(Quebec) Electricity rate increases for residential customers will be capped at 3% per year until 2035 according to Hydro-Québec’s planning, said its CEO Michael Sabia on Thursday. Business customers, however, will have to pay more.
“According to all the planning that we have done, the 3% is a ceiling that lasts and is there during the period of Hydro-Québec’s 2035 action plan,” said Mr. Sabia during testimony in committee. parliamentarian to answer questions from deputies on this plan.
This 3% ceiling “is an assumption on our part to simplify our planning,” he added in response to questions from Québec solidaire MP Haroun Bouazzi.
The Legault government’s law caps rates at 3% per year until 2025. During a meeting with his employees in September, Michael Sabia suggested that electricity rates should increase further, which sparked a debate in the National Assembly. Prime Minister François Legault pledged at the end of October to “never” increase rates beyond inflation or 3%. A law will be tabled to this effect.
For business customers on the other hand, said Michael Sabia, “it is very likely” that there will be a more significant increase, “of a certain level” which he did not want to specify.
“I’m not very reassured by Mr. Sabia’s answers” about tariffs, particularly for small and medium-sized businesses, responded Liberal MP Gregory Kelley. For residential customers, he said, doubt remains whether rates could increase beyond 3% in the coming years.
To meet a growing demand for electricity, “this is not the time for half measures,” Michael Sabia argued to MPs, while assuring that residential rates “will always remain lower” than elsewhere.
In an exceptional exercise, the boss of the state company testified for five hours in a parliamentary committee on his action plan involving colossal investments of 155 to 185 billion by 2035.
“I am convinced that this is the right time, it is necessary, it is a critical moment to bring Hydro-Québec back to a period of growth and ambition to contribute to the development of a Quebec economy which is at the forefront. both decarbonized and prosperous,” argued Mr. Sabia during a brief press scrum.
At the head of Hydro-Québec since August 1, Sophie Brochu’s successor submitted her plan on November 2 in order to cope with a strong anticipated increase in electricity demand: it will double by 2050 with the decarbonization and economic growth. It is therefore necessary to add 150 or even 200 TWh of energy.
Michael Sabia’s action plan is “very exciting” and “ambitious,” said Prime Minister François Legault, who sees it as a way to make Quebec a world leader in achieving carbon neutrality. This plan is “consistent” with the government’s orientations, added the Minister of the Economy and Energy, Pierre Fitzgibbon.
By 2035, Hydro-Québec plans to increase electricity production by 60 TWh, which represents between 8,000 and 9,000 MW of additional power. This is equivalent to three of its largest hydroelectric works: LG-2, Manic-5 and the Romaine complex.
Hydro-Québec plans to add 3,800 to 4,200 MW of hydroelectric power, which represents investments of 35 to 45 billion. It must also invest 45 to 50 billion between now and 2035 to increase the capacity of its transport network.
It wants to build new hydroelectric power stations, including a first pumped reserve power station. She is currently studying a project on the Petit Mécatina River (North Shore). It plans to increase the capacity of existing power plants, by replacing the turbine-generator groups with more recent technology.
Hydro-Québec wants to triple wind energy production capacity to obtain 1,500 to 1,700 MW of additional power by 2035. This represents public and private investments of more than 30 billion. She wants to invest more in solar power and battery storage.
To build all of this new infrastructure, an average of 35,000 construction workers will be needed per year until 2035, a major challenge in the context of the labor shortage.
In addition to increasing electricity production, its plan is based around four other priorities: improving the quality of service, helping customers consume better energy, working more closely with indigenous communities. and become an agile, innovative and transparent organization.
Hydro-Québec has doubled its energy savings target to 21 TWh by 2035. This would allow it to release a total of 3,500 MW of additional power. It wants to expand its tariff offers to residential customers in order to “move part of consumption outside of winter peak periods”. She wants to add financial assistance for the purchase of energy-efficient equipment such as heat pumps.
Rate increases for residential customers are capped at 3% per year. Industrial rates will be revised upwards.
Investments to modernize and replace Hydro-Québec equipment will reach between 45 and 50 billion by 2035. “We plan to invest on average four to five billion per year in the reliability of all our assets, taking into account the expected effects climate change”, which amounts to almost doubling the investments in sustainability over the last three years.
Hydro-Québec also recognizes that the quality of its services has “degraded”, while 2023 was “among the worst in the last 15 years in terms of power outages”. Hydro-Québec wants to correct the situation and reduce the number of outages by 35% within seven to ten years.
Power delays, the time it takes to respond to a request to connect to the grid, “have increased by almost 70% since 2019.” It wants to reduce “the average time to complete the most common work” related to customer power supply by 2028.
Furthermore, Hydro-Québec forecasts that its operating expenses will increase by 20 to 25 billion by 2035.
After the testimony of Michael Sabia, the next significant step will be the bill concerning Hydro-Québec and the Régie de l’énergie. The Minister of Economy and Energy, Pierre Fitzgibbon, plans to table his legislative text at the start of the year or “in the spring”. “January, February, maybe March, I’m in no rush,” he said.
