This decision aligns with directives from Ontario's Minister of Energy, who has outlined a roadmap for the Ontario pumped storage project, including the negotiation of a cost recovery agreement with the Independent Electricity System Operator (IESO). Pending an agreement with the IESO, this strategic move will facilitate the ongoing development of the project, in line with Ontario's long-term vision for economic growth and the establishment of a sustainable, reliable, and clean electricity system.
Annesley Wallace, Executive Vice-President, Strategy and Corporate Development, and President, Power and Energy Solutions at TC Energy, emphasized the importance of the Minister's direction, stating: "It recognizes the critical role that pumped hydro storage will have in enhancing the diversity of Ontario’s supply mix and achieving a net-zero electricity grid."
Conrad Ritchie, Chief of Saugeen First Nation, and Gregory Nadjiwon, Chief of Chippewas of Nawash Unceded First Nation, underscored the significance of Indigenous participation in electricity development. Ritchie noted: "The Ontario Pumped Storage Project is a long overdue energy initiative with real benefits for the Indigenous people of the land."
Looking ahead, TC Energy will collaborate with the Ministry and the OEB to establish a potential long-term revenue framework for the project, culminating in a report to the Minister by July 31, 2024. Simultaneously, the company will provide a detailed report to the Ministry outlining estimated development costs and schedules. Following the submission of these items, the Ministry will provide a recommendation to proceed with pre-development work within 45 days.
Subsequently, TC Energy will engage in negotiations with the IESO to craft a cost recovery agreement aimed at recuperating eligible expenses associated with pre-development work. A follow-up report will be submitted to the Ministry by the IESO within 60 days of estimates submission.
This comprehensive approach ensures that the Ontario Pumped Storage Project remains on a trajectory for success, with the final decision to fund development costs subject to Cabinet approval and a future Ministerial directive to the IESO to execute the agreement with TC Energy. The initiative is expected to be a cornerstone in Ontario's energy landscape, designed, engineered, and built by a domestic supply chain, creating 1,000 well-paid, unionized jobs and sourcing over 75% of materials locally. Construction is anticipated to commence in the latter part of this decade, with in-service projected for the early 2030s, contingent upon regulatory and corporate approvals. Future capital allocation decisions will adhere to TC Energy's net capital expenditure limit of $6-7 billion post-2024.
