Hydro-Québec
Encyclopedia
Hydro-Québec is a government-owned
public utility
established in 1944 by the Government of Quebec
. Based in Montreal
, the company
is in charge of the generation
, transmission
and distribution
of electricity
across Quebec
.
With sixty hydroelectric
and one nuclear
generating stations, Hydro-Québec is the largest electricity generator in Canada
and the world's largest hydroelectric producer. The combined capacity of its power station
s was and its distribution network served over 4 million customers in 2010.
The development of several large-scale hydroelectric projects which took place non-stop from the late 1940s to the mid-1990s — the Bersimis
, Carillon
, Manic-Outardes
, Churchill Falls
and the two phases of the James Bay Project
— allowed Quebec to reduce its reliance on fossil fuel
s. In 2006, primary electricity accounted for 40.4% of all energy used in the province. However, the construction and operation of these projects has led to conflicts with aboriginal populations
living in Quebec's North.
Hydro-Québec has played a "nearly mythical role" in Quebec's economic development
since its establishment, with its sustained capital investments
, by fostering local engineering
expertise and by its capacity to generate large quantities of electricity at low prices.
Increasing energy costs and the growing international consensus on climate change
had a positive impact on Hydro-Québec's balance sheet
in the last decade. Between 2006 and 2010, the company paid C$10.7 billion in dividend
s to its shareholder
, while keeping Quebec power rates among the lowest in North America.
, voices were raised in Quebec asking for a government takeover in the electricity business. Many of the criticisms leveled at the so-called "electricity trust" focused on high rates and excessive profits. Inspired by the example of Adam Beck
, who had nationalized much of the electric sector
in Ontario
20 years earlier, local politician
s, such as Philippe Hamel
and Télesphore-Damien Bouchard
, strongly advocated moving Quebec towards a similar system. Soon after being elected Premier of Quebec
in 1939
, Adélard Godbout
warmed to the concept of a state-owned utility
. Godbout was outraged by the inefficient power system dominated by Anglo-Canadian
economic interests and the collusion between the Montreal Light, Heat & Power
(MLH&P) and the Shawinigan Water & Power Company, the two main companies involved. At one point, he even called the duopoly an "economic dictatorship, crooked and vicious".
to take control of MLH&P, the company running the gas and electric distribution in and around Montreal
, Quebec's largest city. On April 14, 1944, the Quebec Legislative Assembly
passed Bill 17, creating a publicly owned commercial venture, the Quebec Hydroelectric Commission, commonly referred to as Hydro-Québec. The act
granted the new Crown corporation an electric and gas distribution monopoly
in the Montreal area and mandated Hydro-Québec to serve its customers "at the lowest rates consistent with a sound financial management", to restore the substandard electric grid and to speed up rural electrification
in areas with no or limited electric service.
MLH&P was taken over
the next day, April 15, 1944. The new management
quickly realized that it would need to rapidly increase the company's 600-MW generation capacity in the next few years in order to meet growing demand. By 1948, Hydro-Québec had started the expansion of the Beauharnois generating station. It then set its eyes on the Bersimis
river, near Forestville
, on the North Shore
of the Saint Lawrence River
. Located 700 kilometres (435 mi) east of Montreal, the Bersimis-1
and Bersimis-2
generating stations were built between 1953 and 1959 and were widely considered to be a bench trial
for the fledgling company. They also offered a preview of the large developments that occurred over the next three decades in Northern Quebec.
Other construction projects started in the Maurice Duplessis
era included a second upgrade of the Beauharnois project and the construction of the Carillon generating station
on the Ottawa River
. Between 1944 and 1962, Hydro-Québec's installed capacity increased sixfold, from 616 to 3,661 MW.
The onset of the Quiet Revolution
in 1960 did not stop the construction of new dams. On the contrary, it brought a new momentum to the company's development under the tutelage of a young and energetic Hydraulic Resources minister. René Lévesque
, a 38-year-old former television
reporter and a bona fide star of the new Lesage
government, was appointed to the Hydro-Québec portfolio as part of the liberal Premier
's "Dream Team" . Lévesque quickly approved continuation of the ongoing construction work and put together a team to nationalize the 11 remaining private companies that still controlled a substantial share of the electricity generation and distribution business in Quebec.
On February 12, 1962, Lévesque started his public campaign for nationalization. In a speech to the Quebec Electric Industry Association he bluntly called the whole electric business an "unbelievably costly mess". The minister then toured the province in order to reassure the population and refute the arguments of the Shawinigan Water & Power Company, the main opponent of the proposed takeover. On September 4 and 5, 1962, Lévesque finally convinced his liberal cabinet
colleagues to go ahead with the plan during a working retreat at a fishing camp north of Quebec City
. The issue topped the liberal agenda during a snap election
called two years early, and their chosen theme, "Maîtres chez nous" (in English: "Masters of our domain."), had a strong nationalist
undertone.
The Lesage government was reelected on November 14, 1962
and Lévesque went ahead with the plan. On Friday, December 28, 1962 at 6 pm, Hydro-Québec launched an hostile takeover, offering to buy all of the stock
in 11 companies at a set price, slightly above market value
. After hedging their bets for a few weeks, management of the firms advised their shareholders to accept the C$604 million government offer. In addition to buying the 11 companies, most electric co-operatives and municipally-owned utilities were also taken over and merged with the existing Hydro-Québec operations, which became the largest electric company in Quebec on May 1, 1963.
system from 25 to 60 hertz. All of this had to be done while the construction of a massive hydroelectric complex was underway on the North Shore.
The current company logo of Hydro-Québec was designed by Montreal-based design agency Gagnon/Valkus, Inc. in 1960.
, the largest of its kind in the world. Construction on the Manicouagan
and Outardes
rivers was completed in 1978 with the inauguration of the Outardes-2 generating station.
These large projects raised a new problem that occupied company engineers for a few years: the transmission of the large amounts of power produced by generating stations located 700 kilometres away from the urban centers in southern Quebec in an economical fashion. A young engineer named Jean-Jacques Archambault
drafted a plan to build power lines, a much higher voltage than what was used at the time. Archambault persisted and managed to convince his colleagues and major equipment suppliers of the viability of his plan. The first power line was put into commercial service on November 29, 1965.
The falls were renamed to honor the late British Prime Minister, Sir Winston Churchill
, soon after his passing, in 1965. in Labrador
, a project led by a consortium of banks and industrialists, the British Newfoundland Corporation Limited (Brinco). After years of hard bargaining, the parties reached a deal on May 12, 1969 to finance the construction of the power plant.
The agreement committed Hydro-Québec to buy most of the plant's output at one-quarter of a cent per kWh — the exact rate is 0.25425 cents per kWh until 2016 and 0.20 cents for the last 25 years of the contract —, and to enter into a risk-sharing agreement. Hydro-Québec would cover part of the interest risk and buy some of Brinco's debt, in exchange for a 34.2% share in the company owning the plant, the Churchill Falls (Labrador) Corporation Limited
. The 5,428-MW Churchill Falls generating station delivered its first kilowatts on December 6, 1971. Its 11 turbines were fully operational by June 1974.
In Newfoundland
, Joey Smallwood
's liberals
were replaced in 1972 by a conservative
administration led by Frank Moores
. Unhappy with the terms of the agreement in the aftermath of the 1973 oil crisis
, the Newfoundland government
bought all of the shares in the Churchill Falls company that were not held by Hydro-Québec for C$160 million in June 1974.
Newfoundland then asked to reopen the contract, a demand refused by Hydro-Québec. After a protracted legal battle between the two neighboring provinces, the contract's validity was twice affirmed by the Supreme Court of Canada
, in 1984 and 1988.
, Quebec Premier Robert Bourassa
launched a project which he hoped would help him fulfill a campaign promise to create 100,000 new jobs. On April 30, 1971, in front of a gathering of loyal liberal supporters, he announced plans for the construction of a 10,000-MW hydroelectric complex in the James Bay
area. After assessing three possible options, Hydro-Québec and the government chose to build three new dams on La Grande River
, named LG-2
, LG-3
and LG-4
.
On top of the technical and logistical challenges posed by a public works project of this scope in a harsh and remote setting, the man in charge, Société d'énergie de la Baie James
president Robert A. Boyd
, had to face the opposition of the 5,000 native Cree
residents living in the area, who had grave concerns about the project's impact on their traditional lifestyle. In November 1973, the Crees got an injunction
that temporarily stopped the construction of the basic infrastructure
needed to build the dams, forcing the Bourassa government to negotiate with them.
After two years of difficult negotiations, the Quebec
and Canadian governments
, Hydro-Québec, the Société d'énergie de la Baie James and the Grand Council of the Crees
signed the James Bay and Northern Quebec Agreement
on November 11, 1975. The agreement granted the Crees financial compensation and the management of health and education services in their communities in exchange for the continuation of the project.
Between 14,000 and 18,000 tradesmen were employed on various James Bay construction sites in the period stretching from 1977 to 1981. Inaugurated on October 27, 1979, the LG-2 generating station, an underground powerhouse with a peak capacity of is the most powerful of its kind in the world. The station, the dam and the associated reservoir were renamed in honor of Premier Bourassa two weeks after his death in October 1996. The construction of the first phase of the project was completed with the commissioning of LG-3 in 1982 and of LG-4 on May 27, 1984. A second phase of the project was built between 1987 and 1996, adding five more power plants — the , , , and generating stations — to the complex.
was brought in to implement a tough restructuring and rationalizing agenda, lowering morale and raising tensions in the ranks.
Things were not much better on the environmental front. A new hydroelectric development and the construction of a direct current high voltage line built to export power to New England
faced strong opposition from the Crees as well as environmental groups from the United States
and Canada
. In order to export power from the James Bay Project to New England, Hydro-Québec planned the construction of a 1200 kilometres (745.6 mi) long direct current power line, with a capacity of 2,000 MW, the so-called "Réseau multiterminal à courant continu
" (English: Direct Current Multiterminal Network). Construction work on the line went without a problem with the exception of where the power line had to cross the Saint Lawrence River
, between Grondines and Lotbinière
.
Facing strong opposition from local residents to other options, Hydro-Québec built a 4 km (2.5 mi) tunnel under the river
, at a cost of C$144 million, which delayed the project completion by two and a half years. The line was finally commissioned on November 1, 1992.
after a 9-year hiatus. Shortly after taking office he announced yet another hydro development in the James Bay area. The C$12.6 billion Great Whale Project involved the construction of three new generating stations with a combined capacity of 3,160 MW. It was to produce 16.3 TWh of energy each year by the time it was completed in 1998–1999.
The plan immediately proved controversial. As they had in 1973, the Cree people opposed the project and filed lawsuits against Hydro-Québec in Quebec and Canada to prevent its construction, and also took action in many U.S. states to prevent sales of the electricity there.
Two months after the 1994 general election
, the new Premier, Jacques Parizeau
, announced the suspension of the Great Whale Project, declaring it unnecessary in order to meet Quebec's energy needs.
During the same period, Hydro-Québec had to deal with three major disruptions to its electric transmission system that were primarily caused by natural disasters. The incidents highlighted a major weakness of Hydro's system: the great distances between the generation facilities and the main markets of southern Quebec.
On April 18, 1988 at 2:05 am, all of Quebec and parts of New England
and New Brunswick
lost power because of an equipment failure at a critical substation on the North Shore
, between Churchill Falls and the Manicouagan area. The blackout
, which lasted for up to 8 hours in some areas, was caused by ice deposits on transformation equipment at the Arnaud substation.
Less than a year later, on March 13, 1989 at 2:44 am, a large geomagnetic storm
caused variations in the earth's magnetic field
, tripping circuit breaker
s on the transmission network. The James Bay network went offline in less than 90 seconds, giving Quebec its second blackout in 11 months. The power failure lasted 9 hours, and forced Hydro-Québec to implement a program to reduce the risks associated with geomagnetically induced currents.
In January 1998, five consecutive days of heavy freezing rain
caused the largest power failure in Hydro-Québec's history. The weight of the ice collapsed 600 kilometres (372.8 mi) of high voltage
power lines and over 3000 kilometres (1,864.1 mi) of medium and low voltage
distribution lines in southern Quebec. Up to 1.4 million Hydro-Québec customers were forced to live without power for up to five weeks.
While Montreal
was plunged in darkness, the Hydro-Quebec symbol was still lit up. Part of the Montérégie
region, south of Montreal, was the worst hit area and became known as the Triangle of Darkness by the media and the local population. Ice accumulation exceeded 100 mm (4 in) in some locations. Customers on the Island of Montreal
and in the Outaouais region were also hit by the power outage, causing significant concerns since many Quebec households use electricity for heating. Hydro-Québec immediately mobilized more than 10,000 workers to rebuild a significant portion of the southern Quebec grid. At the height of the crisis, on January 9, 1998, the island of Montreal was fed by a single power line. The situation was so dire the Quebec government temporarily resorted to rolling blackouts in downtown Montreal in order to maintain the city's drinking water supply.
Electric service was fully restored on February 7, 1998. The storm cost Hydro-Québec C$725 million in 1998 and over C$1 billion was invested in the following decade to strengthen the power grid against similar events. However, part of the operation needed to close the 735 kV loop around Montreal that was approved at the height of the crisis without a prior environmental impact assessment
quickly ran into opposition. Eastern Townships
residents went to court to quash the order in council authorizing the power line. Construction work resumed after the National Assembly
passed a law retroactively approving the work done in the immediate aftermath of the ice storm, but it also required public hearing
s on the remaining projects. Construction of the Hertel-Des Cantons high voltage line was properly approved in July 2002 and commissioned a year later.
on new hydro projects in northern Quebec after the Great Whale cancellation forced the company's management to develop new sources of electricity to meet increasing demand. In September 2001, Hydro-Québec announced its intention to build a new combined cycle
gas turbine
plant — the Centrale du Suroît plant — in Beauharnois
, southwest of Montreal, stressing the pressing need to secure additional electricity supply to mitigate the effects of any shortfall in the water cycle
of its reservoir
s. Hydro's rationale also stressed the cost-effectiveness of the plant and the fact that it could be built within a two year period.
The announcement came at a bad time since attention was drawn to the ratification by Canada of the Kyoto Protocol
. With estimated emissions levels of 2.25 Mt of carbon dioxide
per year, the Suroît plant would have increased the provincial CO2 emissions by nearly 3%. Faced with a public uproar—a poll conducted in January 2004 found that ca. 65% Quebecers were opposed to it—the Jean Charest
government abandoned the project in November 2004.
On February 7, 2002, Premier Bernard Landry
and Ted Moses
, the head of the Grand Council of the Crees
, signed an agreement allowing the construction of new hydroelectric projects in northern Quebec. The Paix des Braves
agreement clarified some provisions of the James Bay and Northern Quebec Agreement
, granted a C$4.5 billion compensation to the Cree Nation to be paid over a 50 year period, established a special wildlife and forestry regime, and gave assurances that Cree businesses and workers would get a share of the economic spin offs of future construction projects in the area.
In return, the Cree nation agreed not to challenge new construction projects in the area, such as the Eastmain-1 generating station—authorized by the government in March 1993—and the partial diversion of the Rupert River
to the Robert-Bourassa Reservoir
, subject to a number of provisions regarding the protection of the natural and social environment.
Construction on the first 480-MW plant started in the spring of 2002 with a road linking the project site to the Nemiscau substation 80 kilometres (49.7 mi) away. In addition to the plant, built on the left bank of the Eastmain River
, the project required the construction of a 890 metres (2,919.9 ft) wide and 70 metres (229.7 ft) tall dam, 33 smaller dams and a spillway
. The three generating units of Eastmain-1 entered into service in the spring of 2007. The plant has an annual output of 2.7 TWh.
These projects are part of Quebec's 2006–2015 energy strategy. The document calls for the development of 4,500 MW of new hydroelectric generation, including the development of the 1,550 MW Romaine River
complex, under construction since May 2009, the integration 4,000 MW of wind power
, increased electricity exports and the implementation of new energy efficiency
programs.
's visit to Canada, a tower along the Quebec – New England Transmission circuit in the Eastern Townships near the Canada-U.S. border was damaged by explosive charges detonated at its base. The CBC
reported that a message, purportedly from the Résistance internationaliste and issued to the La Presse and Le Journal de Montréal
newspapers and the CKAC radio station
, stated that the attack had been carried out to "denounce the 'pillaging' of Quebec's resources by the United States."
s of New Brunswick
, Shawn Graham
, and Quebec, Jean Charest
, signed a controversial memorandum of understanding
to transfer most assets of NB Power
to Hydro-Québec. The C$4.75 billion agreement would have transferred most generation, transmission and distribution assets of the New Brunswick Crown corporation to a subsidiary of the Quebec utility. The deal also included provisions to reduce industrial power rates to the levels offered by Hydro-Québec for similar customers and a 5-year rate freeze on residential and commercial rates.
The deal proved hugely unpopular in New Brunswick and the two provinces revised the scope of the sale to the hydroelectric and nuclear power plants. Under the second agreement, transmission and distribution assets would have been kept under New Brunswick control and a long-term power purchase agreement with Hydro-Québec would have allowed NB Power to freeze residential and general customers rates for 5 years. However, the industrial rates rollback would have been smaller than under the original MOU. The second deal failed to quell the growing opposition to the plan and on March 24, 2010, Premier Graham announced the deal had fallen through, due to Hydro-Québec's concern over unanticipated risks and costs of some aspects such as dam security and water levels.
in the United States. While still a vertically integrated
company, Hydro-Québec has created separate business units dealing with the generation
, transmission
and distribution
aspects of the business.
The transmission division, TransÉnergie
, was the first to be spun off in 1997, in response to the U.S. Federal Energy Regulatory Commission
's publication of Order 888. The restructuring was completed in the year 2000 with the adoption of Bill 116, which amended the Act respecting the Régie de l'énergie, to enact the functional separation of Hydro-Québec's various business units.
This functional separation and the creation of a so-called "heritage pool" of electricity echoed a recommendation of a Merrill Lynch
study commissioned by the Lucien Bouchard
government. The January 2000 report was aimed at finding a way to deregulate the electricity market in a way that was consistent with continental trends while maintaining the "Quebec social pact"; namely low, uniform and stable rates across the province, "particularly in the residential sector".
Legislation passed in 2000 commits the generation division, Hydro-Québec Production, to provide the distribution division, Hydro-Québec Distribution, a yearly heritage pool of up to 165 TWh of energy plus ancillary services—including an extra 13.9 TWh for losses and a guaranteed peak capacity of 34,342 MW—at a set price of 2.79¢ per kWh. Order in council 1277-2001 specifies quantities to be delivered for each of the 8,760 hourly intervals, which vary from 11,420 to 34,342 MW.
Hydro-Québec Distribution has to buy the remainder of the power and energy it needs—approximately 8.2 TWh in 2007 — by calling for tenders for long-term contracts open to all suppliers, including Hydro-Québec Production, or targeted towards suppliers of a particular energy source, like wind, gas power, biomass or small hydro. For instance, Hydro-Québec Distribution launched calls for tenders in 2003 and 2005, for 1,000 and 2,000 MW of wind power respectively. Early deliveries started in 2006 and the 23 wind farm
s under contract should be completely on-line by December 2015.
The TransÉnergie and distribution divisions remain regulated by the Régie de l'énergie du Québec (Quebec energy board), an administrative tribunal
established to set retail rates for electricity and natural gas for residential, commercial and industrial service in the province based on a cost-of-service approach. The Régie also has extended powers, including approval authority over every transmission and distribution-related capital expenditure project exceeding C$10 million; approval of the terms of service and of long-term supply contracts; dealing with customer complaints; and the setting and enforcement of safety and reliability standards for the electric grid.
The Generation division, Hydro-Québec Production is not subject to regulation by the Régie. However, it must still submit every new construction project to a full environmental impact process, including the release of extensive environmental studies. The release of the studies are followed by a public hearing process conducted by the Bureau d'audiences publiques sur l'environnement.
Hydro-Québec employed 23,659 people in 2009, including 2,060 engineers, making the company the largest employer of engineers in Quebec.
For the year ending on December 31, 2009, Hydro-Québec posted net earnings of C$3.035 billion, down 3.0% over the previous year, despite adverse economic conditions. Revenue
declined 3.4% in 2009 to C$12.334 billion, while expenditure
s amounted to C$6.9 billion, down by C$360 million from 2008, mainly due to lower fuel and electricity purchases and the gradual phaseout of Quebec's capital tax.
