Hydro CEO vows limit on rate hikes
Liberals slam CAQ over allocation of power to foreign companies
The CEO of Hydro-québec made waves at the legislature Tuesday, contradicting the former energy minister, Pierre Fitzgibbon, on residential rate increases and questioning the government's strategy of awarding increasingly scarce power resources to foreign firms over Quebec companies.
Stepping up as the first witness at hearings on Bill 69, which is designed to accelerate Hydro-québec's green power production, the frank-talking Michael Sabia said he does not think massive investments in the coming years to boost Quebec's power capacity will lead to increases in residential power rates.
“Let me be very clear,” Sabia told the committee. “Residential rate increases will be limited to three per cent. For commercial and industrial clients, we're talking about four and five per cent.
“This is exactly what I said when we tabled our action plan. There is nothing new.”
On his way into the room, Sabia said he considers the residential rates Quebecers pay a kind of “social pact” that is not to be broken.
His comments contradict those of Fitzgibbon, who resigned last week after saying he did not feel motivated enough to stay on as minister of the economy, innovation and energy.
On his way out the door, Fitzgibbon said that “in five or 10 years, there will be significant increases” in rates, including residential, to pay the costs of Hydro's plan to invest $185 billion to double Quebec's power output capacity as the province continues the shift away from fossil fuels.
Premier François Legault has already tried to quash those politically damaging comments by saying that as long as he is premier rates will not be increased more than three per cent a year.
But Sabia revealed another difference of opinion he had with Fitzgibbon under questioning at the committee by Liberal energy critic Marwah Rizqy, who asked about Fitzgibbon's penchant to allocate precious power to large foreign companies such as Northvolt.
The Liberals have argued that Quebec has given too much power to such firms to the detriment of Quebec companies crying for help in the shift toward green power.
Interim Liberal leader Marc Tanguay said on his way into the hearing that 35 established companies last year asked the government for more power resources, but only 11 got the additional resources.
“Yes, to date, the government put a big accent on new companies,” Sabia answered when asked by Rizqy if too many resources have gone to outside companies. “It becomes a question of the balance between decarbonization and new industries.”
He noted that Hydro-québec's strategic plan allocates 75 per cent of new energy resources to existing companies in Quebec to help them reduce their reliance on fossil fuels. The other 25 per cent is for new companies.
“Has this ratio been respected in all the decisions to date on the allocation of megawatts? It's not at all clear to me,” Sabia said.
Rizqy also asked Sabia to be clearer on how long the three per cent residential figure will be respected.
“For us, the three per cent is something which continues into the future,” Sabia responded.
Rizqy persisted, questioning why Bill 69 includes the creation of a fund to come to the aid of domestic clients if the three per cent figure is true. Fitzgibbon said the fund would cost between $200 million and $300 million a year to finance, which would mean a subsidy by the government to consumers.
“What is the real increase?” she asked Sabia.
Later, during question period, Tanguay and Rizqy went on the attack, tossing Sabia's remarks at Legault and the new minister of the economy and energy, Christine Fréchette. They asked what happened to the CAQ'S “Quebec first” policy.
Legault was candid saying many companies, foreign and domestic, are asking for power resources. What he's interested in is encouraging companies that offer the best potential for workers here.
“How do we make the choice?” Legault said. “We look at those with the best fallout for Quebecers. If a company creates jobs that pay $50 an hour and another creates them at $20 an hour, I choose the one at $50 an hour.
“That's how we have reduced the wage gap with the rest of Canada over the last six years.” Tanguay mentioned the example of Les Forges de Trois-rivières, which employs 320 workers and asked the government in August for an additional 16 megawatts of power to reduce its carbon footprint only to be told it would get nothing.
On the other hand, a Chinese company, Tiandingfeng Canada (TDF), got the megawatts it wanted for a project in nearby Sorel-tracy.
“Don't talk to me about economic nationalism,” Tanguay shot across the floor. “Our companies, our people ... he abandoned them.”
The exchange came as two weeks of hearings into Bill 69 opened. A total of 40 groups are scheduled to testify.
In her opening remarks, Fréchette tried to sell the legislation, noting it is a key tool for Quebec to respect its commitment to make Quebec's economy carbon neutral by 2050.
She said Quebec would be making a mistake to not tap into the worldwide demand for green energy by stepping up its domestic production.
“The entire planet is looking for green energy,” Fréchette said. “Rare are the jurisdictions as well positioned as Quebec on an energy level. We need to act to tap the full potential of this strategic advantage.”