Smart Grid Fund – FAQ

Application Information

Who can apply?

Applications will be accepted from applicants of the following organization types:

  • Business organizations such as technology developers/manufacturers, software providers, communications and information services providers;
  • Ontario electricity utilities;
  • Universities and colleges;
  • Regional or municipal government agencies; and
  • Non-governmental organizations.

Ontario government agencies are not eligible to apply.

Multiple applications by the same applicant are allowed but each application must be for distinctly different projects.

Organizations who are already Smart Grid Fund recipients are still eligible to apply to this round of funding for new, distinct projects.

What are the primary responsibilities of an applicant?

The applicant is meant to act in a lead role in relation to the project. The applicant formally submits the application to the Smart Grid Fund (SGF) and is the primary organization in contact with the SGF for the following purposes:

  • Signatory for the Transfer Payment Agreement with the Ministry;
  • Main formal communications contact for the signed Agreement and project reporting;
  • Submission of reports, receipt of disbursements and hosting/organizing site visits;
  • Project management – responsible for management of the project including financing the project, leading the work of the project; and
  • Primary contact for the project with all collaborators for the project.

What is a collaborator?

Collaborators work with the applicant as project participants, and support the project by providing a contribution to project costs – either in-kind or cash. A contribution is defined as that which the collaborator does not seek reimbursement for. Some examples include:

  • Time contributed to the project;
  • Flat discount on services provided; or
  • Equipment provided free of charge or at cost.

All applicants to the SGF are encouraged to collaborate with other organizations. Collaboration with other organizations should provide mutual benefits such as leveraging complementary skill sets, knowledge sharing and greater economic development opportunities. applicants are encouraged to secure their collaborators as early as possible in the application process and maintain communication throughout the evaluation process.

In contrast to a collaborator, a supplier is a provider of products or services that does so through a traditional procurement process or agreement with the applicant, and is reimbursed accordingly.

What types of projects are eligible?

The Smart Grid Fund supports a wide assortment of energy technology innovations. In particular, eligible projects should demonstrate the advancement of Smart Grid as defined in the Ministry of Energy’s Directive to the Ontario Energy Board [PDF – 78KB] and the objectives of the Smart Grid Fund as outlined in the SGF Guidelines.Current projects supported by the SGF span the range of smart grid technologies including: electric vehicle integration; electricity storage; microgrids; data analytics; home energy management; grid automation and cyber security.

As further support to project and application development, applicants may want to consider the technology functions listed in the Smart Grid Assessment and Roadmap Report. These have been identified as being of specific benefit to Ontario and include: self-healing grids; enhanced fault prevention; automated voltage control; dynamic capacity rating; microgrids (including those in a remote context); distributed energy resources monitoring and control; and Advanced Metering Infrastructure (AMI).

Projects must also adhere to the project funding structure as defined in the SGF Guidelines. Please review the SGF Program Guidelines [PDF – 283KB] for examples of eligible and ineligible projects.

For applicants that are not electric utilities, why must demonstration projects include an electricity utility as a collaborator?

The purpose of the utility’s involvement is to provide a real-world environment and/or the technical expertise to properly evaluate the technology. Utility contributions could include access to the utility’s system and technical resources. Applicants will be required to provide documentation to substantiate the collaboration with the electrical utility. Given the key role of utilities in controlling and developing Ontario’s electricity system, the involvement of a utility is essential if the project is to succeed in expanding Ontario’s Smart Grid capabilities.

How long can a project run for?

The Ministry is requesting that applicants design their projects within a 2-year timeframe.

Any tips on writing the application?

It is important to consider each answer carefully. Writing concise answers that directly relate to the question being posed is the best way to craft a strong application. Prospective applicants should remember that while this is a competitive process, you are not “selling” your product. The goal of the application is to clearly explain the project goals, methodology, tasks, costs, benefits, risks, etc. and how it directly relates to and supports the SGF’s objectives; standard marketing communications will not convey the level of information required for your application to stand out during evaluation. Clarity, directness and brevity are best.