The company has assets of C$68.978 billion, C$57.760 billion of which are tangible assets. Its long-term debt stood at C$38.002 billion, and the company reported a capitalization rate of 37.0% in 2009. Bond
s issued by Hydro-Québec are backed
by the Quebec government. On December 31, 2009, long-term
securities
of Hydro-Québec were rated Aa2 stable by Moody's
, AA- positive by Fitch Ratings and A+ by Standard & Poor's
.
In 2009, Hydro-Québec paid a C$2.168 billion dividend
to its sole shareholder, the Government of Quebec
. Between 2005 and 2009, the company paid a total of C$10 billion in dividends.
government redefined Hydro-Québec's mission by modifying the terms of the social pact of 1944. The government issued itself 43,741,090 shares worth C$100 each, and the amended statute stated that Hydro-Québec would now pay up to 75% of its net earnings in dividends. This amendment to the Hydro-Québec Act started an episodic debate on whether Hydro-Québec should be fully or partially privatized. In recent years, economist Marcel Boyer and businessman Claude Garcia—both associated with the conservative think tank The Montreal Economic Institute—have often raised the issue, claiming that the company could be better managed by the private sector and that the proceeds from a sale would lower public debt
.
Without going as far as Boyer and Garcia, Mario Dumont
, the head of the Action démocratique du Québec
, briefly discussed the possibility of selling a minority stake of Hydro-Québec during the 2008 election campaign. A Léger Marketing
poll conducted in November 2008 found that a majority of Quebec respondents (53%) were opposed to his proposal to sell 7.5% of the company's equity
to Quebec citizens and businesses, while 38% were in favor.
Commenting on the issue on Guy A. Lepage
's talk show
, former PQ Premier Jacques Parizeau estimated that such an idea would be quite unpopular in public opinion, adding that Hydro-Québec is often seen by Quebecers as a national success story and a source of pride. This could explain why various privatization proposals in the past have received little public attention. The liberal government has repeatedly stated that Hydro-Québec is not for sale.
Like many other economists, Yvan Allaire, from Montreal's Hautes études commerciales
business school, advocate increased electricity rates as a way to increase the government's annual dividend without resorting to privatization. Others, like columnist Bertrand Tremblay of Saguenay
's Le Quotidien, claim that privatization would signal a drift to the days when Quebec's natural resources were sold in bulk to foreigners at ridiculously low prices. "For too long, Tremblay writes, Quebec was somewhat of a banana republic, almost giving away its forestry and water resources. In turn, those foreign interests were exporting our jobs associated with the development of our natural resources with the complicity of local vultures".
Left-wing academics, such as UQAM
's Léo-Paul Lauzon and Gabriel Sainte-Marie, have claimed that privatization would be done at the expense of residential customers, who would pay much higher rates. They say that privatization would also be a betrayal of the social pact between the people and its government, and that the province would be short-selling itself by divesting of a choice asset for a minimal short term gain.
On December 31, 2009, Hydro-Québec Production owned and operated 59 hydro
plants—including 12 of over a 1,000 MW capacity—and 26 major reservoirs. These facilities are located in 13 of Quebec's 430 watersheds
, including the Saint Lawrence
, Betsiamites
, La Grande
, Manicouagan
, Ottawa
, Outardes
, and Saint-Maurice
rivers. These plants provide the bulk of electricity generated and sold by the company.
Non-hydro plants include the baseload
675-MW gross Gentilly nuclear generating station
, a CANDU-design reactor
, one thermal
and three gas turbine
peaker plants
and an experimental 2-MW wind farm, for a total installed capacity of 36,810 MW in 2009. Hydro-Québec's average generation cost was 2.0 cents per kWh in 2009.
The company also purchases the bulk of the output of the 5,428-MW Churchill Falls generating station in Labrador, under a long term contract expiring in 2041. In 2009, Hydro-Québec bought the 60% stake owned by AbitibiBowater
in the McCormick plant
(335 MW), located at the mouth of the Manicouagan River near Baie-Comeau, for C$616 million.
In 2008, the energy supply sold by Hydro-Québec to its customers came primarily from hydroelectric sources (95.8%). Emissions of carbon dioxide (7,263 tonnes/TWh), sulfur dioxide
(19 tonnes/TWh) and nitrogen oxide
s (29 tonnes/TWh) were between 20 and 43 times lower than the industry average in northeastern North America. Imported electricity bought in neighboring markets was responsible for almost all of these emissions.
Hydro-Québec's expertise at building and operating a very high voltage electrical grid spreading over long distances has long been recognized in the electrical industry. TransÉnergie, Hydro-Québec's transmission division, operates the largest electricity transmission network in North America. It acts as the independent system operator and reliability coordinator for the Québec interconnection
of the North American Electric Reliability Corporation system, and is part of the Northeast Power Coordinating Council
(NPCC). TransÉnergie manages the flow of energy on the Quebec network and ensures non-discriminatory access to all participants involved in the wholesale market. The non-discriminatory access policy allows a company such as Nalcor
to sell some of its share of power from Churchill Falls on the open market in the State of New York using TransÉnergie's network, upon payment of a transmission fee.
In recent years, TransÉnergie's Contrôle des mouvements d'énergie (CMÉ) unit has been acting as the reliability coordinator of the bulk electricity network for Quebec as a whole, under a bilateral agreement between the Régie de l'énergie du Québec and the Federal Energy Regulatory Commission
of the United States.
TransÉnergie's high voltage network stretches over 33244 km (20,656.9 mi), including 11422 km (7,097.3 mi) of , and a network of 515 substations. It is connected to neighboring Canadian provinces and the United States by 18 ties, with a maximum reception capacity of 9,575 MWThis number includes the 5,200-MW Churchill Falls lines, which have no export capability. and a maximum transmission capacity of 7,100 MW.
. Although Quebec uses the same 60 hertz
frequency as the rest of North America, its grid does not use the same phase as surrounding networks. TransÉnergie mainly relies on back to back HVDC converters to export or import electricity from other jurisdictions.
This feature of the Quebec network allowed Hydro-Québec to remain unscathed during the Northeast Blackout of August 14, 2003
, with the exception of 5 hydro plants on the Ottawa River
directly connected to the Ontario grid at the time. A new 1250-MW back to back HVDC tie has been commissioned at the Outaouais substation, in L'Ange-Gardien
, near the Ontario
border. The new interconnection has been online since 2009 and the 315 kV line will be fully operational in 2010.
One drawback of the TransÉnergie network involves the long distances separating the generation sites and the main consumer markets. For instance, the Radisson
substation links the James Bay project plants to the Nicolet station near Sainte-Eulalie
, south of the Saint Lawrence, over 1200 kilometres (745.6 mi) away.
In addition to the new tie with Ontario, the company plans to build a new 1200-MW direct current link between the Des Cantons substation at Windsor, Quebec
in Quebec's Eastern Townships
and Deerfield, New Hampshire
, with an HVDC converter terminal built at Franklin, New Hampshire
. The US segment of the US$1.1 billion line, would be built by Northern Pass Transmission LLC, a partnership between Northeast Utilities
(75%) and NSTAR
(25%). In order to go ahead, the project must receive regulatory approval in Quebec and the United States. The proposed transmission line could be in operation in 2015. According to Jim Robb, a senior executive from Northeast Utilities, New England
could meet one third of its Regional Greenhouse Gas Initiative
commitments with the hydropower coming through this new power line alone.
lines. The division is the sole electric distributor across the province, with the exception of 9 municipal distribution networks — in Alma
, Amos
, Baie-Comeau, Coaticook
, Joliette, Magog
, Saguenay
, Sherbrooke and Westmount
—and the electric cooperative of Saint-Jean-Baptiste de Rouville
.
Hydro-Québec Distribution buys most of its power from the 165-TWh heritage pool provided by Hydro-Québec Production at 2.79¢/kWh. The division usually purchases additional power by entering into long-term contracts after a public call for tenders. For shorter term needs, it also buys power from the neighboring systems at market prices. As a last resort, Hydro-Québec Production can also provide short-term relief. Supply contracts above and beyond the heritage pool must be approved by the Régie de l'énergie du Québec and their costs are passed on to customers.
The division signed one natural gas
cogeneration
agreement for 507 MW in 2003, three forest biomass deals (47.5 MW) in 2004 and 2005, and ten contracts for wind power
(2,994 MW) in 2005 and 2008, all with private sector producers. It also signed two flexible contracts with Hydro-Québec Production (600 MW) in 2002.
Hydro-Québec Distribution is also responsible for the production of power in remote communities not connected to the main power grid. The division operates an off-grid hydroelectric dam serving communities on the Lower North Shore and 23 small diesel power plants in the Magdalen Islands
, in Haute-Mauricie
and in Nunavik
.
in 1967, the research center is located in Varennes
, a suburb on the South Shore
of Montreal
. IREQ operates on an annual research budget of approximately C$100 million and specializes in the areas of high voltage, mechanics
and thermomechanics, network simulations and calibration.
Research conducted by scientists and engineers at IREQ has helped to extend the life of dams, improve water turbine
performance, automate network management and increase the transmission capacity of high voltage power lines.
Another research center, the Laboratoire des technologies de l'énergie (LTE) in Shawinigan, was opened in 1988 to adapt and develop new products while helping industrial customers improve their energy efficiency.
In the last 20 years, the institute has also conducted research and development
work towards the electrification of ground transportation
. Current projects include battery
materials, including innovative work on lithium iron phosphate
and nano-titanate, improved electric drive train
s and the impacts of the large scale deployment of electric vehicles on the power grid. Projects focus on technologies to increase range, improve performance in cold weather and reduce charging time
.
Hydro-Québec has been criticized for not having taken advantage of some of its innovations. An electric wheel motor concept that struck a chord with Quebecers, first prototyped in 1994 by Pierre Couture, an engineer and physicist
working at IREQ, is one of these. The heir to the Couture wheel motor is now marketed by TM4 Electrodynamic Systems, a spin-off established in 1998 that has made deals with France's Dassault and Heuliez
to develop an electric car, the Cleanova
, of which prototypes were built in 2006. Hydro-Québec announced in early 2009 at the Montreal International Auto Show
that its engine had been chosen by Tata Motors
to equip a demonstration version of its Indica
model, which will be road tested in Norway
.
, which are assigned to the Société d'énergie de la Baie James
subsidiary.
In the James Bay area, two new plants, Eastmain-1-A (768 MW) and Sarcelle (125 MW), and the partial diversion of the Rupert River
to the Robert-Bourassa Reservoir
, are under construction and should be operating at full power by 2011.
The construction of a complex of four hydroelectric generating stations on the Romaine River began on May 13, 2009. The plants are scheduled to be built and commissioned between 2014 and 2020.
In his March 2009 inaugural speech, Quebec Premier Jean Charest
announced that his government intends to further develop the province's hydroelectric potential. The call for further development of hydroelectric and other renewable generating capacity has been implemented in the company's 2009-2013 strategic plan, released on July 30, 2009. Hydro-Québec plans capacity upgrades at the Jean-Lesage (120 MW) and René-Lévesque (210 MW) stations and a third unit at the SM-3 plant (440 MW). The company will also conduct technical and environmental studies and undertake consultations with local communities to build new facilities on the Petit-Mécatina (1,200 MW) and Magpie (850 MW) rivers on the North Shore, and revive the Tabaret project (132 MW) in the Abitibi-Témiscamingue
region, in western Quebec.
During the next 25 years, Hydro-Québec was particularly active abroad with investments in electricity transmission networks and generation: Transelec in Chile
, the Cross Sound Cable
in the United States
, the Consorcio Transmantaro in Peru
, Hidroelectrica Rio Lajas in Costa Rica
, Murraylink
in Australia
and the Fortuna generating station in Panamá
.
It briefly held a 17% share in SENELEC, Senegal
's electric utility, when the Senegalese government decided to sell part of the company to a consortium led by the French company Elyo, a subsidiary of Group Suez Lyonnaise des Eaux, in 1999. The transaction was canceled in 2000 following the election of president Abdoulaye Wade
.
Also in 1999, Hydro-Québec International acquired a 20% stake in the Meiya Power Company in China
for C$83 million. The company held this participation until July 2004. The company's expertise was sought by several hydroelectric developers throughout the world, including the Three Gorges Dam
, where Hydro's employees trained Chinese engineers in the fields of management, finance and dams.
Hydro-Québec gradually withdrew from the international business between 2003 and 2006, and sold off all of its foreign investments for a profit. Proceeds from these sales were paid to the government's Generations Fund, a trust fund set up by the province to alleviate the impact of public debt on future generations.
The construction and operation of electric generation, transmission and distribution facilities has environmental impacts and Hydro-Québec's activities are no exception. Hydroelectric development has an impact on the natural environment where facilities are built and on the people living in the area. For instance, the development of new reservoirs increases the level of mercury in lakes and rivers, which works up the food chain. It temporarily increases the emission of greenhouse gases from reservoirs and contributes to shoreline erosion.
In addition, hydroelectric facilities transform the human environment. They create new obstacles to navigation, flood traditional hunting and trapping grounds, force people to change their eating habits due to the elevated mercury content of some species of fish, destroy invaluable artifacts that would help trace the human presence on the territory, and disrupt the society and culture of Aboriginal people living near the facilities.
Since the early 1970s, Hydro-Québec has been aware of the environmental externalities of its operations. The adoption of a Quebec statute on environmental quality in 1972, the cancellation of Champigny Project, a planned pumped storage plant in the Jacques-Cartier River
valley in 1973, and the James Bay negotiations leading to the James Bay and Northern Quebec Agreement
in 1975, forced the company to reconsider its practices.
To address environmental concerns, Hydro-Québec established a environmental protection committee in 1970 and an Environmental Management unit in September 1973. Its mandate is to study and measure the environmental impacts of the company, prepare impact assessment, and develop mitigation strategies for new and existing facilities, while conducting research projects in these areas, in cooperation with the scientific community.
Despite the fact that the transformation of a terrestrial environment into an aquatic environment constitutes a major change and that flooding leads to the displacement or death of nonmigratory animals, the riparian environments lost through flooding are partially replaced by new ones on the exposed banks of reduced-flow rivers. The biological diversity of reservoir islands is comparable to other islands in the area and the reservoir drawdown
zone is used by a variety of wildlife. The population of migratory species of interest such as the caribou have even increased to the point where the hunt has been expanded.
Emissions of greenhouse gases (GHG) rise significantly for a few years after reservoir impoundment, and then stabilize after 10 years to a level similar to that of surrounding lakes. Gross GHG emissions of reservoirs in the James Bay area fluctuate around 30,000 tonnes of CO2 equivalent per TWh of generated power. Hydro-Québec claims its hydroelectric plants release 35 times less GHG than comparable gas-fired plants and 70 times less than coal-fired ones and that they constitute the "option with the best performance" overall.
Another major environmental concern relates to the population of areas affected by hydroelectric development, specifically the Innu
of the North Shore and the Cree
and Inuit
in Northern Quebec. The hydroelectric developments of the last quarter of the 20th century have accelerated the settling process among Aboriginal populations that started in the 1950s. Among the reasons cited for the increased adoption of a sedentary lifestyle among these peoples are the establishment of Aboriginal businesses, the introduction of paid labor, and the flooding of traditional trapping and fishing lands by the new reservoirs, along with the operation of social and education services run by the communities themselves under the James Bay and Northern Quebec Agreement
.
Some native communities, particularly the Crees, have come to a point "where they increasingly resemble the industrialized society of the South", notes an Hydro-Québec report summarizing the research conducted in the area between 1970 and 2000. The report adds that a similar phenomenon was observed after the construction of roads and hydroelectric plants near isolated communities in northern Canada and Scandinavia. However, growing social problems and rising unemployment have followed the end of the large construction projects in the 1990s. The report concludes that future economic and social development in the area "will largely depend on the desire for cooperation among the various players".
After the strong rejection of the Suroît project and its subsequent cancellation in November 2004, Hydro-Québec, under the leadership of its new CEO Thierry Vandal, reaffirmed Hydro-Québec's commitment towards energy efficiency, hydropower and development of alternative energy. Since then, Hydro-Québec regularly stresses three criteria for any new hydroelectric development undertaken by the company: projects must be cost effective, environmentally acceptable and well-received by the communities. Hydro-Québec has also taken part in a series of sustainable development
initiatives since the late 1980s. Its approach is based on three principles: economic development, social development and environmental protection. Since 2007 the company adheres to the Global Reporting Initiative
, which governs the collection and publication of sustainability performance information. The company employs 250 professionals and managers in the environmental field and has implemented an ISO 14001
-certified environmental management system.
At the end of 2010, Hydro-Québec served 4,011,789 customers grouped into three broad categories: residential and farm (D Rate), commercial and institutional (G Rate) and industrial (M and L rates). The Other category includes public lighting systems and municipal distribution systems.
About a dozen distribution rates are set annually by the Régie de l'énergie after public hearings. Pricing is based on the cost of delivery, which includes depreciation on fixed assets and provisions for the maintenance of facilities, customer growth and a profit margin.
Rates are uniform throughout the province and are based on consumer type and volume of consumption. All rates vary in block to mitigate any cross-subsidization effect between residential, commercial and industrial customers.
After a five-year rate freeze, between May 1, 1998 and January 1, 2004, the Régie granted 7 rate increases between 2004 and 2009. However, Hydro-Québec rates are still among the lowest in North America. A few months after obtaining a 0.4% increase for 2010–2011, Hydro-Québec tabled a rate case before the Régie de l'énergie in August, 2010, calling a rate freeze for 2011-2012.
(68% of residences). Hydro-Québec estimates that heating accounts for more than one half of the power used in the residential sector.
This preference for electric heating makes electricity demand more unpredictable, but offers some environmental benefits. Despite Quebec's very cold climate in winter, greenhouse gases emissions in the residential sector accounted for only 5.5% (4.65 Mt eq.) of all emissions in Quebec in 2006. Emissions from the residential sector in Quebec fell by 30% between 1990 and 2006.
Residential use of electricity fluctuates from one year to another, and is strongly correlated with the weather. Contrary to the trend in neighboring networks, Hydro-Québec's system is winter-peaking
. A new consumption record was set on January 16, 2009 at 8 am, with a load of . The temperature recorded in Quebec City
at the time was -31.8 C. The previous record of was established on January 15, 2004, during another cold spell.
The price of electricity for residential and agricultural customers in effect since April 1, 2010, includes a 40.64¢ daily subscription fee, and two price levels depending on consumption The rates are all-included: power, transmission and distribution costs. Customers pay 5.45¢/kWh for the first 30 daily kWh, while the remainder is sold at 7.51¢/kWh. The average monthly bill for a residential customer was approximately C$100 in 2008.
Electric meter readings are usually conducted every two months and bills are bimonthly. However, the company offers an optional Equalized Payment Plan allowing residential customers to pay their annual electricity costs in 12 monthly installments, based on past consumption patterns of the current customer address and the average temperature in that location.
In 2007, Hydro-Québec pulled out of a Canadian government initiative to install smart meter
s across the province, stating that it would be "too costly to deliver real savings". Since then, Hydro-Québec organized a 2-year pilot project, involving 2,000 customers in 4 cities, with time of use metering
. A report, filed with the Régie de l'énergie, in the summer of 2010 concluded that the impact of marginal cost pricing with three levels of pricing in the winter would lead to minimal load and energy savings. The company intends to gradually phase-in Advanced Metering Infrastructure (AMI) between 2011 and 2017. Early efforts will focus on meter data transfer, connect-disconnect, outage detection and theft reduction.
Large industrial users pay a lower rate than the domestic and commercial customers, because of lower distribution costs. In 2009, the largest industrial users, the Rate L customers, were paying an average of 4.79¢/kWh.
The Quebec government uses low electricity rates to attract new business and consolidate existing jobs. Despite its statutory obligation to sell electric power to every person who so requests, the province has reserved the right to grant large load allocations to companies on a case by case basis since 1974. The threshold was set at 175 MW from 1987 to 2006 and was reduced to 50 MW in the government's 2006–2015 energy strategy.
