Hydro-Québec is a Canadian Crown corporation public utility established in 1944 by the Government of Quebec. The company is in charge of the generation, transmission and distribution of electricity across Quebec. Its head office is located in Montreal.
Origins In the years after the Great Depression, voices were raised in Quebec asking for a government takeover of the electricity business. Many of the criticisms leveled at the so-called "electricity trust" focused on high rates and excessive profits. Inspired by the example of Adam Beck, who had nationalized much of the electric sector in Ontario in 1906 as the Hydro-Electric Power Commission of Ontario, local politicians, such as Philippe Hamel and Télesphore-Damien Bouchard, strongly advocated moving Quebec towards a similar system. Soon after being elected Premier of Quebec in 1939, Adélard Godbout warmed to the concept of a state-owned utility. Godbout was outraged by the inefficient power system dominated by Anglo-Canadian economic interests and the collusion between the Montreal Light, Heat & Power (MLH&P) and the Shawinigan Water & Power Company, the two main companies involved. At one point, he even called the duopoly an "economic dictatorship, crooked and vicious".
1944: First stage of state control
In the fall of 1943, the Godbout government tabled a bill to take control of MLH&P, the company running the gas and electric distribution in and around Montreal, Quebec's largest city. On April 14, 1944, the Quebec Legislative Assembly passed Bill 17, creating a publicly owned commercial venture, the Quebec Hydroelectric Commission, commonly referred to as Hydro-Québec. The act granted the new Crown corporation an electric and gas distribution monopoly in the Montreal area and mandated Hydro-Québec to serve its customers "at the lowest rates consistent with a sound financial management", to restore the substandard electric grid and to speed up rural electrification in areas with no or limited electric service.
MLH&P was taken over the next day, April 15, 1944. The new management quickly realized that it would need to rapidly increase the company's 600-megawatt generation capacity in the next few years in order to meet growing demand. By 1948, Hydro-Québec had started the expansion of the Beauharnois power station. It then set its eyes on the Bersimis near Forestville, on the North Shore of the Saint Lawrence River, located east of Montreal. The Bersimis-1 and Bersimis-2 generating stations were built between 1953 and 1959 and were widely considered to be a bench trial for the fledgling company. They also offered a preview of the large developments that occurred over the next three decades in Northern Quebec.
Other construction projects started in the Maurice Duplessis era included a second upgrade of the Beauharnois project and the construction of the Carillon generating station on the Ottawa River. Between 1944 and 1962, Hydro-Québec's installed capacity increased sixfold, from 616 to 3,661 megawatts.
1963: Second stage of state control
The onset of the Quiet Revolution in 1960 did not stop the construction of new dams. On the contrary, it brought a new momentum to the company's development under the tutelage of a young and energetic Hydraulic Resources minister. René Lévesque, a 38-year-old former television reporter and a bona fide star of the new Lesage government, was appointed to the Hydro-Québec portfolio as part of the liberal Premier's "équipe du tonnerre" (English: "Dream Team"). Lévesque quickly approved continuation of the ongoing construction work and put together a team to nationalize the 11 remaining private companies that still controlled a substantial share of the electricity generation and distribution business in Quebec.
On February 12, 1962, Lévesque started his public campaign for nationalization. In a speech to the Quebec Electric Industry Association he bluntly called the whole electric business an "unbelievably costly mess". The minister then toured the province in order to reassure the population and refute the arguments of the Shawinigan Water & Power Company, the main opponent of the proposed takeover. On September 4 and 5, 1962, Lévesque finally convinced his liberal cabinet colleagues to go ahead with the plan during a working retreat at a fishing camp north of Quebec City. The issue topped the liberal agenda during a snap election called two years early, and their chosen theme, "Maîtres chez nous" (in English: "Master in our Own Homes"), had a strong nationalist undertone.
The Lesage government was re-elected on November 14, 1962 and Lévesque went ahead with the plan. On Friday, December 28, 1962 at 6 pm, Hydro-Québec launched a hostile takeover, offering to buy all of the stock in 11 companies at a set price, that was slightly above market value: Shawinigan Water & Power, Quebec Power, Southern Canada Power, Saint-Maurice Power, Gatineau Power, la Compagnie de pouvoir du Bas-Saint-Laurent, Saguenay Power, Northern Quebec Power, la Compagnie électrique de Mont-Laurier, la Compagnie électrique de Ferme-Neuve and La Sarre Power. After hedging their bets for a few weeks, management of the firms advised their shareholders to accept the C$604 million government offer. In addition to buying the 11 companies, most electric co-operatives and municipally owned utilities were also taken over and merged with the existing Hydro-Québec operations, which became the largest electric company in Quebec on May 1, 1963.
In 1962, the US government lent Quebec $300 million. The funds were used to acquire independent power companies.
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.
The 1960s and 1970s
Following the 1963 nationalization Hydro-Québec had to deal with three problems simultaneously. It first had to reorganize in order to seamlessly merge the new subsidiaries into the existing structure, while standardizing dozens of networks in various state of disrepair and upgrading large parts of the Abitibi system from 25 to 60 Hz.
