PARTICIPANT S GUIDE. New Plant, Expansion or Addition of Production Lines. Hydro-Québec Vol. 5, No G1158

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1 2015G1158 PARTICIPANT S GUIDE New Plant, Expansion or Addition of Production Lines Hydro-Québec Vol. 5, No. 1 May 2015

2 Contents Overview of the Industrial Systems Program... 3 Each component has its own Participant s Guide that sets out its specific terms and conditions Scope of the Participant s Guide... 5 New Plant, Expansion or Addition of Production Lines Component Description... 6 Glossary... 7 Section 1. Conditions and Undertakings... 9 Section 2. New Plant, Expansion or Addition of Production Lines Component Eligibility Section 3. New Plant, Expansion or Addition of Production Lines Component Financial Assistance Section 4. New Plant, Expansion or Addition of Production Lines Component Procedure Section 5. New Plant, Expansion or Addition of Production Lines Component Overview of Steps and List of Deliverables Appendix 1 Activity Sectors Eligible for the Industrial Systems Program According to the North American Industry Classification System (NAICS codes) Appendix 2 Specific Terms and Conditions for Certain Off-Grid Systems Appendix 3 Municipal and Cooperative Systems Appendix 4 New Plant, Expansion or Addition of Production Lines Component Standard Contract Appendix 5 New Plant, Expansion or Addition of Production Lines Component of the Industrial Systems Program Revision List Appendix 6 To Contact Us Participant s Guide New Plant, Expansion or Addition of Production Lines Component 2

3 Overview of the Industrial Systems Program An energy efficiency culture affects all aspects of corporate life. Supported by an overall vision, it goes beyond improving the efficiency of procedures, systems, equipment or processes. It involves a series of practices that all members of an organization are encouraged to adopt, and which quickly become habit, within a framework informed by standards and electricity consumption data. Hydro-Québec offers a number of services, including considerable financial assistance under its Industrial Systems Program, to help industrial customers make energy efficiency part of their corporate culture. Here is an overview of the Program s multiple components: Assistance for Analysis These components are used to determine energy efficiency measures concerning both operation and investment projects for the installation of efficient electrical equipment. Electricity Consumption Analysis Customers may obtain financial assistance to perform an analysis of their electricity consumption. Eligible types of analysis include design review, analysis of electricity consumption in existing facilities, and control systems and process optimization. Electricity Management Systems Customers may obtain financial assistance to purchase and install continuous measurement equipment and implement an electricity management system aimed at continuous improvement, in compliance with ISO standards. ISO certification is however not a requirement under this component. Assistance for Investments These components are used for investment projects to implement efficient electrical equipment. Retrofit Customers may obtain financial assistance for projects designed to reduce specific electricity consumption while maintaining or increasing production volume as part of a plant modernization or retrofit project. New plant, Expansion or Addition of Production Lines Customers may obtain financial assistance for projects designed to reduce specific electricity consumption when expanding a plant, adding production lines or building a new plant. Prescriptive Measures Customers may obtain financial assistance for projects involving the implementation of certain predetermined energy efficiency measures relating to lighting, variable-frequency drives rated between 1 and 200 hp (for ventilation systems and centrifugal fluid pumps), air compressors, water chillers with a capacity of up to 200 tons of refrigeration, and industrial refrigeration units. Choosing equipment that is more energy-efficient, as opposed to standard or regulation equipment, leads to higher levels of energy efficiency. The amount of financial assistance for each eligible measure on a project is automatically calculated using tools provided by Hydro-Québec. Participant s Guide New Plant, Expansion or Addition of Production Lines Component 3

4 Each component has its own Participant s Guide that sets out its specific terms and conditions. ASSISTANCE FOR ANALYSIS ASSISTANCE FOR INVESTMENTS ELECTRICITY CONSUMPTION ANALYSIS Examples: design review, analysis of consumption in existing facilities, and control system and process optimization RETROFIT ELECTRICITY MANAGEMENT SYSTEMS NEW PLANT, EXPANSION OR ADDITION OF PRODUCTION LINES PRESCRIPTIVE MEASURES Compressed air, lighting, variable-frequency drives (VFDs), water chillers and industrial refrigeration Presentation of the project under the appropriate component Once Hydro-Québec has provided preliminary approval for a project under a given component, participants cannot request to have their project reviewed under another component in the Program. Furthermore, Hydro-Québec reserves the right to determine the appropriate components for all submitted projects. Technology and Business Demonstration project submission On May 1, 2015, the Technology Demonstration component was removed from the Industrial Systems Program to be replaced by the new activity, Technology and Business Demonstration. For more information about the new activity and about how to submit a demonstration project ( Participant s Guide New Plant, Expansion or Addition of Production Lines Component 4

5 Scope of the Participant s Guide This guide explains the Industrial Systems Program s objectives, eligibility criteria, procedures and special requirements. However, all new terms or conditions announced in the Program newsletter take precedence over those described in this document. The newsletters can be found on the Industrial Systems Program Web site, at Participant s Guide New Plant, Expansion or Addition of Production Lines Component 5

6 New Plant, Expansion or Addition of Production Lines Component Description Hydro-Québec s Industrial Systems Program offers financial assistance to industrial customers located in Québec for projects designed to reduce specific electricity consumption, i.e., the average amount of electricity used per unit produced. This Participant s Guide explains the specific objectives, services, eligibility criteria, procedures and requirements for the Program s New Plant, Expansion or Addition of Production Lines component. Hydro-Québec strongly encourages you to take advantage of the assistance offered under the Electricity Consumption Analysis component to carry out a design review before submitting your project under the New Plant, Expansion or Addition of Production Lines component. This component does not prescribe specific energy efficiency measures *. Rather, it provides a framework in which we receive energy efficiency project proposals from customers, review them and grant financial assistance to those that meet component requirements. Eligible electricity savings are based on the difference between the electricity consumption of the standard or regulation solution and the consumption of a more efficient solution that reduces specific electricity consumption, that is, the average kilowatthours consumed per unit produced. To obtain financial assistance, you must demonstrate the electricity savings achieved by measuring your consumption after implementing the project (some exceptions apply). * Note: Some predefined measures for lighting, variable-frequency drives, compressed air, water chillers and industrial refrigeration are automated in the tools required by Hydro Québec to calculate financial assistance under the Prescriptive Measures component. As a result, all measures covered by those tools must be submitted under the Prescriptive Measures component. For more information about our energy efficiency programs and other services, visit our Web site, Participant s Guide New Plant, Expansion or Addition of Production Lines Component 6

7 Glossary The following definitions are specific to the New Plant, Expansion or Addition of Production Lines component of the Industrial Systems Program: additional costs Difference between baseline scenario costs and those associated with the high-efficiency scenario, which take into account the implementation of electricity-saving measures. Note: The term differential costs is also used in this guide. For this component, additional costs are equivalent to 10% of total costs. adjusted electricity savings baseline or baseline scenario baseline production electricity savings payback period energy efficiency measure high-efficiency scenario industrial site Industrial Systems Program measurement Difference between electricity consumed per unit produced before and after the implementation of energy efficiency measures, adjusted to take into account: discrepancies between production at the time of measurement and baseline production, or one or more independent variables used for calculation purposes. Scenario used as a baseline to calculate financial assistance (costs and eligible electricity savings). Note: This component uses standard efficiency or regulated efficiency currently in effect as a baseline. All production parameters for an industrial firm in a typical year before an energy efficiency project is carried out. Time it takes for the eligible electricity savings on an energy efficiency project to equal the project s eligible costs. Measure that requires an investment and is implemented in order to improve the energy efficiency of equipment, systems or buildings and reduce their specific electricity consumption. Note: This guide also uses the abbreviated form measure. Proposed solution to obtain electricity savings. Site with one or more buildings, including annexes, intended for the production of goods and operated by a single business customer. Assistance program composed of five components to assist eligible customers who wish to implement energy efficiency projects in an industrial building.* Note: This guide also uses the abbreviated form Program. *The eligibility of an industrial building is determined by its NAICS code. As a general rule, eligible buildings under the Program have a goods-producing NAICS code. Action of measuring consumption and productivity using measurement instruments. Note: Measurement requires the collection of consumption, production and any other required data. Participant s Guide New Plant, Expansion or Addition of Production Lines Component 7

