Hydro-Quebec

Between 1944 and 1962, Hydro-Québec's installed capacity increased from 616 to 3,661 MW while lowering residential power rates by half in the Montreal area.

1960–1979: the second nationalization

Duplessis's conservative reign, now known as the Grande Noirceur, ended when he died in office in 1959. The subsequent election of the Quebec Liberal Party, led by Jean Lesage, marked the beginning of the Quiet Revolution, a period of reform and modernization. In 1962, the US government lent Quebec $300 million. The funds were used to acquire independent power companies. The new government gave Hydro-Québec an exclusive mandate to develop new sites. In 1963 the government authorized it to acquire private electricity distributors, including the Gatineau Power Company and the Shawinigan Water & Power Company Hydro-Québec achieved province-wide scope. All of the 46 rural coops accepted Hydro-Québec's 1963 buyout offer, except Saint-Jean-Baptiste-de-Rouville which still exists. In 1964, the Province of British Columbia provided the Province of Quebec with a $100 million loan. $60 million from that loan went to Hydro-Québec. The loan faced controversy in the Quebec legislature. Major projects during this period included:

Manicougan-Outardes Project, a 7-dam hydroelectric complex including the Jean-Lesage generating station (1,145 MW), René-Lévesque generating station (1,244 MW), and the Daniel-Johnson Dam (2,596 MW), originally named Manic-2, Manic-3, and Manic-5 respectively. Because these stations were 700 kilometres (400 miles) away from the urban centres in southern Quebec, through transmission line voltage was stepped up to 735 kV for the first time anywhere, led by engineer Jean-Jacques Archambault.

Churchill Falls Generating Station, 5,428 MW. The station is in Labrador and the government of Quebec negotiated a contract where Hydro-Québec buys power from the project at 1969 prices until the year 2041. That contract had been a source of conflict between the two provinces. In December 2024, Newfoundland premier Andrew Furey and Quebec premier François Legault signed a 50-year Memorandum of understanding that would not terminate the original contract but see Hydro-Quebec paying the Churchill Falls operating company a fixed amount above the original price contracted in 1969 while remaining well below fair market value for the electricity. If ratified by both provinces, Hydro-Quebec would pay an average of 2.7 cents per kilowatt hour for electricity from CF until 2075.

Phase I of the James Bay Project.

Hydro-Québec worked with Atomic Energy of Canada Limited to build the CANDU reactor equipped Gentilly Nuclear Generating Station, which closed in 2012.

1980–1996: restructuring

Because of the economic climate, demand for electricity dropped significantly in the early 1980s, which led to structural changes at Hydro-Québec. It became a joint stock company whose sole shareholder is Government of Québec, to which it pays an annual dividend. It was also given the mandate to export power and to work in any energy-related field.

In 1986 the Quebec – New England Transmission began bringing power from the James Bay Project 1,100 kilometers (700 miles) south to the Boston area.

Phase II of the James Bay Project started in 1987 and took nine years to complete. Construction of the Denis-Perron Dam began in 1994.

1997–present: renewed growth

Like its counterparts in the North American utility industry, Hydro-Québec was reorganized in the late 1990s to comply with electricity deregulation in the United States. The transmission division, TransÉnergie, was the first to be spun off in 1997, in response to the U.S. Federal Energy Regulatory Commission's publication of Order 888. In the same year, the U.S. Federal Energy Regulatory Commission granted Hydro-Québec a licence to sell wholesale electricity at market prices, enabling Hydro-Québec to expand its market. Hydro-Québec also acquired a substantial share of Noverco, controller of natural gas distributor Énergir, to participate in that market in northeastern North America.

In 2002 the Agreement Respecting a New Relationship Between the Cree Nation and the Government of Quebec between the Grand Council of the Crees and the Quebec government made possible the development of the Eastmain Reservoir. The Eastmain-1-A and Sarcelle powerhouses and Rupert River diversion project were completed for $5,000 million CAD. This will provide water power to the turbines at Eastmain-1, Eastmain-1-A and Sarcelle powerhouses and will provide increased flow at the existing La Grande-1 generating station as well as Robert-Bourassa and the La Grande-2-A generator stations. Output will be 918 MW.

Other stations commissioned since 1997 are:

Sainte-Marguerite-3 in 2003, 882 MW.

Péribonka in 2008, 385 MW.

Rocher-de-Grand-Mère in 2004, 230 MW.

Eastmain-1in 2007, 480 MW

Rapide-des-Cœurs in 2009, 76 MW.

Chute-Allard in 2009, 62 MW

Mercier in 2009, 55 MW.

Bernard-Landry in 2012, 768 MW

La Sarcelle in 2013, 150 MW.

Romaine-2 in 2014, 640 MW.

Romaine-1 in 2015, 270 MW.

Romaine-3 in 2017, 395 MW.

Romaine-4 in 2022, 245 MW.

Major outages

In 1988, all of Quebec and parts of New England and New Brunswick lost power because of an equipment failure at a substation on the North Shore. The March 1989 geomagnetic storm tripped circuit breakers on the transmission network causing a nine-hour Quebec-wide blackout.