In 1987, Hydro-Québec and the Quebec government agreed to a series of controversial deals with aluminum giants Alcan
and Alcoa
. These risk sharing contracts set the price of electricity based on a series of factors, including aluminum world prices and the value of the Canadian dollar
Those agreements are gradually being replaced by one based on published rates.
On May 10, 2007, the Quebec government signed an agreement with Alcan. The agreement, which is still in force despite the company's merger with Rio Tinto Group
, renews the water rights concession on the Saguenay and Peribonka rivers. In exchange, Alcan has agreed to invest in its Quebec facilities and to maintain jobs and its corporate headquarters in Montreal.
On December 19, 2008, Hydro-Québec and Alcoa signed a similar agreement. This agreement, which expires in 2040, maintains the provision of electricity to Alcoa's three aluminum smelters in the province, located in Baie-Comeau, Bécancour
and Deschambault-Grondines. In addition, the deal will allow Alcoa to modernize the Baie-Comeau plant which will increase its production capacity by 110,000 tonnes a year, to a total of 548,000 tonnes.
Several economists, including Université Laval
's Jean-Thomas Bernard and Gérard Bélanger, have challenged the government's strategy and argue that sales to large industrial customers are very costly to the Quebec economy. In an article published in 2008, the researchers estimate that, under the current regime, a job in a new aluminum smelter or an expansion project costs the province between C$255,357 and C$729,653 a year, when taking into consideration the money that could be made by selling the excess electricity on the New York market.
This argument is disputed by large industrial customers, who point out that data from 2000 to 2006 indicate that electricity exports prices get lower when quantities increase, and vice versa. "We find that the more we export, the less lucrative it gets", said Luc Boulanger, the head of the association representing Quebec's large industrial customers. In his opinion, the high volatility of electricity markets and the transmission infrastructure physical limitations reduce the quantities of electricity that can be exported when prices are higher.
Hydro-Québec sells part of its surplus electricity to neighboring systems in Canada and the United States under long term contracts and transactions on the New England, New York and Ontario bulk energy markets. Two subsidiaries, HQ Energy Marketing and HQ Energy Services (U.S.) are engaged in the electricity trade on behalf of the company. In 2009, Hydro-Québec exported 23.36 TWh of electricity, and the brokerage business generated revenues of C$1.5 billion.
Although most export sales are now short-term transactions, Hydro-Québec has entered into long-term export contracts in the past. In 1990, the company signed a 328-MW deal with a group of 13 electric distributors in Vermont
. Exports from Hydro-Québec account for 28% of all power used in the state. On March 11, 2010, Vermont's two largest utilities, Green Mountain Power and Central Vermont Public Service, entered into a tentative 26-year deal with Hydro-Québec to purchase up to 225 MW of hydro power from 2012 to 2038. The memorandum of understanding provides for a price smoothing mechanism shielding Vermont customers from market price spikes. The deal is contingent upon the enactment designating large hydro as "renewable energy".
The renewable energy law, H.781, was adopted by both houses of the legislature and signed into law by governor Jim Douglas
on June 4, 2010.
A second contract has been signed with Cornwall Electric, a subsidiary of Fortis Inc.
, a utility serving 23,000 customers in the Cornwall
, Ontario
area. The contract was renewed in 2008 and will be in force until 2019.
The company has several advantages in its dealings in export markets. First, its costs are not affected by the fluctuations of fossil fuel
prices, since hydropower
requires no fuel. Also, Hydro-Québec has a lot of flexibility in matching supply and demand, so it can sell electricity at higher prices during the day and replenish its reservoirs at night, when wholesale prices are lower. Third, the Quebec power grid peaks in winter because of heating, unlike most neighboring systems, where peak demand occur on very warm days in the summer, due to the air conditioning
needs of homes and offices.
The election of Barack Obama
—a supporter of renewable energy
, greenhouse gas
emissions trading
and the development of electric car
s—as president of the United States
in 2008
was seen as a positive development for the company's outlook. Despite the success of the previous policy of short-term sales on neighboring energy markets, the Quebec government asked Hydro-Québec management to write a new strategic plan, focusing on long-term sale agreements with US distributors, as was the case after the commissioning of the James Bay Project. The new plan was released in July 2009.
Government-owned corporation
A government-owned corporation, state-owned company, state-owned entity, state enterprise, publicly owned corporation, government business enterprise, or parastatal is a legal entity created by a government to undertake commercial activities on behalf of an owner government...
public utility
Public utility
A public utility is an organization that maintains the infrastructure for a public service . Public utilities are subject to forms of public control and regulation ranging from local community-based groups to state-wide government monopolies...
established in 1944 by the Government of Quebec
Government of Quebec
The Government of Quebec refers to the provincial government of the province of Quebec. Its powers and structure are set out in the Constitution Act, 1867....
. Based in Montreal
Montreal
Montreal is a city in Canada. It is the largest city in the province of Quebec, the second-largest city in Canada and the seventh largest in North America...
, the company
Company
A company is a form of business organization. It is an association or collection of individual real persons and/or other companies, who each provide some form of capital. This group has a common purpose or focus and an aim of gaining profits. This collection, group or association of persons can be...
is in charge of the generation
Electricity generation
Electricity generation is the process of generating electric energy from other forms of energy.The fundamental principles of electricity generation were discovered during the 1820s and early 1830s by the British scientist Michael Faraday...
, transmission
Electric power transmission
Electric-power transmission is the bulk transfer of electrical energy, from generating power plants to Electrical substations located near demand centers...
and distribution
Electricity distribution
File:Electricity grid simple- North America.svg|thumb|380px|right|Simplified diagram of AC electricity distribution from generation stations to consumers...
of electricity
Electricity
Electricity is a general term encompassing a variety of phenomena resulting from the presence and flow of electric charge. These include many easily recognizable phenomena, such as lightning, static electricity, and the flow of electrical current in an electrical wire...
across Quebec
Quebec
Quebec or is a province in east-central Canada. It is the only Canadian province with a predominantly French-speaking population and the only one whose sole official language is French at the provincial level....
.
With sixty hydroelectric
Hydroelectricity
Hydroelectricity is the term referring to electricity generated by hydropower; the production of electrical power through the use of the gravitational force of falling or flowing water. It is the most widely used form of renewable energy...
and one nuclear
Nuclear power
Nuclear power is the use of sustained nuclear fission to generate heat and electricity. Nuclear power plants provide about 6% of the world's energy and 13–14% of the world's electricity, with the U.S., France, and Japan together accounting for about 50% of nuclear generated electricity...
generating stations, Hydro-Québec is the largest electricity generator in Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
and the world's largest hydroelectric producer. The combined capacity of its power station
Power station
A power station is an industrial facility for the generation of electric energy....
s was and its distribution network served over 4 million customers in 2010.
The development of several large-scale hydroelectric projects which took place non-stop from the late 1940s to the mid-1990s — the Bersimis
Bersimis-1 generating station
The Bersimis-1 generating station is a dam and a hydroelectric power station built by Hydro-Québec on the Betsiamites River, in Lac-au-Brochet, north of the town of Forestville, Quebec...
, Carillon
Carillon Generating Station
The Carillon Generating Station is a hydroelectric power station on the Ottawa River near Carillon, Quebec, Canada. Built between 1959 and 1964, it is managed and operated by Hydro-Québec. It is a run-of-river generating station with an installed capacity of 752 MW, a head of , and a reservoir of...
, Manic-Outardes
Daniel-Johnson Dam
The Daniel-Johnson Dam , formerly known as Manic-5, is a multiple arch buttress dam on the Manicouagan River which creates Manicouagan Reservoir. The dam is composed of 14 buttresses and 13 arches and is north of Baie-Comeau in Quebec, Canada...
, Churchill Falls
Churchill Falls Generating Station
The Churchill Falls Generating Station is a hydroelectric power station located on the Churchill River in Newfoundland and Labrador. The underground power station can generate 5,428 MW, which makes it the second-largest in Canada, after the Robert-Bourassa generating station. The generating station...
and the two phases of the James Bay Project
James Bay Project
The James Bay Project is a series of hydroelectric development with a combined installed capacity of over 16,000 megawatts built since 1974 for Hydro-Québec by the on the La Grande and other rivers of Northern Quebec....
— allowed Quebec to reduce its reliance on fossil fuel
Fossil fuel
Fossil fuels are fuels formed by natural processes such as anaerobic decomposition of buried dead organisms. The age of the organisms and their resulting fossil fuels is typically millions of years, and sometimes exceeds 650 million years...
s. In 2006, primary electricity accounted for 40.4% of all energy used in the province. However, the construction and operation of these projects has led to conflicts with aboriginal populations
Aboriginal peoples in Canada
Aboriginal peoples in Canada comprise the First Nations, Inuit and Métis. The descriptors "Indian" and "Eskimo" have fallen into disuse in Canada and are commonly considered pejorative....
living in Quebec's North.
Hydro-Québec has played a "nearly mythical role" in Quebec's economic development
Economic development
Economic development generally refers to the sustained, concerted actions of policymakers and communities that promote the standard of living and economic health of a specific area...
since its establishment, with its sustained capital investments
Investment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...
, by fostering local engineering
Engineering
Engineering is the discipline, art, skill and profession of acquiring and applying scientific, mathematical, economic, social, and practical knowledge, in order to design and build structures, machines, devices, systems, materials and processes that safely realize improvements to the lives of...
expertise and by its capacity to generate large quantities of electricity at low prices.
Increasing energy costs and the growing international consensus on climate change
Climate change
Climate change is a significant and lasting change in the statistical distribution of weather patterns over periods ranging from decades to millions of years. It may be a change in average weather conditions or the distribution of events around that average...
had a positive impact on Hydro-Québec's balance sheet
Balance sheet
In financial accounting, a balance sheet or statement of financial position is a summary of the financial balances of a sole proprietorship, a business partnership or a company. Assets, liabilities and ownership equity are listed as of a specific date, such as the end of its financial year. A...
in the last decade. Between 2006 and 2010, the company paid C$10.7 billion in dividend
Dividend
Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business , or it can be distributed to...
s to its shareholder
Shareholder
A shareholder or stockholder is an individual or institution that legally owns one or more shares of stock in a public or private corporation. Shareholders own the stock, but not the corporation itself ....
, while keeping Quebec power rates among the lowest in North America.
History
In the years after the Great DepressionGreat Depression in Canada
Canada was hit hard by the Great Depression. Between 1929 and 1939, the gross national product dropped 40% . Unemployment reached 27% at the depth of the Depression in 1933...
, voices were raised in Quebec asking for a government takeover in the electricity business. Many of the criticisms leveled at the so-called "electricity trust" focused on high rates and excessive profits. Inspired by the example of Adam Beck
Adam Beck
Sir Adam Beck was a politician and hydroelectricity advocate who founded the Hydro-Electric Power Commission of Ontario.-Biography:...
, who had nationalized much of the electric sector
Ontario electricity policy
Ontario electricity policy refers to plans, legislation, incentives, guidelines, and policy processes put in place by the Government of the Province of Ontario, Canada, to address issues of electricity production, distribution, and consumption. Policymaking in the electricity sector involves...
in Ontario
Ontario
Ontario is a province of Canada, located in east-central Canada. It is Canada's most populous province and second largest in total area. It is home to the nation's most populous city, Toronto, and the nation's capital, Ottawa....
20 years earlier, local politician
Politician
A politician, political leader, or political figure is an individual who is involved in influencing public policy and decision making...
s, such as Philippe Hamel
Philippe Hamel
Philippe Hamel was a nationalist and progressive politician in Quebec, Canada.-Member of the legislature:Hamel entered politics to achieve the nationalization of all privately-owned electric companies...
and Télesphore-Damien Bouchard
Télesphore-Damien Bouchard
Télesphore-Damien Bouchard was a politician in Quebec, Canada.Born in Saint-Hyacinthe, Quebec, he was the mayor of the municipality from 1917 to 1930 and from 1932 to 1944 and president of the Federation of Canadian Municipalities in 1918...
, strongly advocated moving Quebec towards a similar system. Soon after being elected Premier of Quebec
Premier of Quebec
The Premier of Quebec is the first minister of the Canadian province of Quebec. The Premier is the province's head of government and his title is Premier and President of the Executive Council....
in 1939
Quebec general election, 1939
The Quebec general election of 1939 was held on October 25, 1939 to elect members of the Legislative Assembly of the Province of Quebec, Canada...
, Adélard Godbout
Adélard Godbout
Joseph-Adélard Godbout was an agronomist and politician in Quebec, Canada. He served as the 15th Premier of Quebec briefly in 1936, and again from 1939 to 1944. He was also leader of the Parti Libéral du Québec .-Youth and early career:Adélard Godbout was born in Saint-Éloi...
warmed to the concept of a state-owned utility
Public utility
A public utility is an organization that maintains the infrastructure for a public service . Public utilities are subject to forms of public control and regulation ranging from local community-based groups to state-wide government monopolies...
. Godbout was outraged by the inefficient power system dominated by Anglo-Canadian
English Canadian
An English Canadian is a Canadian of English ancestry; it is used primarily in contrast with French Canadian. Canada is an officially bilingual state, with English and French official language communities. Immigrant cultural groups ostensibly integrate into one or both of these communities, but...
economic interests and the collusion between the Montreal Light, Heat & Power
Montreal Light, Heat & Power
The Montreal Light, Heat and Power Company was a utility company operating the electric and gas distribution monopoly in the area of Montreal, Quebec, Canada until its nationalization by the government of Quebec in 1944, under a law creating the Quebec Hydroelectric Commission, also known as...
(MLH&P) and the Shawinigan Water & Power Company, the two main companies involved. At one point, he even called the duopoly an "economic dictatorship, crooked and vicious".
The two-step takeover
Montreal and the North Shore
In the fall of 1943, the Godbout government tabled a billBill (proposed law)
A bill is a proposed law under consideration by a legislature. A bill does not become law until it is passed by the legislature and, in most cases, approved by the executive. Once a bill has been enacted into law, it is called an act or a statute....
to take control of MLH&P, the company running the gas and electric distribution in and around Montreal
Montreal
Montreal is a city in Canada. It is the largest city in the province of Quebec, the second-largest city in Canada and the seventh largest in North America...
, Quebec's largest city. On April 14, 1944, the Quebec Legislative Assembly
National Assembly of Quebec
The National Assembly of Quebec is the legislative body of the Province of Quebec. The Lieutenant Governor and the National Assembly compose the Parliament of Quebec, which operates in a fashion similar to those of other British-style parliamentary systems.The National Assembly was formerly the...
passed Bill 17, creating a publicly owned commercial venture, the Quebec Hydroelectric Commission, commonly referred to as Hydro-Québec. The act
Statute
A statute is a formal written enactment of a legislative authority that governs a state, city, or county. Typically, statutes command or prohibit something, or declare policy. The word is often used to distinguish law made by legislative bodies from case law, decided by courts, and regulations...
granted the new Crown corporation an electric and gas distribution monopoly
Government monopoly
In economics, a government monopoly is a form of coercive monopoly in which a government agency or government corporation is the sole provider of a particular good or service and competition is prohibited by law...
in the Montreal area and mandated Hydro-Québec to serve its customers "at the lowest rates consistent with a sound financial management", to restore the substandard electric grid and to speed up rural electrification
Rural electrification
Rural electrification is the process of bringing electrical power to rural and remote areas. Electricity is used not only for lighting and household purposes, but it also allows for mechanization of many farming operations, such as threshing, milking, and hoisting grain for storage; in areas...
in areas with no or limited electric service.
MLH&P was taken over
Takeover
In business, a takeover is the purchase of one company by another . In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to the acquisition of a private company.- Friendly takeovers :Before a bidder makes an offer for another...
the next day, April 15, 1944. The new management
Management
Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively...
quickly realized that it would need to rapidly increase the company's 600-MW generation capacity in the next few years in order to meet growing demand. By 1948, Hydro-Québec had started the expansion of the Beauharnois generating station. It then set its eyes on the Bersimis
Betsiamites River
The Betsiamites is a river of Côte-Nord, Quebec, Canada, which joins the Saint Lawrence River.The Pipmuacan Reservoir, impounded by the Bersimis-1 Dam, is roughly halfway down its course.-Hydro-electric facilities:...
river, near Forestville
Forestville, Quebec
Forestville is a town in the Côte-Nord region of Quebec, Canada. It is located on the north shore of the Saint Lawrence River along Route 138, approximately southwest of Baie-Comeau. There is a vehicle and passenger ferry service from Forestville to Rimouski, on the south shore of the St. Lawrence...
, on the North Shore
Côte-Nord
Côte-Nord is the second largest administrative region by land area in Quebec, Canada, after Nord-du-Québec...
of the Saint Lawrence River
Saint Lawrence River
The Saint Lawrence is a large river flowing approximately from southwest to northeast in the middle latitudes of North America, connecting the Great Lakes with the Atlantic Ocean. It is the primary drainage conveyor of the Great Lakes Basin...
. Located 700 kilometres (435 mi) east of Montreal, the Bersimis-1
Bersimis-1 generating station
The Bersimis-1 generating station is a dam and a hydroelectric power station built by Hydro-Québec on the Betsiamites River, in Lac-au-Brochet, north of the town of Forestville, Quebec...
and Bersimis-2
Bersimis-2 generating station
The Bersimis-2 generating station is a dam and a run-of-the-river hydroelectric power station built by Hydro-Québec on the Betsiamites River, in Lac-au-Brochet, north of the town of Forestville, Quebec...
generating stations were built between 1953 and 1959 and were widely considered to be a bench trial
Bench trial
A bench trial is a trial held before a judge sitting without a jury. The term is chiefly used in common law jurisdictions to describe exceptions from jury trial, as most other legal systems do not use juries to any great extent....
for the fledgling company. They also offered a preview of the large developments that occurred over the next three decades in Northern Quebec.
Other construction projects started in the Maurice Duplessis
Maurice Duplessis
Maurice Le Noblet Duplessis served as the 16th Premier of the Canadian province of Quebec from 1936 to 1939 and 1944 to 1959. A founder and leader of the highly conservative Union Nationale party, he rose to power after exposing the misconduct and patronage of Liberal Premier Louis-Alexandre...
era included a second upgrade of the Beauharnois project and the construction of the Carillon generating station
Carillon Generating Station
The Carillon Generating Station is a hydroelectric power station on the Ottawa River near Carillon, Quebec, Canada. Built between 1959 and 1964, it is managed and operated by Hydro-Québec. It is a run-of-river generating station with an installed capacity of 752 MW, a head of , and a reservoir of...
on the Ottawa River
Ottawa River
The Ottawa River is a river in the Canadian provinces of Ontario and Quebec. For most of its length, it now defines the border between these two provinces.-Geography:...
. Between 1944 and 1962, Hydro-Québec's installed capacity increased sixfold, from 616 to 3,661 MW.
Quiet Revolution
Quiet Revolution
The Quiet Revolution was the 1960s period of intense change in Quebec, Canada, characterized by the rapid and effective secularization of society, the creation of a welfare state and a re-alignment of politics into federalist and separatist factions...
in 1960 did not stop the construction of new dams. On the contrary, it brought a new momentum to the company's development under the tutelage of a young and energetic Hydraulic Resources minister. René Lévesque
René Lévesque
René Lévesque was a reporter, a minister of the government of Quebec, , the founder of the Parti Québécois political party and the 23rd Premier of Quebec...
, a 38-year-old former television
Television
Television is a telecommunication medium for transmitting and receiving moving images that can be monochrome or colored, with accompanying sound...
reporter and a bona fide star of the new Lesage
Jean Lesage
Jean Lesage, PC, CC, CD was a lawyer and politician in Quebec, Canada. He served as the 19th Premier of Quebec from 22 June 1960, to 16 August 1966...
government, was appointed to the Hydro-Québec portfolio as part of the liberal Premier
Premier
Premier is a title for the head of government in some countries and states.-Examples by country:In many nations, "premier" is used interchangeably with "prime minister"...
's "Dream Team" . Lévesque quickly approved continuation of the ongoing construction work and put together a team to nationalize the 11 remaining private companies that still controlled a substantial share of the electricity generation and distribution business in Quebec.
