adr-sml/src/content/insights/what-a-system-impact-assessment-evaluates.mdx

---
title: 'What a System Impact Assessment actually evaluates'
description: 'What an IESO System Impact Assessment evaluates, who performs it, where the transmitter customer impact assessment sits, and what to look for in one.'
# publishDate is the drafting date. Set it on approval (D9).
publishDate: 2026-08-31
topics: ['technical-explainer']
practiceAreas: ['energy', 'technology']
readingTime: 8
draft: true
reviewedByPouya: false
---

## An SIA is not an assessment of the project

A connection date is a common term in Ontario energy contracts: EPC schedules,
equipment supply terms, the covenants around a commercial operation date. When
it moves, the System Impact Assessment is the document the argument turns to,
and it invites one specific misreading. An SIA does not assess the project; it
assesses what happens to the grid if the project connects to it.

The term is the Independent Electricity System Operator's own, and so is its
companion. In the IESO's description of the connection process, "New connections
or modifications to facilities connected to a transmitter's system are subject
to the IESO's system impact assessment (SIA) and the transmitter's customer
impact assessment (CIA)." Two documents, two authors. The IESO conducts the SIA.
The transmitter conducts the CIA. Treating the pair as one exhibit loses the
distinction most of these disputes turn on. Both sit in the IESO's and
transmitter's connection assessment and approval process, CAA in the IESO's
usage, and each application is given a unique CAA ID.

## What the assessment is actually of

The IESO describes its study step as assessing "the impact of [the] proposed new
or modified connection on the reliability of the integrated power system". Stage
one of the same process puts it more broadly: planned connections and
modifications "must be assessed to identify and mitigate any potential adverse
effect on the reliability of the electricity grid and its existing customers".

The subject of the assessment is the system, not the applicant. The IESO
describes its own function as coordinator and integrator of Ontario's
electricity system, balancing supply against provincial demand in real time and
directing the flow across the transmission lines, and it names five pillars of
reliability it is responsible for meeting: capacity, energy, transmission,
operability and ancillary services. An SIA asks whether a new connection
disturbs those.

That is also how to read a condition: the assessment's subject is the system,
so a condition speaks to how the system behaves with the facility on it. The
published process does not describe what conditions a report may carry — that
question is answered in the report. A pleading that reads a condition as an
admission of defective work is reading the document as though the other side
had commissioned it.

The IESO's connection-process FAQ names the tools: "The IESO uses DSA and PSSE
tools to conduct SIA studies." Naming the tools is not describing the study, and
the published process description does not say what a given study assumed,
modelled or tested. Where the argument is about the study itself, the report and
the record behind it are what answer it — not this outline of the process that
produced it.

## Where it sits, and how long it takes

The IESO runs connection in up to six stages: prepare application; obtain
conditional approval to connect; design and build; authorize market and program
participation; register equipment; commission equipment and validate
performance.

The SIA and the CIA both live in stage two, which "typically takes one year" on
the IESO's figure. Stage four typically takes about a month, stage five at least
three months, and the whole process "can take anywhere from a few months for
small modifications to existing facilities, to more than three years for major
modifications or to connect new facilities". All applicable stages have to be
completed before final approval to connect and the start of commercial
operation.

Which stages apply depends on what the facility connects to: "New or modified
connections to a transmitter's system are generally subject to all six stages,
while new or modified connections to a distributor's system may only be subject
to the first three."

That last point is about parties as much as engineering. Distribution
connections run through the distributor's own assessment process, and the IESO
records that a distributor may itself need to participate in the IESO's and the
transmitter's processes on the applicant's behalf. The entity handling the
assessment correspondence is not always the entity whose contract is in dispute.

## Two documents, two authors, two agreements

The sequence is where the SIA and the CIA come apart.

On the IESO's account of stage two, a pre-application meeting comes first. The
IESO then determines whether the application qualifies for a system impact
assessment or an expedited system impact assessment (ESIA). Once the application
and its deposit are in, it prepares an SIA agreement, "in accordance with
section 6.1.15.3 of chapter 0.4 of the Market Rules", for execution by the
applicant's authorized representative. Once all required information has been
provided, it carries out the studies and issues a draft SIA report to the
applicant and the transmitter for review and comments. After addressing the
comments on the draft or on a revised draft, it sends the final report to both,
with either a "Notification of conditional approval (NoCA)" or a "Notification
of disapproval with reasons (NoDR)".

The CIA runs on a different clock. The transmitter "generally initiates the
customer impact assessment (CIA) after the draft SIA report from the IESO", and
the CIA has its own agreement, between the applicant and the transmitter.