8 New Plant, Expansion or Addition of Production Lines component participant Participant s Guide production parameters project regulated efficiency service contract specific (electricity) consumption specific electricity savings standard efficiency start-up total costs New Plant, Expansion or Addition of Production Lines portion of the Industrial Systems Program. Note: This guide also uses the abbreviated form component. Eligible business customer that enrolls in the Industrial Systems Program. Document presenting the general conditions and requirements of the Industrial Systems Program, plus objectives, services, eligibility criteria, terms and requirements specific to the New Plant, Expansion or Addition of Production Lines component. Note: The terms and conditions applicable to the project presented to Hydro-Québec are those of the Participant s Guide in effect when you submit your project proposal form. Measurable factors (independent variables) that have an impact on the electricity consumption of a process. Note: The parameters may include such things as products, production capacity and seasonal factors. Project proposed or completed under the New Plant, Expansion or Added Production Lines component of the Industrial Systems Program that is intended to reduce specific electricity consumption. Efficiency prescribed by regulation for equipment. Note: May be used as a baseline or reference to calculate eligible electricity savings under this component. Agreement entered into between two parties for electricity service and delivery. Average electricity consumption per unit produced or served or per unit of another independent variable affecting consumption. Electricity savings per unit produced or per unit of another independent variable. Note: Calculated as the difference between electricity consumed before and after the implementation of energy efficiency measures. Efficiency of unregulated equipment as generally accepted by the industry. Note: May be used as a baseline or reference to calculate eligible electricity savings under this component. Action of bringing a device or machine into production. All costs related to carrying out a project. Participant s Guide New Plant, Expansion or Addition of Production Lines Component 8

9 Section 1. Conditions and Undertakings This section presents the general conditions and undertakings common to all components of the Industrial Systems Program. Conditions and undertakings that apply exclusively to the New Plant, Expansion or Addition of Production Lines component will also be found in this section Hydro-Québec s exclusive rights in relation to the Industrial Systems Program and the New Plant, Expansion or Addition of Production Lines component Under the terms of its contracts or agreements with business customers, Hydro-Québec reserves the exclusive right to: amend or terminate the Program at any time without notice; interpret Program terms, conditions and requirements; determine the eligibility of any customer, project, building or energy efficiency measure under the Program; reject any proposal or project if it does not meet Program criteria, or if the budget for the Program has been spent; request changes or clarifications to the proposal or project; verify whether the anticipated electricity savings from a project that received financial assistance are still being achieved or whether the components implemented as part of energy efficiency measures are still in operation. If the electricity savings are no longer being achieved, or if the components are no longer in operation in the five years following payment of the financial assistance, Hydro-Québec may request repayment of the financial assistance, prorated to the number of weeks the electricity savings are not achieved or project components are not in operation, based on a 60-month period starting on the date of payment of the financial assistance Signing the contract A contract between Hydro-Québec and you will confirm the specific terms and conditions for the project. If you fail to fulfill the requirements specified in this Participant s Guide and in the contract, Hydro-Québec may terminate its financial assistance for the project and demand repayment of any financial assistance you have already received Hydro-Québec s undertakings Hydro-Québec s obligation is to pay out the amount of financial assistance stated in the acceptance letter or approved under the Program, provided that the project presented is complete and meets all Program criteria. Should Hydro-Québec modify or end the Industrial Systems Program, it will only review (on the date the modifications come into effect or the Program is ended, as the case may be) eligible projects for which: an initial contract to complete the work has been signed with a third party (copy of contract required) or a first equipment order was made (purchase order or invoice showing the order date) Participant s Guide New Plant, Expansion or Addition of Production Lines Component 9

10 Payment of the financial assistance is conditional on the participant s compliance with the terms of the Program. However, Hydro-Québec cannot be held liable for: any damage or harm of any nature whatsoever arising from the Program any error, omission or failure to achieve electricity savings as a result of carrying out the proposed project or, if applicable, using tools required under the Program 1.4. Participant s undertakings Industrial Systems Program General Conditions and Undertakings As the participant, you: are responsible for your entire energy efficiency project, including selecting and implementing energy efficiency measures, setting your electricity and cost savings objectives and calculating the electricity savings achieved; remain solely responsible to Hydro-Québec for the quality and results of the project, irrespective of any other parties that may have been involved; agree to abide by all terms and conditions stated in this Participant s Guide; in particular, to meet the deadlines for project completion and for any measurements required, and to provide all requested deliverables within the prescribed time frames; are entirely responsible for keeping informed of updates to the terms and conditions of the Program, and therefore agree to regularly check the Program Web site and sign up for the Program newsletter at agree that Hydro-Québec may, at any time during regular business hours, verify that the energy efficiency project has been completed in its entirety, including depending upon the project type implementation of energy efficiency measures, equipment installation and start-up, and the completion of any required measurements, and that it has been carried out in accordance with the requirements set out in the agreement, as well as with the terms and conditions of the Participant s Guide and the Program; agree to use the money paid out by Hydro-Québec solely for project execution and to repay Hydro-Québec all amounts received and not used for that purpose. You acknowledge that Hydro-Québec is entitled to verify how any amount paid as financial assistance was spent; agree that Hydro-Québec may obtain copies of supporting documents and general vouchers relating to the project; undertake to make these documents or vouchers available to an auditor appointed by Hydro-Québec, during regular business hours, on at least 24 hours notice, for up to five years from the payment of financial assistance; are responsible for implementing the project and liable for any damage of any kind, suffered by any person, resulting from the project. You agree to take up at your cost the defense of Hydro-Québec, its directors, officers, employees, subcontractors and assigns in all disputes, claims or legal proceedings pertaining directly or indirectly to the project in question; undertake to mention in media releases or advertising materials concerning the project that you have received financial support from Hydro-Québec; however, at no time will you suggest or imply that Hydro-Québec recommends any product, process, or industry provider whatsoever; Participant s Guide New Plant, Expansion or Addition of Production Lines Component 10

