Hydro-Québec () is a Canadian Crown corporation public utility owned by the Provincial government of Quebec headquartered in Montreal, Quebec. It manages the generation, transmission and distribution of electricity in Quebec, as well as the export of power to portions of the Northeast United States. More than 40 percent of Canada's water resources are in Quebec, and Hydro-Québec is one of the largest hydropower producers in the world.
It was established as a Crown corporation by the government of Quebec in 1944 from the expropriation of private firms. This was followed by massive investment in hydro-electric projects like the James Bay Project. Today, with 63 hydroelectric power stations, the combined output capacity is 37,370 megawatts. Extra power is exported from the province and Hydro-Québec supplies 10 per cent of New England's power requirements. The company logo, a stylized "Q" fashioned out of a circle and a lightning bolt, was designed by Montreal-based design agency Gagnon/Valkus in 1960.
In 2023, it paid 2.47 billion in dividends to its sole shareholder, the Government of Quebec. Its residential power rates are among the lowest in North America.
History
1945–1959: beginnings and development In Quebec, advocates for the creation of a public hydroelectric utility protested against high costs, poor rural electrification, and the lack of French speakers in management positions in hydroelectricity companies. In 1944, Montreal Light, Heat & Power company was nationalised, along with its subsidiary, Beauharnois Power, and Hydro-Québec was created to manage the companies.
Quebec Premier Adélard Godbout adopted a policy of investing 10 million dollars per year in rural electrification. However, in 1944 the government changed, and the new premier Maurice Duplessis was opposed to any form of government intervention in the economy. Local cooperatives were created to bring power to rural areas. Duplessis remained in power until 1960, and during that time there were no further nationalisations of companies, and Hydro-Québec mostly served the Montreal area.
Major projects included: Bersimis-1 generating station completed in 1956, 1,125 MW Bersimis-2 generating station completed in 1959, 845 MW Beauharnois Hydroelectric Generating Station completed in 1961, 1,903 MW. Carillon Generating Station built 1959–1964, 752 MW
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 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 of high voltage power lines and over of medium and low voltage distribution lines in southern Quebec. Up to 1.4 million customers were without power for up to five weeks.
Corporate structure and financial results
Corporate structure
Hydro-Québec has created separate business units dealing with the generation, transmission, distribution and construction. In 2017, production division generated 1.9B $ of net income (68.4%), transmission division 0.55B$ (19.4%), distribution division 0.33B $ (11.7%), and construction division did not generate any income. Hydro-Quebec redistributes all profits back to the government. In 2017, the crown corporation contributed $4 billion to the Quebec government by means of net income ($2.8B), royalties ($0.7B), public utilities tax ($0.3B) and debt securities ($0.2B).
In the year 2000 with the adoption of Bill 116, which amended the Act respecting the Régie de l'énergie, to enact the functional separation of Hydro-Québec's various business units. Legislation passed in 2000 commits the generation division, Hydro-Québec Production, to provide the distribution division, Hydro-Québec Distribution, a yearly heritage pool of up to 165 TWh of energy plus ancillary services—including an extra 13.9 TWh for losses and a guaranteed peak capacity of 34,342 MW—at a set price of 2.79¢ per kWh. Order in council 1277-2001 specifies quantities to be delivered for each of the 8,760 hourly intervals, which vary from 11,420 to 34,342 MW.
According to the 2017 annual report the workforce stood at 19,786 employees, both permanent and temporary workers. And, a total of 1,304 employees were hired.
Privatization debate
In 1981, the Parti Québécois government redefined Hydro-Québec's mission by modifying the terms of the social pact of 1944. The government issued itself 43,741,090 shares worth C$100 each, and the amended statute stated that Hydro-Québec would now pay up to 75% of its net earnings in dividends. This amendment to the Hydro-Québec Act started an episodic debate on whether Hydro-Québec should be fully or partially privatized. In recent years, economist Marcel Boyer and businessman Claude Garcia—both associated with the conservative think tank The Montreal Economic Institute—have often raised the issue, claiming that the company could be better managed by the private sector and that the proceeds from a sale would lower public debt.
Without going as far as Boyer and Garcia, Mario Dumont, the head of the Action démocratique du Québec, briefly discussed the possibility of selling a minority stake of Hydro-Québec during the 2008 election campaign. A Léger Marketing poll conducted in November 2008 found that a majority of Quebec respondents (53%) were opposed to his proposal to sell 7.5% of the company's equity to Quebec citizens and businesses, while 38% were in favour.
Commenting on the issue on Guy A. Lepage's talk show, former PQ Premier Jacques Parizeau estimated that such an idea would be quite unpopular in public opinion, adding that Hydro-Québec is often seen by Quebecers as a national success story and a source of pride. This could explain why various privatization proposals in the past have received little public attention. The liberal government has repeatedly stated that Hydro-Québec is not for sale.
Like many other economists, Yvan Allaire, from Montreal's Hautes études commerciales business school, advocate increased electricity rates as a way to increase the government's annual dividend without resorting to privatization. Others, like columnist Bertrand Tremblay of Saguenay's Le Quotidien, claim that privatization would signal a drift to the days when Quebec's natural resources were sold in bulk to foreigners at ridiculously low prices. "For too long, Tremblay writes, Quebec was somewhat of a banana republic, almost giving away its forestry and water resources. In turn, those foreign interests were exporting our jobs associated with the development of our natural resources with the complicity of local vultures".