Increase in Hydro-Québec electricity rates

Monday April 1, 2013

Increase in Hydro-Québec electricity rates Increase in Hydro-Québec electricity rates

On March 13, by allowing Hydro-Québec a rate increase of only 2.4% starting April 1, the Régie de l’énergie effectively ignored the government-owned corporation’s demands and the Marois government’s projections when the recent budget took effect: a clear way of reaffirming its independence.

 

In November, the Marois government had issued a decree setting Hydro-Québec's minimum net profit at $2.7 billion and its operating expenses at $1.5 million in order to help balance the public purse, which led Hydro-Québec to revise the rate increase it was requesting from the Régie from 2.7% to 3.4%. On February 21 of this year, the Quebec Government tabled Bill 25, which specified the provisions included in the budget speech, without arousing any reaction from the opposition.

 

Pressure to substantially increase rates is, however, very real: decreased exports, low natural gas prices, the energy surplus and the provincial budget are just a few of the factors involved. It should however be noted that, since 2004, Hydro-Québec’s rate increases have totalled close to 19% :

   
 
Table of Hydro-Québec rate increases and reductions agreed to
by the Régie de l’énergie since 2004.

 

We also know that starting in 2014, at the request of the PQ government, Hydro-Québec will increase the cost of the heritage pool, which has been set at 2.79 cents per kilowatt-hour since 2000. This rate, which is applied to the first 165 terawatthours that Quebecers consume each year, will be indexed annually based on the cost of living. This is in addition to the annual increase allowed by the Régie de l’énergie.


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