Hydro-Québec looks to charge big consumers higher rates

Hydro-Québec presented its planned rate increases Thursday, indicating it wants to charge its highest residential consumers more, provide rebates for solar power and electric vehicle users as well as for low-income households.

If the Régie de l'énergie approves, homes that consume more than 50,000 kWh in a year (about one per cent of residential customers) could be charged an overconsumption rate as of April 1, 2027.

The announcement comes a little over a month after the Crown corporation released its 2035 action plan, indicating it intends to impose higher rates for households that use "excessive" amounts of electricity. 

"We believe that these customers should lead by example because they have more opportunities to act," Dave Rhéaume, Hydro-Québec's executive vice-president of commercial activities, said at a news conference Thursday. 

He said the company is also planning to introduce new incentives for Quebecers to use less energy. As an example, Rhéaume said, clients who charge their electric cars at night would save up to $350 per year. 

Rate increases

Starting in April 2025, Hydro-Québec is increasing rates for industrial properties by 3.3 per cent. Meanwhile, commercial businesses could see a 3.9 per cent increase. This year, businesses were hit with a 5.1 per cent increase. 

Residential electricity rates are slated to go up by three per cent — the maximum established by the Quebec government until 2026. 

For residential clients, the monthly impact of that adjustment would correspond to $2.40 for a dwelling, $4.50 for a small house, $6 for a medium-sized house and $7.40 for a large house.

The utility also said it plans to subsidize solar panels in 2026 to support clients who choose to self-generate electricity.

In July, Hydro-Québec emphasized the need for 10,000 megawatts of new wind power generated by 2035 to meet the demand for renewable energy.

In its 2035 action plan, the utility said it could add between 3,800 to 4,200 megawatts of hydroelectricity by increasing the capacity of existing generating stations and build more hydropower and pumped-storage facilities. 

Hydro said it plans to increase investments in the next decade to $45 to $50 billion to improve its electricity grid.

Low-income households

Despite intentions to increase rates for bigger consumers, Hydro-Québec says it would implement measures to ensure that no low-income household would be charged the residential over-consumption rate.

The Crown corporation says it would allocate $60 million to mainly help pay off bills and debts of some customers who have entered into a payment agreement and offer those customers energy efficiency programs aimed at reducing consumption. 

More carrot than stick

Pierre-Olivier Pineau, a professor and researcher in energy policy at HEC Montreal and the chair in Energy Sector Management, said turning to dynamic pricing can help change behaviours, but said he believes the measures announced aren't enough to significantly curtail energy consumption. 

Pineau says Hydro-Québec is offering more carrots — in the form of subsidies and energy efficient technology — than sticks, such as financial incentives. 

"At one point, sticks are necessary, especially if we want to move fast on the energy transition and if we want to minimize the cost of additional infrastructure," Pineau said.

Residential clients benefit from a 15 per cent discount on the price of electricity because the price is partially financed by what the utility charges commercial consumers, he said. 

"Everyone should see that price, even if we're providing some help for customers that do need support," he said. 

Pineau added that although only the top one per cent of energy consumers would be targeted with higher electricity rates in the foreseeable future, most Quebecers can and should still make efforts to use less electricity.