INDUSTRIAL ENERGY OPTIMIZATION PROGRAM

Transcription

1 INDUSTRIAL ENERGY OPTIMIZATION PROGRAM YOU VE GOT THE POWER TO SAVE Identify energy waste and reduce your production costs. Our efficiency experts will provide customized technical assistance to help you identify and develop opportunities to save. We also provide financial incentives to turn those opportunities into action. Eligibility Industrial facilities operating in Saskatchewan Your facility s primary purpose is the manufacturing or processing of goods or the extraction of raw materials Facility operates under North American Industry Classification System (NAICS) codes 21, 22, 31, 32, 33, or 486 Facility has an average annual peak monthly demand equal to or greater than 1.00 MVA (megavolt ampere) What You Will Receive Access to customized technical support from our efficiency experts Technical assistance with capital and energy management project identification and development Financial incentives How To Apply Contact your SaskPower account manager or Dallas Munro, IEOP Manager at dmunro@saskpower.com Benefits Up to $15,000 per project to assist in identifying energy-saving opportunities or projects Up to $50,000 per project to develop those opportunities or projects Up to $500,000 per facility each year to implement capital projects Up to $100,000 per facility to implement energy management projects Improved energy performance and reduction of your power costs Increased process efficiency through the implementation of cost effective projects Decreased energy waste and costs to help us reduce demand on the power grid and better manage electricity rates in the long term

2 SaskPower Industrial Energy Optimization Program Program Guide Version 5.0 March 2017 This document is for reference purposes only. The information in this document is subject to change without notice.

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4 Table of Contents Introduction... 1 How the Program Works... 1 Facility Eligibility Requirements... 3 Eligible Projects... 3 Financial Incentives... 4 Identification Incentive... 4 Development Incentive... 5 Energy Management Implementation Incentive... 5 Capital Project Implementation Incentive... 5 Eligible Costs... 6 Incentive Agreement... 7 Program Timeframe... 7 Make it Happen!... 7 Program Guide

5 Introduction The SaskPower Industrial Energy Optimization Program (IEOP) is designed to help industrial facilities identify energy waste and to ultimately reduce the cost associated with electrical energy use and demand as an important input to the production process. This is clearly beneficial to industry and is also an important strategy in the long-term planning of Saskatchewan s energy supply needs. Through Programs such as the IEOP, SaskPower is committed to demonstrating the value of demand-side management, and to providing it as a cost effective long-term energy supply option. How the Program Works The Program employs a custom approach to accommodate specific industry needs. Figure 1 presents an overall view of the Program and Incentive structure and demonstrates how the Incentives are related. SaskPower aims to deliver the Program by building lasting relationships with Industry through the following general process: Following initial contact and discussions, the Proponent submits a Letter of Intent to Participate, including a statement of the Industry Investment Criteria. The Investment Criteria is used to assess projects in the Capital Track of the program (shown below in figure 1). Once the Letter of Intent is submitted to SaskPower, the Proponent becomes an official Participant in the Program. SaskPower works with the Participant by providing technical assistance with the aim of catalyzing project conceptualization, and prioritizing potential program activities. When an Incentive for a Project is required, the Participant submits an Incentive Pre-Approval Request. If the Project meets Program requirements the Incentive is approved and an Incentive Agreement is executed. The Participant may begin the Project and eligible costs are considered as of the date of the pre-approval. SaskPower and the Participant agree to a Project Plan for the Project which forms Schedule A to the Incentive Agreement that defines the Project milestones and payments. The Incentive Agreement along with the Schedule A is signed by both parties. When a milestone is reached, the Participant submits to SaskPower an Incentive Payment Request along with an invoice for eligible costs and any associated deliverables. Before sending the Incentive Payment Request participants are invited to take advantage of an optional Draft Review stage. This Draft Review allows Participants to request preliminary feedback from SaskPower on the scope and quality of draft Project deliverables. The scope of draft reports is compared against the reporting requirements that are included in the Incentive Details document and feedback is provided. This will help Participants minimize any delays at the Incentive Payment stage by ensuring early-on that the documents will adhere to the Program s reporting requirements. If all deliverables meet the Incentive Agreement requirements, the Incentive Payment is made. In addition to the financial Incentives available to Participants, the Program provides technical assistance to Participants via the energy support team, comprised of SaskPower and their 3 rd party delivery partners. The energy support team acts as an extension of industry plant/company resources to provide high-quality value added services that aim to remove barriers from the identification and qualification of energy savings opportunities. Customer Programs INDUSTRIAL ENERGY OPTIMIZATION PROGRAMProgram Guide Page 1 of 8

