Price shock imminent: Hydro-Quebec rates could more than double in next decade according to consumer report

Hydro rates could more than double according to a new report from the Union des Consummateurs. (Graham Hughes, The Canadian Press)

A new consumer report study suggests that Quebecers' hydro prices could more than double over the next decade and shock customers despite the premier insisting increases will remain at three per cent.

The Union des Consommateurs report says that Quebec's energy transition "could lead to a price shock" as the province moves to decarbonize. Electrifying sectors that rely on fossil fuels, such as transport, gas heating, and industrial production, could cause "a significant and rapid increase in tariffs," the report reads.

"Despite promises by the government and Hydro-Québec to limit rate increases to three per cent until 2035, Bill 69, An Act to ensure the responsible governance of energy resources, contains no concrete measures in this regard," a release from the organization says. "What's more, it changes the terms and conditions of tariffs and plans for accelerated development of new sources of electricity production, which is expected to increase production costs."

The release adds that the support for households is optional and "largely insufficient to protect consumers from the anticipated increases."

The union suggests electricity rates could rise from between 5.6 and nine per cent per year starting in 2028.

"These increases, far from being temporary, are likely to intensify in the medium term, particularly with the commissioning of new production sources, which would further weaken the finances of Quebec households already struggling with the general rise in the cost of living," the release reads.

Premier Francois Legault responded to the report, saying that hydro rates will not increase beyond three per cent.

"As long as I am premier, Quebecers' rates will not increase by more than three per cent per year and Quebecers will continue to have the lowest rates in North America," Legault wrote on X. "But Quebec will make profits from companies that will increasingly be looking for clean energy."

According to the Union des Consummateurs report, rate increases may occur due to the "explosion in Hydro-Quebec's investments," as well as the reduction in residential electricity supply and cost of new energy sources.

The report argues that the rise in prices will lead to more Quebecers enterering energy poverty. The report says that 178,000 Quebecers needed to negotiate payment agreements with Hydro-Quebec in 2023 to keep their power on.

"This situation is all the more worrying given that most household electricity consumption is for essential needs," the report reads. "In reality, households are not looking to consume electricity as such, but rather to use the services it makes possible: light, heat, washing, cooking, accessing information, using appliances, using technological devices, entertainment, communication and even travel."

Fuel poverty, the report reads, leads people to develop coping strategies, which can be detrimental to their health and well-being.

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The union suggests Quebec come up with a strategic plan to optimize rising demand, in addition to enacting policy and regulatory measures to ensure hikes are not possible.

It also suggests targeted support for middle-income customers.