Coming off its most profitable year in history, Hydro Quebec is asking for another price hike.
The provincial utility wants customers to shell out an extra 3.9 per cent for electricity starting April 1, 2015.
If the demand is approved, customers can expect a monthly price hike of about $2/month for those in an apartment, while those in homes should expect their bills to rise from $5 per month to $10/month, depending on the size of their house and how they heat (see chart below).
Hydro Quebec insists that even with the increased price, electricity rates in Quebec will remain the lowest in Canada and among the lowest in North America.
Before this price hike is approved the utility will have to face the Quebec Energy Board to get permission.
"I understand that it might be a bit harsh for some customers," said Patrice Lavoie, spokesperson Hydro-Quebec. "We do understand that fact. That being said, we need to understand that it's basically the real cost of what it cost to provide the service to Quebec customers. We do not ask a rate increase to increase revenues. We ask because it's actually the real cost to provide the service for 2015-16 and it's the same process each year."
The provincial utility says the hike is justified because of the investments it has been making into new power plants, especially wind power generators, and said the requested increase would be higher if it hadn't convinced customers to be more efficient.
Another portion of the increase is to cover the cost of inflation on its heritage pool electricity -- the pool of energy that Hydro-Quebec offers Quebecers at a reduced rate compared to its other clients. Until recently the price on that heritage pool was frozen, but that price was unfrozen last year due to inflation. Hydro-Quebec is therefore looking for a 3.9 per cent increase on what it charges 90 per cent of Quebecers for that power.
If those justifications seem familiar, it's because Hydro Quebec used them last year when it asked for (but was denied) a 5.8 per cent price increase.
Instead the Energy Board said Hydro Quebec could increase prices on April 1, 2014 by 4.3 per cent for residential customers and 3.5 per cent for industrial clients.
When the last increase took effect, Quebec consumer group Option Quebec reminded the utility that some 40,000 customers had their electricity cut two years ago when they couldn't pay their hydro bills. They were unavailable for comment Tuesday.
Hydro-Quebec pulled in a record profit of $2.9 billion in fiscal 2013, up drastically from the $860 million it cleared in 2012.
The Energy Board will rule on the requested increase early next year.
