We don’t know what, when or how, but the Government of Quebec is preparing to cede part of the electricity transmission network to the Mohawk community of Kahnawake, a decision which constitutes a first and which is intended to facilitate the export of energy to New York.
The 58 kilometer line which will be partially privatized will connect Quebec to the American border and will belong to a new company owned by Hydro-Quebec and the Mohawk Council of Kahnawake according to an unspecified ownership division, but in which the Crown corporation will be majority.
The underground link that will be owned by this new company will cost $1.14 billion to build. The sharing of investment costs between the two partners as well as the distribution of any revenues that the transmission line should generate are information that is and will remain confidential.
This was explained by the Minister for the Economy, Christopher Skeete, during the study of Bill 13 aimed at allowing Hydro-Québec to transfer part of its transmission network to a third party.
This is strategic information that must remain confidential, explained the minister to opposition deputies who were worried about what could be the start of a privatization of Hydro-Québec’s activities.
The agreement that will be concluded between Hydro-Québec and the Mohawk Council is a historic first, he said, which will serve as a model because there will be others, hence the need not to give more information. “It’s a new way of doing things that we intend to replicate,” he said.
The government must move quickly to allow the creation of the joint venture because the schedule of the contract with the State of New York is very tight, according to the minister.
“It’s always difficult to create a law upstream of an agreement, but, once again, we cannot presume the outcome of this meeting, we cannot presume how the lawyers of the Mohawk Council will [advise] their client on the form that future society should take. So, we [express] our intention clearly: we must remain in the majority, that is not negotiable, so we come to root it in a bill. Thereafter, we allow ourselves the necessary openness to satisfy our partner, “he argued in parliamentary committee.
Consideration of Bill 13 was conducted at a brisk pace and did not encounter much opposition along the way. Given the importance of the issues, more transparency would have been necessary, according to Jean-François Blain, independent energy analyst. “This is a file that has enormous consequences and which has been knowingly put under the radar by Hydro-Quebec and by the government,” he denounces.
There is a lot of money at stake around this agreement. The construction of the estimated 1.14 billion transmission line is a necessary condition for the completion of the contract to export 10.4 terawatt hours of electricity to New York, the largest in the history of Hydro-Québec. which is expected to bring in $30 billion over 25 years.
The agreement provides that the joint venture formed by the Mohawk Council of Kahnawake and Hydro-Québec will be called Horizon Kahnawake Hydro-Québec. It will own the 58 kilometer line and sell its transmission capacity to Hydro-Québec. The income thus generated will be shared according to the participation of each of the two partners.
“The 40-year period corresponds to the estimated average amortization period of the line,” explains Hydro-Québec spokeswoman Lynn St-Laurent.
Once the 25-year contract with New York ends, it will be possible to use this line to export and import electricity in the short term or for another export contract, she said.
During their appearance in the National Assembly to support Bill 13, representatives of the indigenous community argued that the project both provides clean energy to New York City and creates a new source of income and employment for members of their community.
The transmission line between the Hertel substation located in La Prairie and the American border will not pass through the territory of the Kahnawake reserve. After 58 kilometers it will rejoin the American portion of the interconnection at a point below the Richelieu River and Lake Champlain. Commissioning is scheduled for 2026.
The Quebec portion of the interconnection project was studied by the Bureau d’audiences publiques sur l’environnement, which did not identify any major environmental issues, but which expresses concerns about Quebec’s future electricity needs.
“The commission of inquiry is of the opinion that, faced with the climate emergency and the imminence of the need to increase Quebec’s energy supply, the energy transition should be based on planning that reconciles its supply needs and its electricity export projects,” the report concludes.