11 acknowledge that any false statement, whether intentional or unintentional, may: result in the cancellation or adjustment of any financial assistance granted under the Program or, if applicable, repayment of amounts received; result in your disqualification from the Program; undertake to ensure that your electrical installation continues to meet the distributor s conditions of service and is used and maintained in such a way that it does not cause system disturbances. Since these disturbances (voltage and current fluctuations, flicker, harmonics, etc.) can be caused by many devices associated with energy efficiency measures (electronic ballasts, variable-frequency drives), additional protection equipment must occasionally be installed as part of an energy efficiency project New Plant, Expansion or Addition of Production Lines Component General Conditions and Undertakings As the participant, you: may not submit the same energy efficiency measure under a different component of the Industrial Systems Program or another Hydro-Québec program in order to obtain further financial assistance for its implementation; must demonstrate that the eligible electricity savings have been achieved by conducting consumption measurements in accordance with component requirements; must periodically report to Hydro-Québec on the progress of the work; agree to declare to Hydro-Québec the value of services provided to you by Hydro-Québec or any other entity, as well as all financial assistance paid out to you by other sources if these services and assistance total over $50,000. This information should be included in your proposal form and in the detailed breakdown of eligible costs. You must pay at least 25% of the project s eligible costs (see subsection 2.7), independent of other financial assistance. The component s electricity savings objectives must be achieved within a specified time limit. You therefore undertake to: submit your completed project to Hydro-Québec along with all required deliverables no later than the date specified in the contract, in accordance with the terms and conditions of this guide; maintain the project components in good working order for a period of five years from the date of payment of the financial assistance Environmental requirements As the participant, you: shall comply with all laws and regulations governing environmental protection in Québec: shall take all necessary measures to prevent, control or eliminate any contamination or damage to the environment and any degradation in the quality of soil, woodlands, farmlands, waterways, lakes, wetlands or the air, or any danger to wildlife (terrestrial, avian or aquatic); shall obtain all permits, certificates, licenses and authorizations and pay any fees required by law to implement the energy efficiency measures for which financial assistance has been provided; shall be responsible for the management, handling, storage, transportation and disposal of hazardous waste and materials generated, in compliance with legislation in effect : shall transport hazardous waste to a site or a company authorized to receive such waste. Participant s Guide New Plant, Expansion or Addition of Production Lines Component 11

12 1.5. Specific conditions of financial assistance The total financial assistance received under previous programs* and under other components of the Industrial Systems Program** may not exceed $8 million per industrial site or service contract for projects submitted after * The total includes all financial assistance granted as part of the Industrial Initiatives Program Major Customers, the Technology Demonstration component of the Industrial Analysis and Demonstration Program Major Customers, and the Empower Program for Industrial Systems. ** Retrofit, New Plant, Expansion or Addition of Production Lines, Technology Demonstration, Prescriptive Measures and any other component or investment assistance program offered Compensation Hydro-Québec may deduct from the financial assistance any amount owed to it by you or your partners, associates, shareholders and subsidiaries. This compensation is effected by operation of law in favor of Hydro-Québec only. Enforcement of this provision allows Hydro-Québec to terminate this contract upon written notice Financial position and operating capacity You must guarantee the completion of the project to the satisfaction of Hydro-Québec and operate the project components for at least five years from the date of payment of the financial assistance provided for in the contract. Hydro-Québec may terminate the contract upon written notice if your financial position or long-term operating capacity is insufficient to guarantee the completion of the project or the operation of the project components for at least five years from the date of payment of the financial assistance provided for in the contract. If Hydro-Québec considers that your financial position or long-term capacity to operate the project components is insufficient to guarantee the completion of the project or the operation of the project components for at least five years from the date of payment of the financial assistance provided for in the contract, Hydro-Québec may also, at its sole discretion: a) refuse to pay you any financial assistance; or, b) if the financial assistance has already been paid out, require repayment, prorated to the number of weeks the project components are not in operation or fail to meet Program requirements, based on a 60-month period starting on the date of payment of the financial assistance; or, c) if the financial assistance has not yet been paid out, require a financial guarantee equal to the total amount provided for in the contract; or, d) if the financial assistance has already been paid out, require a financial guarantee equal to the amount paid, prorated to the number of weeks the project components are not in operation or fail to meet Program requirements, based on a 60-month period starting on the date of payment of the financial assistance. Where a financial guarantee is required, it shall take the form of an irrevocable and unconditional letter of credit issued by a financial institution that fully meets Hydro-Québec requirements at all times. For these purposes, the financial institution issuing the letter of credit must: be a Canadian financial institution or foreign institution with a Canadian branch; have a minimum of $10 billion in assets; Participant s Guide New Plant, Expansion or Addition of Production Lines Component 12

13 maintain a credit rating of at least A- (S&P), A3 (Moody s) or A low (DBRS) at all times. Hydro-Québec will not accept a letter of credit issued by a financial institution that has been placed on credit watch with a negative outlook, even if its credit rating meets this minimum standard. If all the credit rating agencies do not grant equivalent credit ratings to the financial institution, the lowest credit rating shall be considered. The financial guarantee shall be based on the template provided by Hydro-Québec at the time it is requested and must be approved by Hydro-Québec prior to being officially issued. The financial guarantee shall remain in effect and be renewed, if applicable, until the end of the five-year period starting on the date of payment of the financial assistance. However, with the consent of Hydro-Québec, the amount of the guarantee may be reduced annually, prorated to the number of weeks the project components are in operation and meet Program requirements, based on a 60-month period starting on the date of payment of the financial assistance. Hydro-Québec may exercise the financial guarantees it holds if: you fail to repay, within 30 days of Hydro-Québec s request, the financial assistance, prorated to the number of weeks during which the project components are not in operation or fail to meet Program requirements, based on a 60-month period starting on the date of payment of the financial assistance; you fail to provide or renew a financial guarantee within five business days of Hydro-Québec s request Cessation of participant s business activities Should you partially or completely cease business activities in the buildings targeted by the project, Hydro-Québec may: if the financial assistance has not yet been paid out, refuse to pay it; or, if the financial assistance has already been paid out, require repayment, prorated to the number of weeks the project components are not in operation or fail to meet Program requirements, based on a 60-month period starting on the date of payment of the financial assistance. The exercise of Hydro-Québec s right to repayment of the financial assistance is grounds for termination of the contract Confidentiality You agree that it is necessary to disclose to Hydro-Québec confidential information (be it in writing, verbally or visually) including, without limiting the generality of the foregoing, data, formulas, processes, models, photographs, plans, drawings, specifications, reports, studies and ideas and Hydro-Québec undertakes to keep such information confidential. However, the following information is not considered confidential: Your name, the cost of the project, the amount of financial assistance granted, the energy efficiency measures recommended and their field of application (described in general terms), and the subsequent electricity savings; Any information that was in the public domain at the time of disclosure; Any information that, after being disclosed, entered the public domain through no action on the part of Hydro-Québec; Participant s Guide New Plant, Expansion or Addition of Production Lines Component 13

14 Any information that Hydro-Québec can prove it had in its possession before it was disclosed; Any information disclosed to Hydro-Québec without restriction by a third party legitimately entitled to disclose it. Any disclosure to the public or to a third party of your confidential information shall be the subject of a written agreement. You agree to authorize the disclosure of confidential information provided that such disclosure does not adversely affect your competitive position. Consequently, Hydro-Québec undertakes to consult you prior to disseminating any information (other than that necessary for Program follow-up) that could adversely affect your competitive position Tax implications This section sums up the main tax implications of the Program. It is included for reference only. Payments by Hydro-Québec under the Program are normally subject to the goods and services tax (GST) and the Québec sales tax (QST), unless your organization does not conduct business activities under the terms of these tax regimes. As a result, you must first produce an invoice that includes those taxes before Hydro-Québec can make a payment under the Program. For income tax purposes, the financial assistance granted under the Program is an inducement that should, depending on your case, reduce the cost of property or capital expenditure, reduce the amount of outlay or expense, or count as income. Unless your organization is exempt from paying tax, Hydro-Québec will issue a Relevé 27 Paiements du gouvernement [government payment information] slip, as required by the Québec Taxation Act, as a record of the financial assistance paid. The section on invoicing of financial assistance provides further details to help ensure that all tax requirements are met. However, you should consult a tax advisor or the tax authorities, if necessary. Determining the full extent of income and other tax implications is your sole responsibility. Hydro-Québec cannot be held responsible for participants who incorrectly determine their tax status, as applicable taxation usually depends on the specific situation of each participant. Participant s Guide New Plant, Expansion or Addition of Production Lines Component 14