In the North American ice storm of 1998, five days of freezing rain collapsed 600 kilometres (370 mi) of high voltage power lines and over 3,000 kilometres (1,900 mi) of medium and low voltage distribution lines in southern Quebec. Up to 1.4 million customers were without power for up to five weeks.

Another research centre, the Laboratoire des technologies de l'énergie (LTE) in Shawinigan, was opened in 1988 to adapt and develop new products while helping industrial customers improve their energy efficiency.

In the last 20 years, the institute has also conducted research and development work towards the electrification of ground transportation. Current projects include battery materials, including innovative work on lithium iron phosphate and nano-titanate, improved electric drive trains and the effects of the large-scale deployment of electric vehicles on the power grid. Projects focus on technologies to increase range, improve performance in cold weather and reduce charging time.

Hydro-Québec has been criticized for not having taken advantage of some of its innovations. An electric wheel motor concept that struck a chord with Quebecers, first prototyped in 1994 by Pierre Couture, an engineer and physicist working at IREQ, is one of these. The heir to the Couture wheel motor is now marketed by TM4 Electrodynamic Systems, a spin-off established in 1998 that has made deals with France's Dassault and Heuliez to develop an electric car, the Cleanova, of which prototypes were built in 2006. Hydro-Québec announced in early 2009 at the Montreal International Auto Show that its engine had been chosen by Tata Motors to equip a demonstration version of its Indica model, which will be road tested in Norway.

Quebec market

At the end of 2010, Hydro-Québec served 4,060,195 customers grouped into three broad categories: residential and farm (D Rate), commercial and institutional (G Rate) and industrial (M and L rates). The Other category includes public lighting systems and municipal distribution systems.

About a dozen distribution rates are set annually by the Régie de l'énergie after public hearings. Pricing is based on the cost of delivery, which includes the cost of supply and transmission, depreciation on fixed assets and provisions for the maintenance of facilities, customer growth and a profit margin.

Rates are uniform throughout Quebec and are based on consumer type and volume of consumption. All rates vary in block to mitigate any cross-subsidization effect between residential, commercial and industrial customers.

Hydro-Québec retail rates are among the lowest in North America. After a five-year rate freeze, between May 1, 1998 and January 1, 2004, the Régie granted rate increases on 8 occasions between 2004 and 2010 for a total of 18.4%. More recently, the regulator ordered two successive rate rollbacks in 2011 (0.4%) and 2012 (0.5%). However, rates are expected to go up by 3.7% a year from 2014 to 2018 to reflect a gradual increase of heritage pool electricity announced in the 2010 Quebec budget.

Residential customers

The average consumption of residential and agricultural customers is relatively high, at 16,857 kWh per year in 2011, because of the widespread use of electricity as the main source of space (77%) and water heating (90%). Hydro-Québec estimates that heating accounts for more than one half of the electricity demand in the residential sector.

This preference for electric heating makes electricity demand more unpredictable, but offers some environmental benefits. Despite Quebec's very cold climate in winter, greenhouse gases emissions in the residential sector accounted for only 5.5% (4.65 Mt CO2 eq.) of all emissions in Quebec in 2006. Emissions from the residential sector in Quebec fell by 30% between 1990 and 2006.

Residential use of electricity fluctuates from one year to another, and is strongly correlated with the weather. Contrary to the trend in neighboring networks, Hydro-Québec's system is winter-peaking. A new all-time consumption record was set on January 23, 2013 with a load of 38,910 MW. Previous records were established on January 24, 2011 with 37,717 MW, on January 16, 2009, with a load of 37,230 MW, and on January 15, 2004 when peak reached 36,268 MW.

The price of electricity for residences and farms includes a 40.64¢ daily subscription fee, and two price levels depending on consumption. The rates are all-included: power, transmission and distribution costs, but are subject to the Goods and Services Tax (GST) and the Quebec Sales Tax (QST). As of April 1, 2012, customers pay 5.32¢/kWh for the first 30 daily kWh, while the remainder is sold at 7.51¢/kWh. The average monthly bill for a residential customer was approximately C$100 in 2008.

Electric meter readings are usually conducted every two months and bills are bimonthly. However, the company offers an optional Equalized Payment Plan allowing residential customers to pay their annual electricity costs in 12 monthly installments, based on past consumption patterns of the current customer address and the average temperature in that location.

In 2007, Hydro-Québec pulled out of a Canadian government initiative to install smart meters across the province, stating that it would be "too costly to deliver real savings". Since then, Hydro-Québec organized a 2-year pilot project, involving 2,000 customers in 4 cities, with time of use metering. A report, filed with the Régie de l'énergie, in the summer of 2010 concluded that the effect of marginal cost pricing with three levels of pricing in the winter would lead to minimal load and energy savings. The company intends to gradually phase-in Advanced Metering Infrastructure (AMI) between 2011 and 2017. Early efforts will focus on meter data transfer, connect-disconnect, outage detection and theft reduction.

