This consultation was open from:
May 12, 2025
to June 26, 2025
Decision summary
Ontario has made regulatory amendments to support financing for Ontario Power Generation’s major nuclear projects by establishing a mechanism to recover debt interest during the construction period of the Darlington New Nuclear Project (DNNP) and Pickering Refurbishment Project and enable Indigenous equity partnerships for DNNP.
Decision details
The decision was made to amend Ontario Regulation 53/05 (O. Reg. 53/05), effective January 1, 2026, to establish a Concurrent Cost Recovery Mechanism (CCR) which enables Ontario Power Generation (OPG) to recover debt interest during the construction period of the DNNP and Pickering Refurbishment Project, and to establish equity partnerships for DNNP.
What does this mean?
In May 2025, the Ontario government approved OPG’s plan to begin construction of the first of four small modular reactor (SMR) units as part of the DNNP. The project will create 18,000 Canadian jobs during construction. Over the next 65 years, the project’s construction and operation will contribute $38.5 billion to Canada’s GDP and sustain an average of 3,700 highly-skilled, good-paying jobs.
In November 2025, the government announced its support for OPG to refurbish Pickering “B” Nuclear Generating Station, which is expected to commence in January 2027, pending Canadian Nuclear Safety Commission (CNSC) approval. The project is expected to create 28,000 jobs in Ontario during refurbishment, while sustaining an average of 6,700 jobs in Ontario throughout the station’s refurbishment and operation. Refurbishment and ongoing operation will increase Canada’s GDP by $41.6 billion.
These projects are long-lead and capital-intensive, requiring significant borrowing to finance them. These amendments will support financing for OPG for major nuclear projects, in addition to the government and OPG working to identify other sources of cash to ensure sufficient funds are available to finance these projects and to minimize ratepayer impacts. In November 2025, the Province committed $5 billion in equity injections into OPG by way of purchasing and subscribing for preferred shares between 2025-2027.
Concurrent Cost Recovery (CCR) Amendments
Under the previous Ontario Energy Board (OEB) regulatory framework, OPG could only begin to recover costs through OEB-approved rates once generation projects are complete and generating electricity.
The amendment to establish a CCR mechanism supports OPG’s cash flow needs for DNNP and Pickering Refurbishment Project while the project construction is underway, thereby lowering borrowing requirements and associated costs, which would otherwise make the projects more expensive.
This change reduces the long-term project costs to be recovered from ratepayers for these two projects, generating significant overall ratepayer savings over the life of the projects.
Equity Partnerships Amendments
Previously, O.Reg. 53/05 prescribed OPG as the rate-regulated “generator” subject to OEB oversight for any SMRs at the DNNP site. If OPG were to establish a new commercial partnership for the Darlington SMRs to allow equity investments from public, private or Indigenous investors, the generating facility would no longer be subject to OEB rate-regulation under the current O.Reg. 53/05 since the new entity or entities would not otherwise be eligible as prescribed “generators.”
In October 2025, OPG secured up to $2 billion in equity financing from the Canada Growth Fund (CGF) and up to $1 billion from the Building Ontario Fund (BOF). Through their investment, BOF and CGF have become part of an equity partnership with OPG for DNNP, known as DNNP LP.
This amendment prescribes DNNP GP Inc., acting on behalf of DNNP LP, as a rate-regulated generator for the DNNP Nuclear Generating Station and sets out its applicable rate-setting framework. This ensures that the DNNP remains subject to oversight by the OEB through its public and transparent rate-setting processes.
Effects of consultation
A total of 17 submissions during the 45-day posting period (i.e., May 12-June 26, 2025). Two submissions were marked off-topic.
Supportive submissions were received from industry associations, business community groups, energy sector stakeholders and Indigenous communities. These submissions cited the importance of attracting investment in nuclear projects and advancing long-term economic opportunities.
One submission from a business association expressed concern about the affordability of energy rate increases for small businesses and called for transparency and phased implementation.
Environmental groups opposed the amendments, citing lack of environmental assessment, financial risk to ratepayers, and insufficient Indigenous consultation.
Submissions from some private individuals raised concerns about nuclear waste, project risks, and the prioritization of nuclear over renewable energy alternatives.
All feedback received during the consultation period was considered in developing the amendments and the Ministry of Energy and Mines would note the following in response:
- CCR would introduce a cashflow stream for the projects earlier than would be available under the traditional regulated cost recovery model which would be attractive to Indigenous and private investors that OPG is looking to partner with on the project(s).
