Montréal, March 5, 2019
Rate increases below inflationHydro-Québec honors commitment for fourth consecutive year
For the fourth year running, Hydro-Québec has upheld its commitment to keep rate increases no higher than inflation. In its decision on 2019–2020 rates, the Régie de l’énergie approved a 0.9% increase for all residential customers and most business customers, while the inflation rate is expected to be 2.0%. This modest increase takes into account $43.4 million in 2017 earning variances shared with customers in the form of a reduced rate increase.
This increase, which is higher than the initial rate application for 0.8%, is due to an adjustment in the rate application filed in December 2018 to integrate a $40.2 million increase in expenses related to Transition énergétique Québec. The adjusted rate application was for 1.2%.
The resulting impact on electricity bills as of April 1, 2019, will be an increase of $0.32 per month for a five-and-a-half-room apartment heated with electricity, $0.90 for a small house, $1.72 for a midsize house and $2.56 for a large house.
Electricity rates are established in such a way as to generate sufficient revenue to recover the cost of providing electricity service, estimated at $12.3 billion for the year 2019, to some 4.3 million customers throughout Québec.
Quebecers will continue to enjoy the lowest residential electricity rates in North America. In 2019–2020, they will pay about half the price customers pay in Toronto, and only a quarter of what customers pay in New York and Boston.
Increase in first energy consumption tier
The Régie de l’énergie approved Hydro-Québec’s request to cap the first energy consumption tier at 40 kilowatthours (kWh) rather than 36 kWh. Customers will be able to use an additional 4 kWh per day at the lowest residential price tier, which will lighten the burden on small consumers who use electricity for heating, including low-income households.
Dynamic pricing on an opt-in basis
Starting in winter 2019–2020, Hydro-Québec will propose two new dynamic rate offerings to customers: base rate with winter credit and Flex rate. Customers interested in these offerings will be able to sign up on a totally voluntary basis. Those who are not interested will be able to conserve their base rate as is.
Both dynamic rate offerings will enable customers to save during the winter period between December 1 and March 31. To do so, they will have to modify their electricity use, at Hydro-Québec’s request, during critical peak events between 6 and 9 a.m. and 4 and 8 p.m., for a total of up to 100 hours per winter.
The base rate with winter credit is risk-free and represents potential savings for customers. Those who have enrolled will keep their base rate and receive a credit of $0.50 per kWh curtailed during critical peak events.
With the Flex rate, customers who have signed up will pay less than the base rate for the entire winter period outside of critical peak events. During critical peak events, however, they will pay more than the base rate: $0.50 per kWh consumed. This rate represents a greater potential for savings than the winter credit, but customers will have to be careful, because their bill might go up if they don’t change their energy habits during critical peak events.
To provide optimum support to customers and to ensure the success of these new rate offerings, we will be rolling them out gradually. In the first year, 20,000 randomly selected customers will be invited to participate. They will have to meet certain conditions, such as having a valid email address, a communicating meter and a Customer Space. Participating customers will be provided with tools to assist them.
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