Hydro should share power: report

The Gazette, The Leader-Post
July 17, 2010
Michelle Lalonde

Hydro should share power: report
Ontario's peak demand is in summer Environment groups also call on Quebec to boost energy-efficiency incentives

MONTREAL - Hydro-Quebec is heading for lower profits and higher electricity rates unless it invests significantly in energy efficiency incentive programs and enters into a power-exchange deal with Ontario, according to a report released today by two environment groups.

Because demand for electricity peaks in Quebec in cold winter months, while demand in Ontario peaks in summer due to heavy use of air conditioning in that province, Quebec has surplus generating capacity in summer and Ontario has surplus generating capacity in winter.

"By more closely co-ordinating the two province's power systems, Hydro-Quebec's need to build new high-cost hydroelectric generating capacity to meet its winter peak demands will be reduced," according to the report produced jointly by Montreal-based Equiterre and Toronto-based Ontario Clean Air Alliance.

"Similarly, Ontario's need to build new high-cost natural-gas-fired power plants to provide peak power on hot summer days will also be reduced."

According to Hydro-Quebec's current strategic plan, which covers the period 2009-2013, electricity rates will climb by eight per cent over that period, while net profits will fall by 24 per cent.

Hydro-Quebec's profits are falling and rates rising for three reasons, according to the report. The cost of building new power stations is much higher than earlier projects, electricity demand is rising, and profits from electricity exports are forecast to fall sharply.

The report says Hydro-Quebec is not pursuing energy efficiency aggressively enough. Since Quebec has the highest per-person electricity consumption rate in the world, there is great potential for conservation.

Stronger energy efficiency incentive programs would "simultaneously reduce customers' electricity bills, make Quebec industries more competitive and free up more of its existing hydro-electricity generating capacity for highly profitable exports to Ontario and the U.S."

And if Quebec exports more electricity to Ontario and the U.S., these jurisdictions will not have to burn as much coal or natural gas, thus lowering greenhouse gas emissions, the report notes.

Equiterre's Steven Guilbeault said no one is suggesting

Quebec should stop construction on new hydro projects already under way. But he said energy efficiency programs should be greatly expanded before any new power stations -even those powered by greener sources like wind or biomass -are considered.

Hydro-Quebec could increase its profits by $473 million per year by beefing up its incentive programs for energy efficiency, the report suggests.

But Hydro-Quebec disagrees with the report's conclusions.

"They say we should buy wind power from Ontario, but they don't say that wind power costs 13 to 20 cents per kilowatt hour, which is much more expensive than our production costs at our Romaine project, for example," said Hydro-Quebec spokesperson Marc-Brian Chamberland, adding that Quebec and Ontario already buy some energy from each other.

He said the utility is already doing a lot with energy efficiency programs and intends to do more.

"It's easy to suggest in a 10-page report that we can do a lot more," he said. "They say we should stop building power plants in Quebec, buy more expensive energy from Ontario and somehow get $500 million more (per year) through energy efficiency ... I don't see it."

To read the report, titled Higher Profits and Lower Bills: A New Electricity Strategy for Hydro-Quebec, go to: www.equiterre.org/publications