15 Section 2. New Plant, Expansion or Addition of Production Lines Component Eligibility Customers wishing to obtain financial assistance for a project under the New Plant, Expansion or Addition of Production Lines component of the Industrial Systems Program must meet all the terms, conditions and requirements in this Participant s Guide Eligible customers Any individuals or legal entities that own, operate or occupy one or more of the buildings eligible under the New Plant, Expansion or Addition of Production Lines component (see subsection 2.2) and meet all of the other eligibility criteria described in this section are eligible for this component. Notwithstanding the foregoing, Hydro-Québec reserves the right to reject an eligible customer s project if: the customer or one of its partners, associates, shareholders or subsidiaries owes any amount to Hydro-Québec or the customer is unable to demonstrate to Hydro-Québec s satisfaction that its financial position or long-term operating potential is sufficient to guarantee completion of the project or operation of the project components for a period of at least five years from the date of payment of the financial assistance.* * Nonetheless, Hydro-Québec may approve such a customer s project if the customer provides a financial guarantee equal to the amount initially requested on the project proposal form, at the start of the financial assistance procedure. Where a financial guarantee is required, it shall take the form of an irrevocable and unconditional letter of credit issued by a financial institution that fully meets Hydro-Québec s requirements at all times, as detailed in Financial position and operating capacity (see Industrial Systems Program General Conditions and Undertakings) Eligible buildings The New Plant, Expansion or Addition of Production Lines component of the Industrial Systems Program is intended for all eligible industrial buildings. As a general rule, the building where the project is to be carried out must have a goods-producing NAICS code (see appendix 1 for more details and exceptions). An eligible building must use electricity to manufacture, assemble or process goods or foodstuffs, to extract raw materials, or to handle or transport materials. Exceptionally, buildings that are used primarily for commercial, institutional or agricultural 1 purposes may be eligible for their industrial activities The project must involve a single building. In addition, the facility or building where the project is to be carried out must be located in Québec. 1 As a result, agricultural buildings subject to Rate D service contracts are eligible if they meet the other eligibility criteria of the Program. Participant s Guide New Plant, Expansion or Addition of Production Lines Component 15

16 Details for industrial buildings connected to the Hydro-Québec grid Only buildings subject to an electricity rate regulated and approved by the Régie de l énergie (such as general rates L, M, G or G-9) are eligible. In calculating financial assistance, the only electricity savings and eligible costs taken into consideration are those related to equipment, systems or processes whose consumption is subject to an electricity rate regulated and approved by the Régie de l énergie. Specific terms for off-grid and municipal systems Special terms and conditions apply to buildings connected to certain off-grid systems (see appendix 2). The list of eligible municipal systems is given in appendix Eligible projects To be eligible, a project must: reduce specific electricity consumption below standard specific electricity consumption, or, if applicable, below the consumption prescribed by regulation for the type of plant, workshop, process or system that the project targets; consist of a measurable energy efficiency measure or series of interdependent measures measurable as a single entity to be implemented on one or more pieces of equipment, at a specified cost; achieve eligible savings of at least 25,000 kwh per year; cover all equipment: that is modified by energy efficiency measures; whose electricity consumption is modified (increased or decreased) by the direct or indirect effects of the measures; whose electricity consumption is separately measurable as a single entity with regard to energy efficiency; in the case of an existing plant: provide a significant increase over the current annual average production capacity; or involve the manufacture of a new product that can be marketed in your target market or the addition of a new manufacturing activity in the plant covered by the project; Eligible project types include the following: Installing solar walls Installing a geothermal system 2.4. Ineligible projects The following types of projects are not eligible: Projects with an electricity savings payback period of less than 2 years when costs are amortized only by eligible electricity savings Energy source conversions or substitutions Power generation projects Participant s Guide New Plant, Expansion or Addition of Production Lines Component 16

17 Projects not involving any equipment purchase or installation costs related to energy efficiency measures Projects carried out for the sole purpose of achieving compliance with Québec or Canadian laws, regulations or standards Projects that may have a negative impact on health, safety or the environment Projects involving equipment that is less efficient than the industry standard or the generally recognized standard Projects or subprojects that include predefined measures for lighting, variable-frequency drives, compressed air, water chilling and industrial refrigeration covered by the calculation tools required by Hydro-Québec under the Prescriptive Measures component 2.5. Definition of a project under this component Measures involving various types of electricity use in industrial buildings Should you wish to implement measures involving various types of electricity use in your industrial building (e.g., heating, ventilation, humidification and air-conditioning systems, service water heating or thermal envelope), you must submit a separate project for each measure, even if you intend to implement other types of measures in your building (e.g., for your processes). Measures related to the same use must be submitted in a single project. Energy savings and financial assistance calculators used by industry providers (e.g., DOE2, EnergyPlus, equest, SIMEB2) are acceptable for these types of measures). They must, however, be preapproved by Hydro-Québec Measures for auxiliary systems (lighting, engines, air compressors, pumps, etc.) If you wish to implement measures for auxiliary systems covered by Hydro-Québec s PROSI (industrial systems application), you must use the software to submit them under the Prescriptive Measures component. If your measures for auxiliary systems are not included in the Prescriptive Measures component, you may implement them under another component of the Industrial Systems Program, assuming your project meets all of the eligibility criteria. In such a case, all measures must be submitted as a single project if they are interdependent and measurable as a single entity. Projects involving these types of measures must be completed within 12 months of receiving confirmation of project acceptance Industrial refrigeration measures If you wish to implement industrial refrigeration measures covered by Hydro-Québec s Refrigeration application, you must use the software to submit them under the Prescriptive Measures component. If your industrial refrigeration measures are not included in the Prescriptive Measures component, you may implement them under another component of the Industrial Systems Program, assuming your project fulfills all of its eligibility criteria. In such a case, all measures must be submitted as a single project if they are interdependent and measurable as a single entity. Participant s Guide New Plant, Expansion or Addition of Production Lines Component 17

18 Measures for specific processes As a general rule, a process must be submitted as a single project if all of its associated measures are interdependent and measurable as a single entity. Otherwise, the process must be broken down into separate projects consisting of interdependent measures measurable as a single entity Projects involving the same measure applied to several pieces of equipment You must submit a separate project for each piece of equipment to which you are applying the measure if the measure is independent and can be separated from the component and measured in isolation. In such a case, each measure must meet all the Program s eligibility criteria General instructions Each project must meet all eligibility requirements for the component, particularly with respect to the electricity savings payback period and the kilowatthour savings (see section 3 of this Guide). The fact that the eligible costs cannot be separated does not affect the way the project is defined. For more information about how to break down your projects, contact Soutien aux clients et aux partenaires [customer and partner support] at Eligible electricity savings The project s eligible savings are based on measurable electricity savings calculated using the baseline scenario and the project s measured consumption Eligible costs A project s eligible costs are all the additional costs (or differential costs) of implementing the measures intended to generate electricity savings. For the purposes of this component, eligible additional costs correspond to 10% of total eligible costs. Subject to Hydro-Québec s approval, the following costs are eligible: Purchase of new equipment involving energy efficiency measures Installation and start-up of equipment Measurement after the implementation of energy efficiency measures, including purchase of the necessary instruments Engineering In-house labor (number of hours and hourly rates), subject to these conditions: You must fill out the in-house labor costs by trade section (Main-d œuvre interne par type de métier) of the detailed breakdown of total eligible costs (Grille détaillé des coûts totaux admissibles), indicating the project s cost centre; If your accounting system does not provide the option of isolating in-house labor hours allocated to the project, you must provide Hydro-Québec with a letter to this effect signed by your controller, accountant or the retrofit project applicant, in addition to the breakdown sheet. A letter template is available on request. Participant s Guide New Plant, Expansion or Addition of Production Lines Component 18

