Aug 5, 2014
Hydro-Québec has filed an application with the Régie de l'énergie [Québec energy board] for a 3.9% rate adjustment effective April 1, 2015.
Once again this year, more than half of the increase requested is to cover the cost of new supplies, chiefly wind power, and the higher price of heritage pool electricity, as provided by the Act respecting the Régie de l'énergie.
The specific factors behind the requested adjustment are as follows:
- The cost of new supplies, mainly wind power, integrated into the grid under purchasing programs established by the Québec government, is putting upward pressure on overall electricity supply costs for the Québec market (+2.1%).
- The price of the heritage pool, which covers over 90% of Québec's electricity needs, is being indexed yearly as of 2014, under the Act respecting the Régie de l'énergie (+0.4%).
- Investments in the transmission and distribution systems, made necessary by the growth in residential and commercial demand throughout Québec and approved by the Régie de l'énergie, are also contributing to higher costs (+1.9%).
- Last, efficiency gains achieved by the company partly offset those three factors ( 0.5%), thus limiting the requested increase to 3.9%.
Under the Act respecting the Régie de l'énergie, indexing of the price of heritage pool electricity does not affect large-power industrial customers (Rate L), so their increase would be 3.5%.
The rate application also proposes and takes into account a smoothing mechanism to spread out costs incurred due to extreme weather events. (The winter of 2013-2014 was particularly harsh.)
If the Régie approves Hydro-Québec's application, the monthly impact of the 3.9% rate adjustment will come to the approximate amounts shown in the table, depending on the type of home.
Type of home Monthly impact
Small house $5.14
Midsize house $7.33
Large house $9.46
Hydro-Québec's residential rates will still be the lowest in Canada and among the lowest in all of North America.
Hydro-Québec Distribution's proposed budget for energy efficiency programs and activities is $135 million. This amount will help generate additional energy savings of 546 GWh in 2015, bringing the cumulative total to almost 8.8 TWh by the end of 2015.
Support for low-income customers
Hydro-Québec Distribution will maintain its programs in support of low-income customers. It is proposing a budget of $25.8 million, mainly to help customers who have personalized arrangements to pay their electricity bills and arrears.
Hydro-Québec Distribution is also proposing to invest close to $8 million in energy efficiency programs for those customers.
Public hearings on the rate application will enable representatives of all interested parties to review and debate the proposal. The Régie de l'énergie will then issue a ruling in early 2015, with the new rates taking effect April 1, 2015. By law, it is the Régie that sets Québec electricity rates.
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