6 Figure 1 Program Tracks and Incentive Overview Letter of Intent to Participate Identification Incentive Energy Management Track Project Identification 50% of incentive upon report delivery Maximum Total Incentive: The lesser amount of $15,000 or 100% of the Pre-Feasibility Report Cost Incentive Agreement Capital Project Track Project Identification 50% of incentive upon report delivery Maximum Total Incentive: The lesser amount of $15,000 or 100% of the Eligible Costs Cumulative maximum of $60,000 per Facility per track 50% of incentive when proceeding to development 50% of incentive when proceeding to development Incentive Agreement Development Incentive Cumulative maximum of $200,000 per Facility per track Project or Plan Development 50% of incentive upon report delivery Maximum Total Incentive: The lesser amount of $50,000 or 50% of the Energy Management Plan Cost 50% of incentive when proceeding to implementation Incentive Agreement Project Development 50% of incentive upon report delivery Maximum Total Incentive: The lesser amount of $50,000 or 50% of the Eligible Costs 50% of incentive when proceeding to implementation Technical Assistance Implementation Incentive Cumulative maximum of: $400,000 per Facility, for Energy Management Projects $500,000 per Facility, annually, for Capital Projects Certification or Implementation 50% of incentive upon project completion Maximum Total Incentive: The lesser amount of $100,000 or 50% of Certification/Implementation Cost 50% upon reporting milestones Project Implementation 50% of upon Project completion Maximum Total Incentive: up to $500,000. See for conditions. 50% upon reporting milestones Project Results Customer Programs INDUSTRIAL ENERGY OPTIMIZATION PROGRAMProgram Guide Page 2 of 8

7 Facility Eligibility Requirements The SaskPower Industrial Energy Optimization Program (IEOP) is open to companies operating industrial facilities in Saskatchewan that meet the following criteria: The facility s primary purpose is the manufacturing or processing of goods, or the extraction of raw materials The facility operates under the North American Industry Classification System (NAICS) codes 21, 22, 31, 32, 33 or 486 The facility has an average annual peak monthly demand equal to or greater than 1.00 MVA, and is served by SaskPower Standard Rates, Time-of-Use Rates or Oil-Field Standard Rates Eligible Projects Complete details on Project Eligibility and reporting requirements are provided in the document available on the Program web site or through the SaskPower Program office. Generally, Projects are considered eligible if they result in the following types of benefits: Permanent, reliable, and measurable, energy efficiency performance improvements; Reduced energy intensity; Enhanced management of energy, increased availability and communication of energy management information; and/or Demonstration of results of energy savings Projects. Specifically, the Program supports Projects that lead to the identification, development, implementation and demonstration of results from the Projects under two separate Program tracks; namely the Capital Project Track and the Energy Management Track. The Capital Project Track supports the following types of Projects: Energy Efficiency Projects that decrease electricity use within the facility and/or result in decreased electrical energy intensity Lighting Retrofits Projects that decrease electricity demand (KW) and consumption (kwh) within the facility. Projects include lighting fixtures and controls and cannot be combined with other projects. Note that Lighting projects are classified under the Capital Project Track but are subject to different incentive and reporting criteria as outlined in the document. Peak Demand Management Projects aimed at reducing peak electrical demand at the facility and on the electricity grid The Energy Management Track Supports the following types of Projects: Customer Programs INDUSTRIAL ENERGY OPTIMIZATION PROGRAMProgram Guide Page 3 of 8

8 Energy Management Planning and Systems Developing new energy management plans to potentially carry out Projects that decrease energy demand and/or consumption use within the facility and/or decrease electrical energy intensity within energy intensive processes Energy Management System Certification (ex. ISO 50001) Projects that facilitate proven achievement and maintenance of higher management and operational efficiencies, and which lead to enhanced identification of capital energy efficiency Projects; Planning and implementation of ISO certification Energy Management Information System Projects that culminate in a performance management system that makes energy performance visible to various levels of the organization so that actions can be taken to systematically drive energy waste, variability and use down to reduce cost and create financial value for the company Sub-Metering Systems Projects that aim to provide energy use and demand information of a specific system, or Projects that create a structured process for verifying the energy saving results from the implementation of energy efficiency Projects. Note that these Projects tend to be more limited in scope than an Energy Management Information System Project Financial Incentives SaskPower provides financial Incentives to assist Participants to identify and/or develop the business case for single or multiple Projects and/or to purchase and install energy efficient equipment. One of the principles of SaskPower s Incentive payments is that they are contingent upon concrete action by Industry to move forward with specific Projects that meet Industry s financial hurdle rates and other Industrial Investment Criteria. These criteria are stated in the Letter of Intent to Participate, and form an important part of the Implementation Incentive Agreements. Complete details on all Incentives and reporting requirements are provided in the document available at the Program website or through the SaskPower Program office. Identification Incentive The Program provides a financial Incentive to cover the cost of activities that aim to identify or determine the preliminary feasibility of energy initiatives. These can apply to initiatives under the Energy Management track or the Capital Project Track (excluding Lighting Projects). The Program provides 100% of the cost, up to $15,000, for the identification of Capital or Energy Management Project opportunities. The Program provides 50% of the Incentive on delivery of an Identification Incentive Report meeting the Program s reporting requirements, and 50% when evidence of proceeding to the development or implementation stage is provided. Customer Programs INDUSTRIAL ENERGY OPTIMIZATION PROGRAMProgram Guide Page 4 of 8