19 Eligible costs are additional eligible costs, before taxes. As a general rule, only costs incurred after Hydro-Québec s confirmed date of receipt of your proposal are eligible. However, specific types of design costs (e.g., preparing plans and holding meetings) incurred up to 18 months before that date may be eligible, conditionally on Hydro-Québec approval. Moreover, some organizations are entitled to partial GST and QST refunds. The nonrefundable portion of these taxes is considered an eligible cost under the component Ineligible costs In general, all costs not specifically identified as eligible shall be considered ineligible. The following are examples of ineligible costs for a project: Production losses, waste or other losses stemming from implementation of energy efficiency measures, and operating, repair and maintenance costs Purchase and installation of used equipment Costs related to electricity savings guarantees and other performance guarantees Cost of work done for reasons other than to improve energy efficiency Costs incurred once the work has been completed, including running-in and fine-tuning installations, as well as monitoring energy consumption Financing and administrative costs Costs incurred prior to Hydro-Québec s confirmed receipt of the proposal, including those for any engineering and other types of work or services performed prior to this date, as well as purchase costs of equipment, materials and accessories for which purchase orders were issued prior to this date 2.9. Motors and other devices covered by federal Energy Efficiency Regulations For equipment not built into the machinery, the baselines (minimum nominal efficiency) set by the Office of Energy Efficiency apply. You must use those in effect at the time you submit your project proposal. They can be downloaded from For more information, contact Soutien aux clients et aux partenaires [customer and partner support] at Justification of eligible costs If an eligible cost exceeds the average market values recognized by Hydro-Québec, or if there is no average market value for a given system, piece of equipment or type of work, you must provide the appropriate justifications, upon request, failing which, Hydro Québec reserves the right to reduce the amount of eligible costs. All other costs not specified in this Participant s Guide must be approved by Hydro-Québec. Participant s Guide New Plant, Expansion or Addition of Production Lines Component 19

20 Section 3. New Plant, Expansion or Addition of Production Lines Component Financial Assistance Hydro-Québec grants financial assistance to every project that is accepted, according to the criteria described in this section. As the Industrial Systems Program budget is limited, Hydro-Québec will allocate the financial assistance amounts at the time proposals are received on a first-come, first-served basis. If the project is later turned down, the financial assistance allocated will be canceled. The terms of financial assistance are set out in the contract Calculating financial assistance Financial assistance will be the lowest of the following amounts, depending on the rate.* Rate L only /kwh of eligible savings, based on first full year of operations a 2. Amount required to reduce electricity payback period to two years (based on electricity savings and eligible additional costs) b 3. 10% of total eligible costs c Maximum $2 million per project. Other rates regulated and approved by the Régie de l énergie /kwh of eligible savings, based on first full year of operations a 2. Amount required to reduce electricity payback period to two years (based on electricity savings and eligible additional costs) b 3. 10% of total eligible costs c Maximum $1 million per project. Notes: a) Eligible kilowatthour savings are determined according to the baseline consumption of standard or regulation equipment (just as costs are determined in relation to a baseline or baseline scenario). b) See subsection For this component, additional costs correspond to 10% of total costs. c) The 10% proportion of a project s total eligible costs represents 50% of its additional (differential) costs, given that these costs are equivalent to 20% of the total eligible costs.* * The rate used is that in effect when the project proposal form is submitted. To calculate the financial assistance your project may be eligible for, see the project proposal form (Proposition de projet Nouvelle usine, agrandissement ou ajout de chaînes de production, Excel file) at Eligible costs are described in subsection 2.7. The electricity cost used to calculate your financial assistance is the average annual cost (power and energy in cents per kilowatthour) calculated for the target site. Participant s Guide New Plant, Expansion or Addition of Production Lines Component 20

21 If the project s electricity savings are small in relation to the plant s total consumption, you may use the average electricity bill (excluding taxes) for the site for the calendar year preceding your submission of the project proposal. If bills are unavailable or if bills for the previous year do not reflect your expected consumption, your technical representative will estimate the costs and submit them to the Hydro-Québec engineer assigned to your project for approval. Major projects can be entitled to a running-in period of one year or more, offering the possibility of correcting the cost ( /KWh) when the assistance is paid out. The running-in period depends upon the size of the project and is subject to Hydro-Québec s approval. When the project is accepted by Hydro-Québec, the amount of financial assistance granted is confirmed and set out in the contract Confirmation of project eligibility after final measurements (taken after implementation of measures) At the end of the project, Hydro-Québec will calculate the actual amount of financial assistance in light of the eligible electricity savings achieved, the project s actual eligible costs and the cost of electricity ( /KWh) revised after the running-in period. This amount therefore becomes the actual amount of assistance paid out, based on the project results. If the electricity payback period, as defined here, is less than 2 years, the project will no longer be eligible and the financial assistance will be canceled Amount of financial assistance paid out to participant Rule regarding the amount of financial assistance paid out to participant If the project is still eligible following the confirmation of project eligibility described in section 3.2, Hydro-Québec will pay the participant the revised amount of financial assistance, according to the project results, up to the amount of financial assistance initially approved in the contract (with the exception of the case in subsection 3.3.2) Specific case regarding amount of financial assistance paid out to participant Hydro-Québec will pay the participant the revised amount of financial assistance, according to the project results, up to 50% of total eligible project costs in the contract, if this amount is greater than the amount of financial assistance specified in the contract, provided the following two conditions are met: the approved amount of financial assistance in the contract is determined according to eligible kwh saved; and the final measurements indicate that eligible electricity savings exceed the savings set out in the contract Specific case regarding minimum contribution by participant The participant must pay at least 25% of the project s eligible costs (see subsection 2.7). Hydro-Québec can reduce the amount of financial assistance paid out to the participant to ensure that the latter meets this minimum contribution requirement. Participant s Guide New Plant, Expansion or Addition of Production Lines Component 21

22 3.3. Payment of financial assistance Terms of payment For all accepted projects that meet the energy savings objectives and respect the eligible project costs and timeline, payment of the actual amount of financial assistance is made at the end of the project, after all deliverables have been received and checked by Hydro-Québec, as set out in this guide. The terms of payment are described in detail in section Invoicing Hydro-Québec for financial assistance before payment To receive the financial assistance, you must prepare an invoice as detailed below. As explained in the section covering tax implications (see Industrial Systems Program General Conditions and Undertakings), payments by Hydro-Québec under the component are subject to GST and QST (with a few exceptions). You must first issue an original invoice indicating the amounts of each of these taxes. The invoice must include the following information: Your organization s business name (acting as supplier in this transaction) Invoice date Total amount of goods or services supplied (amount of financial assistance) GST and QST registration numbers GST and QST amounts, shown separately Name of purchaser (Hydro-Québec) Description of goods or services supplied (financial assistance under Industrial Systems Program New Plant, Expansion or Addition of Production Lines component) If you do not need to collect GST and QST, you must indicate Taxes not applicable on your invoice. Participant s Guide New Plant, Expansion or Addition of Production Lines Component 22

