Montréal, March 16, 2016
The New England Power Generators Association should not be afraid of competition from clean Québec hydropower
Dan Dolan’s recent op ed in the Cape Cod Times claims that Hydro-Québec seeks to sell “expensive” power on wholesale markets to keep prices low in Québec. Either Mr. Dolan doesn’t understand the reality of the Québec electricity market, or wants to mislead Massachusetts customers into thinking that importing more hydropower could have negative impacts on local energy jobs, affordable electric rates and power reliability. His assertions are simply false.
Hydro-Québec sells at market prices outside the province
Inside Québec, Hydro-Québec sells electricity to its customers at tariffs set by the Québec energy board. Hydro-Québec’s generation division is required by law to make a certain quantity of energy, called the heritage pool, available to Québec customers at a fixed, low rate. Above and beyond that volume, any electricity generated by Hydro-Québec can be sold on electricity markets at wholesale prices. These sales have no impact on Québec tariffs. Dan Dolan is wrong when he says that Massachusetts ratepayers are subsidizing Hydro-Québec.
Québec hydropower: clean and reliable baseload energy
NEPGA further claims that nearly all electricity shortages in New England in recent years have been caused by curtailing of supply from Canada. In fact, Mr. Dolan might want to be looking in his own backyard for solutions to the region’s supply problem, which has nothing to do with deliveries from Canada. ISO New England, the independent, not-for-profit corporation responsible for keeping electricity flowing across the six New England states and ensuring that the region has reliable, competitively priced wholesale electricity, clearly pointed out in its September 2015 update on the Winter Reliability Program that the problem is related to increasing reliance on resources with uncertain performance and availability, namely “natural gas resources that lack firm gas transportation or fuel storage and rely on “just-in-time” fuel”. ISO further reported that it had to frequently operate its system with “little or no gas-fired generation”.
Hydro-Québec has 63 hydropower generating stations and a network of over 20,000 miles of high-voltage lines to ensure that power gets to where it is consumed. Signing a long-term contract with Hydro-Québec is the best way for Massachusetts customers to lock in the benefits of this clean energy supply and ensure that their energy needs are treated in the same way that we treat all of our obligations, including Québec load.
With over 10,000 MW of generating capacity at risk of retirement in coming years, New England needs a new injection of baseload energy. Low-carbon Québec hydropower can be part of the solution and can even back up other forms of intermittent renewable energy, allowing growth in that industry as well.
Hydro-Québec: providing clean, competitively priced energy in the New England market for decades
Hydro-Québec has sold into the New England market for decades and already meets, year after year, about 10% of the region’s energy needs. The utility has done so at market prices and conditions, with no subsidies, proving time and time again its cost-competitiveness.
Massachusetts bill SB 1965 doesn’t require utilities to sign with Hydro-Québec if they find our electricity isn’t cost-effective. Let’s allow a competitive solicitation to determine the true cost and benefits of delivered Quebec hydropower and whether this clean energy option is a good one for Massachusetts customers.
* Cape Cod Times, March 12, 2016: http://m.capecodtimes.com/opinion/20160312/massachusetts-doesnt-need-hydro-quebec