Marshall Eidinger -
On June 12, 2012, the Ontario Ministry of Energy introduced the Industrial Electricity Incentive Program with the objective of creating new jobs in the industrial sector.
Effective January 2013, eligible companies could qualify for reduced electricity rates if they create new jobs and/or bring new investment to Ontario. New businesses entering the province would be able to receive contracts of up to 20 years for power at $55 per megawatt hour inclusive of transmission and delivery costs. Contracts of comparable length usually receive pricing of $75 per megawatt.
Businesses would be able to apply to the program through two streams. Stream 1 would be available to companies looking to establish new operations in Ontario. To be eligible, companies would be required to make a minimum investment of $250 million that supports new technology, products or processes. Proposals from companies will be evaluated according to expected job and economic benefits. If a proposal is accepted, long-term contracts would be offered through the Ontario Power Authority, depending on the size of the proposed project.
Stream 2 would be available to companies which have already established operations in Ontario. To be eligible, companies would be required to expand their current operations. Such companies would be required to pay the market rate for electricity until 2020, after which they would qualify for long-term contracts at the reduced rates whose terms would depend on the size of the proposed project.
The Ontario government expects to consult with industry over the next three to four months. It plans to provide specific rules by Fall 2012 with a full program launch in January 2013. The program would not affect electricity rates for consumers.