23 Section 4. New Plant, Expansion or Addition of Production Lines Component Procedure The procedure consists of up to eight steps (a detailed description follows): Step 1 Submit project proposal Step 2 Hydro-Québec acknowledges receipt and confirms or denies eligibility of project proposal Step 3 Submit measurement plan Step 4 Hydro-Québec accepts or rejects measurement plan Step 5 Hydro-Québec rejects project or accepts it and signs contract Step 6 Start up equipment Step 7 Take after measurements Step 8 Hydro-Québec pays out financial assistance Participant s Guide New Plant, Expansion or Addition of Production Lines Component 23

24 4.1. Step-by-step procedure for obtaining financial assistance CUSTOMER/PARTICIPANT HYDRO-QUÉBEC STEP 1 Submit project proposal including details of bids obtained for purchase and installation of all equipment STEP 3 Submit measurement plan SIGN CONTRACT Duly completed proposal form Hydro-Québec confirms or denies project eligibility Measurement plan Plan acceptance Contract STEP 2 Hydro-Québec acknowledges receipt and confirms or denies eligibility of project proposal Confirms date of receipt and name of engineer assigned to project STEP 4 Hydro-Québec accepts or rejects measurement plan STEP 5 Hydro-Québec rejects project, or accepts it and signs contract Verifies eligibility of costs and electricity savings and financial assistance calculation Prepares contract and sends to customer for signature ORDER FIRST EQUIPMENT (PURCHASE ORDERS) Contract (in French) signed by customer SIGNS CONTRACT AND SENDS COPY TO CUSTOMER STEP 6 Start up equipment Updated after measurement schedule STEP 7 Take after measurements Purchase orders, invoices, after measurement report and other deliverables HYDRO-QUÉBEC VERIFIES AND ACCEPTS REPORT AND INVOICES STEP 8 Hydro-Québec pays out financial assistance Participant s Guide New Plant, Expansion or Addition of Production Lines Component 24

25 4.2. General instructions Submitting proposals Proposals must be submitted once your technical lead for the project has selected the processes, systems and equipment and is ready to present you with the different options (standard or high-efficiency solutions) and their advantages and costs Application processing times A Hydro-Québec representative may contact you at any time during the application process to request further details about your proposal. Hydro-Québec reserves the right to stop processing your application and close the file if it does not receive a satisfactory response to its request within two months. In such a case, Hydro-Québec will notify you in writing of its intention prior to closing your file. The time required to process your application, and consequently to pay out the financial assistance, depends on the complexity, thoroughness and quality of the proposal submitted, as well as how quickly you (a customer and now participant) provide all the required deliverables Participant s Guide Applicable terms and conditions The terms and conditions applicable to your project are those of the Participant s Guide in effect when you submit the duly completed project proposal form and all the other deliverables listed in step 1 (see subsection 4.3) that are applicable to the project submitted to Hydro-Québec Step-by-step procedure for obtaining financial assistance Step 1 Submit project proposal Before you start the work, 2 you must submit a proposal in compliance with the component requirements, along with all required documents. To do so, you must: Properly complete all tabs in the project proposal form (Excel file) downloadable from Submit details of bids received for equipment purchase and installation, as well as the calculation of electricity savings according to the baseline scenario and the anticipated production volume. The baseline scenario is the scenario that would be adopted without the financial assistance from the program. It is used to calculate financial assistance (additional costs 3 and eligible electricity savings). In addition, you must provide justification to demonstrate that the baseline scenario represents standard efficiency in your industry and indicate why you would have adopted it without the Program s financial assistance. Your proposal will be considered on the condition that you submit all required documents and information in the required format. 2 The start date for work on eligible energy efficiency projects is: 1) the date on which an initial contract is signed with a third party to complete work related to the project; or 2) the date on which a first order for equipment related to the project is placed (purchase order or invoice indicating the order date). 3 For the purposes of this component, additional costs correspond to 10% of total costs. Participant s Guide New Plant, Expansion or Addition of Production Lines Component 25

26 You must ensure the accuracy of the estimated eligible electricity savings (for each baseline 4 and high-efficiency scenario), eligible costs and project timetables. To do so, you must obtain bids for the purchase and installation of equipment, and provide Hydro-Québec with the breakdown of other estimated costs. Eligible costs are described in subsection 2.7. In addition, the description of your recommended baseline scenario must take into account all the information required in the proposal form. Costs of engineering work done prior to Hydro-Québec s confirmed receipt of the proposal and the costs of equipment for which purchase orders were issued prior to that date are not eligible for financial assistance. 5 Similarly to costs, electricity savings associated with the equipment are ineligible and must be taken out of the calculation of financial assistance under the Program. You may ask Hydro-Québec for further explanations when preparing your proposal. The project, along with all required deliverables, must be submitted no later than 24 months after the submission of the complete and compliant project proposal. Submitting the proposal and other required documents the documents to PGEE_Projet_Industriel_OISI@hydro.qc.ca or if the documents cannot be sent by , they may be faxed to or sent or hand-delivered to Systèmes industriels Programme de soutien aux projets d efficacité énergétique Bureau de traitement des demandes Efficacité énergétique Direction Efficacité énergétique Hydro-Québec 2, complexe Desjardins, tour Est, 18e étage C. P , succ. Place Desjardins Montréal (Québec) H5B 1H7 Step 2 Hydro-Québec acknowledges receipt and confirms or denies eligibility of project proposal Hydro-Québec will acknowledge in writing the date on which your project proposal was received and confirm its eligibility under the Retrofit component, if applicable. At the same time, Hydro-Québec will give you the name of the engineer assigned to review your proposal. The date of receipt confirmed in this communication corresponds to the date of submission of the complete and compliant proposal. Hydro-Québec may request additional information. Hydro-Québec reserves the right to reject all incomplete proposals. You must submit a complete proposal to obtain the date of receipt of the project you submitted. 4 The baseline scenario used to calculate savings is determined in relation to standard or currently regulated equipment and the baseline annual production volume after the project, including measurement. See Aide technique sur les méthodes de mesurage [technical assistance for measurement methods] at 5 However, specific types of design costs (e.g., preparing plans and holding meetings) incurred up to 18 months before that date may be eligible upon Hydro-Québec approval. Participant s Guide New Plant, Expansion or Addition of Production Lines Component 26

27 You will be notified of the acceptance or rejection of your proposal within about two weeks of submission. At this stage, if the proposal is accepted, Hydro-Québec confirms your eligibility and that of the site and the buildings, of the project type and of the energy efficiency measures presented in the proposal, and you become a Program participant. The amount of financial assistance, the electricity savings payback period and the acceptance of the project will be confirmed with the signing of the contract in step 5. Step 3 Submit measurement plan You must submit to Hydro-Québec your plan for measuring electricity consumption after implementing the energy efficiency measures, including modified parameters for baseline consumption if production volumes (or any other independent variables used for measurement) differ from projections. The measurement plan must meet Hydro-Québec s requirements and be submitted approximately four weeks after you receive confirmation from Hydro-Québec that your proposal was received and that the energy efficiency measures are eligible. There is a guide titled Aide technique sur les méthodes de mesurage [technical assistance with measurement methods] that indicates how to proceed when an energy efficiency project under the Industrial Systems Program requires measuring. However, it is not binding in the way this guide is. Thus it is up to each project manager and Hydro-Québec to determine the degree of accuracy required and to choose the evaluation methods according to the nature of the project and the amount of financial assistance. You can download the guide from You can also download a project measurement plan template. Step 4 Hydro-Québec accepts or rejects measurement plan Upon receiving your measurement plan, Hydro-Québec will verify it and, if applicable, confirm its acceptance in writing. Step 5 Hydro-Québec rejects project, or accepts it and signs contract In this step, Hydro-Québec verifies the eligibility of all project parameters against the component s terms and conditions, including its eligible costs, electricity savings objectives and financial assistance calculation. Signing of contract If the project is accepted, you must sign a contract with Hydro-Québec setting out the electricity savings objectives, the eligible project costs, the maximum amount of financial assistance granted and a project description. A standard contract for new plant, expansion or addition of production lines projects can be found in appendix 4 of this Participant s Guide. The signed contract should be sent to DEE_Contrat_PGEE@hydro.qc.ca. Participant s Guide New Plant, Expansion or Addition of Production Lines Component 27

