Advocacy on Local Electricity Distribution

Top Insights

• The province’s Panel for Utility Leadership and Service Excellence (PULSE) and AMO held townhall meetings with municipal elected officials and CAOs. The panel shared details about their mandate and scope, including that it is not considering mandatory consolidation and is instead focusing on making sure LDCs have the right tools to meet local needs.
• AMO’s LDC review submission urged the province to prioritize local growth planning needs and accountability with broader provincial energy planning goals. We specifically asked the province to maintain majority public ownership of LDCs; provide flexibility on board composition and governance, financial models, and performance reporting; and take the timing of the 2026 municipal election into account in implementation plans.
• The province has released the final regulation outlining criteria for the designation of Special Economic Zones which can be used to exempt projects from legislation, regulations, or by-laws. The province now has the authority to exempt designated projects from municipal by-laws while simultaneously offering municipalities "trusted proponent" status to bypass laws for high-priority local developments benefiting the economy.

AMO Townhalls on the Panel for Utility Leadership and Service Excellence (PULSE)

AMO recently hosted two townhall webinars led by PULSE Chair Anthony Haines, and members of the panel including Alex Nuttall, Paula Conboy, and David MacNaughton. These townhalls provided an opportunity for discussion and feedback on the PULSE mandate, and potential recommendations on how local distribution corporations (LDCs) can finance and deliver infrastructure. PULSE is expected to deliver its final recommendations to the Minister of Energy and Mines in early 2026.

Following the townhalls, PULSE Chair, Anthony Haines reached out to AMO expressing gratitude for AMO’s stakeholder engagement support. He also took the opportunity to note that the panel is not recommending further LDC consolidation, in addition to summarizing key themes that emerged in stakeholder consultations. The full letter to Karen Nesbitt, Director of Policy and Government Relations at AMO, is reproduced in full, below.

Hello Karen,

We appreciate your continued engagement on the Panel for Utility Leadership and Service Excellence (PULSE) and thank AMO for its efficient coordination with municipalities across the province. The focus on municipal shareholder perspectives has been particularly helpful.

The Panel remains committed to developing solutions as stakeholders navigate the pressures of growth and change in the electricity distribution sector. Since amalgamation and corporatization began in 1998, the number of electricity utilities in Ontario has decreased from 307 to 58. While the Panel is not recommending further consolidation, our goal is to create an environment where municipal shareholders of electricity utilities can have informed conversations about the next steps in the evolution of electricity distribution in Ontario. We are not seeking to limit options, but rather to expand them.

Key themes emerging from our engagement include:

• Local employment needs: Many electricity utilities will require a significant increase in resources—potentially doubling—to meet growth demands and this will require more skilled workers in communities across the province.
• Long-term planning: As asset-intensive businesses, electricity utilities need funding strategies aligned with long-term planning horizons.
• Regulatory challenges: Stakeholders have expressed concern that the current regulatory system is overly burdensome, leading to under-earning for many utilities. While customer protection remains essential, regulatory requirements should be re-evaluated to ensure they are balanced, incremental, and supportive of investor confidence.
• Investment barriers: The existing tax system presents obstacles to investment, and solutions must be identified to encourage capital inflows where necessary.
• Mergers and acquisitions: Where a merger or acquisition makes sense, the regulatory process is seen as cumbersome and slow, requiring retooling to better support timely decisions.
• Governance models: To attract external partners, governance structures must evolve to reflect collaboration with the financial community.
• Funding diversity: Funding sources will vary depending on utility size, and tailored solutions will be necessary for both the largest and smallest entities.

We recognize that further workshops are needed to refine options for smaller utilities. However, there is broad agreement on the principles guiding this work, which provides a strong foundation for moving forward.

Thank you again for your engagement and support. We look forward to continuing these discussions and working together on sustainable solutions for the sector.

Sincerely,

Anthony Haines, PULSE Panel Chair

AMO’s Submission on the PULSE Review

AMO provided advice to PULSE and the Ministry of Energy and Mines as they finalize recommendations on how to deliver the next generation of distribution infrastructure. AMO advanced recommendations centred on ensuring local growth planning and provincial energy planning are undertaken in coordination while mutually supporting shared objectives. Specifically,

1. Majority municipal ownership of LDCs with expanded private financing tools.
2. Transparent and accountable performance reporting and board composition.
3. Flexibility for shareholders to decide what governance and financial models best meet local needs.
4. Implementation timelines that account for the 2026 municipal elections.

AMO looks forward to continuing to support PULSE and the province in modernizing LDC governance while making sure municipalities remain active participants in energy planning.

Province Announces Final Regulation for Special Economic Zones (SEZs)

The Ministry of Economic Development, Job Creation and Trade (MEDJCT) has announced the release of the final SEZ regulation. This new regulation sets criteria for the Minister to designate projects, trusted proponents, and geographic boundaries as SEZs. The province can now exempt designated projects from provincial laws and regulations, and municipal by-laws. The regulation does not outline a process for the province to determine what laws, regulations or by-laws would be exempt – the province has previously indicated an intent to make these decisions on a case-by-case basis.

Municipalities are named as a “trusted proponent” under the regulation, allowing them to bypass traditional regulatory hurdles to accelerate high-priority projects. This status is not universal and is tied to designated projects.

AMO continues to encourage the province to use this new authority in collaboration with host municipalities on proposed SEZ projects.