9 The maximum cumulative sum of all Identification Incentives is $60,000 per facility annually for each of the Capital Project and Energy Management tracks. This means that a facility can apply for an Identification Incentive to the maximum of $15,000 four times in one year if they are identifying and determining the preliminary feasibility of separate energy initiatives. Development Incentive The Program provides a financial Incentive to cover a portion of the cost of developing an investmentgrade business case for Projects under the Energy Management or Capital Project Tracks (excluding Lighting Projects). The Program provides 50% of the cost up to $50,000 for an investment-grade business case leading to implementation of the Project. The Program provides 50% of the Incentive on delivery of a Development Incentive Report meeting the Program s reporting requirements, and 50% when evidence of proceeding to implementation is provided. The maximum cumulative sum of all Development Incentives is $200,000 per facility annually for each of the Capital Project and Energy Management tracks. This means that a facility can apply for a Development Incentive four times in one year if they are developing an investment-grade business case for four different projects within the facility. Energy Management Implementation Incentive The Program provides a financial Incentive to cover a portion of the cost of implementing an energy management initiative under the Energy Management Track. The Program provides 50% of the cost up to $100,000 of external capital or expense implementation costs. The Program provides 50% of the Incentive on completion of the Project, and 50% following delivery of mutually agreed-upon progress reports following implementation. The maximum cumulative sum of all individual Incentives is $400,000 per facility. Therefore, a facility can implement four different projects within the facility and receive $100,000 for each project or $400,000 for the entire facility. Capital Project Implementation Incentive The Program will provide a financial Incentive to cover a portion of the cost of implementing an energy efficiency capital Project. The maximum Incentive will be the lesser of $500,000, 50% of the Eligible Project Costs, or the amount required to reduce the financial return of the Capital Based Projects to meet the Participant Investment Criteria, as stated in the Letter of Intent to Participate and as agreed-to in the Incentive Agreement. Customer Programs INDUSTRIAL ENERGY OPTIMIZATION PROGRAMProgram Guide Page 5 of 8

10 For energy efficiency Lighting Projects, the Program will provide a financial Incentive to cover a portion of the cost of implementation. The maximum Incentive will be the lesser of: - $500,000-50% of Eligible Project Costs - Amount needed to reduce payback period to industries desired hurdle rate mentioned in Letter of Intent (LOI) - Total lifespan electricity (kwh) savings multiplied by the eligible Incentive Rate. The Incentive Rate is determined by SaskPower after a financial evaluation of project implementation proposal and ranges from $0.015 to $0.035 per kwh saved. Generally, the higher the demand saving potential of projects, the higher the applicable Incentive Rate. Note: Lighting Projects qualifying for an IEOP Incentive will not be eligible for the SaskPower Commercial Lighting Program Incentives. The Program will provide 50% of the Incentive on completion of Project implementation. The remaining 50% of the Incentive will be paid following delivery of progress reports in accordance with the Program s reporting requirements, such delivery being made on a mutually agreeable scope and schedule based on the operational requirements of the Project and as agreed upon in the Incentive Agreement The maximum cumulative Incentive is $500,000 per facility annually. This means that the same facility can apply for an Implementation Incentive for separate projects every year that the program runs. Note: If the project implementation cost to savings ratio on any capital project is too high in comparison to typical projects that have been successfully implemented through IEOP, SaskPower may reduce the implementation incentive based on an internal evaluation. This may result in implementation incentive being lower than 50% of project cost or buy down to industry s desired hurdle rate. Eligible Costs Eligible Costs are defined in detail in the context of the document but can generally be described as costs incurred by Industry, which are deemed eligible for reimbursement through Incentive payments. For the purpose of the Program, eligible costs fall into two categories, as follows: Third-Party Costs: These are salaries, fees and reasonable expenses paid to third-parties, such as equipment suppliers, consultants, etc. that have undertaken Project activities. Implementation Costs: Include the material and installation costs of implementing Capital Projects or developing Energy Management systems under the Incentive tracks offered by the Program. Eligible Costs are subject to certain specific exclusions. More detailed information relative to Eligible Costs is available in the document. Customer Programs INDUSTRIAL ENERGY OPTIMIZATION PROGRAMProgram Guide Page 6 of 8

11 Incentive Agreement The Incentive Agreement is a binding document to be entered into by both SaskPower and the Participant for each Incentive. It is structured to encourage movement of Projects that meet Industry s stated objectives from phase to phase toward implementation. The Incentive Agreement governs each Incentive activity and documents both SaskPower s and Industry s obligations relating to the Project. Program Timeframe The current Program is available to all qualifying industries. Requests for participation in the Program will be considered as they are received, and approval and allocation of Incentive funds for proposed Projects will occur on a first-come, first-served basis. Make it Happen! 1. Contact a Program Consultant from SaskPower to discuss needs and project ideas 2. Submit a Letter of Intent to participate in the Program 3. Work with SaskPower to develop an eligible project 4. Build a lasting energy management strategy and partnership with SaskPower Customer Programs INDUSTRIAL ENERGY OPTIMIZATION PROGRAMProgram Guide Page 7 of 8

12 SaskPower Industrial Energy Optimization Program Version 5.0 March 2017 This document is for reference purposes only. The information in this document is subject to change without notice. Customer Programs INDUSTRIAL ENERGY OPTIMIZATION PROGRAM

