Hydro-québec boosts request for rate hike
Increase expected to get approval as part of government’s effort to raise revenue
Hydro-Québec is seeking an average rate increase of 3.3 per cent next April, up from the 2.9 per cent it had originally sought. The Régie de l’énergie is expected to rubber-stamp the proposed hike in February, since the PQ government has said it expects the utility to provide more help in balancing the provincial budget.
Hydro-Québec, the electric power provider, is seeking an average rate increase of 3.3 per cent as of April 13, up from the 2.9 per cent it had originally asked for this summer, and raising the burden on consumers, commerce and industry as economic growth is slowing to a crawl.
The rate hike is expected to get approval from the Régie de l’énergie, the province’s regulator, because Parti Québécois Finance Minister Nicolas Marceau’s November budget made clear the government wanted higher dividend income from the utility in 2013-14.
This was one of the government’s steps to raise revenue to achieve a budget “equilibrium” in 2014-15. Marceau also told Hydro-Québec to reduce its staffing by 2,000, mainly through attrition, and promised to prune rate increases envisaged by the Liberal government of Jean Charest for 2014-15.
The Marois government also passed a decree that ef- fectively sidelines the Régie’s normal hearings and surveillance role and virtually requires it to rubber-stamp the 3.3-per-cent hike.
The Régie’s final decision is expected at the end of February.
Critics such as the Union des consommateurs accused the government of arbitrary action to force Hydro-Québec to raise tariffs to generate $31 million more revenue.
“It calls into question the Régie’s real purpose as a regulator,” Marc-Olivier Moison-Plante, the organization’s energy analyst, told TVA’s Argent program Wednesday.
Hydro-Québec put the higher rates squarely on the government’s shoulders. Under the original 2.9-per-cent in- crease demand for 2013, it estimated an average Quebec household (heated by electricity) would face a monthly cost increase of $5.25.
In last month’s budget, Marceau promised the new rates and staff cutbacks would not affect consumer services. Hydro-Québec and sister provincial corporations Loto-Québec and the Société des alcools du Québec will now be subject to performance audits by the province’s auditor general.
In the third quarter this year, Hydro-Québec posted operating income of $376 million, down from $404 million in 2011, due to special factors. It recently raised $500 million by an issue of five-per-cent, 38-year debentures.