4. Terms of the Incentive
4.1 Level of the Incentive
The ecoENERGY RP will provide an incentive of 1 cent per kilowatt hour (kWh) of production over 10 years for eligible projects within the following limits:
- The budget for the ecoENERGY RP is fixed over the 14 years and for each year it will be in operation.
- Contribution Agreements are based on expected power production levels established prior to the commissioning of the project. Contribution Agreements will outline the maximum amount of incentive payable over the 10 years of the agreement, as well as the estimated annual production. Once a Contribution Agreement is entered into, funding for the following 10 years will be committed and set aside for that particular project. It must be recognized, therefore, that:
- the initial estimate of expected production contained in the project's resource assessment must be as accurate as possible; and
- the program cannot accommodate significant variability on a year-to-year basis.
- Payment is subject to there being an appropriation by Parliament for the year in which the payment of monies is to be made.
4.2 Payment of Eligible Production
The Eligible Recipient must maintain separate records for the net production from the Qualifying Project, including bills of sale to the first purchaser(s) of the electricity. Subsequent sales of the energy production do not qualify for the incentive.
4.3 Period of Payment
The incentive can be claimed for the total eligible production of a Qualifying Project starting on the day after the day of the Qualifying Project's commissioning and up to, and including, the day of the 10th anniversary of the commissioning.
4.4 Maximum Eligible Production and Annual Eligible Production
The Contribution Agreement will specify the maximum production eligible for the incentive over the 10-year period, which will be the basis for determining the payment of the incentive annually and over 10 years.
The Maximum Eligible Production for the 10-year period is calculated as the expected annual production of the Qualifying Project, as provided in the Technical Project Information application for project, and as limited by the maximum capacity factor level for the technology, divided by 365 days and multiplied by the total number of days in the 10-year period of the program.
The Maximum Annual Eligible Production is calculated as the expected annual production of the Qualifying Project, as provided in the Technical Project Information application for project, and as limited by the maximum capacity factor level for the technology, divided by 365 days and multiplied by the total number of days in the particular year being considered.
4.5 Maximum Contribution
Total funding for a project will be based on the maximum eligible production, as agreed in the Contribution Agreement between the proponent and Natural Resources Canada, times the program's incentive per kWh.
In any given year, payment of the incentive will be made for the full net production of the Qualifying Project up to the Maximum Annual Eligible Production. If a project is over-producing in a given year, unclaimed amounts from previous years of under-production may be paid up to the actual production, pending availability of funds. If a project constantly over-produces, the difference between the over-production amount and the Maximum Annual Eligible Production will be paid on the first quarter of the next fiscal year, and this amount will be counted on the new year's Maximum Annual Eligible Production. The Contribution Agreement will be deemed terminated when the total maximum eligible production has been reached or when the 10-year period has been completed.
The amount of funding allocated to an Eligible Recipient for a Qualifying Project under a contribution agreement is not confidential information. In October 2005, the Government announced that it will proactively disclose the awarding of grants and contributions over $25,000 as part of its Management Improvement Agenda. Grants and contributions are reported in the Public Accounts of Canada.
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