28 Step 6 Start up equipment You must periodically report on the progress of the work to the Hydro-Québec engineer assigned to your project. The Hydro-Québec engineer may visit your facility at any time, during regular business hours, to ensure that the project meets the contract and component terms and conditions. You must submit an updated after measurement schedule to Hydro-Québec. Step 7 Take after measurements You must measure electricity consumption after implementing the energy efficiency measures, as set out in the measurement plan approved by Hydro-Québec. We recommend a two-phase approach to measurement: First, send the preliminary data series to the Hydro-Québec engineer for comment, and adjust your measurement methods accordingly. Then, perform the full suite of measurements. The Hydro-Québec engineer may assist with the measuring and, if necessary, make sure that the method and instruments used, as well as the equipment measured and operating and load cycles, are consistent with those defined in your measurement plan. Deliverables required for payment of financial assistance You must submit your completed project to Hydro-Québec along with all deliverables no later than the date specified in the contract, in accordance with the terms and conditions in this guide: Purchase orders for equipment used for eligible energy efficiency measures Copies of all project invoices Start-up report (a sample can be downloaded from After measurement report (a sample can be downloaded from A summary report of the calculation of the project s electricity savings signed by a member of the Ordre des ingénieurs du Québec who works for you or has been hired for that purpose, unless you are otherwise instructed by Hydro-Québec s designated engineer. It must present the estimates of the project s target baseline consumption, according to actual forecast production parameters. Once the energy efficiency measures have been implemented, it must also present consumption as established by measurements. Final version of the detailed breakdown of total eligible costs (Grille détaillée des coûts totaux admissibles, Excel file) If you fail to provide the required documents within a reasonable period of time, Hydro-Québec may cancel the financial assistance granted. Participant s Guide New Plant, Expansion or Addition of Production Lines Component 28

29 Step 8 Hydro-Québec pays out financial assistance Hydro-Québec pays out the financial assistance after validating the deliverables (see step 7). Hydro-Québec will inform you in writing of the actual amount of financial assistance to which you are entitled. You must submit your invoice to Hydro-Québec within 30 days of being advised of the amount. Payment will be issued within 45 days of receiving your supporting documents, provided they meet the requirements. Participant s Guide New Plant, Expansion or Addition of Production Lines Component 29

30 Section 5. New Plant, Expansion or Addition of Production Lines Component Overview of Steps and List of Deliverables In addition to the documents described below, Hydro-Québec may request any deliverables it deems necessary. Steps Approximate deadline (for Description Deliverables References reference) 6 Step 1 Submit project proposal Customer: Obtains and submits bids for equipment and breakdown of other estimated costs Submits duly prepared project proposal, along with all deliverables required when project engineer is selecting equipment and processes for your approval Provides Hydro-Québec with baseline scenario. Hydro-Québec: Provides technical support if required. Proposal form for new plant, expansion or addition of production lines project (Proposition de projet Nouvelle usine, agrandissement ou ajout de chaînes de production, Excel file), including baseline scenario Bids for purchase and installation of all equipment, and other estimated costs Web site Step 2 Hydro-Québec acknowledges receipt and confirms or denies eligibility of project proposal 2 weeks after submission of proposal Hydro-Québec: Reviews proposal Accepts or rejects proposal Provides written confirmation of date of receipt and name of engineer assigned to review proposal (if accepted) Step 3 Submit measurement plan Within 4 weeks of Hydro-Québec s confirmation that proposal was received and is eligible Participant: Submits plan for measuring electricity consumption after implementation of measures Baseline scenario Project measurement plan (Plan de mesurage du projet) Aide technique sur les méthodes de mesurage [technical assistance with measurement methods] and measurement plan template (Web site) Step 4 Hydro-Québec accepts or rejects baseline scenario and measurement plan Hydro-Québec: Checks scenario and measurement plan Confirms acceptance or rejection of deliverables in writing 6 You must submit your completed project to Hydro-Québec along with all deliverables no later than the date specified in the contract, in accordance with the terms and conditions in this guide. Participant s Guide New Plant, Expansion or Addition of Production Lines Component 30

31 Steps Approximate deadline (for Description Deliverables References reference) 6 Step 5 Hydro-Québec rejects project or accepts it and signs contract Hydro-Québec: Checks project parameter eligibility Determines eligible financial assistance to be set out in contract Participant: Signs contract with Hydro-Québec Cost centre assigned to project in your accounting system for in-house labor costs or letter to this effect 7 signed by the project controller, accountant or applicant. Signed contract (in French) Sample letter on request Web site and Appendix 4 Orders equipment for project Step 6 Start up equipment Participant: Starts up equipment Updated after measurement schedule Submits updated after measurement schedule Step 7 Take after measurements No later than the date specified in the contract Participant: Provides data to Hydro-Québec engineer and makes all required adjustments Carries out measurements after implementation of energy efficiency measures Submits after measurement report Purchase orders Copies of all project invoices Start-up report (Rapport de mise en route) Signed after measurement report (Rapport de mesurage après la mise en œuvre des mesures) Summary of calculations Final version of the detailed breakdown of total eligible costs (Grille détaillée des coûts totaux admissibles, Excel file) Web site Aide technique sur les méthodes de mesurage [technical assistance with measurement methods] and measurement report template (Web site) 7 If your accounting system does not provide the option of isolating in-house labor hours allocated to the project. Participant s Guide New Plant, Expansion or Addition of Production Lines Component 31

32 Steps Approximate deadline (for Description Deliverables References reference) 6 Step 8 Hydro-Québec pays out financial assistance Within 45 days of receiving supporting documents (if they meet requirements) Participant: Submits deliverables and required supporting documents Hydro-Québec: Reviews and verifies measurement report and documents provided Reviews and adjusts total financial assistance based on results and calculation rules Informs you in writing of actual amount of financial assistance Original invoice for financial assistance Participant: Issues original invoice for amount specified by Hydro-Québec within 30 days of being advised of amount. Hydro-Québec: Pays out actual amount of financial assistance for project. Participant s Guide New Plant, Expansion or Addition of Production Lines Component 32

33 Appendix 1 Activity Sectors Eligible for the Industrial Systems Program According to the North American Industry Classification System (NAICS codes) Guidelines Statistics Canada uses the North American Industry Classification System (NAICS) to classify Canadian industries according to economic sector. Every business has its own NAICS code based on the economic activity carried out in its building. Hydro-Québec uses this code to determine whether projects submitted to the Industrial Systems Program and Buildings Program for business customers (commercial, institutional and industrial) are eligible). Hydro-Québec s energy efficiency programs are intended for customers in the service-providing and goods-producing categories. General rules for project allocation under the Industrial Systems Program In the vast majority of cases, to be eligible for all of the components of the Industrial Systems Program, the building where the project will be implemented must have a NAICS code in one of the following goods-producing economic sectors. An eligible building must use electricity to manufacture, assemble or process goods or foodstuffs, extract raw materials, or handle or transport materials. Exceptionally, buildings that are used primarily for commercial, institutional or agricultural purposes may be eligible for industrial activities (see examples of exceptions below). GOODS-PRODUCING INDUSTRIES 11 Agriculture, Forestry, Fishing and Hunting 21 Mining and Oil and Gas Extraction 31 Manufacturing; 32 Manufacturing; 33 Manufacturing Exceptions The table below lists examples of the most common exceptions. It is not an exhaustive list. If you are unsure about the eligibility of your project, please contact your Hydro-Québec representative or Soutien aux clients et aux partenaires [customer and partner support centre] at Participant s Guide New Plant, Expansion or Addition of Production Lines Component 33