On February 12, 1962, Lévesque started his public campaign for nationalization. In a speech to the Quebec Electric Industry Association he bluntly called the whole electric business an "unbelievably costly mess". The minister then toured the province in order to reassure the population and refute the arguments of the Shawinigan Water & Power Company, the main opponent of the proposed takeover. On September 4 and 5, 1962, Lévesque finally convinced his liberal cabinet
Cabinet (government)
A Cabinet is a body of high ranking government officials, typically representing the executive branch. It can also sometimes be referred to as the Council of Ministers, an Executive Council, or an Executive Committee.- Overview :...
colleagues to go ahead with the plan during a working retreat at a fishing camp north of Quebec City
Quebec City
Quebec , also Québec, Quebec City or Québec City is the capital of the Canadian province of Quebec and is located within the Capitale-Nationale region. It is the second most populous city in Quebec after Montreal, which is about to the southwest...
. The issue topped the liberal agenda during a snap election
Snap election
A snap election is an election called earlier than expected. Generally it refers to an election in a parliamentary system called when not required , usually to capitalize on a unique electoral opportunity or to decide a pressing issue...
called two years early, and their chosen theme, "Maîtres chez nous" (in English: "Masters of our domain."), had a strong nationalist
Quebec nationalism
Quebec nationalism is a nationalist movement in the Canadian province of Quebec .-1534–1774:Canada was first a french colony. Jacques Cartier claimed it for France in 1534, and permanent French settlement began in 1608. It was part of New France, which constituted all French colonies in North America...
undertone.
The Lesage government was reelected on November 14, 1962
Quebec general election, 1962
The Quebec general election of 1962 was held on November 14, 1962, to elect members of the Legislative Assembly of the Province of Quebec, Canada. The incumbent Quebec Liberal Party, led by Jean Lesage, won re-election, defeating the Union Nationale led by Daniel Johnson, Sr..In an unusual move,...
and Lévesque went ahead with the plan. On Friday, December 28, 1962 at 6 pm, Hydro-Québec launched an hostile takeover, offering to buy all of the stock
Stock
The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...
in 11 companies at a set price, slightly above market value
Market value
Market value is the price at which an asset would trade in a competitive auction setting. Market value is often used interchangeably with open market value, fair value or fair market value, although these terms have distinct definitions in different standards, and may differ in some...
. After hedging their bets for a few weeks, management of the firms advised their shareholders to accept the C$604 million government offer. In addition to buying the 11 companies, most electric co-operatives and municipally-owned utilities were also taken over and merged with the existing Hydro-Québec operations, which became the largest electric company in Quebec on May 1, 1963.
The 1960s and 1970s
Following the 1963 takeover, Hydro-Québec had to deal with three problems simultaneously. It first had to reorganize in order to seamlessly merge the new subsidiaries into the existing structure, while standardizing dozens of networks in various state of disrepair and upgrading large parts of the AbitibiAbitibi-Témiscamingue
Abitibi-Témiscamingue is a region located in western Quebec, Canada, along the border with Ontario. It became part of the province in 1898. It has a land area of 57,674.26 km2 . As of the 2006 census, the population of the region was 143,872 inhabitants.-History:The land was first occupied...
system from 25 to 60 hertz. All of this had to be done while the construction of a massive hydroelectric complex was underway on the North Shore.
The current company logo of Hydro-Québec was designed by Montreal-based design agency Gagnon/Valkus, Inc. in 1960.
Manic-Outardes
By 1959, thousands of workers were building the Manic-Outardes project, a 7-dam hydroelectric complex, including the 1314 metres (4,311 ft) wide Daniel-Johnson DamDaniel-Johnson Dam
The Daniel-Johnson Dam , formerly known as Manic-5, is a multiple arch buttress dam on the Manicouagan River which creates Manicouagan Reservoir. The dam is composed of 14 buttresses and 13 arches and is north of Baie-Comeau in Quebec, Canada...
, the largest of its kind in the world. Construction on the Manicouagan
Manicouagan River
The Manicouagan River is a river in Côte-Nord region of Quebec, Canada. The river originates at the Daniel-Johnson Dam of the Manicouagan Reservoir and flows approximately south, emptying into the Saint Lawrence River near Baie-Comeau...
and Outardes
Rivière aux Outardes
The Rivière aux Outardes or Outardes River is a river in Quebec, Canada. The river originates in the Otish Mountains, and flows in a southerly direction for its entire course. It passes through Lake Plétipi and Burnt Islands Lake , and widens about midway to form the large Outardes 4 Reservoir...
rivers was completed in 1978 with the inauguration of the Outardes-2 generating station.
These large projects raised a new problem that occupied company engineers for a few years: the transmission of the large amounts of power produced by generating stations located 700 kilometres away from the urban centers in southern Quebec in an economical fashion. A young engineer named Jean-Jacques Archambault
Jean-Jacques Archambault
Jean-Jacques Archambault was a Quebec engineer, died December 23, 2001. He worked at Hydro-Québec and is known for is work on the 735kV electric transmission technology.-735-kV transmission line:...
drafted a plan to build power lines, a much higher voltage than what was used at the time. Archambault persisted and managed to convince his colleagues and major equipment suppliers of the viability of his plan. The first power line was put into commercial service on November 29, 1965.
Churchill Falls
When it bought the Shawinigan Water & Power Company and some of its subsidiaries in 1963, Hydro-Québec acquired a 20% share of a planned hydroelectric facility at Hamilton FallsChurchill Falls
Churchill Falls are waterfalls named after former British Prime Minister, Winston Churchill. They are high, located on the Churchill River in Newfoundland and Labrador, Canada....
The falls were renamed to honor the late British Prime Minister, Sir Winston Churchill
Winston Churchill
Sir Winston Leonard Spencer-Churchill, was a predominantly Conservative British politician and statesman known for his leadership of the United Kingdom during the Second World War. He is widely regarded as one of the greatest wartime leaders of the century and served as Prime Minister twice...
, soon after his passing, in 1965. in Labrador
Labrador
Labrador is the distinct, northerly region of the Canadian province of Newfoundland and Labrador. It comprises the mainland portion of the province, separated from the island of Newfoundland by the Strait of Belle Isle...
, a project led by a consortium of banks and industrialists, the British Newfoundland Corporation Limited (Brinco). After years of hard bargaining, the parties reached a deal on May 12, 1969 to finance the construction of the power plant.
The agreement committed Hydro-Québec to buy most of the plant's output at one-quarter of a cent per kWh — the exact rate is 0.25425 cents per kWh until 2016 and 0.20 cents for the last 25 years of the contract —, and to enter into a risk-sharing agreement. Hydro-Québec would cover part of the interest risk and buy some of Brinco's debt, in exchange for a 34.2% share in the company owning the plant, the Churchill Falls (Labrador) Corporation Limited
Churchill Falls Labrador Corporation Limited
The Churchill Falls Corporation, also known as CFCo or CFLco is a Canadian electric company. The company was founded in 1961 and is based in St. John's, Newfoundland...
. The 5,428-MW Churchill Falls generating station delivered its first kilowatts on December 6, 1971. Its 11 turbines were fully operational by June 1974.
In Newfoundland
Newfoundland and Labrador
Newfoundland and Labrador is the easternmost province of Canada. Situated in the country's Atlantic region, it incorporates the island of Newfoundland and mainland Labrador with a combined area of . As of April 2011, the province's estimated population is 508,400...
, Joey Smallwood
Joey Smallwood
Joseph Roberts "Joey" Smallwood, PC, CC was the main force that brought Newfoundland into the Canadian confederation, and became the first Premier of Newfoundland . As premier, he vigorously promoted economic development, championed the welfare state, and emphasized modernization of education and...
's liberals
Liberal Party of Newfoundland and Labrador
The Liberal Party of Newfoundland and Labrador is a political party in the province of Newfoundland and Labrador, Canada and the provincial wing of the Liberal Party of Canada. It is the Official Opposition and currently holds six seats in the provincial legislature.-Origins:The party originated in...
were replaced in 1972 by a conservative
Progressive Conservative Party of Newfoundland and Labrador
For pre-1949 Conservative parties see Conservative parties in Newfoundland The Progressive Conservative Party of Newfoundland and Labrador is a centre-right provincial political party in Newfoundland and Labrador, Canada. Originally founded in 1949 the party has formed the Government of...
administration led by Frank Moores
Frank Moores
Frank Duff Moores served as the 2nd Premier of Newfoundland. He served as leader of the Progressive Conservatives from 1972 until his retirement in 1979.-Early life:...
. Unhappy with the terms of the agreement in the aftermath of the 1973 oil crisis
1973 oil crisis
The 1973 oil crisis started in October 1973, when the members of Organization of Arab Petroleum Exporting Countries or the OAPEC proclaimed an oil embargo. This was "in response to the U.S. decision to re-supply the Israeli military" during the Yom Kippur war. It lasted until March 1974. With the...
, the Newfoundland government
Government of Newfoundland and Labrador
The Government of Newfoundland and Labrador refers to the provincial government of the province of Newfoundland and Labrador. Its powers and structure are set out in the Constitution Act, 1867....
bought all of the shares in the Churchill Falls company that were not held by Hydro-Québec for C$160 million in June 1974.
Newfoundland then asked to reopen the contract, a demand refused by Hydro-Québec. After a protracted legal battle between the two neighboring provinces, the contract's validity was twice affirmed by the Supreme Court of Canada
Supreme Court of Canada
The Supreme Court of Canada is the highest court of Canada and is the final court of appeals in the Canadian justice system. The court grants permission to between 40 and 75 litigants each year to appeal decisions rendered by provincial, territorial and federal appellate courts, and its decisions...
, in 1984 and 1988.
James Bay Project
Almost a year to the day after his April 1970 electionQuebec general election, 1970
The Quebec general election of 1970 was held on April 29, 1970 to elect members of the National Assembly of Quebec, Canada. The former Legislative Assembly had been renamed the "National Assembly" in 1968...
, Quebec Premier Robert Bourassa
Robert Bourassa
Jean-Robert Bourassa, was a politician in Quebec, Canada. He served as the 22nd Premier of Quebec in two different mandates, first from May 12, 1970, to November 25, 1976, and then from December 12, 1985, to January 11, 1994, serving a total of just under 15 years as Provincial Premier.-Early...
launched a project which he hoped would help him fulfill a campaign promise to create 100,000 new jobs. On April 30, 1971, in front of a gathering of loyal liberal supporters, he announced plans for the construction of a 10,000-MW hydroelectric complex in the James Bay
James Bay
James Bay is a large body of water on the southern end of Hudson Bay in Canada. Both bodies of water extend from the Arctic Ocean. James Bay borders the provinces of Quebec and Ontario; islands within the bay are part of Nunavut...
area. After assessing three possible options, Hydro-Québec and the government chose to build three new dams on La Grande River
La Grande River
La Grande River is a river in northwestern Quebec, Canada, which rises in the highlands of north central Quebec and flows roughly west to drain into James Bay. It is the second largest river in Quebec, surpassed only by the Saint Lawrence River....
, named LG-2
Robert-Bourassa generating station
The Robert-Bourassa generating station is a hydroelectric power station on the La Grande River that is part of Hydro-Québec's James Bay Project in Canada...
, LG-3
La Grande-3 generating station
The La Grande-3 or LG-3 is a hydroelectric dam on the La Grande River in northern Quebec, part of Hydro-Québec's James Bay Project. The station can generate 2,418 MW and was commissioned in 1982-1984. It generates electricity through the reservoir and dam system. The dam and reservoir both are...
and LG-4
La Grande-4 generating station
The La Grande-4 is a hydroelectric generating station on the La Grande River that is part of Hydro-Québec's James Bay Project. The station can generate 2,779 MW and was commissioned in 1984–1986...
.
On top of the technical and logistical challenges posed by a public works project of this scope in a harsh and remote setting, the man in charge, Société d'énergie de la Baie James
James Bay Energy
The Société d'énergie de la Baie James is the company in charge of building the hydroelectric development known as the James Bay Project in northern Quebec...
president Robert A. Boyd
Robert A. Boyd
Robert A. Boyd, CM, OQ was a Canadian electric engineer and utility executive. He successfully led the construction of first phase of the James Bay hydroelectric project, a large dam complex built in northern Quebec by Hydro-Québec during the 1970s and early 1980s.Born in Sherbrooke in the Eastern...
, had to face the opposition of the 5,000 native Cree
Cree
The Cree are one of the largest groups of First Nations / Native Americans in North America, with 200,000 members living in Canada. In Canada, the major proportion of Cree live north and west of Lake Superior, in Ontario, Manitoba, Saskatchewan, Alberta and the Northwest Territories, although...
residents living in the area, who had grave concerns about the project's impact on their traditional lifestyle. In November 1973, the Crees got an injunction
Preliminary injunction
A preliminary injunction, in equity, is an injunction entered by a court prior to a final determination of the merits of a legal case, in order to restrain a party from going forward with a course of conduct or compelling a party to continue with a course of conduct until the case has been decided...
that temporarily stopped the construction of the basic infrastructure
Infrastructure
Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function...
needed to build the dams, forcing the Bourassa government to negotiate with them.
After two years of difficult negotiations, the Quebec
Government of Quebec
The Government of Quebec refers to the provincial government of the province of Quebec. Its powers and structure are set out in the Constitution Act, 1867....
and Canadian governments
Government of Canada
The Government of Canada, formally Her Majesty's Government, is the system whereby the federation of Canada is administered by a common authority; in Canadian English, the term can mean either the collective set of institutions or specifically the Queen-in-Council...
, Hydro-Québec, the Société d'énergie de la Baie James and the Grand Council of the Crees
Grand Council of the Crees
The Grand Council of the Crees , or the GCC, is the political body that represents the approximately 16,357 Crees or “Iyyu” / “Iynu” of the Eeyou Istchee territory in the James Bay and Nunavik regions of Northern Quebec, Canada...
signed the James Bay and Northern Quebec Agreement
James Bay and Northern Quebec Agreement
The James Bay And Northern Quebec Agreement was an Aboriginal land claim settlement, approved in 1975 by the Cree and Inuit of northern Quebec, and later slightly modified in 1978 by the Northeastern Quebec Agreement, through which Quebec's Naskapi First Nations joined the treaty...
on November 11, 1975. The agreement granted the Crees financial compensation and the management of health and education services in their communities in exchange for the continuation of the project.
Between 14,000 and 18,000 tradesmen were employed on various James Bay construction sites in the period stretching from 1977 to 1981. Inaugurated on October 27, 1979, the LG-2 generating station, an underground powerhouse with a peak capacity of is the most powerful of its kind in the world. The station, the dam and the associated reservoir were renamed in honor of Premier Bourassa two weeks after his death in October 1996. The construction of the first phase of the project was completed with the commissioning of LG-3 in 1982 and of LG-4 on May 27, 1984. A second phase of the project was built between 1987 and 1996, adding five more power plants — the , , , and generating stations — to the complex.
The 1980s and 1990s
After two consecutive decades of sustained growth, the late 1980s and the 1990s were much more difficult for Hydro-Québec. With the new James Bay capacity coming on stream at a time of slower growth, the company had to move from a "builder" to a "seller" of electricity. In the early 1980s, a new management team led by Guy CoulombeGuy Coulombe
Guy Coulombe was a senior public servant in the Canadian province of Quebec. At various times the leader of Hydro-Quebec and the Sûreté du Québec and the general manager of Montreal, Coulombe was described as Quebec's "go-to mandarin on tough issues."-Early life:Coulombe was born to an upper...
was brought in to implement a tough restructuring and rationalizing agenda, lowering morale and raising tensions in the ranks.
Things were not much better on the environmental front. A new hydroelectric development and the construction of a direct current high voltage line built to export power to New England
New England
New England is a region in the northeastern corner of the United States consisting of the six states of Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut...
faced strong opposition from the Crees as well as environmental groups from the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
and Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
. In order to export power from the James Bay Project to New England, Hydro-Québec planned the construction of a 1200 kilometres (745.6 mi) long direct current power line, with a capacity of 2,000 MW, the so-called "Réseau multiterminal à courant continu
Quebec - New England Transmission
The Quebec – New England Transmission is a long-distance high-voltage direct current line between Radisson, Quebec and Sandy Pond in Ayer, Massachusetts...
" (English: Direct Current Multiterminal Network). Construction work on the line went without a problem with the exception of where the power line had to cross the Saint Lawrence River
Saint Lawrence River
The Saint Lawrence is a large river flowing approximately from southwest to northeast in the middle latitudes of North America, connecting the Great Lakes with the Atlantic Ocean. It is the primary drainage conveyor of the Great Lakes Basin...
, between Grondines and Lotbinière
Lotbinière, Quebec
Lotbinière is a municipality in the Municipalité régionale de comté de Lotbinière in Quebec, Canada. It is part of the Chaudière-Appalaches region and the population is 909 as of 2009. It is named after seigneurie of which it was part...
.
Facing strong opposition from local residents to other options, Hydro-Québec built a 4 km (2.5 mi) tunnel under the river
Saint Lawrence River HVDC Powerline Crossing
The Saint Lawrence River HVDC Powerline Crossing is the crossing of Hydro-Québec's Quebec-New England HVDC transmission line over the Saint Lawrence River between Grondines and Lotbinière, Quebec, Canada...
, at a cost of C$144 million, which delayed the project completion by two and a half years. The line was finally commissioned on November 1, 1992.
Great Whale Project
Hydro-Québec and the Bourassa government had a much harder time circumventing the next hurdle in northern Quebec. Robert Bourassa was reelected in late 1985Quebec general election, 1985
The Quebec general election of 1985 was held on December 2, 1985, to elect members of the National Assembly of the Province of Quebec, Canada. The Quebec Liberal Party, led by former premier Robert Bourassa, defeated the incumbent Parti Québécois, led by premier Pierre-Marc Johnson.This election...
after a 9-year hiatus. Shortly after taking office he announced yet another hydro development in the James Bay area. The C$12.6 billion Great Whale Project involved the construction of three new generating stations with a combined capacity of 3,160 MW. It was to produce 16.3 TWh of energy each year by the time it was completed in 1998–1999.
The plan immediately proved controversial. As they had in 1973, the Cree people opposed the project and filed lawsuits against Hydro-Québec in Quebec and Canada to prevent its construction, and also took action in many U.S. states to prevent sales of the electricity there.
Two months after the 1994 general election
Quebec general election, 1994
The Quebec general election of 1994 was held on September 12, 1994, to elect members of the National Assembly of Quebec, Canada. The Parti Québécois, led by Jacques Parizeau, defeated the incumbent Quebec Liberal Party, led by Daniel Johnson, Jr.....
, the new Premier, Jacques Parizeau
Jacques Parizeau
Jacques Parizeau, is an economist and noted Quebec sovereignist who was the 26th Premier of the Canadian province of Quebec from September 26, 1994 to January 29, 1996.-Early life and career:...
, announced the suspension of the Great Whale Project, declaring it unnecessary in order to meet Quebec's energy needs.
Fire and ice
During the same period, Hydro-Québec had to deal with three major disruptions to its electric transmission system that were primarily caused by natural disasters. The incidents highlighted a major weakness of Hydro's system: the great distances between the generation facilities and the main markets of southern Quebec.
On April 18, 1988 at 2:05 am, all of Quebec and parts of New England
New England
New England is a region in the northeastern corner of the United States consisting of the six states of Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut...
and New Brunswick
New Brunswick
New Brunswick is one of Canada's three Maritime provinces and is the only province in the federation that is constitutionally bilingual . The provincial capital is Fredericton and Saint John is the most populous city. Greater Moncton is the largest Census Metropolitan Area...
lost power because of an equipment failure at a critical substation on the North Shore
Côte-Nord
Côte-Nord is the second largest administrative region by land area in Quebec, Canada, after Nord-du-Québec...
, between Churchill Falls and the Manicouagan area. The blackout
Power outage
A power outage is a short- or long-term loss of the electric power to an area.There are many causes of power failures in an electricity network...
, which lasted for up to 8 hours in some areas, was caused by ice deposits on transformation equipment at the Arnaud substation.
Less than a year later, on March 13, 1989 at 2:44 am, a large geomagnetic storm
March 1989 geomagnetic storm
The March 1989 geomagnetic storm was a severe geomagnetic storm that caused the collapse of Hydro-Québec's electricity transmission system. It occurred during solar cycle 22.-Geomagnetic storm and auroras:...
caused variations in the earth's magnetic field
Earth's magnetic field
Earth's magnetic field is the magnetic field that extends from the Earth's inner core to where it meets the solar wind, a stream of energetic particles emanating from the Sun...
