Montréal, August 1, 2017
Rate Application Below Inflation: Commitment Honored for Third Consecutive Year
For the third consecutive year, Hydro-Québec has honored its commitment to Quebecers and kept its electricity rate adjustment application below inflation. The application it filed today with the Régie de l’énergie proposes a rate adjustment of 1.1%, effective April 1, 2018, for all residential customers and most business customers.
The requested 1.1% rate increase is mainly due to:
- The financial impact of commissioning various high-voltage transmission facilities, which will ensure a secure and reliable supply of electricity (0.9%)
- Increased distribution costs, in particular to step up vegetation control programs aimed at preventing outages (0.3%)
- Higher electricity purchase costs (1.7%)
Two main factors contribute to limiting the requested increase to 1.1%:
- Growth in electricity demand, particularly as a result of the sales development strategy, which focuses on encouraging business customers to convert eligible equipment to electricity and on attracting data centres to Québec (−0.5%)
- The impact of milder temperatures in the past two winters (−1.3%)
The impact of the 1.1% rate adjustment would be $0.47/month for an apartment, $1.48/month for a small house, $2.21/month for a midsize house and $2.95/month for a large house.
Hydro-Québec’s rates will still be the lowest in North America: people in Toronto pay twice as much and New Yorkers, four times as much.
It is worth noting that, without the $590 million in efficiency gains achieved by Hydro-Québec Distribution over the past 10 years, rates would be about 5% higher in
Small consumers and low-income households a particular concern
Hydro-Québec will continue its programs for low-income households. It has earmarked $56 million for this purpose, most of which will go toward supporting payment of the bills and arrears of customers with whom Hydro-Québec has negotiated payment arrangements, and toward energy efficiency programs to help these customers reduce their electricity consumption.
Moreover, in an effort to lighten the burden on small consumers and low-income households, Hydro-Québec is asking the Régie de l’énergie to cap the first energy consumption tier at 36 kilowatthours (kWh) rather than at 33 kWh. Customers will therefore be entitled to an additional 3 kWh per day at the lowest price of their rate for part of their electric heating.
Hydro-Québec Distribution intends to spend $110 million on energy efficiency programs and initiatives. This amount will both yield additional energy savings and reduce capacity requirements by 400 megawatts.
Large-power industrial rate
Under the Act respecting the Régie de l'énergie, indexation of the heritage pool electricity prices does not affect large-power industrial customers (Rate L). These customers would therefore see their rates go up by 0.8% on April 1, 2018.
Hydro-Québec is also proposing a number of rate measures to help industrial customers become more competitive.
A rigorous review process
Every year, Hydro-Québec’s rate application is carefully reviewed by the Régie de l’énergie. The review ends in December, with public hearings in which representatives of all concerned organizations have an opportunity to express their views. The Régie issues a ruling early in the new year, so that the new rates can take effect on April 1.
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