- The proposed amendment for equity partnership for DNNP would allow public, private and Indigenous investment while maintaining regulatory oversight through the OEB.
- CCR would result in a near-term increase in electricity rates during the construction period; however, over the long-term, the project costs to be recovered from electricity ratepayers would be reduced.
- According to the Independent Electricity System Operator (IESO), the alternative to DNNP of a non-emitting resource portfolio including "variable generation" in the form of wind and solar energy paired with battery energy storage systems (BESS) carries significant risk, including supply chain constraints, excessive land requirements and siting constraints, and the need for a large transmission build-out.
- The proposed amendments do not alter existing environmental regulatory requirements, and OPG remains accountable to the Canadian Nuclear Safety Commission (CNSC) for safety and environmental compliance.
Supporting materials
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Garima Sodhi
77 Grenville Street, 7th Floor
Toronto,
ON
M7A 2C1
Canada
Original proposal
Proposal details
In May 2025, the Ontario government approved OPG’s plan to begin construction of the first of four small modular reactor (SMR) units as part of the DNNP. The government has highlighted the importance of partnerships with Indigenous communities for OPG’s new nuclear projects including DNNP.
OPG is also taking next steps toward refurbishing four reactors at the Pickering Nuclear Generating Station. The government announced its support in January 2025 for OPG to proceed to the Project Definition Phase which will last through 2026. Note: Advancing Pickering refurbishment to construction is subject to additional provincial government and federal nuclear regulatory approvals.
The Ministry of Energy and Mines (MEM) is considering potential amendments to Ontario Regulation 53/05 (payments under section 78.1 of the Act) to be made, if approved, under the Ontario Energy Board Act, 1998 (“O.Reg. 53/05”) which would allow for the following:
- Establishing a Concurrent Cost Recovery (CCR) mechanism to allow OPG to recover debt interest costs during the construction phase for DNNP and Pickering Refurbishment Project.
- Adding a new prescribed generator under O.Reg. 53/05 to enable OPG to enter into commercial partnerships for SMRs that are built as part of DNNP.
In addition to these proposed regulatory amendments, the government will continue to work with OPG to minimize ratepayer impacts and identify additional sources of cash to ensure sufficient funds are available to finance these projects.
Concurrent Cost Recovery (CCR) Amendments
Under the current Ontario Energy Board (OEB) regulatory framework, OPG can only begin to recover costs through OEB-approved rates once generation projects are complete and generating electricity.
The Ontario government is proposing establishing a CCR mechanism by amending O.Reg. 53/05 to enable OPG to recover debt interest costs from ratepayers through OEB-approved rates during the construction phase of DNNP and Pickering Refurbishment Project.
These projects are long-lead and capital-intensive, requiring OPG to significantly increase its borrowing to finance them. The proposed CCR mechanism for debt interest would support OPG’s cash flow needs while the project construction is underway, thereby lowering borrowing requirements and associated costs.
This change would reduce the long-term project costs to be recovered from ratepayers, generating significant overall ratepayer savings over the life of the projects.
Equity Partnerships Amendments
Currently, O.Reg. 53/05 prescribes OPG as the owner of rate-regulated generating stations subject to OEB oversight, including any SMRs at the DNNP site.
Absent regulatory amendments, if OPG were to establish a new commercial partnership for the Darlington SMRs to allow equity investments from public, private or Indigenous investors, the generating facility would no longer be subject to OEB rate-regulation under the current O.Reg. 53/05 since the new entity or entities would not otherwise be eligible as “prescribed” generators.
As such, amendments to O.Reg. 53/05 are required to prescribe any new partnerships for the project as a rate-regulated generator and set out its applicable rate-setting framework. This would ensure that any SMRs that are built as part of the DNNP remain subject to oversight by the OEB through its public and transparent rate-setting processes.
Environmental Impact
The proposed regulatory amendments are financial in nature (i.e., to a regulation governing payments for electricity generation from facilities subject to OEB rate-regulation) and have no direct or indirect impact on the environment.
Supporting materials
View materials in person
Some supporting materials may not be available online. If this is the case, you can request to view the materials in person.
Get in touch with the office listed below to find out if materials are available.
Comment
Commenting is now closed.
This consultation was open from May 12, 2025
to June 26, 2025
Connect with us
Contact
Garima Sodhi
77 Grenville Street, 7th Floor
Toronto,
ON
M7A 2C1
Canada
Comments received
Through the registry
16By email
1By mail
0