may offer insight into the policy objectives that future connection requirements under the Regulation may seek to advance. Given these details, and noting that the applicable requirements are not known at this time, data centres proponents should consider ways to demonstrate their economic potential in the region they wish to connect in.

The regulatory landscape for data centre development and connectivity in Ontario continues to evolve. With the introduction of Bill 40, the release of Ontario’s first Integrated Energy Plan, and increased market experience following IESO’s Market Renewal Program, data centre proponents must remain attentive to emerging requirements and public policy shifts. While the full implications of these changes are still unfolding — particularly as regulations under Bill 40 have yet to be released — available information suggests that it may be important for data centre proponents to demonstrate economic value to secure grid access. Proponents should continue to monitor developments closely and engage early with the OEB and IESO to navigate the emerging framework effectively. 

• * Daliana Coban is counsel at Torys LLP in its energy regulatory practice. Before joining Torys, Daliana was the Director of Regulatory Applications and Business Support at Toronto Hydro. While there, she was also a member of the Adjudicative Modernization Committee, which was formed in 2021 to provide early advice, input and feedback on enhancing adjudication processes and policies at the Ontario Energy Board. With over a decade of experience in the regulated electricity industry, Daliana offers practical counsel on a wide range of complex regulatory matters, including in public and administrative law, economic regulation, and regulatory compliance.

  Daniel Gralnick is a senior associate at Torys LLP in its energy regulatory practice. His experience includes advising public and private sector energy sector participants on matters relating to electricity markets, regulatory proceedings, including rate applications, energy procurements, and regulatory and commercial issues arising from energy transactions and project development.

  Ian T. D. Thomson is an incoming associate at Torys LLP with a focus in its energy and infrastructure practice areas. He previously worked as a public policy consultant providing research, analysis and strategic advice to governments, media outlets and research institutes on energy policy matters. The views expressed in this article are those of the authors alone, and do not necessarily reflect that of Torys nor any other person or entity.

  ¹ Ontario, “Ontario Securing Affordable Energy for Future Generations” (last visited 4 June 2025), online <news.ontario.ca/en/release/1005988/ontario-securing-affordable-energy-for-future-generations>.

• ² Legislative Assembly of Ontario, “Bill 40: An Act to amend various statutes with respect to energy, the electrical sector and public utilities” (last visited 4 June 2025), Schedule 1, s 28.1, online (pdf): <ola.org/sites/default/files/node-files/bill/document/pdf/2025/2025-06/b040_e.pdf>. 

• ³ Ibid.

• ⁴ Ibid at s 28.1(1).

• ⁵ Ontario, “Energy for Generations: Ontario’s Integrated Plan to Power the Strongest Economy the G7” (last visited 30 June 2025), online (pdf): <ontario.ca/files/2025-06/mem-energy-for-generations-en-2025-06-20.pdf>.

• ⁶ Ibid at 6.

• ⁷ Ibid at 22.