, tripping circuit breaker
Circuit breaker
A circuit breaker is an automatically operated electrical switch designed to protect an electrical circuit from damage caused by overload or short circuit. Its basic function is to detect a fault condition and, by interrupting continuity, to immediately discontinue electrical flow...
s on the transmission network. The James Bay network went offline in less than 90 seconds, giving Quebec its second blackout in 11 months. The power failure lasted 9 hours, and forced Hydro-Québec to implement a program to reduce the risks associated with geomagnetically induced currents.
1998 ice storm
In January 1998, five consecutive days of heavy freezing rain
Freezing rain
Freezing rain is the name given to rain that falls when surface temperatures are below freezing. The raindrops become supercooled while passing through a sub-freezing layer of air, many hundred feet , just above the surface, and then freeze upon impact with any object they encounter. The resulting...
caused the largest power failure in Hydro-Québec's history. The weight of the ice collapsed 600 kilometres (372.8 mi) of high voltage
High voltage
The term high voltage characterizes electrical circuits in which the voltage used is the cause of particular safety concerns and insulation requirements...
power lines and over 3000 kilometres (1,864.1 mi) of medium and low voltage
Low voltage
Low voltage when used as an electrical engineering term concerning an electricity supply grid or industrial use, broadly identifies safety considerations of the system based on the voltage used. The meaning of the term "low voltage" is somewhat different when used with regard to a more typical end...
distribution lines in southern Quebec. Up to 1.4 million Hydro-Québec customers were forced to live without power for up to five weeks.
While Montreal
Montreal
Montreal is a city in Canada. It is the largest city in the province of Quebec, the second-largest city in Canada and the seventh largest in North America...
was plunged in darkness, the Hydro-Quebec symbol was still lit up. Part of the Montérégie
Montérégie
Montérégie is an administrative region in southwest Québec. It includes the cities of Boucherville, Brossard, Granby, Longueuil, Salaberry-de-Valleyfield, Saint-Jean-sur-Richelieu, Saint-Hyacinthe, Sorel-Tracy, and Vaudreuil-Dorion....
region, south of Montreal, was the worst hit area and became known as the Triangle of Darkness by the media and the local population. Ice accumulation exceeded 100 mm (4 in) in some locations. Customers on the Island of Montreal
Island of Montreal
The Island of Montreal , in extreme southwestern Quebec, Canada, is located at the confluence of the Saint Lawrence and Ottawa Rivers. It is separated from Île Jésus by the Rivière des Prairies....
and in the Outaouais region were also hit by the power outage, causing significant concerns since many Quebec households use electricity for heating. Hydro-Québec immediately mobilized more than 10,000 workers to rebuild a significant portion of the southern Quebec grid. At the height of the crisis, on January 9, 1998, the island of Montreal was fed by a single power line. The situation was so dire the Quebec government temporarily resorted to rolling blackouts in downtown Montreal in order to maintain the city's drinking water supply.
Electric service was fully restored on February 7, 1998. The storm cost Hydro-Québec C$725 million in 1998 and over C$1 billion was invested in the following decade to strengthen the power grid against similar events. However, part of the operation needed to close the 735 kV loop around Montreal that was approved at the height of the crisis without a prior environmental impact assessment
Environmental impact assessment
An environmental impact assessment is an assessment of the possible positive or negative impact that a proposed project may have on the environment, together consisting of the natural, social and economic aspects....
quickly ran into opposition. Eastern Townships
Eastern Townships
The Eastern Townships is a tourist region and a former administrative region in south-eastern Quebec, lying between the former seigneuries south of the Saint Lawrence River and the United States border. Its northern boundary roughly followed Logan's Line, the geologic boundary between the flat,...
residents went to court to quash the order in council authorizing the power line. Construction work resumed after the National Assembly
National Assembly of Quebec
The National Assembly of Quebec is the legislative body of the Province of Quebec. The Lieutenant Governor and the National Assembly compose the Parliament of Quebec, which operates in a fashion similar to those of other British-style parliamentary systems.The National Assembly was formerly the...
passed a law retroactively approving the work done in the immediate aftermath of the ice storm, but it also required public hearing
Hearing (law)
In law, a hearing is a proceeding before a court or other decision-making body or officer, such as a government agency.A hearing is generally distinguished from a trial in that it is usually shorter and often less formal...
s on the remaining projects. Construction of the Hertel-Des Cantons high voltage line was properly approved in July 2002 and commissioned a year later.
Suroît controversy
The moratoriumMoratorium (law)
A moratorium is a delay or suspension of an activity or a law. In a legal context, it may refer to the temporary suspension of a law to allow a legal challenge to be carried out....
on new hydro projects in northern Quebec after the Great Whale cancellation forced the company's management to develop new sources of electricity to meet increasing demand. In September 2001, Hydro-Québec announced its intention to build a new combined cycle
Combined cycle
In electric power generation a combined cycle is an assembly of heat engines that work in tandem off the same source of heat, converting it into mechanical energy, which in turn usually drives electrical generators...
gas turbine
Gas turbine
A gas turbine, also called a combustion turbine, is a type of internal combustion engine. It has an upstream rotating compressor coupled to a downstream turbine, and a combustion chamber in-between....
plant — the Centrale du Suroît plant — in Beauharnois
Beauharnois, Quebec
Beauharnois is a city located in the Beauharnois-Salaberry Regional County Municipality of southwestern Quebec, Canada and is part of Greater Montreal Area. The city's population as of the Canada 2006 Census was 11,918...
, southwest of Montreal, stressing the pressing need to secure additional electricity supply to mitigate the effects of any shortfall in the water cycle
Water cycle
The water cycle, also known as the hydrologic cycle or H2O cycle, describes the continuous movement of water on, above and below the surface of the Earth. Water can change states among liquid, vapor, and solid at various places in the water cycle...
of its reservoir
Reservoir
A reservoir , artificial lake or dam is used to store water.Reservoirs may be created in river valleys by the construction of a dam or may be built by excavation in the ground or by conventional construction techniques such as brickwork or cast concrete.The term reservoir may also be used to...
s. Hydro's rationale also stressed the cost-effectiveness of the plant and the fact that it could be built within a two year period.
The announcement came at a bad time since attention was drawn to the ratification by Canada of the Kyoto Protocol
Kyoto Protocol
The Kyoto Protocol is a protocol to the United Nations Framework Convention on Climate Change , aimed at fighting global warming...
. With estimated emissions levels of 2.25 Mt of carbon dioxide
Carbon dioxide
Carbon dioxide is a naturally occurring chemical compound composed of two oxygen atoms covalently bonded to a single carbon atom...
per year, the Suroît plant would have increased the provincial CO2 emissions by nearly 3%. Faced with a public uproar—a poll conducted in January 2004 found that ca. 65% Quebecers were opposed to it—the Jean Charest
Jean Charest
John James "Jean" Charest, PC, MNA is a Canadian politician who has been the 29th Premier of Quebec since 2003. He was leader of the federal Progressive Conservative Party of Canada from 1993 to 1998 and has been leader of the Quebec Liberal Party since 1998....
government abandoned the project in November 2004.
New hydroelectric developments
After a pause in the 1990s, Hydro-Québec restarted its construction activities in the early 2000s. Recent projects include the Sainte-Marguerite-3 (SM-3) station in 2004 (884 MW); Toulnustouc in 2005 (526 MW); Eastmain-1 in 2007 (480 MW); Peribonka (385 MW) and Mercier in 2008 (50.5 MW), Rapides-des-Cœurs (76 MW) and Chute-Allard (62 MW) in 2009.On February 7, 2002, Premier Bernard Landry
Bernard Landry
Bernard Landry, is a Quebec lawyer, teacher, politician, who served as the 28th Premier of Quebec , leader of the Opposition and leader of the Parti Québécois .-Personal:...
and Ted Moses
Ted Moses
Ted Moses, is a Cree politician from Eastmain, a small remote village in northern Quebec, Canada. He is a former Grand Chief of the Crees . In addition, Mr. Moses is a recipient of the title of "Officer" of the National Order of Quebec.-Profile:Ted Moses was born in Eastmain, in the James Bay...
, the head of the Grand Council of the Crees
Grand Council of the Crees
The Grand Council of the Crees , or the GCC, is the political body that represents the approximately 16,357 Crees or “Iyyu” / “Iynu” of the Eeyou Istchee territory in the James Bay and Nunavik regions of Northern Quebec, Canada...
, signed an agreement allowing the construction of new hydroelectric projects in northern Quebec. The Paix des Braves
Agreement Respecting a New Relationship Between the Cree Nation and the Government of Quebec
The Agreement Respecting a New Relationship Between the Cree Nation and the Government of Quebec is an agreement between the Government of Quebec, Canada, and the Grand Council of the Crees...
agreement clarified some provisions of the James Bay and Northern Quebec Agreement
James Bay and Northern Quebec Agreement
The James Bay And Northern Quebec Agreement was an Aboriginal land claim settlement, approved in 1975 by the Cree and Inuit of northern Quebec, and later slightly modified in 1978 by the Northeastern Quebec Agreement, through which Quebec's Naskapi First Nations joined the treaty...
, granted a C$4.5 billion compensation to the Cree Nation to be paid over a 50 year period, established a special wildlife and forestry regime, and gave assurances that Cree businesses and workers would get a share of the economic spin offs of future construction projects in the area.
In return, the Cree nation agreed not to challenge new construction projects in the area, such as the Eastmain-1 generating station—authorized by the government in March 1993—and the partial diversion of the Rupert River
Rupert River
The Rupert River is one of the largest rivers in Quebec, Canada. From its headwaters in Lake Mistassini, the largest natural lake in Québec, it flows west into Rupert Bay on James Bay. The Rupert drains an area of . There is some extremely large whitewater on the river, but paddlers can avoid...
to the Robert-Bourassa Reservoir
Robert-Bourassa Reservoir
The Robert-Bourassa Reservoir is a man-made lake in northern Quebec, Canada. It was created in the mid 1970s as part of the James Bay Project and provides the needed water for the Robert-Bourassa and La Grande-2-A generating stations. It has a maximum surface area of , and a surface elevation...
, subject to a number of provisions regarding the protection of the natural and social environment.
Construction on the first 480-MW plant started in the spring of 2002 with a road linking the project site to the Nemiscau substation 80 kilometres (49.7 mi) away. In addition to the plant, built on the left bank of the Eastmain River
Eastmain River
The Eastmain River is a river in northwestern Quebec which rises in north central Quebec and flows 800 km west to drain into James Bay. 'East Main' is an old name for the east side of James Bay. This river drains an area of 46,400 km²...
, the project required the construction of a 890 metres (2,919.9 ft) wide and 70 metres (229.7 ft) tall dam, 33 smaller dams and a spillway
Spillway
A spillway is a structure used to provide the controlled release of flows from a dam or levee into a downstream area, typically being the river that was dammed. In the UK they may be known as overflow channels. Spillways release floods so that the water does not overtop and damage or even destroy...
. The three generating units of Eastmain-1 entered into service in the spring of 2007. The plant has an annual output of 2.7 TWh.
These projects are part of Quebec's 2006–2015 energy strategy. The document calls for the development of 4,500 MW of new hydroelectric generation, including the development of the 1,550 MW Romaine River
Romaine River
The Romaine River is a river in the Côte-Nord region of the Canadian province of Quebec. It is long. It is not to be confused with the Olomane River that is to the east and had the same name for a long time....
complex, under construction since May 2009, the integration 4,000 MW of wind power
Wind power
Wind power is the conversion of wind energy into a useful form of energy, such as using wind turbines to make electricity, windmills for mechanical power, windpumps for water pumping or drainage, or sails to propel ships....
, increased electricity exports and the implementation of new energy efficiency
Efficient energy use
Efficient energy use, sometimes simply called energy efficiency, is the goal of efforts to reduce the amount of energy required to provide products and services. For example, insulating a home allows a building to use less heating and cooling energy to achieve and maintain a comfortable temperature...
programs.
2004 hydro tower bombing
In 2004, shortly before U.S. President George W. BushGeorge W. Bush
George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
's visit to Canada, a tower along the Quebec – New England Transmission circuit in the Eastern Townships near the Canada-U.S. border was damaged by explosive charges detonated at its base. The CBC
Canadian Broadcasting Corporation
The Canadian Broadcasting Corporation, commonly known as CBC and officially as CBC/Radio-Canada, is a Canadian crown corporation that serves as the national public radio and television broadcaster...
reported that a message, purportedly from the Résistance internationaliste and issued to the La Presse and Le Journal de Montréal
Le Journal de Montréal
Le Journal de Montréal is a daily tabloid newspaper published in Montreal, Quebec, Canada, and is the largest-circulation French-language newspaper in North America. Established by Pierre Péladeau in 1964, it is owned by the Sun Media division of Quebecor Media. It is also Canada's largest tabloid...
newspapers and the CKAC radio station
Radio station
Radio broadcasting is a one-way wireless transmission over radio waves intended to reach a wide audience. Stations can be linked in radio networks to broadcast a common radio format, either in broadcast syndication or simulcast or both...
, stated that the attack had been carried out to "denounce the 'pillaging' of Quebec's resources by the United States."
Failed expansion in the Maritime provinces
On October 29, 2009, the premierPremier
Premier is a title for the head of government in some countries and states.-Examples by country:In many nations, "premier" is used interchangeably with "prime minister"...
s of New Brunswick
New Brunswick
New Brunswick is one of Canada's three Maritime provinces and is the only province in the federation that is constitutionally bilingual . The provincial capital is Fredericton and Saint John is the most populous city. Greater Moncton is the largest Census Metropolitan Area...
, Shawn Graham
Shawn Graham
Shawn Michael Graham, MLA is a New Brunswick politician, who served as the 31st Premier of New Brunswick. He received a Bachelor of Physical Education Degree in 1991 and a Bachelor of Education Degree in 1993, he worked for New Brunswick's civil service before being elected to the Legislative...
, and Quebec, Jean Charest
Jean Charest
John James "Jean" Charest, PC, MNA is a Canadian politician who has been the 29th Premier of Quebec since 2003. He was leader of the federal Progressive Conservative Party of Canada from 1993 to 1998 and has been leader of the Quebec Liberal Party since 1998....
, signed a controversial memorandum of understanding
Memorandum of understanding
A memorandum of understanding is a document describing a bilateral or multilateral agreement between parties. It expresses a convergence of will between the parties, indicating an intended common line of action. It is often used in cases where parties either do not imply a legal commitment or in...
to transfer most assets of NB Power
NB Power
NB Power , formerly known as New Brunswick Power Corporation and New Brunswick Electric Power Commission is the primary and former monopoly electrical utility in the Canadian province of New Brunswick...
to Hydro-Québec. The C$4.75 billion agreement would have transferred most generation, transmission and distribution assets of the New Brunswick Crown corporation to a subsidiary of the Quebec utility. The deal also included provisions to reduce industrial power rates to the levels offered by Hydro-Québec for similar customers and a 5-year rate freeze on residential and commercial rates.
The deal proved hugely unpopular in New Brunswick and the two provinces revised the scope of the sale to the hydroelectric and nuclear power plants. Under the second agreement, transmission and distribution assets would have been kept under New Brunswick control and a long-term power purchase agreement with Hydro-Québec would have allowed NB Power to freeze residential and general customers rates for 5 years. However, the industrial rates rollback would have been smaller than under the original MOU. The second deal failed to quell the growing opposition to the plan and on March 24, 2010, Premier Graham announced the deal had fallen through, due to Hydro-Québec's concern over unanticipated risks and costs of some aspects such as dam security and water levels.
Corporate structure
Like its counterparts in the North American utility industry, Hydro-Québec was reorganized in the late 1990s to comply with electricity deregulationDeregulation
Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces.Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces.Deregulation is the removal or...
in the United States. While still a vertically integrated
Vertical integration
In microeconomics and management, the term vertical integration describes a style of management control. Vertically integrated companies in a supply chain are united through a common owner. Usually each member of the supply chain produces a different product or service, and the products combine to...
company, Hydro-Québec has created separate business units dealing with the generation
Electricity generation
Electricity generation is the process of generating electric energy from other forms of energy.The fundamental principles of electricity generation were discovered during the 1820s and early 1830s by the British scientist Michael Faraday...
, transmission
Electric power transmission
Electric-power transmission is the bulk transfer of electrical energy, from generating power plants to Electrical substations located near demand centers...
and distribution
Electricity distribution
File:Electricity grid simple- North America.svg|thumb|380px|right|Simplified diagram of AC electricity distribution from generation stations to consumers...
aspects of the business.
The transmission division, TransÉnergie
Hydro-Québec's electricity transmission system
Hydro-Québec's electricity transmission system is an expansive, international power transmission system located in Quebec, Canada with extensions into the Northeastern United States...
, was the first to be spun off in 1997, in response to the U.S. Federal Energy Regulatory Commission
Federal Energy Regulatory Commission
The Federal Energy Regulatory Commission is the United States federal agency with jurisdiction over interstate electricity sales, wholesale electric rates, hydroelectric licensing, natural gas pricing, and oil pipeline rates...
's publication of Order 888. The restructuring was completed in the year 2000 with the adoption of Bill 116, which amended the Act respecting the Régie de l'énergie, to enact the functional separation of Hydro-Québec's various business units.
This functional separation and the creation of a so-called "heritage pool" of electricity echoed a recommendation of a Merrill Lynch
Merrill Lynch
Merrill Lynch is the wealth management division of Bank of America. With over 15,000 financial advisors and $2.2 trillion in client assets it is the world's largest brokerage. Formerly known as Merrill Lynch & Co., Inc., prior to 2009 the firm was publicly owned and traded on the New York...
study commissioned by the Lucien Bouchard
Lucien Bouchard
Lucien Bouchard, is a Canadian lawyer, diplomat, politician and former Minister of the Environment of the Canadian Federal Government. He was the Leader of Opposition in the Canadian House of Commons from 1993 to 1996, and the 27th Premier of Quebec from January 29, 1996 to March 8, 2001...
government. The January 2000 report was aimed at finding a way to deregulate the electricity market in a way that was consistent with continental trends while maintaining the "Quebec social pact"; namely low, uniform and stable rates across the province, "particularly in the residential sector".
Legislation passed in 2000 commits the generation division, Hydro-Québec Production, to provide the distribution division, Hydro-Québec Distribution, a yearly heritage pool of up to 165 TWh of energy plus ancillary services—including an extra 13.9 TWh for losses and a guaranteed peak capacity of 34,342 MW—at a set price of 2.79¢ per kWh. Order in council 1277-2001 specifies quantities to be delivered for each of the 8,760 hourly intervals, which vary from 11,420 to 34,342 MW.
Hydro-Québec Distribution has to buy the remainder of the power and energy it needs—approximately 8.2 TWh in 2007 — by calling for tenders for long-term contracts open to all suppliers, including Hydro-Québec Production, or targeted towards suppliers of a particular energy source, like wind, gas power, biomass or small hydro. For instance, Hydro-Québec Distribution launched calls for tenders in 2003 and 2005, for 1,000 and 2,000 MW of wind power respectively. Early deliveries started in 2006 and the 23 wind farm
Wind farm
A wind farm is a group of wind turbines in the same location used to produce electric power. A large wind farm may consist of several hundred individual wind turbines, and cover an extended area of hundreds of square miles, but the land between the turbines may be used for agricultural or other...
s under contract should be completely on-line by December 2015.
The TransÉnergie and distribution divisions remain regulated by the Régie de l'énergie du Québec (Quebec energy board), an administrative tribunal
Administrative law
Administrative law is the body of law that governs the activities of administrative agencies of government. Government agency action can include rulemaking, adjudication, or the enforcement of a specific regulatory agenda. Administrative law is considered a branch of public law...
established to set retail rates for electricity and natural gas for residential, commercial and industrial service in the province based on a cost-of-service approach. The Régie also has extended powers, including approval authority over every transmission and distribution-related capital expenditure project exceeding C$10 million; approval of the terms of service and of long-term supply contracts; dealing with customer complaints; and the setting and enforcement of safety and reliability standards for the electric grid.
