Item - 2026.EX30.1

The Executive Committee recommends that:

1. City Council authorize the General Manager, Transportation Services, in consultation with the Chief Financial Officer and Treasurer, to negotiate and execute, on behalf of the City, amendments to the 2006 Street and Expressway Lighting Service Agreement with Toronto Hydro Energy Services Inc. based on the key terms attached as Attachment 1 to the report (March 30, 2026) from the Chief Financial Officer and Treasurer and on such other terms and conditions satisfactory to the General Manager, Transportation Services, and in a form satisfactory to the City Solicitor.

2. City Council authorize the General Manager, Transportation Services, in consultation with the Chief Financial Officer and Treasurer, to provide input, collaborate with Toronto Hydro Energy Services Inc. and to approve, as needed, any modifications to the annual Streetlighting Program Plan as necessary for delivery of maintenance, capital works, capital coordination or operational requirements; any adjustments must remain within City Council-approved funding, preserve the program's overall scope and maintain the terms of the Street and Expressway Lighting Service Agreement.

3. City Council delegate standing authority to the General Manager, Transportation Services to negotiate and execute on behalf of the City any subsequent amendments to the 2006 Street and Expressway Lighting Service Agreement with Toronto Hydro Energy Services Inc., on terms and conditions satisfactory to the General Manager, Transportation Services and in a form satisfactory to the City Solicitor, subject to the following conditions:

a. any amendment shall not increase the overall funding commitment approved by City Council; and

b. any amendment shall not materially impact the potential liability of the City.

Toronto’s streetlighting infrastructure, which includes 173,100 luminaires, 56,900 poles and 2,477 km of overhead and underground cables, is a critical public safety and quality of life asset that supports mobility, goods movement, nighttime visibility, and economic activity across the City. The streetlighting infrastructure is owned by Toronto Hydro due to a sale that occurred in late 2005. The City of Toronto currently compensates Toronto Hydro for the operation and maintenance of the system via a 30-year service agreement (known as the “Street and Expressway Lighting Service Agreement”, or “Services Agreement”). This agreement governs the delivery of streetlighting services and is separate and distinct from the City’s other relationships with Toronto Hydro.

Much of the streetlighting infrastructure has reached or exceeded its useful life, creating service and asset management challenges that require a more structured, long‑term renewal approach. Toronto Hydro has identified widespread deterioration in key components, particularly underground cables and structural streetlighting elements, which require strategic planned renewal rather than continued reactive maintenance. To address these risks and align the network with modern lighting standards, in collaboration with Toronto Hydro, and consistent with approvals included in the 2026 Budget, the City is recommending an enhanced, multi-year investment framework to renew the streetlighting system and support citywide conversion to energy‑efficient LED lighting.

The 2026 Budget included funding for a total investment of $577 million over 10 years in the City’s Capital Plan to support a comprehensive streetlighting program, including full LED conversion, enhanced capital renewal and rehabilitation investments, and sustained service standards across the citywide network. This report provides the next step by setting out the details of that investment and seeks authority to amend the Services Agreement between the City and Toronto Hydro to enable implementation. Amendments to the Services Agreement (Attachment 1) are needed to establish a revised funding model with updated terms for accountability and assurance related to program delivery, payment, and other conditions that align with the enhanced investment intended to enable the expanded scope of work.

The streetlighting system includes both regulated and unregulated assets. Any additional City funding provided under the proposed amendments would be applied only to streetlighting assets attributable to the City of Toronto as the customer and used to deliver municipal services, regardless of regulatory classification. Importantly, these costs are not recovered through general electricity distribution rates, ensuring that there is no cross‑subsidization to other electricity ratepayers.

While the Services Agreement includes expressway lighting assets, streetlighting assets located on the Gardiner Expressway and Don Valley Parkway are in transition (per the New Toronto Deal provincial upload commitment) and, as such, are not included within the City’s enhanced funding framework. Should the Province elect to support enhanced investments for these assets once the transfer is complete, the Province can work with the City and Toronto Hydro to advance enhanced maintenance activities.

The recommended infrastructure investment is consistent with the City’s Capital Prioritization Framework, Corporate Asset Management Plan, and state of good repair (SOGR) objectives. Work has been and will continue to be coordinated between Transportation Services and Toronto Hydro and aligned with the City’s capital coordination and congestion management frameworks, to coordinate construction and support capital delivery.

The enhanced investment is expected to support the following outcomes:

- Improved public safety through more reliable lighting and fewer “lights‑out” conditions.

- Renewal of aging underground and structural infrastructure to reduce failures, system outages and emergency repairs.

- Full LED conversion to improve nighttime visibility and lighting consistency.

- Strong governance, accountability, and budgetary control under the amended Services Agreement.

- Long term operating savings through energy efficiency and reduced reliance on temporary fixes.

- Improved compliance with modern lighting standards, including IES RP‑8 illumination requirements.

This report is supported by the Streetlighting Infrastructure Investment Report (Attachment 2), prepared by Toronto Hydro in response to City Council’s request for a more detailed report examining the costs and benefits of a citywide LED streetlighting conversion initiative, with further direction to assess the incremental requirement for streetlight system infrastructure renewal (2022.EX34.9). Toronto Hydro’s supporting report provides detailed analysis of asset condition, safety risks, LED conversion benefits, infrastructure renewal needs, and options considered. The recommended approach in this report draws on that analysis and reflects a balanced response to critical system risks, while recognizing the City’s need to manage competing capital priorities within limited available funding.