Industrial customers

For more than a century, industrial development in Quebec has been stimulated by the abundance of hydroelectric resources. Energy represents a significant expenditure in the pulp and paper and aluminum sectors, two industries with long-standing traditions in Quebec. In 2010, industrial customers purchased 68.4 TWh from Hydro-Québec, representing 40.4% of all electricity sold by the company on the domestic market.

The Quebec government uses low electricity rates to attract new business and consolidate existing jobs. Despite its statutory obligation to sell electric power to every person who so requests, the province has reserved the right to grant large load allocations to companies on a case-by-case basis since 1974. The threshold was set at 175 MW from 1987 to 2006 and was reduced to 50 MW in the government's 2006–2015 energy strategy.

Large industrial users pay a lower rate than the domestic and commercial customers, because of lower distribution costs. In 2010, the largest industrial users, the Rate L customers, were paying an average of 4.66¢/kWh whereas companies with special contracts paid 3.07¢/kWh.

In 1987, Hydro-Québec and the Quebec government agreed to a series of controversial deals with aluminum giants Alcan and Alcoa. These risk sharing contracts set the price of electricity based on a series of factors, including aluminum world prices and the value of the Canadian dollar Those agreements are gradually being replaced by one based on published rates.

On May 10, 2007, the Quebec government signed an agreement with Alcan. The agreement, which is still in force despite the company's merger with Rio Tinto, renews the water rights concession on the Saguenay and Peribonka rivers. In exchange, Alcan has agreed to invest in its Quebec facilities and to maintain jobs and its corporate headquarters in Montreal.

On December 19, 2008, Hydro-Québec and Alcoa signed a similar agreement. This agreement, which expires in 2040, maintains the provision of electricity to Alcoa's three aluminum smelters in the province, located in Baie-Comeau, Bécancour and Deschambault-Grondines. In addition, the deal will allow Alcoa to modernize the Baie-Comeau plant which will increase its production capacity by 110,000 tonnes a year, to a total of 548,000 tonnes.

Several economists, including Université Laval's Jean-Thomas Bernard and Gérard Bélanger, have challenged the government's strategy and argue that sales to large industrial customers are very costly to the Quebec economy. In an article published in 2008, the researchers estimate that, under the current regime, a job in a new aluminum smelter or an expansion project costs the province between C$255,357 and C$729,653 a year, when taking into consideration the money that could be made by selling the excess electricity on the New York market.

This argument is disputed by large industrial customers, who point out that data from 2000 to 2006 indicate that electricity exports prices get lower when quantities increase, and vice versa. "We find that the more we export, the less lucrative it gets", said Luc Boulanger, the head of the association representing Quebec's large industrial customers. In his opinion, the high volatility of electricity markets and the transmission infrastructure physical limitations reduce the quantities of electricity that can be exported when prices are higher.

Hydro Quebec gained attention with Bitcoin miners in 2018 after the crackdown on mining in China. The province has an energy surplus equivalent to 10 Terawatt hours per year.

Export markets

Hydro-Québec sells part of its surplus electricity to neighbouring systems in Canada and the United States under long-term contracts and transactions on the New England, New York and Ontario bulk energy markets. In 2017, net exports revenues were at $1,651 million for a total of 34.4 TWh sent to New England (53%), New York (23%), Ontario (13%) and other (5%).

Although most export sales are now short-term transactions, Hydro-Québec has entered into long-term export contracts in the past. The corporation has 15 interconnections to neighboring markets. In 1990, the company signed a 328-MW deal with a group of 13 electric distributors in Vermont. On March 11, 2010, Vermont's two largest utilities, Green Mountain Power and Central Vermont Public Service, entered into a tentative 26-year deal with Hydro-Québec to purchase up to 225 MW of hydro power from 2012 to 2038. The memorandum of understanding provides for a price smoothing mechanism shielding Vermont customers from market price spikes. The deal is contingent upon the enactment designating large hydro as "renewable energy".

In 2015, Hydro-Quebec and the Ontario Independent Electricity System Operator (IESO) signed a 500-MW seasonal capacity sharing agreement. Ontario has increased capacity in the Winter, and shortages in the summer. Quebec has increased capacity in the summer, and shortages in the Winter. Thus, the agreement serves as to achieve a cost-effective solution for both provinces. Furthermore, in 2016 (IESO) and Hydro-Quebec signed a new long-term agreement starting in 2017 until 2023. The deal will send 2TWh per year to Ontario. On the other hand, Quebec should receive capacity from Ontario during Winter's peak demand.

Influence of Cross-Border Transmission Research

In addition to the long-standing focus on large-scale transmission expansion, contemporary research—such as that presented by Gazar et al. (2024)—has investigated the causal relationships between cross-border transmission capacity, new hydroelectric generation, and evolving energy demand in the northeastern United States and Canada. Their Bayesian network analysis suggests that increases in Quebec's hydroelectric capacity historically correlate more strongly with domestic demand and market price signals, rather than simply the availability of expanded transmission corridors. These findings can inform discussions of whether newly proposed U.S.–Canada intertie projects should include upstream reservoir development in environmental impact assessments.