All of this had to be done while construction of the Manic-Outardes Complex was underway on the North Shore. By 1959, thousands of workers were building 7 new hydroelectric stations, including the wide Daniel-Johnson Dam, the largest of its kind in the world. Construction on the Manicouagan and Outardes rivers was completed in 1978 with the inauguration of the Outardes-2 generating station.
These large projects raised a new problem that occupied company engineers for a few years: the transmission of the large amounts of power produced by generating stations located hundreds of kilometres away from the urban centres in southern Quebec in an economical fashion. A young engineer named Jean-Jacques Archambault drafted a plan to build 735 kV power lines, a much higher voltage than what was used at the time. Archambault persisted and managed to convince his colleagues and major equipment suppliers of the viability of his plan. The first 735 kV power line was put into commercial service on November 29, 1965.Trinôme Inc. Chantiers : La route des pylônes. Documentary broadcast on the Historia channel. 2006.
Churchill Falls
When it bought the Shawinigan Water & Power Company, Hydro-Québec acquired a 20% share of a planned hydroelectric facility at Grand FallsThe falls were renamed to honour the late British Prime Minister, Sir Winston Churchill, soon after his death, in 1965. in Labrador, a project led by a consortium of banks and industrialists, British Newfoundland Corporation Limited (Brinco). After years of hard bargaining, the parties reached a deal on May 12, 1969 to finance the construction of the power plant. The agreement committed Hydro-Québec to buy most of the plant's output at one-quarter of a cent per kilowatt-hour for 65 years, and to enter into a risk-sharing agreement. Hydro-Québec would cover part of the interest risk and buy some of Brinco's debt, in exchange for a 34.2% share in the company owning the plant, Churchill Falls (Labrador) Corporation Limited. The 5,428-megawatt Churchill Falls generating station delivered its first kilowatts on December 6, 1971. Its 11 turbines were fully operational by June 1974.
In the aftermath of the 1973 oil crisis, the Government of Newfoundland, unhappy with the terms of the agreement, bought all of the shares in CF(L)Co that were not held by Hydro-Québec. The Newfoundland government then asked to reopen the contract, a demand refused by Hydro-Québec. After a protracted legal battle between the two neighbouring provinces, the contract's validity was twice affirmed by the Supreme Court of Canada, in 1984 and 1988...
In December 2024, Newfoundland premier Andrew Furey and Quebec premier François Legault signed a 50-year Memorandum of understanding that terminated the original contract. If ratified by both provinces, the rates Hydro-Quebec pays for Churchill Falls electricity would rise by 2,850% and Quebec would pay Newfoundland and Labrador Hydro $3.5 billion for co-development rights for two anticipated Churchill River energy projects. At the press conference announcing the deal, Furey symbolically tore up a copy of the 1969 agreement.
The nuclear option
In the late 1960s and early 1970s, Hydro-Québec briefly considered building nuclear power plants to meet the energy needs of Quebec. The company partnered with Atomic Energy of Canada Limited (AECL) to build two CANDU nuclear reactors, in Bécancour, on the south shore of the Saint Lawrence River, opposite Trois-Rivières, the Gentilly nuclear generating station.
The first reactor, Gentilly-1, was a 266-megawatt CANDU-BWR unit, built between 1966 and 1970. Except for two brief periods, extending over 183 days in 1972, the plant was never put in commercial operation. In 1980, the plant was mothballed by AECL, which still owns the plant.
The second plant, Gentilly-2, is a 675-megawatt CANDU-PHW unit commissioned in 1983, after a 10-year construction period. On August 19, 2008, after several years of studies, the government of Quebec and Hydro-Québec announced its decision to go ahead with Gentilly-2's refurbishment in 2011 and 2012 at a cost of C$1.9 billion. The project was to extend the plant's useful life until 2035. However, on October 3, 2012, the Québec government announced it would accept Hydro-Québec's recommendation to shut down Gentilly-2. The cost to shut the plant down was estimated at $2 billion, whereas the estimate for the cost of a refurbishment had increased to $4.3 billion. The plant shutdown on December 28, 2012..
"The Project of the Century"
Almost a year to the day after his April 1970 election, Quebec Premier Robert Bourassa launched a project which he hoped would help him fulfill a campaign promise to create new jobs. On April 30, 1971, in front of a gathering of loyal liberal supporters, he announced plans for the construction of a 10,000-megawatt hydroelectric complex in the James Bay area. After assessing three possible options, Hydro-Québec and the government chose to build three new dams on La Grande River, named LG-2, LG-3 and LG-4.
On top of the technical and logistical challenges posed by a public works project of this scope in a harsh and remote setting, the man in charge, Société d'énergie de la Baie James president Robert A. Boyd, had to face the opposition of the Cree residents of the area, who had grave concerns about the project's impact on their traditional lifestyle. In November 1973, the Crees got a preliminary injunction that temporarily stopped the construction of the basic infrastructure needed to build the dams, forcing the Bourassa government to negotiate with them.