The Generation division, Hydro-Québec Production is not subject to regulation by the Régie. However, it must still submit every new construction project to a full environmental impact process, including the release of extensive environmental studies. The release of the studies are followed by a public hearing process conducted by the Bureau d'audiences publiques sur l'environnement.
Hydro-Québec employed 23,659 people in 2009, including 2,060 engineers, making the company the largest employer of engineers in Quebec.
Financial results
| 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | 2000 | 1999 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | |||||||||||
| Net income | |||||||||||
| Dividends declared | |||||||||||
| Total assets | |||||||||||
| Long-term debt | |||||||||||
| Equity |
For the year ending on December 31, 2009, Hydro-Québec posted net earnings of C$3.035 billion, down 3.0% over the previous year, despite adverse economic conditions. Revenue
Revenue
In business, revenue is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, such as the United Kingdom, revenue is referred to as turnover....
declined 3.4% in 2009 to C$12.334 billion, while expenditure
Cost
In production, research, retail, and accounting, a cost is the value of money that has been used up to produce something, and hence is not available for use anymore. In business, the cost may be one of acquisition, in which case the amount of money expended to acquire it is counted as cost. In this...
s amounted to C$6.9 billion, down by C$360 million from 2008, mainly due to lower fuel and electricity purchases and the gradual phaseout of Quebec's capital tax.
The company has assets of C$68.978 billion, C$57.760 billion of which are tangible assets. Its long-term debt stood at C$38.002 billion, and the company reported a capitalization rate of 37.0% in 2009. Bond
Bond (finance)
In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...
s issued by Hydro-Québec are backed
Government debt
Government debt is money owed by a central government. In the US, "government debt" may also refer to the debt of a municipal or local government...
by the Quebec government. On December 31, 2009, long-term
Long-run
In macroeconomics, the long run is the conceptual time period in which there are no fixed factors of production as to changing the output level by changing the capital stock or by entering or leaving an industry. The long run contrasts with the short run, in which some factors are variable and...
securities
Security (finance)
A security is generally a fungible, negotiable financial instrument representing financial value. Securities are broadly categorized into:* debt securities ,* equity securities, e.g., common stocks; and,...
of Hydro-Québec were rated Aa2 stable by Moody's
Moody's
Moody's Corporation is the holding company for Moody's Analytics and Moody's Investors Service, a credit rating agency which performs international financial research and analysis on commercial and government entities. The company also ranks the credit-worthiness of borrowers using a standardized...
, AA- positive by Fitch Ratings and A+ by Standard & Poor's
Standard & Poor's
Standard & Poor's is a United States-based financial services company. It is a division of The McGraw-Hill Companies that publishes financial research and analysis on stocks and bonds. It is well known for its stock-market indices, the US-based S&P 500, the Australian S&P/ASX 200, the Canadian...
.
In 2009, Hydro-Québec paid a C$2.168 billion dividend
Dividend
Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business , or it can be distributed to...
to its sole shareholder, the Government of Quebec
Government of Quebec
The Government of Quebec refers to the provincial government of the province of Quebec. Its powers and structure are set out in the Constitution Act, 1867....
. Between 2005 and 2009, the company paid a total of C$10 billion in dividends.
Privatization debate
In 1981, the Parti QuébécoisParti Québécois
The Parti Québécois is a centre-left political party that advocates national sovereignty for the province of Quebec and secession from Canada. The Party traditionally has support from the labour movement. Unlike many other social-democratic parties, its ties with the labour movement are informal...
government redefined Hydro-Québec's mission by modifying the terms of the social pact of 1944. The government issued itself 43,741,090 shares worth C$100 each, and the amended statute stated that Hydro-Québec would now pay up to 75% of its net earnings in dividends. This amendment to the Hydro-Québec Act started an episodic debate on whether Hydro-Québec should be fully or partially privatized. In recent years, economist Marcel Boyer and businessman Claude Garcia—both associated with the conservative think tank The Montreal Economic Institute—have often raised the issue, claiming that the company could be better managed by the private sector and that the proceeds from a sale would lower public debt
Government debt
Government debt is money owed by a central government. In the US, "government debt" may also refer to the debt of a municipal or local government...
.
Without going as far as Boyer and Garcia, Mario Dumont
Mario Dumont
Mario Dumont is a television personality and former politician in the province of Quebec. He was a Member of the National Assembly of Quebec , and the leader of the Action démocratique du Québec , from 1994 to 2009...
, the head of the Action démocratique du Québec
Action démocratique du Québec
The Action démocratique du Québec, commonly referred to as the ADQ is a centre-right political party in Quebec, Canada. On the sovereignty question, it defines itself as autonomist, and has support from both soft nationalists and federalists....
, briefly discussed the possibility of selling a minority stake of Hydro-Québec during the 2008 election campaign. A Léger Marketing
Léger Marketing
Leger Marketing is the largest solely Canadian owned polling and market research firm in Canada with 650 employees, including 103 professionals. Leger Marketing provides access to Canadian and American markets...
poll conducted in November 2008 found that a majority of Quebec respondents (53%) were opposed to his proposal to sell 7.5% of the company's equity
Equity (finance)
In accounting and finance, equity is the residual claim or interest of the most junior class of investors in assets, after all liabilities are paid. If liability exceeds assets, negative equity exists...
to Quebec citizens and businesses, while 38% were in favor.
Commenting on the issue on Guy A. Lepage
Guy A. Lepage
Guy A. Lepage is a Canadian comedian turned producer.-Career:Lepage was one of the five founding members of the Quebec comedy group Rock et Belles Oreilles , and remained with the group from 1981 to 1995.Lepage became a media mogul and...
's talk show
Talk show
A talk show or chat show is a television program or radio program where one person discuss various topics put forth by a talk show host....
, former PQ Premier Jacques Parizeau estimated that such an idea would be quite unpopular in public opinion, adding that Hydro-Québec is often seen by Quebecers as a national success story and a source of pride. This could explain why various privatization proposals in the past have received little public attention. The liberal government has repeatedly stated that Hydro-Québec is not for sale.
Like many other economists, Yvan Allaire, from Montreal's Hautes études commerciales
HEC Montréal
HEC Montréal , is the independent affiliated business school of the Université de Montréal, and the oldest management School in Canada. It holds accreditations from AACSB, EQUIS and AMBA, one of three schools in North America to hold triple accreditation in management education...
business school, advocate increased electricity rates as a way to increase the government's annual dividend without resorting to privatization. Others, like columnist Bertrand Tremblay of Saguenay
Saguenay, Quebec
Saguenay is a city in the Saguenay-Lac-Saint-Jean region of Quebec, Canada, on the Saguenay River, about north of Quebec City....
's Le Quotidien, claim that privatization would signal a drift to the days when Quebec's natural resources were sold in bulk to foreigners at ridiculously low prices. "For too long, Tremblay writes, Quebec was somewhat of a banana republic, almost giving away its forestry and water resources. In turn, those foreign interests were exporting our jobs associated with the development of our natural resources with the complicity of local vultures".
Left-wing academics, such as UQAM
Université du Québec à Montréal
The Université du Québec à Montréal is one of four universities in Montreal, Quebec, Canada.-Basic facts:The UQAM is the largest constituent element of the Université du Québec , a public university system with other branches in Gatineau , Rimouski, Rouyn-Noranda, Quebec City, Chicoutimi, and...
's Léo-Paul Lauzon and Gabriel Sainte-Marie, have claimed that privatization would be done at the expense of residential customers, who would pay much higher rates. They say that privatization would also be a betrayal of the social pact between the people and its government, and that the province would be short-selling itself by divesting of a choice asset for a minimal short term gain.
Power generation
Hydropower
Hydropower, hydraulic power, hydrokinetic power or water power is power that is derived from the force or energy of falling water, which may be harnessed for useful purposes. Since ancient times, hydropower has been used for irrigation and the operation of various mechanical devices, such as...
plants—including 12 of over a 1,000 MW capacity—and 26 major reservoirs. These facilities are located in 13 of Quebec's 430 watersheds
Drainage basin
A drainage basin is an extent or an area of land where surface water from rain and melting snow or ice converges to a single point, usually the exit of the basin, where the waters join another waterbody, such as a river, lake, reservoir, estuary, wetland, sea, or ocean...
, including the Saint Lawrence
Saint Lawrence River
The Saint Lawrence is a large river flowing approximately from southwest to northeast in the middle latitudes of North America, connecting the Great Lakes with the Atlantic Ocean. It is the primary drainage conveyor of the Great Lakes Basin...
, Betsiamites
Betsiamites River
The Betsiamites is a river of Côte-Nord, Quebec, Canada, which joins the Saint Lawrence River.The Pipmuacan Reservoir, impounded by the Bersimis-1 Dam, is roughly halfway down its course.-Hydro-electric facilities:...
, La Grande
La Grande River
La Grande River is a river in northwestern Quebec, Canada, which rises in the highlands of north central Quebec and flows roughly west to drain into James Bay. It is the second largest river in Quebec, surpassed only by the Saint Lawrence River....
, Manicouagan
Manicouagan River
The Manicouagan River is a river in Côte-Nord region of Quebec, Canada. The river originates at the Daniel-Johnson Dam of the Manicouagan Reservoir and flows approximately south, emptying into the Saint Lawrence River near Baie-Comeau...
, Ottawa
Ottawa River
The Ottawa River is a river in the Canadian provinces of Ontario and Quebec. For most of its length, it now defines the border between these two provinces.-Geography:...
, Outardes
Rivière aux Outardes
The Rivière aux Outardes or Outardes River is a river in Quebec, Canada. The river originates in the Otish Mountains, and flows in a southerly direction for its entire course. It passes through Lake Plétipi and Burnt Islands Lake , and widens about midway to form the large Outardes 4 Reservoir...
, and Saint-Maurice
Saint-Maurice River
The Saint-Maurice River is a river in central Quebec which flows south from Gouin Reservoir to empty into the Saint Lawrence River at Trois-Rivières, Quebec. The river is 563 km in length and has a drainage basin of 43,300 km² ....
rivers. These plants provide the bulk of electricity generated and sold by the company.
Non-hydro plants include the baseload
Base load power plant
Baseload is the minimum amount of power that a utility or distribution company must make available to its customers, or the amount of power required to meet minimum demands based on reasonable expectations of customer requirements...
675-MW gross Gentilly nuclear generating station
Gentilly Nuclear Generating Station
Gentilly Nuclear Generating Station is a Canadian nuclear power station located near Bécancour, Quebec. The facility derives its name from the Gentilly suburb of the city of Bécancour, in which it is located...
, a CANDU-design reactor
CANDU reactor
The CANDU reactor is a Canadian-invented, pressurized heavy water reactor. The acronym refers to its deuterium-oxide moderator and its use of uranium fuel...
, one thermal
Thermal power station
A thermal power station is a power plant in which the prime mover is steam driven. Water is heated, turns into steam and spins a steam turbine which drives an electrical generator. After it passes through the turbine, the steam is condensed in a condenser and recycled to where it was heated; this...
and three gas turbine
Gas turbine
A gas turbine, also called a combustion turbine, is a type of internal combustion engine. It has an upstream rotating compressor coupled to a downstream turbine, and a combustion chamber in-between....
peaker plants
Peaking power plant
Peaking power plants, also known as peaker plants, and occasionally just "peakers," are power plants that generally run only when there is a high demand, known as peak demand, for electricity.-Peak hours:...
and an experimental 2-MW wind farm, for a total installed capacity of 36,810 MW in 2009. Hydro-Québec's average generation cost was 2.0 cents per kWh in 2009.
The company also purchases the bulk of the output of the 5,428-MW Churchill Falls generating station in Labrador, under a long term contract expiring in 2041. In 2009, Hydro-Québec bought the 60% stake owned by AbitibiBowater
AbitibiBowater
Resolute Forest Products , formerly known as AbitibiBowater Inc. is a pulp and paper manufacturer headquartered in Montreal, Quebec, Canada, formed by the merger of Bowater and Abitibi-Consolidated, which was announced 29 January 2007...
in the McCormick plant
McCormick Dam
The McCormick Dam is a dam and power station built on the Manicouagan river by the Quebec & Ontario Paper Company and the Canadian British Aluminium Company east of Baie-Comeau, Quebec, Canada. It is named after colonel Robert R...
(335 MW), located at the mouth of the Manicouagan River near Baie-Comeau, for C$616 million.
| Plant | River | Capacity (MW) |
|---|---|---|
| Robert-Bourassa Robert-Bourassa generating station The Robert-Bourassa generating station is a hydroelectric power station on the La Grande River that is part of Hydro-Québec's James Bay Project in Canada... |
La Grande | |
| La Grande-4 La Grande-4 generating station The La Grande-4 is a hydroelectric generating station on the La Grande River that is part of Hydro-Québec's James Bay Project. The station can generate 2,779 MW and was commissioned in 1984–1986... |
La Grande | |
| La Grande-3 La Grande-3 generating station The La Grande-3 or LG-3 is a hydroelectric dam on the La Grande River in northern Quebec, part of Hydro-Québec's James Bay Project. The station can generate 2,418 MW and was commissioned in 1982-1984. It generates electricity through the reservoir and dam system. The dam and reservoir both are... |
La Grande | |
| La Grande-2-A La Grande-2-A generating station The La Grande-2-A is a hydroelectric power station on the La Grande River that is part of Hydro-Québec's James Bay Project. The station can generate 2,106 MW and was commissioned in 1991–1992. Together with the adjacent Robert-Bourassa generating station, it uses the reservoir and dam system... |
La Grande | |
| Beauharnois Beauharnois Hydroelectric Power Station The Beauharnois Hydroelectric Power Station is a run-of-the-river hydroelectric power station along the Saint Lawrence Seaway on the Saint Lawrence River, in Quebec, Canada. The station was built in three phases, and comprises 38 turbines, capable of generating up to of electrical power... |
Saint Lawrence | |
| Manic-5 Daniel-Johnson Dam The Daniel-Johnson Dam , formerly known as Manic-5, is a multiple arch buttress dam on the Manicouagan River which creates Manicouagan Reservoir. The dam is composed of 14 buttresses and 13 arches and is north of Baie-Comeau in Quebec, Canada... |
Manicouagan | |
| La Grande-1 La Grande-1 generating station The La Grande-1 is a hydroelectric power station on the La Grande River that is part of Hydro-Québec's James Bay Project. The station can generate 1,436 MW and was commissioned in 1994–1995... |
La Grande | |
| René-Lévesque | Manicouagan | |
| Bersimis-1 Bersimis-1 generating station The Bersimis-1 generating station is a dam and a hydroelectric power station built by Hydro-Québec on the Betsiamites River, in Lac-au-Brochet, north of the town of Forestville, Quebec... |
Betsiamites | |
| Jean-Lesage | Manicouagan | |
| Manic-5-PA Daniel-Johnson Dam The Daniel-Johnson Dam , formerly known as Manic-5, is a multiple arch buttress dam on the Manicouagan River which creates Manicouagan Reservoir. The dam is composed of 14 buttresses and 13 arches and is north of Baie-Comeau in Quebec, Canada... |
Manicouagan | |
| Outardes-3 Outardes-3 Outardes-3 is a hydroelectric power station and dam on the Outardes River northwest of Baie-Comeau, Quebec, Canada. The power station was commissioned in 1969 and is run-of-the-river.... |
aux Outardes | |
| Others (46 hydro, 1 nuclear, 4 thermal, 1 wind farm) | ||
In 2008, the energy supply sold by Hydro-Québec to its customers came primarily from hydroelectric sources (95.8%). Emissions of carbon dioxide (7,263 tonnes/TWh), sulfur dioxide
Sulfur dioxide
Sulfur dioxide is the chemical compound with the formula . It is released by volcanoes and in various industrial processes. Since coal and petroleum often contain sulfur compounds, their combustion generates sulfur dioxide unless the sulfur compounds are removed before burning the fuel...
(19 tonnes/TWh) and nitrogen oxide
Nitrogen oxide
Nitrogen oxide can refer to a binary compound of oxygen and nitrogen, or a mixture of such compounds:* Nitric oxide, also known as nitrogen monoxide, , nitrogen oxide* Nitrogen dioxide , nitrogen oxide...
s (29 tonnes/TWh) were between 20 and 43 times lower than the industry average in northeastern North America. Imported electricity bought in neighboring markets was responsible for almost all of these emissions.
Transmission system
Québec Interconnection
The Québec Interconnection is one of the three minor alternating current power grids in North America. The other two minor interconnections are the Texas Interconnection and the Alaska Interconnection...
of the North American Electric Reliability Corporation system, and is part of the Northeast Power Coordinating Council
Northeast Power Coordinating Council
The Northeast Power Coordinating Council was formed January 19, 1966, as a successor to the Canada–United States Eastern Interconnection . NPCC is one of nine regional electric reliability councils under North American Electric Reliability Corporation authority. NERC and the regional...
(NPCC). TransÉnergie manages the flow of energy on the Quebec network and ensures non-discriminatory access to all participants involved in the wholesale market. The non-discriminatory access policy allows a company such as Nalcor
Newfoundland and Labrador Hydro
Newfoundland and Labrador Hydro is a provincial Crown corporation that generates and delivers electricity for Newfoundland and Labrador, Quebec, and the north-eastern areas of the United States. It also delivers voice and data services to customers in some areas...
to sell some of its share of power from Churchill Falls on the open market in the State of New York using TransÉnergie's network, upon payment of a transmission fee.
In recent years, TransÉnergie's Contrôle des mouvements d'énergie (CMÉ) unit has been acting as the reliability coordinator of the bulk electricity network for Quebec as a whole, under a bilateral agreement between the Régie de l'énergie du Québec and the Federal Energy Regulatory Commission
Federal Energy Regulatory Commission
The Federal Energy Regulatory Commission is the United States federal agency with jurisdiction over interstate electricity sales, wholesale electric rates, hydroelectric licensing, natural gas pricing, and oil pipeline rates...
of the United States.
TransÉnergie's high voltage network stretches over 33244 km (20,656.9 mi), including 11422 km (7,097.3 mi) of , and a network of 515 substations. It is connected to neighboring Canadian provinces and the United States by 18 ties, with a maximum reception capacity of 9,575 MWThis number includes the 5,200-MW Churchill Falls lines, which have no export capability. and a maximum transmission capacity of 7,100 MW.
Interconnections
The TransÉnergie's network operates asynchronously from that of its neighbors on the Eastern InterconnectionEastern Interconnection
The Eastern Interconnection is one of the two major alternating current power grids in North America. The other major interconnection is the Western Interconnection...
. Although Quebec uses the same 60 hertz
Hertz
The hertz is the SI unit of frequency defined as the number of cycles per second of a periodic phenomenon. One of its most common uses is the description of the sine wave, particularly those used in radio and audio applications....
frequency as the rest of North America, its grid does not use the same phase as surrounding networks. TransÉnergie mainly relies on back to back HVDC converters to export or import electricity from other jurisdictions.
This feature of the Quebec network allowed Hydro-Québec to remain unscathed during the Northeast Blackout of August 14, 2003
Northeast Blackout of 2003
The Northeast blackout of 2003 was a widespread power outage that occurred throughout parts of the Northeastern and Midwestern United States and Ontario, Canada on Thursday, August 14, 2003, just before 4:10 p.m....
, with the exception of 5 hydro plants on the Ottawa River
Ottawa River
The Ottawa River is a river in the Canadian provinces of Ontario and Quebec. For most of its length, it now defines the border between these two provinces.-Geography:...
directly connected to the Ontario grid at the time. A new 1250-MW back to back HVDC tie has been commissioned at the Outaouais substation, in L'Ange-Gardien
L'Ange-Gardien, Outaouais, Quebec
L'Ange-Gardien is a municipality in the Outaouais region of Quebec, Canada. It constitutes the eastern-most part of the Les Collines-de-l'Outaouais Regional County Municipality, north of the Buckingham Sector of the City of Gatineau.The municipality straddles both sides of the Du Lièvre River...
, near the Ontario
Ontario
Ontario is a province of Canada, located in east-central Canada. It is Canada's most populous province and second largest in total area. It is home to the nation's most populous city, Toronto, and the nation's capital, Ottawa....
border. The new interconnection has been online since 2009 and the 315 kV line will be fully operational in 2010.
