Power surge
ÉRIC MARTEL’S AMBITIOUS PLANS TO REBOOT HYDRO-QUÉBEC HINGE ON THE U.S. NORTHEAST, BUT THE EXPANSION IS BEING MET WITH FIERCE OPPOSITION
MONTREAL • Éric Martel took over as Hydro-Québec’s chief executive in mid-2015 when the company’s troubles were apparent to even casual observers.
Internal surveys showed employee engagement was at its lowest in years, public opinion of its customer services division was spiralling downward and future profitability was threatened by a projected flattening of electricity demand, which would force power prices to rise — something consumers never like.
“I said to the guys here, ‘We’re going to have a challenge in profitability, and we’re going to have a hell of challenge maintaining rates,” Martel recalled in a wideranging interview at Hydro-Québec’s Montreal headquarters.
The new head of Canada’s largest utility, which generates more than 37,000 megawatts (MW) of electricity from 28 hydro reservoirs and 63 power stations, promptly laid out a plan to reinvigorate a bloated bureaucratic culture and, crucially, boost profits over the following 15 years with a firm commitment to double revenues, to about $27 billion, by 2030.
Those ambitions hinge on the Crown corporation’s ability to leverage its massive hydro capacity to build new electricity corridors into the northeast U.S. — a region that has a huge appetite for new sources of emissions-free power as it looks to meet stringent climate goals.
But Hydro-Québec’s expansion won’t come easy. It has met fierce environmental resistance by U.S. interest groups, First Nations and some municipal authorities, who say its proposed transmission lines would be disastrous for ecologically sensitive areas. Moreover, a flood of cheap natural gas supplies from within the U.S. and falling costs of renewable energy sources such as wind and solar threaten to elbow out large-scale hydro imports that require long-term contracts, thus dampening Martel’s abilities to meet his company’s ambitious goals.
“Without exports, our profits are in trouble,” he said.