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14 Table of Contents 1 Purpose Definitions Eligibility Eligible Facilities Eligible Projects Eligible Costs Program Participation and Incentive Transaction Process Incentive Amounts, Limits and Payment Terms Reporting Requirements Identification Incentive Report Requirements Development Incentive Report Requirements Implementation Report Requirements Appendix A Letter of Intent to Participate Appendix B Incentive Pre-Approval Request Appendix C Incentive Agreement Appendix D Incentive Payment Request

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16 1 Purpose This document defines the requirements and obligations of industry to access incentives offered through SaskPower s Industrial Energy Optimization Program (IEOP). The definitions, terms and conditions contained in this document will form part and parcel of the Incentive Agreement to be entered into between the Industrial Participant and SaskPower that will govern individual incentives. It is important that all industrial participants read and understand the contents on this document. A SaskPower IEOP Account Representative will be happy to provide further explanation and context on request. The incentive details are presented in the following sections: Definitions Presents definitions of terms used throughout the program and this document Eligibility Covers Eligible Program Participants, Eligible Projects and Eligible Costs Participation and Incentive Transaction Process Presents the process by which a Participant will transact with the Program for approval and payment of incentives under the Program Incentive Amounts, Limits and Payment Terms Presents specific details associated with each incentive offered by the Program Reporting Requirements Presents the requirements for deliverables under the program to satisfy payment terms of the various incentives. Page 1 of 47

17 2 Definitions The following terms are used throughout this document and in various program transactions. Term Capital Project Track Development Incentive Development Incentive Cumulative Maximum Development Incentive Maximum Eligible Cost Eligible Facilities Eligible Project Energy Management Information System Energy Management Planning (and Systems) Energy Management Track Identification Incentive Identification Incentive Cumulative Maximum Definition The set of program activities leading to the implementation of a traditional capital budget-funded retrofit project. Payment from SaskPower towards the recovery of eligible project costs incurred leading to the submission of a Development Incentive Report, as further defined in Exhibit 6 of this document. The maximum total payment from SaskPower towards the recovery of eligible project costs incurred in the submission of multiple Development Incentive Reports for multiple Development Incentives. The maximum payment from SaskPower towards the recovery of eligible project costs incurred leading to the submission of one Development Incentive Report. A cost incurred by the Participant, which, in the opinion of SaskPower, is deemed eligible for reimbursement through Incentive Payments, as further defined in the Eligible Costs section of this document. A facility that meets the criteria defined in the Eligible Facilities section of this document. A project that leads to the identification, development, implementation and/or demonstration of sustained energy efficiency improvements or reduced demand, as further defined in the Eligible Projects section of this document A performance management system that makes energy performance visible to various levels of the organization so that actions can be taken to systematically drive energy waste, variability and use down to reduce cost and create financial value for the company, as defined in the Eligible Projects section of this document. The development of new energy management plans to carry out projects that decrease energy demand and/or consumption use within the facility and/or decrease electrical energy intensity within energy intensive processes, as defined in the Eligible Projects of this document. The set of program activities leading to the implementation of an Energy Management Plan, which may or may not include ISO Certification, and Energy Management Information System, or a Measurement and Verification System. Payment from SaskPower towards the recovery of eligible project costs incurred leading to the submission of an Identification Incentive Report, as further defined in Exhibit 6 of this document. The maximum total payment from SaskPower towards the recovery of eligible project costs incurred in the submission of multiple Identification Incentive Reports for multiple Identification Incentives. Page 2 of 47

18 Term Identification Incentive Maximum Implementation Cumulative Maximum Implementation Incentive Implementation Incentive Maximum Incentive Agreement Incentive Payment Request Incentive Pre-Approval Request Incentive Transaction Process Incentives Industry Investment Criteria Letter of Intent to Participate Proof of Payment for Eligible Cost Sub-Metering System Definition The maximum payment from SaskPower towards the recovery of eligible project costs incurred leading to the submission of one Identification Incentive Report. The maximum total payment from SaskPower towards the recovery of eligible project costs incurred for the implementation of multiple qualifying Capital or Energy Management Projects Payment from SaskPower towards the recovery of eligible project costs incurred for qualifying Capital or Energy Management Projects as further defined in Exhibit 6 of this document. The maximum total payment from SaskPower towards the recovery of eligible project costs incurred for the implementation of one qualifying Capital or Energy Management Project. The agreement to be entered into between the Participant and SaskPower that will govern individual incentives, as referred to in the Participation and Incentive Transaction Process section of this document, a form of which is presented in Appendix C. A request for incentive payment towards the recovery of eligible project costs, to be submitted with the required supporting information, as described in the Participation and Incentive Transaction Process section of this document, the form of which is included in Appendix D. A request to be submitted by a Participant prior to commencing a specific Program Activity that is potentially eligible for a Financial Incentive, as described in the Participation and Incentive Transaction Process section of this document, the form of which is included in Appendix B. The set of activities leading to the pre-approval and payment of an incentive by SaskPower to the Participant for the recovery of eligible project costs. Payments issued by SaskPower to be used toward the recovery of Eligible Costs. The payback period below which the Participant agrees that projects identified should reasonably proceed given current economic conditions at the Facility. The Industry Investment Criteria is stated in the Letter of Intent to Participate, and is agreed to in each Incentive Agreement. It only applies to Capital Track Projects. A Simple Payback period must not be less than one year. Letter to be signed and submitted by the Participant expressing intent to participate in the Program, and stating the Industry Investment Criteria, the form of which is included in Appendix A. Proof that Eligible Costs for recovery by Incentives have been incurred. Acceptable forms of proof of payment for eligible project costs, as further defined in the Eligible Costs section of this document. A metering system and analysis methodology established to verify the energy use in existing systems, or to determine savings as a result of installed energy conservation measures. Page 3 of 47

