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Electricity discount program applicable to large power consumers served by off-grid systems

Summary of the measure

In the Fall 2018 Update on Québec's Economic and Financial Situation, the government announced the adoption of a program to promote investments in businesses served by off-grid systems.

Through this program, large businesses served by Hydro-Québec’s off-grid systems that carry out one or more eligible investment projects may receive government assistance in the form of reduced electricity costs.

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, eight 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 total financial assistance, that is, the reimbursement of 40% of the eligible costs of its project. The assistance granted will correspond to a 20% reduction in its electricity bill for ten months. However, if the allowable costs stand at $60 million, the business will benefit from $9.6 million in total assistance, that is, 20% of its annual electricity bill for four years.

Eligibility

To be eligible for the measure, the investment projects must be carried out in Québec by large power consumers served by Hydro-Québec’s off-grid systems, that is, businesses with annual contracts whose available power is at least 5 000 kilovolt-amperes. The eligibility application that a business submits can combine several investment projects.

Projects that begin starting January 1, 2019 can be submitted until December 31, 2019.

Projects that begin starting January 1, 2020 can be submitted until December 31, 2020.

Projects that begin starting January 1, 2021 can be submitted until December 31, 2021.

Projects that begin starting January 1, 2022 can be submitted until December 31, 2022.

Projects that begin starting January 1, 2023 can be submitted until December 31, 2023.

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 cost of electricity for all of the businesses’ establishments in which the available power is at least 5 000 kilovolt-amperes;
  • $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 demands;
  • increased output to adapt supply to market demands;
  • the launching of new production.

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, 2019 and December 31, 2032. 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, for eight years.

In cases where the production of these reports results in two or more discounts being due simultaneously, the discounts will be applicable consecutively in the order in which they are requested.

Maximum reduction of the electricity bill

The maximum reduction of the electricity bill will be 20% for establishments with an annual contract whose available power is at least 5 000 kilovolt-amperes.

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