Electricity discount program applicable to consumers billed at Rate L

Summary of the measure

In the March 2016 Québec Economic Plan, the government announced the implementation of a program to promote investments by businesses in the manufacturing and natural resource processing sectors.

Through the program, the businesses billed at the large power industrial rate (Rate L) that carry out one or more eligible investment projects can receive government assistance in the form of reduced electricity costs in their establishments billed at Rate L.

The assistance paid in the form of reduced electricity costs allows for the reimbursement of up to 50% of the eligible costs:

  • the reimbursement of 40% of the eligible costs incurred;
  • the additional reimbursement of up to 10% of the eligible costs incurred for projects aimed at greenhouse gas (GHG) emission intensity reductions.

The maximum reduction of the electricity bill is 20% for a maximum period of four years or, in the case of an application concerning at least $250 million, six years.

For example, a business with an annual electricity bill of $12 million whose eligible costs total $5 million can benefit from $2 million in financial assistance, that is, the reimbursement of 40% of the eligible costs of its project. The assistance granted will correspond to a 16% reduction in its electricity bill for a given year.

Eligibility

To be eligible for the measure, the investment projects must be carried out in Québec in businesses at least one of whose establishments is billed at Rate L. The eligibility application that a business submits can combine several investment projects.

To participate in a program, the business must, no later than December 31, 2018, submit an application comprised of the following documents:

  • the signed form, available on the Ministère des Finances website;
  • an investment budget that includes a description of the project and of the nature of the investments, and provides a time frame for expenses.

The application’s receivability is contingent on the above documents being sent by December 31, 2018.

Minimum investment threshold

The total planned investments in the application must reach a minimum investment threshold that corresponds to the lesser of:

  • 40% of the annual electricity cost of all of the business’s establishments billed at Rate L;
  • $40 million.

Eligibility certificate

To obtain an eligibility certificate, businesses must submit a detailed investment plan and show that each of their projects achieves one of the program’s objectives, namely:

  • the enhancement of productivity or energy efficiency through the modernization of operating procedures;
  • the conversion of production processes to adapt existing products to market demand;
  • increased output to adapt supply to market demand;
  • new production start-up.

Where applicable, the businesses must show the potential GHG emission intensity reduction.

Period of application of the measure

A discount may be applied to the electricity bill of a business for consumption between January 1, 2017 and December 31, 2028. The discount will come into force after the submission of the first audited report and a reduction of the electricity bill may be applied for a maximum of four consecutive years or, in the case of an application concerning at least $250 million, six years.

In cases where more than one discount can be applied, unless otherwise indicated by the business, the discounts can be applied consecutively in the order in which they are requested.

Maximum reduction of the electricity bill

The maximum reduction of the electricity bill is 20% for establishments billed at Rate L.

The amount of the eligible reimbursement is calculated according to the investments carried out. If the amount of the eligible reimbursement for a given year exceeds the maximum reduction of 20% of electricity costs, the surplus may be carried over to subsequent years.

Parameters and terms and conditions of the measure