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20 3 Eligibility 3.1 Eligible Facilities The SaskPower Industrial Energy Optimization Program (IEOP) is open to companies operating existing industrial facilities in Saskatchewan that meet the following criteria: The facility s primary purpose is the manufacturing or processing of goods, or the extraction of raw materials. The facility operates under the North American Industry Classification System (NAICS) Codes 21, 22, 31, 32, 33, or 486. The facility has an average annual peak monthly demand equal to or greater than 1.00 MVA, and is served by SaskPower Standard Rates, Time-of-Use Rates or Oil-Field Standard Rates. 3.2 Eligible Projects The Program generally provides Incentives to reduce the costs to Participants for activities that lead to the identification, development, implementation, and/or demonstration of sustained energy efficiency improvements or reduced demand. Expansion projects that increase demand are not eligible projects. Power quality and renewable generation projects are not eligible projects. Exhibit 1 lays out project types (with descriptions) that would be eligible in the capital project track and energy management track. Exhibit 1 Eligible Projects Program Track Eligible Project Type Eligible Project Description Capital Project Track Energy Efficiency Lighting Retrofits Peak Demand Management Projects that decrease electricity use within the facility and/or result in decreased electrical energy intensity Projects that decrease electricity demand (kw) and consumption (kwh) within the facility. Projects include Lighting fixtures and controls and cannot be combined with other projects. Projects aimed at reducing peak electrical demand at the facility and on the electricity grid Page 5 of 47

21 Program Track Eligible Project Type Eligible Project Description Energy Management Track Energy Management Planning (and Systems) Energy Management System Certification (ex. ISO 50001) Energy Management Information System Sub-Metering Systems Developing new energy management plans to facilitate proven achievement and maintenance of higher management and operational efficiencies, and which lead to enhanced identification of projects that decrease energy demand and/or consumption use within the facility and/or decrease electrical energy intensity within energy intensive processes Planning and implementation of ISO certification Projects that culminate in a performance management system that makes energy performance visible to various levels of the organization so that actions can be taken to systematically drive energy waste, variability and use down to reduce cost and create financial value for the company. The project can include non-electrical end-uses, but must include a meaningful electrical component (approx. 50% electrical energy). Projects that aim to provide energy use and demand information of a specific system, or projects that create a structured process for measuring and verifying the energy saving results from the implementation of energy efficiency projects. The project can include nonelectrical end-uses, but must include a meaningful electrical component (approx. 50% electrical energy). 3.3 Eligible Costs Eligible Costs are costs incurred by Participant, which are, in the opinion of SaskPower, deemed eligible for re-imbursement through Incentive Payments, as presented in Exhibit 2: Exhibit 2 Eligible Costs Category Eligible Cost Eligible Cost Description All Incentives Third-Party Costs Fees or remuneration or reasonable expenses paid to professional, technical personnel, consultants, equipment suppliers, and contractors that are, in the opinion of SaskPower, qualified to undertake the work in question. These Third-Party Costs are eligible for reimbursement for the study, design, and/or engineering for activities related to all Incentives offered by the Program. Page 6 of 47

22 Category Eligible Cost Eligible Cost Description Implementation Incentive Timing Exclusions Proof of Payment Implementation Costs All Eligible Costs Non-Eligible Costs All Eligible Costs The costs of purchasing, acquiring, developing, installing, modernizing, renting or leasing equipment or systems. These Implementation Costs are Eligible Costs for reimbursement only under the Implementation Incentives offered by the Program, namely the Energy Management Project Implementation Incentive and the Capital Projects Implementation Incentive. Costs are only considered eligible if they are Third-Party Costs, or Implementation Costs that are incurred no sooner than date of Incentive Pre-Approval by SaskPower, and no later than the date of Incentive Payment Request made by the Participant. For certainty, the following are not Eligible Costs: Any costs incurred prior to Incentive Pre-Approval by SaskPower; The cost of internal salaried or hourly staff; General overhead costs of the Participant, or commitment in-kind, including operating costs related to the general maintenance, repair and overhead cost of Eligible Projects; The cost to purchase or lease real property; Cost in respect of office space for Eligible Project administrative staff; Administrative costs not specifically listed as Eligible Costs; The cost of engineering, audit or feasibility studies to the extent of grants or contributions provided by or committed to be provided by the Office of Energy Efficiency or any other federal, provincial, territorial or municipal government program, including other SaskPower Programs; Conference and conference travel costs; Cost of office supplies, equipment and furniture; Provincial Sales Tax, the Goods and Services Tax or Harmonized Sales Tax for which the recipient is eligible for a tax rebate; and Any other costs eligible for rebates from SaskPower or other party. The following are acceptable proof of payment in the context of Incentive Payment Requests: Invoices providing sufficient detail to verify that the costs claimed are Eligible Costs; and, Cancelled cheques for demonstrating payment of invoices provided; or, Accounting system entries signed by a Chartered Accountant showing payments for invoices provided. Page 7 of 47

