By Maxence Chouinard
Quebec’s public monopoly on energy production and distribution, a legacy of the Quiet Revolution, enabled Quebecers to take ownership over part of its hydroelectric potential and consequently to guarantee relatively low, uniform electricity rates. This monopoly has been, and continues to be, an important source of public revenue, essential to financing infrastructure and public services.
However, this collective jewel is under constant attack, particularly with the implementation of neoliberal policies from the end of the 20th century onwards.
Hydro-Québec’s Action Plan 2035 and Bill 69 (“An Act to ensure the responsible governance of energy resources”), which sets out its regulatory framework, are part of this trend. Over the medium term, they signal the end of the public energy monopoly, to the detriment of the majority of Quebecers.
Hiking rates in the name of “innovation”
In the Action Plan, Hydro-Québec plans massive investment in the power grid, to offer “reliable” service at an “affordable” cost. Yet behind these kind words lies a sinister reality: electricity rates are set to soar. With projected investments of up to $185 billion over 11 years (in contrast to Hydro-Québec’s current book value of $95 billion), representing $15 billion a year instead of today’s $4.5 billion a year, rate increases will be inevitable.
Bill 69 provides for rate increases, but Premier François Legault is promising that they will be frozen at 3 percent. But considering that one in seven Quebec households is currently unable to pay its electricity bill, or does so at the expense of other needs, this “marginal” increase (in the premier’s disconnected view of the reality on the ground) is far from marginal for a significant proportion of the population.
While these rate increases will lead to greater financial insecurity, they are still completely insufficient to repay the funds invested. In fact, over 11 years, the planned investments can only be met with a cumulative rate increase of 75 percent, or around 6 percent per year. But Legault once again provides reassuring promises, this time in the form of a fund to bridge this gap. This fund, of course, will be paid for by taxpayers – that is, by already hard-pressed working people, while large corporations continue to escape fair taxation on their profits.
The absurdity of this project is all the more apparent given that the investment will produce 56 TWh of new electricity in a decade, whereas over the past two decades, from 2003 to 2023, Quebec’s energy consumption increased by only 13 TWh, or eight times less.
Energy transition in words, not deeds
Such an increase in electricity production is not problematic in itself, as this green energy would replace fossil fuels. In fact, this is what the Action Plan 2035 supposedly envisages: 75 percent of new production would be used to decarbonize and 25 percent for economic development. But it is disconcerting that Bill 69 contains absolutely nothing – no measures, objectives or timetables – that will advance decarbonization at all.
Clearly, the real objective of this bill is not to reduce dependence on fossil fuels.
Faced with declining profitability and the rising power of China, Western industrialists led by the United States are desperate to make up for the loss of earnings caused by souring trade and economic relations with China.
These industrialists are betting on a return of production to their own shores, and have committed to huge financing for energy-intensive sectors like batteries, electric vehicles and green hydrogen. For them, as in the 1950s, Quebec is an unlimited reserve of resources that can be plundered at low cost, transformed into value-added products and then resold at unconscionably high prices. Hydro-Québec wants to become the energy pillar of this “green imperialism”.
Farewell to the public electricity monopoly
With Bill 69, Hydro-Québec is showcasing its new public-private financial partnership model, largely inspired by the business model used by the private sector over the past 25 years by the Association québécoise de la production d’énergie renouvelable (AQPER, Quebec Association for the Production of Renewable Energy).
This model favours the fragmentation of energy ownership and operation in the public sphere, immediately reducing government control of these resources and depriving the public purse of a significant portion of the revenues generated, at a time when the government is constantly crying that it lacks the means to fund the social safety net.
Former Minister of Economic Development Pierre Fitzgibbon made little secret of his desire to privatize Hydro-Québec when he announced that the utility would “focus on the big projects” and leave control of small and medium-sized power plants to the private sector. Bill 69 will effectively allow private power producers to increase their output by 50 to 100 MW. Add to this the fact that Hydro-Québec will be able to offer additional harnessing rights or divest under-utilized power plants (a precedent for this already exists), and the amount of energy produced by and for the private sector could rapidly climb.
Adding insult to injury, Bill 69 will also allow private companies to distribute their surplus electricity to private customers located near their production site. This enables a parallel private energy production and distribution network to be built around the increasingly weakened public “monopoly.” The result will be increased privatization which will drive energy prices up, once again generating huge profits for big corporations at the expense of working people.
Notably, this way of operating will let private industrialists off the hook when it comes to participating in the massive financing of public projects, and it also allows them to partly avoid financing their own expansion projects. The profits, of course, are theirs for the taking – only the losses will be socialized. Ultimately, all this will cement and accelerate the privatization of energy production.
Should Bill 69 pass, it will sign the death warrant for social control of one of Quebec’s greatest collective assets. It will decisively signal the privatization of Hydro-Québec, leading to an explosion in electricity rates, a loss of public revenue (and an even greater underfunding of public services), environmental destruction, and greater dependence on foreign capital. And all this, to the detriment of working people in Quebec.
Clarté
Translated from French by PV staff
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