Fri. Feb 23rd, 2024

Documents filed with the Energy Authority show that the state company wants to increase the industrial rate by 3.3% and the commercial rate by 5.1 % from April 1, 2024.

Hydro-Québec wants increase the industrial tariff by 3.3%

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Hydro-Québec CEO Michael Sabia during the presentation of the state-owned company's 2035 Action Plan last November.

  • Thomas Gerbet (View profile)Thomas Gerbet

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Small and medium-sized businesses (SMEs) are preparing to face the largest increase in electricity rates on April 1, 2024, compared to industries and residential customers. This is revealed by documents filed by Hydro-Québec before the Régie de l'nergie on Monday.

The proposal state-owned company is to increase the industrial rate (rate L) by 3.3%, compared to an increase of 5.1% for the commercial rate (rate M).

The 5.1% increase corresponds to the annual variation in the average consumer price index in Quebec between September 2022 and September 2023.

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The residential rate is capped at 3% this year, in accordance with the law.

Hydro-Québec CEO Michael Sabia had warned that rates would increase and the Minister of Economy, Innovation and Energy , Pierre Fitzgibbon, had suggested that additional effort would be required from the commercial or industrial sector.

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Either we will [bill] the commercial and industrial sectors, or there will be fewer profits at Hydro-Québec.

A quote from Pierre Fitzgibbon, Minister of Economy, Innovation and Energy of Quebec

In the document filed by Hydro-Québec with the Régie, the state company considers that it is reasonable to increase the rate of large consumers by 3.3%, even if this represents less than inflation.

Hydro-Québec adds that this will maintain the competitiveness of this industrial rate, which is the lowest in North America.

The Régie de l'énergie must approve these rate increases by March. They will come into force on April 1.

Last year, SMEs suffered a 6.4% increase in their rates, so that industries had seen their rates increase by 4.2% and residential customers by 3%.

It's nonsense that the smallest businesses end up with the biggest bill, reacts the vice-president of the Canadian Federation of Independent Business (CFIB), François Vincent. He denounces legislative decisions which were taken not to protect them.

He we need to review that so that SMEs are not the cash cow of Hydro-Québec.

A quote from François Vincent, vice-president of the Canadian Federation of Independent Business

According to a comment filed by the FCEI before the Régie de l'energy, Monday, the limited increase in the industrial rate inevitably implies higher rates for the rest of customers from 2025 to 2029.

The industrial rate generates revenues almost equivalent to its service cost, writes Hydro-Québec. Residential customers pay less than what it costs Hydro-Québec to supply them (85%) and the opposite is true for commercial customers (133%).

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In their comment to the Régie, the Association of Hoteliers of Quebec and the Association Restauration Québec oppose also with a limited increase for industrialists. According to these associations, this does not meet the objective of maintaining competitiveness, but rather contributes to improving it significantly, to the detriment of other categories of consumers.

The Quebec Cooperative Family Economy Association, which represents 4 million residential customers, estimates that the competitive advantage [of the industrial rate] has increased significantly over the last 10 years. It recommends that industries also receive a 5.1% increase.

In its comment submitted to the Régie de l'nergie, the Quebec Association of Industrial Electricity Consumers proposes that the increase in rate L be limited to 1.6% so as not to further worsen the competitive situation of our Quebec factories.

The Quebec Forest Industry Council goes even further and asks for an increase for industries limited to 0, 4%.

Remember that certain manufacturers benefit from special agreements or a reduction in their electricity bill from the Ministry of Finance. These large industrial customers are fighting for cheap energy from Quebec. The Minister of Energy, Pierre Fitzgibbon, received 150 projects for a total of 30,000 MW.

For comparison, large power customers Calgary and Edmonton experienced an 80% increase in electricity rates between 2022 and 2023.

More details to come

  • Thomas Gerbet (View profile)Thomas GerbetFollow

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