23 4 Program Participation and Incentive Transaction Process The generalized incentive transaction process is shown in Exhibit 3 below, and further detailed in Exhibit 4 and Exhibit 5. This process will be followed for each type of incentive (Identification, Development, and Implementation Phases). Exhibit 3 Engagement Phase and Incentive Transaction Process Engagement Phase Incentive Transaction Process Program Participation Project Conceptualization Incentive Pre- Approval Incentive Agreement Draft Review Incentive Payment Request Incentive Payment Stage Program Document Exhibit 4 Engagement Phase Description Purpose and Result Industry Participant Action SaskPower Action Program Participation Letter of Intent to Participate Template for Letter of Intent to Participate is in Appendix A The purpose of the Letter of Intent to Participate is to: Formally acknowledge participation in the IEOP State the Industry Investment Criteria that will be used as the basis for Implementation Incentive Payment. The Investment Criteria will only apply Submit a scanned Letter of Intent to Participate substantially in the format presented in Appendix A via e- mail to SaskPower. The Letter of Intent to Participate must include the statement of the Industry Investment Criteria, and should be signed by an individual in authority to make investment decisions of the scope intended by the program. If the SaskPower will acknowledge receipt of the letter, and review the Letter of Intent to Participate to ensure that the Participant s Facility is an Eligible Facility, and, SaskPower may request additional information for the purpose of qualifying an eligible participant (i.e. power bill, etc.) SaskPower will then formally acknowledge through e- mail correspondence that the Letter of Intent to Participate has been accepted. When this Stage is Page 8 of 47

24 Stage Program Document Purpose and Result Industry Participant Action SaskPower Action to Capital Track projects and may not be less than one year. Allow the IEOP to invest and allocate Program resources for technical assistance and financial incentives to the Participant Participant has more than one facility that they are considering for the Program, then state in the LOI whether or not the investment criteria are different among them. SaskPower acknowledges that investment criteria may change over time with fluctuations in business and market conditions. If investment criteria changes after submitting the Letter of Intent to Participate, this criteria can be negotiated for the purposes of determining the Implementation Incentive. Investment criteria may not be less than one year simple payback. complete, the Participant is free to apply for Preapproval for Incentives. Stage Program Document Exhibit 5 Incentive Transaction Process Description Purpose and Result Industry Participant Action SaskPower Action Project Conceptualization No formal documents The purpose of this stage is for SaskPower to work with the Participant to assist in identifying potential program activities with a view to Work with SaskPower through meetings and information exchange. Provide Technical Assistance and Account Management in the form of face-to-face and remote meetings, site visits and Engineering Support to assist in identifying potential projects and assist to move projects forward. Page 9 of 47

25 Stage Program Document Purpose and Result Industry Participant Action SaskPower Action defining the scope of potential Eligible Projects The result is a high-level plan to begin structured program activities and a list of potential projects. Incentive Pre- Approval Incentive Pre- Approval Request Form of Incentive Pre-Approval Request is in Appendix B The purpose of this stage is for the Participant to have the Incentive Pre- Approved. Pre-Approval of the Incentive sets the date from which costs become Eligible Costs for the purposes of reimbursement under the Program The result of the Pre- Approval stage will be an Incentive Pre-Approval Letter, and a draft Incentive Agreement. Submit a scanned Incentive Pre-Approval Request Form substantially in the format presented in Appendix B, along with the required supporting documents e.g. scope of work for proposed activity, via to the SaskPower IEOP Program Consultant. Lighting Projects require an Implementation Proposal for pre-approval as outlined in Section SaskPower will evaluate the eligibility of the proposed activity for which Incentive Pre- Approval is being requested. SaskPower will either: Conditionally approve commencement of the specific Program Activity by issuing an Incentive Pre-Approval Letter along with a draft Incentive Agreement to be entered into by the Participant and SaskPower. The date of conditional approval serves as the date following which Eligible Costs may be incurred on the condition that an Incentive Agreement be executed; or, Request further information as required to evaluate the eligibility of the Program Activity; or Reject the proposed Program Activity. In any event, Program Activities and any costs related to such Program Activities born by Participant are not Eligible Costs for recovery until the Incentive Agreement is duly executed. Incentive Incentive The result of the Incentive Agreement stage will be an Review terms of Incentive Agreement and work with Reviews signed Incentive Agreement from Participant. If any changes/information is needed, they will work with the Participant to Page 10 of 47

