Hydro-Québec has planned annual residential property increases of no more than 3% until 2035

Hydro-Québec’s CEO believes the state-owned company must return to being an ambitious organization focused on the economic development of future generations. To achieve this, Michael Sabia relies on massive investments in the construction and modernization of hydropower plants. A major tariff increase for business customers is in the works, keeping to François Legault’s promise to limit residential bill increases to 3% per year. The state-owned company is promising a flood of financial incentives to accelerate energy consumption while turning its back on the Gentilly-2 nuclear power plant.

Here’s what emerges from the CEO’s visit to Parliament, where he defended his action plan by answering questions from elected officials.

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Low rates, except for business customers

Despite all of Hydro-Québec’s planned investments, the state-owned company plans annual residential price increases of no more than 3% until 2035. However, business customers will see a larger increase to compensate. “Even as we add new energy sources with our very low-cost asset base […] “Our average costs will always remain lower,” emphasized Michael Sabia. “An increase at a certain level for business customers is very likely,” he hinted, however. The Prime Minister also vowed that residential electricity tariff increases would always be capped at 3% under a CAQ government. However, Energy Minister Pierre Fitzgibbon clarified that this phrase will not be included in the bill regulating clean energy in Quebec. The tariff could also be changed by the Energy Authority in 2025. Therefore, this measure is based solely on the word of the Prime Minister.

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We are bringing economic growth back

Michael Sabia is “personally” convinced that the national company must once again become an organization focused on economic growth, as was the case in the past. He reiterated Hydro-Québec’s need: $185 billion in investments to increase its production and transmission capacity. Between 8,000 and 9,000 megawatts are expected to be added by 2035. This is the organization’s proposed “energy mix,” which includes building and upgrading dams and increasing wind power production. “It is necessary,” he believes, but would still like to have a discussion with the population. “This is a crucial moment to return Hydro-Québec to a period of growth and ambition to contribute to Quebec’s economic development towards decarbonization and prosperity. We have to do both at the same time,” he said. “Clean energy is the engine of economic growth.” In addition, major projects can only be carried out with the participation of First Nations, emphasized the CEO. “No projects” if there is no social accessibility in the communities, he swears.

Hydro Quebec has planned annual residential property increases of no more

Photo Stevens LeBlanc

Climate resilience

The CEO made it clear: “The service is not up to par.” The first goal is to improve that customer service, especially in the age of climate change. Extreme events are putting increasing strain on the network. The year 2023 also broke all records when it comes to breakdowns. Hydro aims to double investments to reach $50 billion over time and increase the resilience of the network. “These investments will allow us to reduce the number of failures by 35% within seven to ten years,” estimates Mr. Sabia. These extreme events are also responsible for 50% of outages. The presence of vegetation near facilities harms the network. Solutions include burying the lines and installing composite posts. Batteries and mobile networks will also be distributed throughout the area.

Financial incentives

Hydro wants to double its energy efficiency target. There is no question of using a stick to force a change in habits, explains the CEO. To achieve this, he is committed to launching new initiatives that promote better use of hydropower. A “precious” product, he says. The organization promises to increase its financial incentives to convince customers to adhere to energy saving policies. It will also provide larger subsidies of 50% on the price of heat pumps. Hydro plans improvements to reach lower-income families. The organization admits: Quebec performs poorly in energy consumption. Current dynamic pricing products have limited impact, the CEO believes. Currently, only 200,000 out of 4 million customers participate in programs to reduce their bills and consumption.

No in Gentilly, but maybe small reactors

After consideration and due to the lack of social acceptance, Hydro-Québec has abandoned its study to restart the Gentilly-2 nuclear power plant. Last August, the new head of Hydro-Québec, Michael Sabia, initiated a feasibility study to restart the Gentilly-2 nuclear power plant, which has been inactive since 2012. An analysis was actually carried out by the company AtkinsRéalis, nothing more, he said. “We decided not to move forward with this because of the lack of social accessibility,” said Michael Sabia. However, he said the state-owned company was interested in small nuclear reactors. “We may be interested in small modular reactors” that could be structured for specific regions, said Michael Sabia, assuring that no megawatt, including nuclear, has been identified at the moment.

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