One drawback of the TransÉnergie network involves the long distances separating the generation sites and the main consumer markets. For instance, the Radisson
Radisson, Quebec
Radisson is a small village situated near the Robert-Bourassa hydroelectric power station on the La Grande River in the James Bay region of Quebec...
substation links the James Bay project plants to the Nicolet station near Sainte-Eulalie
Sainte-Eulalie, Quebec
Sainte-Eulalie is a municipality in the Nicolet-Yamaska RCM in the Centre-du-Québec region of Quebec, Canada, situated at the crossroads of Autoroutes 55, 20 and 955...
, south of the Saint Lawrence, over 1200 kilometres (745.6 mi) away.
Investments
In 2009, TransÉnergie invested C$1.2 billion in capital expenditures, including C$493 million to expand its network.In addition to the new tie with Ontario, the company plans to build a new 1200-MW direct current link between the Des Cantons substation at Windsor, Quebec
Windsor, Quebec
Windsor is a town of 5,300 people, part of the Le Val-Saint-François Regional County Municipality in the Estrie region of Quebec, Canada, for which it is the seat....
in Quebec's Eastern Townships
Eastern Townships
The Eastern Townships is a tourist region and a former administrative region in south-eastern Quebec, lying between the former seigneuries south of the Saint Lawrence River and the United States border. Its northern boundary roughly followed Logan's Line, the geologic boundary between the flat,...
and Deerfield, New Hampshire
Deerfield, New Hampshire
Deerfield is a town in Rockingham County, New Hampshire, United States. The population was 4,280 at the 2010 census. Deerfield is home to the annual Deerfield Fair.- History :...
, with an HVDC converter terminal built at Franklin, New Hampshire
Franklin, New Hampshire
The median income for a household in the city was $34,613, and the median income for a family was $41,698. Males had a median income of $32,318 versus $25,062 for females. The per capita income for the city was $17,155...
. The US segment of the US$1.1 billion line, would be built by Northern Pass Transmission LLC, a partnership between Northeast Utilities
Northeast Utilities
Northeast Utilities is a publicly-traded, Fortune 500 energy company headquartered in Berlin, Connecticut, with several regulated subsidiaries offering retail electricity and natural gas service to more than 2.1 million customers in New England....
(75%) and NSTAR
NSTAR
NSTAR is a utility company that provides retail electricity and natural gas to 1.4 million customers in eastern and central Massachusetts, including the Boston urban area....
(25%). In order to go ahead, the project must receive regulatory approval in Quebec and the United States. The proposed transmission line could be in operation in 2015. According to Jim Robb, a senior executive from Northeast Utilities, New England
New England
New England is a region in the northeastern corner of the United States consisting of the six states of Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut...
could meet one third of its Regional Greenhouse Gas Initiative
Regional Greenhouse Gas Initiative
Regional Greenhouse Gas Initiative is a regional initiative by states and provinces in the Northeastern United States and Eastern Canada regions to reduce greenhouse gas emissions...
commitments with the hydropower coming through this new power line alone.
Distribution
Hydro-Québec Distribution is in charge of retail sales to most customers in Quebec. It operates a network of 111205 kilometres (69,099.8 mi) of medium and low voltageLow voltage
Low voltage when used as an electrical engineering term concerning an electricity supply grid or industrial use, broadly identifies safety considerations of the system based on the voltage used. The meaning of the term "low voltage" is somewhat different when used with regard to a more typical end...
lines. The division is the sole electric distributor across the province, with the exception of 9 municipal distribution networks — in Alma
Alma, Quebec
Alma is a town in the Canadian province of Quebec.-Geography:Alma is located on the southeast coast of Lac Saint-Jean where it flows into the Saguenay River, in the Saguenay–Lac-Saint-Jean region of Quebec, Canada, approximately 175 km north of Quebec City...
, Amos
Amos, Quebec
Amos is a ville in northwestern Quebec, Canada, on the Harricana River. It is the seat of Abitibi Regional County Municipality.Amos is the main city on the Harricana River, and the smallest of the three primary cities — after Rouyn-Noranda and Val-d'Or — in the Abitibi-Témiscamingue region of Quebec...
, Baie-Comeau, Coaticook
Coaticook, Quebec
Coaticook is a town in southeastern Quebec, Canada on the Coaticook River; it is the seat of the Coaticook Regional County Municipality. Its southern border is also the border with the United States-Communities:...
, Joliette, Magog
Magog, Quebec
Magog is a city in southeastern Quebec, Canada, about east of Montreal at the confluence of Lake Memphremagog--after which the city was named—with the Rivière aux Cerises and the Magog River...
, Saguenay
Saguenay, Quebec
Saguenay is a city in the Saguenay-Lac-Saint-Jean region of Quebec, Canada, on the Saguenay River, about north of Quebec City....
, Sherbrooke and Westmount
Westmount, Quebec
Westmount is a city on the Island of Montreal, an enclave of the city of Montreal, in southwestern Quebec, Canada; pop. 20,494; area 4.02 km²; population density of 5,092.56 inhabitants/km²....
—and the electric cooperative of Saint-Jean-Baptiste de Rouville
Saint-Jean-Baptiste, Quebec
Saint-Jean-Baptiste is a municipality in the Montérégie region of the Canadian province of Quebec. The population as of the Canada 2006 Census was 3,035...
.
Hydro-Québec Distribution buys most of its power from the 165-TWh heritage pool provided by Hydro-Québec Production at 2.79¢/kWh. The division usually purchases additional power by entering into long-term contracts after a public call for tenders. For shorter term needs, it also buys power from the neighboring systems at market prices. As a last resort, Hydro-Québec Production can also provide short-term relief. Supply contracts above and beyond the heritage pool must be approved by the Régie de l'énergie du Québec and their costs are passed on to customers.
The division signed one natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
cogeneration
Cogeneration
Cogeneration is the use of a heat engine or a power station to simultaneously generate both electricity and useful heat....
agreement for 507 MW in 2003, three forest biomass deals (47.5 MW) in 2004 and 2005, and ten contracts for wind power
Wind power
Wind power is the conversion of wind energy into a useful form of energy, such as using wind turbines to make electricity, windmills for mechanical power, windpumps for water pumping or drainage, or sails to propel ships....
(2,994 MW) in 2005 and 2008, all with private sector producers. It also signed two flexible contracts with Hydro-Québec Production (600 MW) in 2002.
Hydro-Québec Distribution is also responsible for the production of power in remote communities not connected to the main power grid. The division operates an off-grid hydroelectric dam serving communities on the Lower North Shore and 23 small diesel power plants in the Magdalen Islands
Magdalen Islands
The Magdalen Islands form a small archipelago in the Gulf of Saint Lawrence with a land area of . Though closer to Prince Edward Island and Nova Scotia, the islands form part of the Canadian province of Quebec....
, in Haute-Mauricie
Mauricie
Mauricie is a traditional and current administrative region of Quebec. La Mauricie National Park is contained within the region, making it a prime tourist location. The region has a land area of 35,855.22 km² and a 2006 census population of 258,928 residents...
and in Nunavik
Nunavik
Nunavik comprises the northern third of the province of Quebec, Canada. Covering a land area of 443,684.71 km² north of the 55th parallel, it is the homeland of the Inuit of Quebec...
.
Research and development
Hydro-Québec has made significant investments in research and development over the past 40 years. In addition to funding university research, the company is the only electric utility in North America to operate its own large scale research institute, L'Institut de recherche d'Hydro-Québec (IREQ). Established by Lionel BouletLionel Boulet
Lionel Boulet, OC, OQ was a Canadian engineer, academic, and utilities executive.Born in Quebec City, Boulet received a Bachelor of Arts degree in 1938 and a Bachelor of Science degree in electrical engineering in 1942 from Université Laval. He received a Master of Science degree in 1947 from the...
in 1967, the research center is located in Varennes
Varennes, Quebec
Varennes is an off-island suburb of Montreal, in southwestern Quebec, Canada on the Saint Lawrence River in the Regional County Municipality of Lajemmerais. The city is approximately 15 miles from Downtown Montreal. The population as of the Canada 2006 Census was 20,950...
, a suburb on the South Shore
South Shore (Montreal)
The South Shore is the general term for the suburbs of Montreal, Quebec located on the southern shore of the Saint Lawrence River opposite the Island of Montreal. The South Shore is located within the Quebec administrative region of Montérégie....
of Montreal
Montreal
Montreal is a city in Canada. It is the largest city in the province of Quebec, the second-largest city in Canada and the seventh largest in North America...
. IREQ operates on an annual research budget of approximately C$100 million and specializes in the areas of high voltage, mechanics
Mechanics
Mechanics is the branch of physics concerned with the behavior of physical bodies when subjected to forces or displacements, and the subsequent effects of the bodies on their environment....
and thermomechanics, network simulations and calibration.
Research conducted by scientists and engineers at IREQ has helped to extend the life of dams, improve water turbine
Water turbine
A water turbine is a rotary engine that takes energy from moving water.Water turbines were developed in the 19th century and were widely used for industrial power prior to electrical grids. Now they are mostly used for electric power generation. They harness a clean and renewable energy...
performance, automate network management and increase the transmission capacity of high voltage power lines.
Another research center, the Laboratoire des technologies de l'énergie (LTE) in Shawinigan, was opened in 1988 to adapt and develop new products while helping industrial customers improve their energy efficiency.
In the last 20 years, the institute has also conducted research and development
Research and development
The phrase research and development , according to the Organization for Economic Co-operation and Development, refers to "creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of...
work towards the electrification of ground transportation
Electric vehicle
An electric vehicle , also referred to as an electric drive vehicle, uses one or more electric motors or traction motors for propulsion...
. Current projects include battery
Battery (electricity)
An electrical battery is one or more electrochemical cells that convert stored chemical energy into electrical energy. Since the invention of the first battery in 1800 by Alessandro Volta and especially since the technically improved Daniell cell in 1836, batteries have become a common power...
materials, including innovative work on lithium iron phosphate
Lithium iron phosphate
Lithium iron phosphate , also known as LFP, is a compound used in lithium iron phosphate batteries . It is targeted for use in power tools and electric vehicles...
and nano-titanate, improved electric drive train
Powertrain
In a motor vehicle, the term powertrain or powerplant refers to the group of components that generate power and deliver it to the road surface, water, or air. This includes the engine, transmission, drive shafts, differentials, and the final drive...
s and the impacts of the large scale deployment of electric vehicles on the power grid. Projects focus on technologies to increase range, improve performance in cold weather and reduce charging time
Rechargeable battery
A rechargeable battery or storage battery is a group of one or more electrochemical cells. They are known as secondary cells because their electrochemical reactions are electrically reversible. Rechargeable batteries come in many different shapes and sizes, ranging anything from a button cell to...
.
Hydro-Québec has been criticized for not having taken advantage of some of its innovations. An electric wheel motor concept that struck a chord with Quebecers, first prototyped in 1994 by Pierre Couture, an engineer and physicist
Physicist
A physicist is a scientist who studies or practices physics. Physicists study a wide range of physical phenomena in many branches of physics spanning all length scales: from sub-atomic particles of which all ordinary matter is made to the behavior of the material Universe as a whole...
working at IREQ, is one of these. The heir to the Couture wheel motor is now marketed by TM4 Electrodynamic Systems, a spin-off established in 1998 that has made deals with France's Dassault and Heuliez
Heuliez
Heuliez is a French company that works as a production and design unit for various automakers. It specializes in producing short series for niche markets, such as convertibles or station-wagons....
to develop an electric car, the Cleanova
Cleanova
Cleanova are a set of plug-in hybrid vehicles by the Société de Véhicules Electriques , a joint venture between Dassault and Heuliez. Cleanova II is based on Renault Kangoo....
, of which prototypes were built in 2006. Hydro-Québec announced in early 2009 at the Montreal International Auto Show
Montreal International Auto Show
The Montreal International Auto Show is an annual auto show held in for 10 days in mid-to-late January in Montreal, Quebec, Canada. It usually takes place at the Palais des congrès de Montréal....
that its engine had been chosen by Tata Motors
Tata Motors
Tata Motors Limited is an Indian multinational automotive corporation headquartered in Mumbai, India. Part of the Tata Group, it was formerly known as TELCO...
to equip a demonstration version of its Indica
Tata Indica
The Tata Indica is a hatchback automobile range manufactured by Tata Motors of India. It is the first passenger car from Tata Motors and is also considered India's first indigenously developed passenger car. , more than 910,000 Indicas were produced. The annual sales of Indica has been as high as ...
model, which will be road tested in Norway
Norway
Norway , officially the Kingdom of Norway, is a Nordic unitary constitutional monarchy whose territory comprises the western portion of the Scandinavian Peninsula, Jan Mayen, and the Arctic archipelago of Svalbard and Bouvet Island. Norway has a total area of and a population of about 4.9 million...
.
Construction
The Hydro-Québec Équipement division acts as the company's main contractor on major construction sites, with the exception of work conducted on the territory covered by the James Bay and Northern Quebec AgreementJames Bay and Northern Quebec Agreement
The James Bay And Northern Quebec Agreement was an Aboriginal land claim settlement, approved in 1975 by the Cree and Inuit of northern Quebec, and later slightly modified in 1978 by the Northeastern Quebec Agreement, through which Quebec's Naskapi First Nations joined the treaty...
, which are assigned to the Société d'énergie de la Baie James
James Bay Energy
The Société d'énergie de la Baie James is the company in charge of building the hydroelectric development known as the James Bay Project in northern Quebec...
subsidiary.
In the James Bay area, two new plants, Eastmain-1-A (768 MW) and Sarcelle (125 MW), and the partial diversion of the Rupert River
Rupert River
The Rupert River is one of the largest rivers in Quebec, Canada. From its headwaters in Lake Mistassini, the largest natural lake in Québec, it flows west into Rupert Bay on James Bay. The Rupert drains an area of . There is some extremely large whitewater on the river, but paddlers can avoid...
to the Robert-Bourassa Reservoir
Robert-Bourassa Reservoir
The Robert-Bourassa Reservoir is a man-made lake in northern Quebec, Canada. It was created in the mid 1970s as part of the James Bay Project and provides the needed water for the Robert-Bourassa and La Grande-2-A generating stations. It has a maximum surface area of , and a surface elevation...
, are under construction and should be operating at full power by 2011.
The construction of a complex of four hydroelectric generating stations on the Romaine River began on May 13, 2009. The plants are scheduled to be built and commissioned between 2014 and 2020.
In his March 2009 inaugural speech, Quebec Premier Jean Charest
Jean Charest
John James "Jean" Charest, PC, MNA is a Canadian politician who has been the 29th Premier of Quebec since 2003. He was leader of the federal Progressive Conservative Party of Canada from 1993 to 1998 and has been leader of the Quebec Liberal Party since 1998....
announced that his government intends to further develop the province's hydroelectric potential. The call for further development of hydroelectric and other renewable generating capacity has been implemented in the company's 2009-2013 strategic plan, released on July 30, 2009. Hydro-Québec plans capacity upgrades at the Jean-Lesage (120 MW) and René-Lévesque (210 MW) stations and a third unit at the SM-3 plant (440 MW). The company will also conduct technical and environmental studies and undertake consultations with local communities to build new facilities on the Petit-Mécatina (1,200 MW) and Magpie (850 MW) rivers on the North Shore, and revive the Tabaret project (132 MW) in the Abitibi-Témiscamingue
Abitibi-Témiscamingue
Abitibi-Témiscamingue is a region located in western Quebec, Canada, along the border with Ontario. It became part of the province in 1898. It has a land area of 57,674.26 km2 . As of the 2006 census, the population of the region was 143,872 inhabitants.-History:The land was first occupied...
region, in western Quebec.
International ventures
Hydro-Québec first forays outside its borders began in 1978. A new subsidiary, Hydro-Québec International, was created to market the company's know-how abroad in the fields of distribution, generation and transmission of electricity. The new venture leveraged the existing pool of expertise in the parent company.During the next 25 years, Hydro-Québec was particularly active abroad with investments in electricity transmission networks and generation: Transelec in Chile
Chile
Chile ,officially the Republic of Chile , is a country in South America occupying a long, narrow coastal strip between the Andes mountains to the east and the Pacific Ocean to the west. It borders Peru to the north, Bolivia to the northeast, Argentina to the east, and the Drake Passage in the far...
, the Cross Sound Cable
Cross Sound Cable
The Cross Sound Cable is a long bipolar high-voltage direct current submarine power cable between New Haven, Connecticut, USA and Shoreham, Long Island New York , USA. The Cross Sound Cable can transmit a maximum power of 330 MW at a voltage of +/- 150 kV DC. The maximum current for Cross Sound...
in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, the Consorcio Transmantaro in Peru
Peru
Peru , officially the Republic of Peru , is a country in western South America. It is bordered on the north by Ecuador and Colombia, on the east by Brazil, on the southeast by Bolivia, on the south by Chile, and on the west by the Pacific Ocean....
, Hidroelectrica Rio Lajas in Costa Rica
Costa Rica
Costa Rica , officially the Republic of Costa Rica is a multilingual, multiethnic and multicultural country in Central America, bordered by Nicaragua to the north, Panama to the southeast, the Pacific Ocean to the west and the Caribbean Sea to the east....
, Murraylink
Murraylink
Murraylink is an Australian high voltage direct current electricity transmission link between Berri in South Australia and Red Cliffs in Victoria, connecting the two state electricity grids...
in Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
and the Fortuna generating station in Panamá
Panama
Panama , officially the Republic of Panama , is the southernmost country of Central America. Situated on the isthmus connecting North and South America, it is bordered by Costa Rica to the northwest, Colombia to the southeast, the Caribbean Sea to the north and the Pacific Ocean to the south. The...
.
It briefly held a 17% share in SENELEC, Senegal
Senegal
Senegal , officially the Republic of Senegal , is a country in western Africa. It owes its name to the Sénégal River that borders it to the east and north...
's electric utility, when the Senegalese government decided to sell part of the company to a consortium led by the French company Elyo, a subsidiary of Group Suez Lyonnaise des Eaux, in 1999. The transaction was canceled in 2000 following the election of president Abdoulaye Wade
Abdoulaye Wade
Abdoulaye Wade is the third and current President of Senegal, in office since 2000. He is also the Secretary-General of the Senegalese Democratic Party and has led the party since it was founded in 1974...
.
Also in 1999, Hydro-Québec International acquired a 20% stake in the Meiya Power Company in China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
for C$83 million. The company held this participation until July 2004. The company's expertise was sought by several hydroelectric developers throughout the world, including the Three Gorges Dam
Three Gorges Dam
The Three Gorges Dam is a hydroelectric dam that spans the Yangtze River by the town of Sandouping, located in the Yiling District of Yichang, in Hubei province, China...
, where Hydro's employees trained Chinese engineers in the fields of management, finance and dams.
Hydro-Québec gradually withdrew from the international business between 2003 and 2006, and sold off all of its foreign investments for a profit. Proceeds from these sales were paid to the government's Generations Fund, a trust fund set up by the province to alleviate the impact of public debt on future generations.
Environment
In addition, hydroelectric facilities transform the human environment. They create new obstacles to navigation, flood traditional hunting and trapping grounds, force people to change their eating habits due to the elevated mercury content of some species of fish, destroy invaluable artifacts that would help trace the human presence on the territory, and disrupt the society and culture of Aboriginal people living near the facilities.
Since the early 1970s, Hydro-Québec has been aware of the environmental externalities of its operations. The adoption of a Quebec statute on environmental quality in 1972, the cancellation of Champigny Project, a planned pumped storage plant in the Jacques-Cartier River
Jacques-Cartier River
The Jacques-Cartier River is a river in the province of Quebec, Canada. It is 161 km long and its source is Jacques-Cartier Lake in Laurentides Wildlife Reserve, and flows in a predominantly southern direction before ending in the Saint Lawrence River at Donnacona, about 30 km upstream...
valley in 1973, and the James Bay negotiations leading to the James Bay and Northern Quebec Agreement
James Bay and Northern Quebec Agreement
The James Bay And Northern Quebec Agreement was an Aboriginal land claim settlement, approved in 1975 by the Cree and Inuit of northern Quebec, and later slightly modified in 1978 by the Northeastern Quebec Agreement, through which Quebec's Naskapi First Nations joined the treaty...
in 1975, forced the company to reconsider its practices.