26 Stage Program Document Purpose and Result Industry Participant Action SaskPower Action Agreement Agreement Form of Incentive Agreement is in Appendix C executed Incentive Agreement, at which time all costs incurred from the Date of the Incentive Pre- Approval become Eligible Costs. SaskPower to develop the reporting and payment milestones. Execute the final incentive agreement, and return to SaskPower. rectify the issues. Execute the terms and conditions of the Incentive Agreement resulting in a fully executed/signed Incentive Agreement Draft Review Stage Draft Report The purpose of this stage is to allow participants to request preliminary feedback from SaskPower on the scope and quality of draft project deliverables. The scope of draft reports is compared against the reporting requirements that are included in the Document and subject to a technical review by SaskPower. Feedback is provided to help Participants minimize any delays at the Incentive Payment stage by ensuring early-on that the documents will adhere to the Program s reporting requirements. It should be noted that this step is optional for industry Participants, but is strongly Send draft report to SaskPower for review. Move into the Incentive Payment Request phase once SaskPower states that reporting requirements have been met. Conducts a technical review of the report and provides any recommendations on improving the draft report to meet requirements. Page 11 of 47

27 Stage Program Document Purpose and Result Industry Participant Action SaskPower Action encouraged. Incentive Payment Request & Incentive Payment Incentive Payment Request Form Incentive Payment Request Form is in Appendix D The purpose of this stage is for the Participant to have the Incentive Amounts paid in accordance with the terms and conditions set out in the Incentive Agreement. The result of the Incentive Payment Stage is a payment to the Participant. Submit via a scanned Incentive Payment Request substantially in the format presented in Appendix D, along with the required supporting documents, which depending on the Incentive may include: An invoice for the amount of incentive payment requested; Proof of Payment of Eligible Cost; Reports substantially meeting the Incentive Reporting Requirements; Reasonably demonstrable evidence that the Participant has taken actions to move forward with the development or implementation of Eligible Projects; Demonstration of substantial completion of an installation. SaskPower will evaluate the supporting documentation submitted as part of the Incentive Payment Request relative to the Reporting Requirements and the terms and conditions of the Incentive Agreement. SaskPower will either: Approve the payment for release, and issue hard-copy cheque of the payment amount. or, Request further information and/or clarification as required to duly evaluate the sufficiency of the supporting documents ;. Page 12 of 47

28 5 Incentive Amounts, Limits and Payment Terms In accordance with the Incentive Transaction Process, SaskPower provides financial Incentives to reduce the Eligible Costs incurred by the Participants for conducting activities related to Eligible Projects. The following table presents the specifics relating to the amounts, maximums, and payment terms for Incentives provided by SaskPower under the IEOP. The Program provides Incentives as follows, in exhibit 6. Page 13 of 47

29 Incentive Incentive Amount and Cumulative Maximum Exhibit 6 Supported Project Activity Payment Terms Reporting Requirements Identification Incentive 100% of Eligible Costs incurred, up to a maximum of $15,000 towards the cost of undertaking the supported Project Activity The Identification Incentive Cumulative Annual Maximum available to each facility is $120,000 with a maximum of $60,000 for each the Capital Track and Energy Management Track. In order to take advantage of the $60,000 maximum in each track, the participant will have to engage in multiple Identification Studies. For each individual study, 100% of Eligible Costs (shown in exhibit 2) incurred in undertaking the supported project activity (shown to the right), up to a maximum of $15,000, will be covered by the program. Capital Track A preliminary energy audit of the Facility or system aimed at identifying Eligible Projects within the Facility in connection to the Capital Project Track. Energy Management Track A study aimed at identifying energy management information system opportunities within the Facility. A study aimed at identifying the gaps and opportunity for implementation of Energy Management Plans or Energy Management System Standards. 50% of the incentive will be paid following delivery of an Incentive Payment Request accompanied by: An Identification Incentive Report that substantially conforms to the Report Requirements; and, Proof of Payment for Eligible Costs related to production of the report; Remaining 50% of the incentive will be paid following delivery of an Incentive Payment Request, and only: If the Report fails to identify Projects (relating to Capital Track Projects and EMIS) that meet the Participant Investment Criteria; or, The activity must result in an Identification Incentive Report that substantially complies with the Identification Incentive Report shown in Section 6 herein. Example: A facility undergoes 3 Identification Studies 2 Capital Track Studies and 1 Energy Management Track Study over 8 months. The 3 Identification Studies incur eligible program costs of the following: $45,100 (Capital Track); $31,300 (Capital Track); $10,400 (Energy Management Track). The participant receives 2x $15,000 = $30,000 of its maximum $60,000 Capital Track incentive dollars and $10,400 (<$15,000) of its maximum $60,000 Note: Lighting projects do not qualify for the Identification Incentive. If the Report identifies Projects (Capital Track Projects and EMIS) that meet the Participant Investment Criteria and the Participant demonstrates action in proceeding to a Development Incentive Report with a minimum of 50% of Projects Page 14 of 47