Costs & Reimbursement

What is an eligible cost? How much will I be reimbursed?

Eligible costs are defined in the SGF guidelines. The Ministry will identify eligible costs from the application and make the final determination as to which costs are counted in a project’s SGF funding allocation. To be considered eligible under the SGF all eligible costs must be directly attributable to, and necessary for, the implementation and completion of the approved project, and be neither wholly nor partially for another purpose.The Ministry will reimburse up to 50% of eligible costs (not including HST), to a maximum of $2,000,000.

Not all project costs are eligible to receive funding through the SGF, including rent, office equipment, and land purchases. Please see the SGF Guidelines for a list of ineligible costs. The Ministry is the final arbiter of what costs are eligible.

What is the difference between Total Project Cost and Total Eligible Cost?

“Total Project Cost” refers to the comprehensive value of the project. It includes both eligible and ineligible costs, as well as contributions made by collaborators.”Total Eligible Cost” refers to only those costs that meet the SGF eligibility criteria. In most cases, the SGF funding allocation will equal up to 50% of Total Eligible Cost. The Ministry will determine the level of funding on a case-by-case basis.

How will I be reimbursed?

The SGF only provides funds to applicants for incurred and approved eligible costs. This includes:

  1. direct project costs of the applicant that meet eligibility criteria, and
  2. eligible expenses paid by the applicant to external collaborators. The SGF will under no conditions reimburse a collaborator/supplier directly.

Applicants report on project progress and receive payment based on project milestone completion. At project milestones applicants provide evidence of milestone completion. The amount that will be paid for each milestone is set out in the agreement between the applicant and the Ministry.

The SGF will pay up to 50% of all invoices deemed eligible (except invoices from electricity utilities, see below). After an initial advance is paid to the applicant after all conditions of funding have been satisfied, the SGF disburses payments based on approved documentation and site visits verifying the completion of project milestones. At project completion, the payment is dependent upon approval of the final project completion documentation as well as the external audit report. The final payment is disbursed following approval of the Commercialization Report a year after project completion.

At project completion, an external auditor will be hired by the applicant to review of all project costs for eligibility. The audit will determine whether the applicant will receive the full amount of funding listed in the agreement, or less if a lower amount of eligible costs were incurred for the project. Please see the SGF Guidelines for a full list of eligible and ineligible project costs.

Contributions by collaborators that are not paid for by the applicant are not eligible for cost recovery.

How are Ontario electricity utilities reimbursed (where they are not the applicant themselves)?

Approved costs incurred by Ontario electricity utilities are eligible for SGF cost recovery up to 50%. The remainder is expected to be borne by the utility.Upon incurring an expense, the utility will provide the applicant and the SGF with documentation that explains 100% of the cost incurred. Subsequent to approval by the SGF that these costs are eligible for funding, the applicant will pay 50% of the approved costs to the utility directly. The SGF will disburse payments to the applicant through the Milestone Completion process which supports the applicant in providing the funds to the electricity utility. Note: it is the responsibility of the applicant to manage their cash flow between milestone payments to enable the project to continue forward as per the project plan provided.

Ontario electricity utilities are expected to seek recovery for the remaining costs through their rate filings with the Ontario Energy Board (OEB).

How confident can electricity utilities be in receiving rate recovery?

The Green Energy and Green Economy Act, 2009 (GEGEA) and a subsequent Ministry Directive to the OEB have created a statutory and regulatory mandate for the OEB to facilitate the implementation of a Smart Grid in Ontario. This includes providing licensed transmitters and distributors with guidance on the crafting of their Smart Grid plans, the filing of which is a license requirement. Over the past few years, the OEB has conducted an extensive stakeholder engagement and regulatory review process as it moves towards a performance-based regulatory system known as the Renewed Regulatory Framework for Energy (RRFE). This process has included the development of the required Smart Grid guidance, which was included in the OEB’s Supplemental Report on Smart Grid [PDF – 234KB] (released February 13th 2013). This guidance makes clear that utilities are expected to demonstrate to the Board that they have investigated the benefits of Smart Grid technologies. To quote from the Report:

“Regulated entities must demonstrate in their investment plans that they have investigated opportunities for operational efficiencies and improved asset management, enabled by more and better data provided by smart grid technology.”

