Bill 40, Protect Ontario by Securing Affordable Energy for Generations Act, 2025

Summary#

Bill 40 changes several Ontario energy laws to tie the power system more closely to economic growth goals and to manage very large electricity users like data centres. It also lets the Province cover some grid costs with public funds instead of electricity bills, and removes the need for local referendums before cities grant utility access to roads.

• Adds “support economic growth” and “build a hydrogen market” as official goals for the electricity system and the Ontario Energy Board (OEB).
• Creates new rules so large power users (including data centres) must meet government-set conditions before a utility will connect or reconnect them.
• Allows the Province to pay some costs to generators, transmitters, and distributors from the provincial budget, which can lower regulated rates.
• Requires the OEB to consider economic growth when deciding on new transmission or distribution lines.
• Ends the requirement for voter approval (referendum) before a municipality grants a utility franchise; a council by-law will be enough.
• Lets the OEB’s CEO set internal timelines and document rules to speed hearings and decisions.

What it means for you#

• Households and small businesses

  • Some transmission and other system costs could be moved from electricity bills to the provincial budget. That could lower rates, but those costs would be paid by taxpayers if the Legislature provides funds.
  • Grid reliability rules for very large users may help avoid sudden new strains on the system that can raise costs for everyone.

• Large power users (e.g., data centres, other high‑demand facilities)

  • New connection rules will apply before a utility connects or reconnects you. You may need approvals, meet location or demand limits, or show local economic benefits.
  • If you do not meet ongoing requirements, you could face notices to fix issues or, in some cases, disconnection under processes set in regulation.
  • Projects with a complete connection request filed before June 3, 2025 are exempt from the new rules.

• Municipalities

  • No referendum is required to grant a utility the right to use municipal roads or operate in your area; council can pass a by-law with terms and duration.
  • You and utilities can ask the OEB to renew or extend rights not only to operate gas works but also to construct, extend, or add to them.

• Electricity sector (utilities, developers)

  • The IESO’s mandate now includes supporting economic growth while protecting consumers.
  • The OEB must consider economic growth and any government‑specified reports when deciding on new lines (“leave to construct”).
  • Licence conditions on non‑discriminatory access are subject to the new connection limits for specified large loads.
  • If transmitters receive provincial payments, the OEB must reduce their rates to reflect that.

• Hydrogen industry and innovators

  • The law now aims to help build a low‑carbon hydrogen market in Ontario, including uses tied to the electricity system.

Expenses#

No publicly available information.

Proponents' View#

• Aligns energy planning with jobs and investment by making economic growth an explicit goal for the grid and the OEB.
• Helps keep rates lower by allowing some grid costs to be paid from the provincial budget, reducing pressure on electricity bills.
• Manages very large loads, like data centres, so they do not overwhelm local grids and only proceed when they benefit communities and the economy.
• Speeds up municipal utility agreements by removing referendums, cutting red tape and delays.
• Supports cleaner industry growth by encouraging a low‑carbon hydrogen market.
• Improves regulatory efficiency with clearer timelines and document requirements for OEB hearings.

Opponents' View#

• Lets government restrict connections for certain customers, which critics say could amount to picking winners and losers and limiting open grid access.
• Shifts costs from bills to taxes, which may hide the true price of electricity and move the burden to all taxpayers.
• Removes direct voter approval for municipal utility franchises, reducing local democratic checks.
• Adding economic growth as a formal objective for regulators may dilute focus on reliability, affordability, and consumer protection.
• Leaves many rules to future regulations, creating uncertainty for investors and the risk of sudden changes or disconnections.
• New limits on large users may deter data centre and other energy‑intensive investments from locating in Ontario.