To address environmental concerns, Hydro-Québec established a environmental protection committee in 1970 and an Environmental Management unit in September 1973. Its mandate is to study and measure the environmental impacts of the company, prepare impact assessment, and develop mitigation strategies for new and existing facilities, while conducting research projects in these areas, in cooperation with the scientific community.
Impacts on the natural environment
In 1978, the company setup a network of monitoring stations to measure the impacts of the James Bay Project which provide a wealth of data on northern environments. The first 30 years of studies in the James Bay area have confirmed that mercury levels in fish increase by 3 to 6 times over the first 5 to 10 years after the flooding of a reservoir, but then gradually revert to their initial values after 20 to 30 years. These results confirm similar studies conducted elsewhere in Canada, the United States and Finland. Research also found that it is possible to reduce human exposure to mercury even when fish constitutes a significant part of a population's diet. Exposure risks can be mitigated without overly reducing the consumption of fish, simply by avoiding certain species and fishing spots.Despite the fact that the transformation of a terrestrial environment into an aquatic environment constitutes a major change and that flooding leads to the displacement or death of nonmigratory animals, the riparian environments lost through flooding are partially replaced by new ones on the exposed banks of reduced-flow rivers. The biological diversity of reservoir islands is comparable to other islands in the area and the reservoir drawdown
Drawdown (hydrology)
In water-related science and engineering there are two similar but distinct definitions in use for drawdown.*In subsurface hydrogeology, drawdown is the change in hydraulic head observed at a well in an aquifer, typically due to pumping a well as part of an aquifer test or well test.*In surface...
zone is used by a variety of wildlife. The population of migratory species of interest such as the caribou have even increased to the point where the hunt has been expanded.
Emissions of greenhouse gases (GHG) rise significantly for a few years after reservoir impoundment, and then stabilize after 10 years to a level similar to that of surrounding lakes. Gross GHG emissions of reservoirs in the James Bay area fluctuate around 30,000 tonnes of CO2 equivalent per TWh of generated power. Hydro-Québec claims its hydroelectric plants release 35 times less GHG than comparable gas-fired plants and 70 times less than coal-fired ones and that they constitute the "option with the best performance" overall.
Social impacts and sustainable development
Innu
The Innu are the indigenous inhabitants of an area they refer to as Nitassinan , which comprises most of the northeastern portions of the provinces of Quebec and some western portions of Labrador...
of the North Shore and the Cree
Cree
The Cree are one of the largest groups of First Nations / Native Americans in North America, with 200,000 members living in Canada. In Canada, the major proportion of Cree live north and west of Lake Superior, in Ontario, Manitoba, Saskatchewan, Alberta and the Northwest Territories, although...
and Inuit
Inuit
The Inuit are a group of culturally similar indigenous peoples inhabiting the Arctic regions of Canada , Denmark , Russia and the United States . Inuit means “the people” in the Inuktitut language...
in Northern Quebec. The hydroelectric developments of the last quarter of the 20th century have accelerated the settling process among Aboriginal populations that started in the 1950s. Among the reasons cited for the increased adoption of a sedentary lifestyle among these peoples are the establishment of Aboriginal businesses, the introduction of paid labor, and the flooding of traditional trapping and fishing lands by the new reservoirs, along with the operation of social and education services run by the communities themselves under the James Bay and Northern Quebec Agreement
James Bay and Northern Quebec Agreement
The James Bay And Northern Quebec Agreement was an Aboriginal land claim settlement, approved in 1975 by the Cree and Inuit of northern Quebec, and later slightly modified in 1978 by the Northeastern Quebec Agreement, through which Quebec's Naskapi First Nations joined the treaty...
.
Some native communities, particularly the Crees, have come to a point "where they increasingly resemble the industrialized society of the South", notes an Hydro-Québec report summarizing the research conducted in the area between 1970 and 2000. The report adds that a similar phenomenon was observed after the construction of roads and hydroelectric plants near isolated communities in northern Canada and Scandinavia. However, growing social problems and rising unemployment have followed the end of the large construction projects in the 1990s. The report concludes that future economic and social development in the area "will largely depend on the desire for cooperation among the various players".
After the strong rejection of the Suroît project and its subsequent cancellation in November 2004, Hydro-Québec, under the leadership of its new CEO Thierry Vandal, reaffirmed Hydro-Québec's commitment towards energy efficiency, hydropower and development of alternative energy. Since then, Hydro-Québec regularly stresses three criteria for any new hydroelectric development undertaken by the company: projects must be cost effective, environmentally acceptable and well-received by the communities. Hydro-Québec has also taken part in a series of sustainable development
Sustainable development
Sustainable development is a pattern of resource use, that aims to meet human needs while preserving the environment so that these needs can be met not only in the present, but also for generations to come...
initiatives since the late 1980s. Its approach is based on three principles: economic development, social development and environmental protection. Since 2007 the company adheres to the Global Reporting Initiative
Global Reporting Initiative
The Global Reporting Initiative produces one of the world's most prevalent standards for sustainability reporting - also known as ecological footprint reporting, Environmental Social Governance reporting, Triple Bottom Line reporting, Corporate Social Responsibility reporting...
, which governs the collection and publication of sustainability performance information. The company employs 250 professionals and managers in the environmental field and has implemented an ISO 14001
ISO 14000
The ISO 14000 environmental management standards exist to help organizations minimize how their operations negatively affect the environment The ISO 14000 environmental management standards exist to help organizations (a) minimize how their operations (processes etc.) negatively affect the...
-certified environmental management system.
Quebec market
| Number of customers | Sales in Quebec (GWh) | Revenue (C$M) | Average annual consumption (kWh) | |||||
|---|---|---|---|---|---|---|---|---|
| 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | |
| Residential and farm | ||||||||
| General and institutional | ||||||||
| Industrial | ||||||||
| Others | ||||||||
| Total | ||||||||
At the end of 2010, Hydro-Québec served 4,011,789 customers grouped into three broad categories: residential and farm (D Rate), commercial and institutional (G Rate) and industrial (M and L rates). The Other category includes public lighting systems and municipal distribution systems.
About a dozen distribution rates are set annually by the Régie de l'énergie after public hearings. Pricing is based on the cost of delivery, which includes depreciation on fixed assets and provisions for the maintenance of facilities, customer growth and a profit margin.
Rates are uniform throughout the province and are based on consumer type and volume of consumption. All rates vary in block to mitigate any cross-subsidization effect between residential, commercial and industrial customers.
After a five-year rate freeze, between May 1, 1998 and January 1, 2004, the Régie granted 7 rate increases between 2004 and 2009. However, Hydro-Québec rates are still among the lowest in North America. A few months after obtaining a 0.4% increase for 2010–2011, Hydro-Québec tabled a rate case before the Régie de l'énergie in August, 2010, calling a rate freeze for 2011-2012.
Residential customers
The average consumption of residential and agricultural customers is relatively high, at 17,230 kWh per year, because of the widespread use of electric heatingElectric heating
Electric heating is any process in which electrical energy is converted to heat. Common applications include space heating, cooking, water heating and industrial processes. An electric heater is an electrical appliance that converts electrical energy into heat...
(68% of residences). Hydro-Québec estimates that heating accounts for more than one half of the power used in the residential sector.
This preference for electric heating makes electricity demand more unpredictable, but offers some environmental benefits. Despite Quebec's very cold climate in winter, greenhouse gases emissions in the residential sector accounted for only 5.5% (4.65 Mt eq.) of all emissions in Quebec in 2006. Emissions from the residential sector in Quebec fell by 30% between 1990 and 2006.
Residential use of electricity fluctuates from one year to another, and is strongly correlated with the weather. Contrary to the trend in neighboring networks, Hydro-Québec's system is winter-peaking
Peak demand
Peak demand is used to refer to a historically high point in the sales record of a particular product. In terms of energy use, peak demand describes a period of strong consumer demand.- Peak load :...
. A new consumption record was set on January 16, 2009 at 8 am, with a load of . The temperature recorded in Quebec City
Quebec City
Quebec , also Québec, Quebec City or Québec City is the capital of the Canadian province of Quebec and is located within the Capitale-Nationale region. It is the second most populous city in Quebec after Montreal, which is about to the southwest...
at the time was -31.8 C. The previous record of was established on January 15, 2004, during another cold spell.
The price of electricity for residential and agricultural customers in effect since April 1, 2010, includes a 40.64¢ daily subscription fee, and two price levels depending on consumption The rates are all-included: power, transmission and distribution costs. Customers pay 5.45¢/kWh for the first 30 daily kWh, while the remainder is sold at 7.51¢/kWh. The average monthly bill for a residential customer was approximately C$100 in 2008.
Electric meter readings are usually conducted every two months and bills are bimonthly. However, the company offers an optional Equalized Payment Plan allowing residential customers to pay their annual electricity costs in 12 monthly installments, based on past consumption patterns of the current customer address and the average temperature in that location.
In 2007, Hydro-Québec pulled out of a Canadian government initiative to install smart meter
Smart meter
A smart meter is usually an electrical meter that records consumption of electric energy in intervals of an hour or less and communicates that information at least daily back to the utility for monitoring and billing purposes. Smart meters enable two-way communication between the meter and the...
s across the province, stating that it would be "too costly to deliver real savings". Since then, Hydro-Québec organized a 2-year pilot project, involving 2,000 customers in 4 cities, with time of use metering
Net metering
Net metering is an electricity policy for consumers who own renewable energy facilities or V2G electric vehicles. "Net", in this context, is used in the sense of meaning "what remains after deductions" — in this case, the deduction of any energy outflows from metered energy inflows...
. A report, filed with the Régie de l'énergie, in the summer of 2010 concluded that the impact of marginal cost pricing with three levels of pricing in the winter would lead to minimal load and energy savings. The company intends to gradually phase-in Advanced Metering Infrastructure (AMI) between 2011 and 2017. Early efforts will focus on meter data transfer, connect-disconnect, outage detection and theft reduction.
Industrial customers
For more than a century, industrial development in Quebec has been stimulated by the abundance of hydroelectric resources. Energy represents a significant expenditure in the pulp and paper and aluminum sectors. two industries with long-standing traditions in Quebec. In 2009, industrial customers purchased 63.3 TWh from Hydro-Québec, representing 38.3% of all electricity sold by the company on the domestic market.Large industrial users pay a lower rate than the domestic and commercial customers, because of lower distribution costs. In 2009, the largest industrial users, the Rate L customers, were paying an average of 4.79¢/kWh.
The Quebec government uses low electricity rates to attract new business and consolidate existing jobs. Despite its statutory obligation to sell electric power to every person who so requests, the province has reserved the right to grant large load allocations to companies on a case by case basis since 1974. The threshold was set at 175 MW from 1987 to 2006 and was reduced to 50 MW in the government's 2006–2015 energy strategy.
In 1987, Hydro-Québec and the Quebec government agreed to a series of controversial deals with aluminum giants Alcan
Alcan
Rio Tinto Alcan Inc. is a Canadian company based in Montreal. It was created on November 15, 2007 as the result of the merger between Rio Tinto PLC's Canadian subsidiary, Rio Tinto Canada Holding Inc., and Canadian company Alcan Inc. On the same date, Alcan Inc. was renamed Rio Tinto Alcan Inc..Rio...
and Alcoa
Alcoa
Alcoa Inc. is the world's third largest producer of aluminum, behind Rio Tinto Alcan and Rusal. From its operational headquarters in Pittsburgh, Pennsylvania, Alcoa conducts operations in 31 countries...
. These risk sharing contracts set the price of electricity based on a series of factors, including aluminum world prices and the value of the Canadian dollar
Canadian dollar
The Canadian dollar is the currency of Canada. As of 2007, the Canadian dollar is the 7th most traded currency in the world. It is abbreviated with the dollar sign $, or C$ to distinguish it from other dollar-denominated currencies...
Those agreements are gradually being replaced by one based on published rates.
On May 10, 2007, the Quebec government signed an agreement with Alcan. The agreement, which is still in force despite the company's merger with Rio Tinto Group
Rio Tinto Group
The Rio Tinto Group is a diversified, British-Australian, multinational mining and resources group with headquarters in London and Melbourne. The company was founded in 1873, when a multinational consortium of investors purchased a mine complex on the Rio Tinto river, in Huelva, Spain from the...
, renews the water rights concession on the Saguenay and Peribonka rivers. In exchange, Alcan has agreed to invest in its Quebec facilities and to maintain jobs and its corporate headquarters in Montreal.
On December 19, 2008, Hydro-Québec and Alcoa signed a similar agreement. This agreement, which expires in 2040, maintains the provision of electricity to Alcoa's three aluminum smelters in the province, located in Baie-Comeau, Bécancour
Bécancour, Quebec
Bécancour is a town in the Centre-du-Québec region of Québec, Canada; it is the seat of the Bécancour Regional County Municipality. It is located on the south shore of the Saint Lawrence River at the confluence of the Bécancour River, opposite Trois-Rivières.Wôlinak, an Abenaki Indian reserve, is...
and Deschambault-Grondines. In addition, the deal will allow Alcoa to modernize the Baie-Comeau plant which will increase its production capacity by 110,000 tonnes a year, to a total of 548,000 tonnes.
Several economists, including Université Laval
Université Laval
Laval University is the oldest centre of education in Canada and was the first institution in North America to offer higher education in French...
's Jean-Thomas Bernard and Gérard Bélanger, have challenged the government's strategy and argue that sales to large industrial customers are very costly to the Quebec economy. In an article published in 2008, the researchers estimate that, under the current regime, a job in a new aluminum smelter or an expansion project costs the province between C$255,357 and C$729,653 a year, when taking into consideration the money that could be made by selling the excess electricity on the New York market.
This argument is disputed by large industrial customers, who point out that data from 2000 to 2006 indicate that electricity exports prices get lower when quantities increase, and vice versa. "We find that the more we export, the less lucrative it gets", said Luc Boulanger, the head of the association representing Quebec's large industrial customers. In his opinion, the high volatility of electricity markets and the transmission infrastructure physical limitations reduce the quantities of electricity that can be exported when prices are higher.
Export markets
| 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | 2000 | 1999 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Exports (GWh)Numbers include energy brokerage on the markets. This energy has not necessarily been produced by Hydro-Québec's plants. | |||||||||||
| Revenue ($M) | |||||||||||
| Average revenue ($/MWh) |
Hydro-Québec sells part of its surplus electricity to neighboring systems in Canada and the United States under long term contracts and transactions on the New England, New York and Ontario bulk energy markets. Two subsidiaries, HQ Energy Marketing and HQ Energy Services (U.S.) are engaged in the electricity trade on behalf of the company. In 2009, Hydro-Québec exported 23.36 TWh of electricity, and the brokerage business generated revenues of C$1.5 billion.
Although most export sales are now short-term transactions, Hydro-Québec has entered into long-term export contracts in the past. In 1990, the company signed a 328-MW deal with a group of 13 electric distributors in Vermont
Vermont
Vermont is a state in the New England region of the northeastern United States of America. The state ranks 43rd in land area, , and 45th in total area. Its population according to the 2010 census, 630,337, is the second smallest in the country, larger only than Wyoming. It is the only New England...
. Exports from Hydro-Québec account for 28% of all power used in the state. On March 11, 2010, Vermont's two largest utilities, Green Mountain Power and Central Vermont Public Service, entered into a tentative 26-year deal with Hydro-Québec to purchase up to 225 MW of hydro power from 2012 to 2038. The memorandum of understanding provides for a price smoothing mechanism shielding Vermont customers from market price spikes. The deal is contingent upon the enactment designating large hydro as "renewable energy".
The renewable energy law, H.781, was adopted by both houses of the legislature and signed into law by governor Jim Douglas
Jim Douglas
James H. Douglas is an American politician from the U.S. state of Vermont. A Republican, he was elected the 80th Governor of Vermont in 2002 and was reelected three times with a majority of the vote...
on June 4, 2010.
A second contract has been signed with Cornwall Electric, a subsidiary of Fortis Inc.
Fortis Inc.
Fortis Inc. is a St. John's, Newfoundland and Labrador based international diversified electric utility holding company. It primarily operates in Canada and the Caribbean. In 2005, it earned a profit of $137.1 million Canadian from revenue of $1.44 billion....
, a utility serving 23,000 customers in the Cornwall
Cornwall, Ontario
Cornwall is a city in Eastern Ontario, Canada and the seat of the United Counties of Stormont, Dundas and Glengarry, Ontario. Cornwall is Ontario's easternmost city, located on the St...
, Ontario
Ontario
Ontario is a province of Canada, located in east-central Canada. It is Canada's most populous province and second largest in total area. It is home to the nation's most populous city, Toronto, and the nation's capital, Ottawa....
area. The contract was renewed in 2008 and will be in force until 2019.
The company has several advantages in its dealings in export markets. First, its costs are not affected by the fluctuations of fossil fuel
Fossil fuel
Fossil fuels are fuels formed by natural processes such as anaerobic decomposition of buried dead organisms. The age of the organisms and their resulting fossil fuels is typically millions of years, and sometimes exceeds 650 million years...
prices, since hydropower
Hydropower
Hydropower, hydraulic power, hydrokinetic power or water power is power that is derived from the force or energy of falling water, which may be harnessed for useful purposes. Since ancient times, hydropower has been used for irrigation and the operation of various mechanical devices, such as...
requires no fuel. Also, Hydro-Québec has a lot of flexibility in matching supply and demand, so it can sell electricity at higher prices during the day and replenish its reservoirs at night, when wholesale prices are lower. Third, the Quebec power grid peaks in winter because of heating, unlike most neighboring systems, where peak demand occur on very warm days in the summer, due to the air conditioning
Air conditioning
An air conditioner is a home appliance, system, or mechanism designed to dehumidify and extract heat from an area. The cooling is done using a simple refrigeration cycle...
needs of homes and offices.
The election of Barack Obama
Barack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
—a supporter of renewable energy
Renewable energy
Renewable energy is energy which comes from natural resources such as sunlight, wind, rain, tides, and geothermal heat, which are renewable . About 16% of global final energy consumption comes from renewables, with 10% coming from traditional biomass, which is mainly used for heating, and 3.4% from...
, greenhouse gas
Greenhouse gas
A greenhouse gas is a gas in an atmosphere that absorbs and emits radiation within the thermal infrared range. This process is the fundamental cause of the greenhouse effect. The primary greenhouse gases in the Earth's atmosphere are water vapor, carbon dioxide, methane, nitrous oxide, and ozone...
emissions trading
Emissions trading
Emissions trading is a market-based approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants....
and the development of electric car
Electric car
An electric car is an automobile which is propelled by electric motor, using electrical energy stored in batteries or another energy storage device. Electric cars were popular in the late-19th century and early 20th century, until advances in internal combustion engine technology and mass...
s—as president of the United States
President of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....
in 2008
United States presidential election, 2008
The United States presidential election of 2008 was the 56th quadrennial presidential election. It was held on November 4, 2008. Democrat Barack Obama, then the junior United States Senator from Illinois, defeated Republican John McCain, the senior U.S. Senator from Arizona. Obama received 365...
was seen as a positive development for the company's outlook. Despite the success of the previous policy of short-term sales on neighboring energy markets, the Quebec government asked Hydro-Québec management to write a new strategic plan, focusing on long-term sale agreements with US distributors, as was the case after the commissioning of the James Bay Project. The new plan was released in July 2009.
See also
- Édifice Hydro-Québec
- James Bay ProjectJames Bay ProjectThe James Bay Project is a series of hydroelectric development with a combined installed capacity of over 16,000 megawatts built since 1974 for Hydro-Québec by the on the La Grande and other rivers of Northern Quebec....
- Hydro-Québec's electricity transmission systemHydro-Québec's electricity transmission systemHydro-Québec's electricity transmission system is an expansive, international power transmission system located in Quebec, Canada with extensions into the Northeastern United States...
- Timeline of Quebec historyTimeline of Quebec historyThis article presents a detailed timeline of Quebec history. Events taking place outside Quebec, for example in English Canada, the United States, Britain or France, may be included when they are considered to have had a significant impact on Quebec's history....
External links
- Hydro-Québec homepage (in EnglishEnglish languageEnglish is a West Germanic language that arose in the Anglo-Saxon kingdoms of England and spread into what was to become south-east Scotland under the influence of the Anglian medieval kingdom of Northumbria...
; also available in French) - Hydro-Québec Act