The Smart Grid plan requirements outlined in the Report are reflective of the same GEGEA policy framework as that which influenced the development of the Smart Grid Fund. In short, the Smart Grid Fund and the OEB’s approach to Smart Grid regulation share the same objectives. While cost recovery for utilities is not guaranteed prior to OEB regulatory review, the similarities in objectives and evaluation criteria are known and recognized by OEB staff. When requested, SGF will provide electricity utilities with project assessment documentation as supporting evidence when submitting rate applications. Ministry and OEB staff are available to consult with applicants and their prospective utility collaborators should there be any questions.

I am receiving funds from other government sources for the same project. Does this impact my ability to receive SGF support?

Projects receiving other government grants/support (federal, provincial, or municipal) are still eligible for SGF funding. However the SGF employs a 75% public funding stacking rule, in which funding will be capped so that no project funded by the SGF is receiving more than 75% of the Total Project Cost from government sources. Other grant programs may also have different cost eligibility criteria than the SGF which may impact the total grant amount. While it is the responsibility of the applicant to understand and apply the program guidelines of the programs they are receiving funding from, SGF staff are willing to work with applicants and other grant programs to maximize the project’s funding allotment, keeping in mind the 75% stacking rule.

Evaluation & Selection

When will we hear about being selected for the technical and financial reviews?

SGF applications are due at 9 a.m. on November 30, 2015. Applicants can expect to be contacted by technical and financial evaluation teams in December, however the Ministry makes no guarantees as to if or when an applicant will be contacted, other than to say the Ministry is committed to processing and evaluating all applications received within a fairly short timeframe.The Ministry will formally inform the applicant when their application has been sent to technical and financial experts for evaluation.

What is involved in the reviews by the technical and financial experts?

Interviews will be scheduled by the technical or financial expert. Questions will include standard questions asked of all applicants moving through the expert evaluation processes and build on the information provided in the application. The technical and financial evaluation processes may occur sequentially or concurrently depending on timing of selection by the Ministry for these evaluations.As these experts are acting on behalf of the Ministry and that the information obtained through these processes will be evaluated for project selection purposes, it is expected that applicants make themselves available to meet with the experts as needed in a reasonably timely fashion and that information is provided in full for consideration by the SGF.

Will I be informed of the decision of my application regardless of the result?

Yes. Following a comprehensive evaluation of the application the Ministry will inform the applicant of the result either through a Letter of Offer or Letter of Rejection. If you have not received one of these documents your application is still under consideration.

What will be included in my Letter of Offer?

The Letter of Offer will include:

  • The maximum funding allocation from the SGF;
  • A request for documentation demonstrating a firm commitment from key collaborators to the project;
  • A copy of the Transfer Payment Agreement template;
  • An outline of key dates for submitting documentation, signing the agreement and project start; and
  • A request to respond to the Letter of Offer by a certain date.

The Ministry will not begin contracting with the applicant unless it is confident the support of the key collaborators has been secured. While the Ministry will be accommodating if minor changes to the project have been contemplated since the application was submitted, it also reserves the right to retract the Letter of Offer should project parameters have changed significantly from what was evaluated.

What is a TPA?

A “Transfer Payment Agreement” is the contract between the Ministry and the applicant that defines the level of funding and project specifications (including objectives, milestones, budget, timeline, etc…). Recognizing that project details and business requirements may change while the application is being evaluated, Ministry staff will work with the applicant to develop an approved list of project requirements and costs that will be included in the agreement. However, the standard terms of the agreement as well as the SGF program specifications are not up for negotiation. The Ministry is the final arbiter of what constitutes eligible cost.