Hydro-Québec rate increase below inflation for fourth consecutive year

MONTRÉAL, July 27, 2018 /CNW Telbec/ - For the fourth year in a row, Hydro-Québec has upheld its commitment by asking the Régie de l'énergie for a rate increase that is below inflation, namely 0.8%, effective April 1, 2019, for all residential customers and most business customers. The forecast inflation rate in Québec for 2019 is 1.8%.

The requested increase is mainly due to:

• Increases in certain distribution costs: +0.1%
• Capital spending to expand and maintain the high-voltage transmission system in order to ensure secure, reliable service: +1.2%
• Higher electricity purchase costs: +2.2%

Two main factors have helped limit the requested increase to 0.8%:

• Growth in electricity demand, particularly as a result of the sales development strategy: −2.4%
• The impact of milder temperatures in recent winters: −0.3%

Also, earnings variances of $46 million were recognized in 2017 and shared with customers, further limiting the rate increase requested.

New dynamic pricing options for winter 2019−2020
With the dual aim of continuing to offer customers more choices while adopting new solutions for handling winter peaks, Hydro-Québec is proposing to add two dynamic pricing options effective in December 2019 that customers may choose to sign up for:

Critical Peak Credit No risk for the customer Customer keeps current rate 50¢ credit for each kWh curtailed at Hydro-Québec's request

Critical Peak Rate High price during peaks: 50¢/kWh, applicable to a maximum of 3% of the hours in the winter period Low off-peak prices: about 2¢/kWh less than Rate D in the winter period

Hydro-Québec's curtailment requests will apply to no more than 100 hours each winter. Various tools will be used to contact customers and provide them with support and information.

These dynamic pricing options will enable customers to lower their electricity bill if they change their energy use habits, while enabling Hydro-Québec to reduce its operating costs during winter peaks.

Small consumers and low-income households a particular concern
Hydro-Québec will continue its programs for low-income households, in large part to:

• support the payment of bills and arrears of customers with whom it has negotiated payment arrangements
• provide energy efficiency programs to help these customers reduce their electricity consumption

Increase in first tier
Hydro-Québec is asking the Régie de l'énergie 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.

Extension of Industrial Revitalization Rate
Hydro-Québec is proposing to extend the Industrial Revitalization Rate—which was implemented for large-power customers this year—to medium-power customers. This advantageous rate, designed to monetize energy surpluses while improving the competitiveness of industrial companies in Québec, is offered to customers that return all or part of a plant's unused production capacity to operation or convert an industrial process now running on fuel to electricity.

Energy efficiency
Hydro-Québec intends to spend $101 million on energy efficiency programs and initiatives. This will yield some 405 GWh in additional energy savings and reduce capacity requirements by 372 MW.

A rigorous review process
Every year, Hydro-Québec's rate application is carefully reviewed by the Régie de l'énergie. The review ends in December with public hearings in which representatives of all concerned organizations have an opportunity to express their views. The Régie issues a ruling early in the new year, so that the new rates can take effect on April 1.

SOURCE Hydro-Québec

Hydro-Québec, Media Relations, Tel.: [phone]

Related Links

http://www.hydroquebec.com