Three consequences follow. The assessments are generally sequenced rather than
parallel, so a slipped draft SIA ordinarily pushes the CIA start behind it.
There are two contracts before there are two reports, and the obligations
parties argue about, which information was owed and by when, live in those two
agreements. And the draft-and-comment step is a record: what a party said about
a study assumption at draft stage, and what it declined to say, sits in that
record alongside the final report.

## What to ask for, and what the record will not support

Where a dispute turns on an SIA, the productive order is the order in which the
record was made, not the order of the pleadings. The application first, and the
IESO's FAQ names the instrument: Form 128 initiates the SIA process. Then the
two agreements. Then the information the applicant supplied, with dates, because
the study step begins once all required information has been provided:
completeness is the hinge on which a year-long stage moves. Then the draft SIA
report and each set of comments on it. Then any revised draft. Then the final
report with the NoCA or the NoDR. Then the CIA.

The final report may already be public: the IESO states that it "will be
published on the IESO website in the Application Status table at the end of the
month in which it was finalized". Upstream of all this sits an optional
technical feasibility study, a "confidential service" provided "on a
cost-recovery basis to identify and mitigate potential issues with various
connection options"; whether one was run often explains why a particular option
was chosen.

Two arguments the published process will not carry. First, the queue. Ontario
has no interconnection queue. The IESO is explicit: it "is not using an
'interconnection queue'", adopting instead "the concept of 'committed projects'
that is defined in Section 3.3 of Market Manual 1.4: Connection Assessment and
Approval", and there is "no option to 'skip the interconnection queue'". Each
assessment follows the timelines in section 5.8 of that manual. A head of loss
framed as a lost place in a queue rests on a mechanism the system operator says
it does not operate.

Second, differential treatment. Renewable generation is not assessed
differently: "The treatment of new renewable generation facilities is no
different than any other new facility, the normal System Impact Assessment (SIA)
process applies to the connection of all generation facilities, renewable or
non-renewable, equally." A delay theory resting on technology-specific handling
has nothing in the published process to stand on.

## Why more contracts are about to depend on this

As this is written in August 2026, the gate in front of large loads is being
rebuilt around the assessment, not in place of it.

Section 28.1 of the Electricity Act, 1998 came into force on 11 December 2025.
Unless a transmitter or distributor is satisfied that the "specified connection
requirements" have been complied with, it "shall not" connect or reconnect a
"specified load facility". That category is defined to include a data centre
meeting criteria that may be set out in the regulations, and a facility whose
demand at the point of connection exceeds a prescribed amount. The section
arrived through Bill 40 of the 44th Parliament, 1st Session — the Protect
Ontario by Securing Affordable Energy for Generations Act, 2025 — which
received Royal Assent on 11 December 2025 as chapter 22 of the Statutes of
Ontario, 2025. Its transition rule turns on a date and a form: the section does
not apply where a connection request made in accordance with the Transmission
System Code or the Distribution System Code was submitted to the transmitter or
distributor before 3 June 2025, the day Bill 40 had First Reading.

The regulation that would fill in those criteria is the part to watch. The
Ministry of Energy and Mines' August 2026 consultation on an economic and
strategic assessment framework for new data centres describes the province as
"considering drafting" a regulation that would require new large data centres to
obtain government approval to connect or reconnect. Its comment period runs to
12 September 2026, and the same notice carries the Ministry's estimate that
data-centre connection proposals could total more than 10,000 MW cumulatively.

None of that displaces the SIA; it sits on top of it. A large load will still be
assessed for its effect on the reliability of the integrated power system, in
stage two, and its transmitter will still run a CIA. What changes is the number
of contracts written against a connection date whose gating conditions were
still under consideration as at August 2026.

## Reading the study and the contract on the same page

Grid connection disputes are argued through technical studies. I work as a
machine-learning and DevOps infrastructure engineer. The study assumptions, the
modelling inputs and the constraint that produced a condition are documents I
read directly and work through with the parties.

In a [mediation](/mediation/) that means a technical disagreement can be tested
in the room rather than deferred to an expert exchange. In a
[commercial arbitration](/arbitration/) it means the first procedural order can
be built around the documents that decide the matter.
[The shape of an engagement](/process/) sets out where each one starts.

Connection is one of the areas I take appointments in, set out at
[energy and grid disputes](/practice/energy/); its large-load half overlaps
with [technology and data disputes](/practice/technology/). Every date above is
as at August 2026, and the instruments move. Nothing here is applied to a
particular matter, and each party to a dispute should have their own legal
advice.