34 Examples of exception cases Projects involving buildings used to produce goods with the following NAICS codes are not eligible for the Industrial Systems Program parameters Support Activities for Agriculture and Forestry All projects in this subsector Support Activities for Mining and Oil and Gas Extraction All projects in this subsector. Projects involving buildings used to provide services 9 with the following NAICS codes must be submitted under the Industrial Systems Program Skiing Facilities Only projects involving the following: Snow-making equipment Ski lifts Industrial applications specific to these subsectors: Canal, Irrigation Sewage Treatment Facilities Pipeline Transportation Refrigerated Warehousing and Storage Waste Management and Remediation Services Note: All other subsectors beginning with 22 Utilities, Transportation and Warehousing, and 56 Administrative and Support, Waste Management and Remediation Services are eligible for Hydro-Québec s Buildings Program. 10 All other industrial applications of a commercial or institutional building As a rule, and except for the cases listed above, all projects that are carried out in a building used to produce services, but which concern an industrial activity conducted in that building, must be submitted under the Industrial Systems Program. 8 These buildings may qualify for the Buildings Program if they meet its conditions. For details, see 9 In most cases, a building project submitted by a customer with a NAICS code in one of the service sectors is eligible for Hydro-Québec s Buildings Program. For details, see 10 To learn more about the service-providing NAICS codes eligible for Hydro-Québec s Buildings Program, see the Participant s Guides at Participant s Guide New Plant, Expansion or Addition of Production Lines Component 34

35 Customer involved in multiple activities If an administrative space or another space with a service-providing NAICS code is located in the same building as an industrial space with a goods-producing NAICS code, the following rule applies: All projects involving this type of building must be submitted under the Industrial Systems Program, unless they include one or more energy efficiency measures to be implemented exclusively in the administrative space (or another space with a service-producing NAICS code). However, if the administrative space (or another space with a service-providing NAICS code) is located in a separate building from the plant, all projects involving this building must be submitted under the Buildings Program, even if the building in question is connected by a walkway to the plant or if the two buildings are located on the same site. Note: If your project involves a multiple-use building, please contact Hydro-Québec to ensure that you are submitting your project to the appropriate program. Obtaining an NAICS code To obtain the official NAICS code of the building where your project will be carried out, you must send an official request to Statistics Canada and submit a formal letter (on company letterhead) with the following information: company number, name and full address, and signature of an authorized person (owner, president or chief executive officer). For more information, visit the Statistics Canada Web site at infostats@statcan.gc.ca or call Hydro-Québec reserves the right to ask you to produce the official document you received from the Business Register Division. If you are unsure about the eligibility of your project, please contact Hydro-Québec. Participant s Guide New Plant, Expansion or Addition of Production Lines Component 35

36 Appendix 2 Specific Terms and Conditions for Certain Off-Grid Systems This Appendix describes the specific terms and conditions that apply to some off-grid systems. Projects involving off-grid systems must also comply with the general terms and undertakings of the component. Villages connected to off-grid systems Côte-Nord (Lac-Robertson generating station) Blanc-Sablon, Chevery, Harrington Harbour, La Tabatière, Lourdes-de-Blanc-Sablon, Middle Bay, Mutton Bay, Rivière-Saint-Paul, Tête-à-la-Baleine, Côte-Nord-du-Golfe-Saint-Laurent, Gros-Mécatina, Bonne-Espérance et Pakuashipi Côte-Nord (Menihek generating station) Schefferville, Matimekosh, Lac-John and La Romaine Gaspésie Îles-de-la-Madeleine Les Îles de la Madeleine (Fatima, Grande-Entrée, Grosse-Île, Havre-aux-Maisons, Havre-Aubert, Étang-du-Nord, Cap-aux-Meules and L île-d Entrée) Nunavik Akulivik, Aupaluk, Inukjuak, Ivujivik, Kangiqsualujjuaq, Kangiqsujuaq, Kangirsuk, Kuujjuaq, Kuujjuarapik, Whapmagoostui, Puvirnituq, Quaqtaq, Salluit, Tasiujaq and Umiujaq Haute-Mauricie Obedjiwan and Clova Île d Anticosti Port-Menier Specific conditions Any measure that helps reduce oil consumption in a building or process connected to an off-grid system is recognized in calculating financial assistance and the eligible energy savings. Oil consumption savings will be expressed in equivalent kilowatthours (ekwh) according to the equipment s output on the date you submit the project proposal form. For this purpose, 1 ekwh has the same value as 1 kwh. Ineligible measures All conversions from one source of energy to another are excluded. Calculating financial assistance Here are the conversion factors for liters of oil to equivalent kilowatthours: Projects for existing buildings: ekwh/l, the equivalent of an oil heating system operating at 70% efficiency. Projects for new buildings: ekwh/l, the equivalent of an oil heating system operating at 80% efficiency. Participant s Guide New Plant, Expansion or Addition of Production Lines Component 36

37 Appendix 3 Municipal and Cooperative Systems Coopérative Régionale d'électricité de St-Jean-Baptiste de Rouville 3113, rue Principale Saint-Jean-Baptiste-de-Rouville (Québec) J0L 2B0 Hydro Westmount 995, rue Glen, Westmount (Québec) H3Z 2L8 Service électrique de la Ville d Alma 900, avenue Bombardier Nord, Alma (Québec) G8B 7A1 Division de l électricité de la Ville d Amos 182, 1 re Rue Est, Amos (Québec) J9T 2G1 Service électrique de la Ville de Baie-Comeau Service à la clientèle, 5, avenue William-Dobell, Baie-Comeau (Québec) G4Z 1T6 Hydro-Coaticook 77, avenue de la Gravière, Coaticook (Québec) J1A 3E5 Hydro-Joliette Édifice Maurice Lévesque (garage municipal), 85, rue P.-H.-Desrosiers, Joliette (Québec) J6E 6H2 Hydro-Magog 520, rue Saint-Luc, Magog (Québec) J1X 2X1 Hydro-Jonquière (Ville de Saguenay) 1710, rue Sainte-Famille, C. P. 2000, Jonquière (Québec) G7X 7W7 Hydro-Sherbrooke 1800, rue Roy, C. P. 610, Sherbrooke (Québec) J1K 1B6 Participant s Guide New Plant, Expansion or Addition of Production Lines Component 37

38 Appendix 4 New Plant, Expansion or Addition of Production Lines Component Standard Contract The example below is provided solely for information purposes (available in French only). Participant s Guide New Plant, Expansion or Addition of Production Lines Component 38

39 Participant s Guide New Plant, Expansion or Addition of Production Lines Component 39

40 Participant s Guide New Plant, Expansion or Addition of Production Lines Component 40

41 Participant s Guide New Plant, Expansion or Addition of Production Lines Component 41

42 Participant s Guide New Plant, Expansion or Addition of Production Lines Component 42

43 Participant s Guide New Plant, Expansion or Addition of Production Lines Component 43