Rates to rise by 8%
Hydro Quebec’s profits to fall by 24%
July 16, 2010 – Hydro Quebec’s profits will fall by 24% and its rates will rise by 8% according to a new report, Higher Profits and Lower Bills: A New Electricity Strategy for Hydro Quebec, released by Equiterre and the Ontario Clean Air Alliance (OCAA) in Montreal this morning.
Hydro Quebec’s falling profits and rising rates are due to three factors. First, its cost of electricity from new supply (e.g., Eastmain, Romaine) is up to four times higher than the cost of its existing heritage hydro-electric resources. Second, Quebec’s electricity demand is forecast to rise despite the fact that its electricity consumption per person is already the highest in the world. Finally, Hydro Quebec’s profits from its electricity exports are forecast to fall by 43%.
“Hydro Quebec is at a turning point. Having developed all of the province’s low-cost hydro-electric resources, it can no longer increase its profits and lower its rates by building new low-cost hydro facilities. Now new hydro projects will mean higher rates and/or lower profits,” said Jack Gibbons, Chair of the OCAA.
“However, Hydro Quebec can increase its profits and lower its customers’ bills by investing in energy efficiency and by better coordinating its power system with Ontario’s,” Mr. Gibbons noted.
The aggressive and cost-effective pursuit of energy efficiency by Hydro Quebec will simultaneously reduce its customers’ electricity bills, make Quebec’s industries more competitive and free up more of its existing hydro-electricity generating capacity for highly profitable exports to Ontario and the U.S.
The demand for electricity peaks in the winter in Quebec and in the summer in Ontario. By more closely coordinating the two province’s power systems, Hydro Quebec and the Ontario Power Authority can reduce Quebec’s need for new high-cost hydro-electric generating capacity in the winter; and Ontario’s need for new, high-cost natural gas-fired power plants to supply electricity on calm, hot summer days when the province’s air-conditioners are running full out and its wind turbines are producing minimal power.
Increased Hydro Quebec electricity exports, by displacing fossil power generation, will also help Ontario and U.S. States reduce their greenhouse gas emissions.
For more information:
Jack Gibbons 416-926-1907 ext. 240