Hydro-Québec vigorously refutes Journal de Montréal article

Hydro-Québec would like to set the record straight after the publication of an article by Isabelle Maréchal in Le Journal de Montréal titled Qui va allumer?

Ms. Maréchal falsely attributes statements to a company spokesperson, making him seem to minimize the impact of the requested rate increase on our customers. On the contrary, in the interview, which can be heard on station 98.5’s Web site, our spokesman clearly expresses the company’s empathy for customers: “I understand that to some people, a 5.8% increase in their electricity bill can be a considerable amount. […] The message we want to get out to our customers is this: If you are having trouble paying your electricity bill, don’t hesitate! Talk to us! We can make payment arrangements […].”

So, far from minimizing the situation, Hydro-Québec is acutely aware that customers will feel the pinch of a monthly increase of $3 for an apartment and $10.40 for a typical house. That is why the company controls costs very carefully. In fact, for 2014–2015, if not for the impact of the integration of wind farms and the indexing of heritage pool electricity, the company’s efficiency gains in 2013 would have offset the costs made necessary by the growth in the number of service contracts and grid assets. There would have been no need for a rate increase for next year.

Furthermore, in addition to payment arrangements for all customers, Hydro-Québec will also continue its assistance programs for low-income customers in 2014–2015. It is proposing a budget of $17.8 million, mainly to help customers who have personalized arrangements to pay their electricity bills and arrears. Hydro-Québec Distribution is also proposing to invest close to $10 million in energy efficiency programs for those customers.

Everyone benefits when Hydro-Québec makes a profit
Contrary to what the article says, the purpose of Hydro-Québec’s request to increase its return rate is to rectify a situation that has lasted a number of years, while Hydro-Québec’s approved rate remains well below that allowed by other power utilities in North America.

Furthermore, the $160 million in efficiency gains achieved in 2013 are included in the rate application before the Régie de l’énergie, for the benefit of all customers as of 2014. So when Hydro-Québec makes a profit, all Quebecers benefit, both as shareholders and as customers.

Meter replacement: Savings for customers
It is totally false to claim that replacing Hydro-Québec’s meter fleet with next-generation meters will be expensive for taxpayers. On the contrary, the project will lead to savings for customers.

As Hydro-Québec demonstrated to the Régie de l’énergie during the project’s strict approval process, this new state-of-the-art technology, which has become the industry standard, will generate $200 million (current dollars) in savings over 20 years, compared with maintaining the current technology. Starting in 2019, when installation is complete, Hydro-Québec expects to achieve recurrent annual savings of $81 million, which will be reflected directly in the form of downward pressure on electricity rates, to customers’ benefit. The Régie decided to approve the Phase 1 rollout of the replacement meters on the basis of those financial benefits, among other things.

It should also be pointed out that it has become necessary to replace the meters because of the aging of the meter fleet and because electromechanical meters have not been manufactured in North America since 2010.

Purchases of wind energy
The purchase of wind energy, which is more expensive than hydropower, is the result of government decisions related to development of this industry in Québec. Hydro-Québec has issued calls for tenders for wind-generated power, as ordered by the government over the years. Several wind farms associated with these calls for tenders will come on stream in 2014, which explains the effect on rates in the coming year.

Keep in mind that even after the proposed rate adjustment, Québec electricity rates are still among the lowest not just in Canada, but in North America.

Contact

Patrice Lavoie
Hydro-Québec
514 289-2097
lavoie.patrice2@hydro.qc.ca