30 Energy Management Track incentive dollars granted other program criteria are met. Development Incentive 50% of Eligible Costs incurred, up to a Development Incentive Annual Maximum of $50,000 towards the cost of undertaking the supported project activity. The Development Incentive Cumulative Maximum available to each facility is $400,000 with a maximum of $200,000 for each the Capital Track and Energy Management Track. In order to take advantage of the $200,000 maximum in each track, the participant will have to engage in more than one Development Study. For each individual study, 50% of Eligible Costs (shown in exhibit 2) incurred in undertaking the supported project activity (shown to the right), up to a maximum of $50,000, will be covered by the program. Example: A facility undergoes 2 Development Studies over 12 months 1 Capital Track Study and 1 Energy Management Track Study. The 2 Development Studies incur eligible program costs of the following: $110,500 (capital track); $84,000 (energy management track). The Capital Track An Investment-Grade Business Case or detailed feasibility assessment of an individual or a group of Eligible Projects in the Capital Projects track. Energy Management Track The development of an Energy Management Plan (EMP), including Energy Management Plans in the context of ISO Energy Management Standard. An Investment-Grade Business Case or Implementation Plan for the implementation of an Energy Management Information System (EMIS), or submetering, or M&V System. Note: Lighting Projects do not qualify for the Development Incentive. 50% of the incentive will be paid following delivery of an Incentive Payment Request accompanied by: A Development Incentive Report that substantially conforms to the Report Requirements Proof of Payment for Eligible Costs related to production of the Report; The remaining 50% of the incentive will be paid following delivery of an Incentive Payment Request, and only: If the Report fails to identify Projects (relating to Capital Track Projects and EMIS) that meet Participant Investment Criteria; or, If the Report identifies Projects (relating to Capital Track Projects and EMIS) that meet the Participant Investment Criteria and Participant demonstrates action in proceeding to implement a minimum of 50% of the Projects; The activity must result in a Development Incentive Report that substantially conforms to the Development Incentive Reporting Requirements shown in section 6 herein. Page 15 of 47

31 participant receives $50,000 of its maximum $200,000 capital track incentive dollars and $42,000 of its maximum $200,000 energy management track incentive dollars granted other program criteria are met. Capital Project Implementation Incentive Eligible Costs up to $500,000 for the implementation of qualifying Capital Projects. The Participant may use the incentive to implement a single project or multiple projects up to the Capital Project Incentive Cumulative Maximum of $500,000 per facility annually. The incentive will be the lesser of: 50% of the Eligible Costs of the Project or, $500,000 or, The amount required to reduce the financial return of the project (relating to Capital Track Projects) to meet the Participant Investment Criteria. Implementation of Eligible Capital Projects. 50% of the incentive will be paid following delivery of an Incentive Payment Request accompanied by: demonstration of substantial completion of the installation; and, on delivery of Proof of Payment for Eligible Costs related to the installation The remaining 50% of the Incentive will be paid: On the basis of milestones as agreed-upon in scope and frequency in the Incentive Agreement, and, Following delivery of an Incentive Payment Request for each milestone. As mutually agreed-upon in scope and frequency in the Incentive Agreement in accordance with the general guidance provided in the Capital Project Implementation Reporting Requirements shown in section 6 herein. Note: If the project implementation cost to savings ratio is too high in comparison to typical projects that have been successfully implemented through IEOP, SaskPower may reduce the implementation incentive based on an internal evaluation. This may result in implementation incentive being lower than 50% of project cost or buy down to Page 16 of 47

32 industry s desired hurdle rate. Energy Management Project Implementation Incentive 50% of Eligible Costs incurred by the Participant up to an Energy Management Project Implementation Incentive Annual Maximum payment of $100,000 The Cumulative Maximum available to each facility is $400,000 over the Program Term. In order to take advantage of the $400,000 maximum, the participant will have to engage in more than one Energy Management Project. For each individual project, 50% of Eligible Costs (shown in exhibit 2) incurred in undertaking the supported project activity (shown to the right), up to a maximum of $100,000, will be covered by the program. Implementation of Eligible Energy Management Projects. 50% of the incentive will be paid following delivery of an Incentive Payment Request accompanied by: demonstration of substantial completion of the installation; and, on delivery of proof of payment for Eligible Costs related to the installation The remaining 50% of the Incentive will be paid: On the basis of milestones as agreed-upon in scope and frequency in the Incentive Agreement, and, As mutually agreed-upon in scope and frequency in the Incentive Agreement in accordance with the general guidance provided in the Energy Management Implementation Reporting Requirements shown in section 6 herein. Following delivery of an Incentive Payment Request for each milestone. Lighting Project Implementation Incentive Eligible Costs up to $500,000 for the implementation of qualifying Capital Lighting Projects. The Participant may use the incentive to implement a single or multiple projects up to the Capital Lighting Project Incentive cumulative Maximum of $500,000 per facility annually. The applicable incentive will be lowest Implementation of Eligible and Preapproved Capital Lighting Projects. 100% of the incentive will be paid following delivery of an Incentive Payment Request Form accompanied by: and, Acceptable proof of payments for eligible costs incurred As mutually agreed-upon in scope and frequency in the Incentive Agreement in accordance with the general guidance provided in the Lighting Implementation Page 17 of 47