Montréal, April 6, 2017
Hydro-Québec is laying down the facts about earnings variances
The earnings variances recorded at year-end indicate that Hydro-Québec was more productive than anticipated. These amounts have already been returned to Quebecers, namely through the dividend that is paid to the government, which goes towards paying for public services such as health and education.
What is an earnings variance?
An earnings variance is the difference between the actual return and the return authorized by the Régie de l’énergie [Québec energy board] for a given year. It is not a billing error. It means Hydro-Québec was more efficient than forecast, surpassing its initial objectives.
Hydro-Québec wants to share its earnings variances with customers. An earnings-sharing mechanism was adopted by the Régie de l’énergie in 2014. The application of this sharing mechanism was suspended until Québec returned to a balanced budget, as stipulated in the Act mainly to implement certain provisions of the Budget Speech of 4 June 2014 and return to a balanced budget in 2015-2016.
Given that Québec now has a balanced budget, this earnings-sharing mechanism will apply and any earnings variances will be shared with our customers through our electricity rates.
Hydro-Québec seeks to provide its customers with the best possible service at the best possible price
Our efficiency gains also result in lower electricity rate increases given that our rate applications take the previous year’s performance into account. Electricity rates are established in such a way as to generate sufficient revenue to recover the cost of providing electricity service to some 4.2 million customers throughout Québec.
Hydro-Québec fulfilled its commitment with a rate increase below inflation for the second year in a row. Québecers pay the lowest electricity rates in North America. In 2017-2018, they will pay half of what people pay in Toronto and a quarter of what they pay in New York.