Quebec and Ontario reach agreement in principle on power exchange

A Hydro worker works on a power line following an ice storm in Montreal, Friday, April 7, 2023. Hydro-Quebec says it's restored power to more than half a million customers since Wednesday's ice storm, but more than 600,000 remain in the dark. THE CANADIAN PRESS/Graham Hughes

Quebec and Ontario have signed a new memorandum of understanding on an exchange of electrical power to help each other during consumption peaks.

The previous agreement covered the 2017-2023 period and included Ontario's purchase from Hydro-Québec of the equivalent of 2 TWh per year. This portion of the power purchase is not included in the new memorandum of understanding.

Premier Doug Ford has said several times in recent years that Ontario would not buy electricity from Quebec, claiming to have an energy surplus.

Ontario Energy Minister Todd Smith said the new energy agreement was a simple exchange, with no payments on either side and that the transfer could begin as early as this winter.

The provinces' electricity operators, Hydro-Québec and the Independent Electricity System Operator (IESO), are expected to exchange up to 600 megawatts of electrical power each year, depending on peak demand, Smith said.

Ontario's energy demand increases in the summer, largely due to air conditioning on hot days, he said.

Quebec's energy needs peak in winter, mainly due to electric heating on cold days.

"The agreement simply makes sense on both sides," said Smith in an interview with The Canadian Press.

"What's also great about this system is that Quebec and Ontario have some of the cleanest grids in the world," he added.

Most of Ontario's energy comes from nuclear power, while most of Quebec's is hydroelectric.

The agreement works because Ontario's and Quebec's energy peaks occur at different times, Smith said.

The agreement would last for ten years, with revisions along the way to adjust power quantities based on usage.

Subject to the terms of the final agreement, the new arrangement could come into effect as early as the next winter season, it was reported.

"With energy demand on the rise, we need to adopt more energy efficiency and intelligence measures to better manage peak electricity consumption," said Quebec's Minister of the Economy, Innovation and Energy, Pierre Fitzgibbon, in a joint statement.

"The sharing agreement between Hydro-Québec and the IESO is a fine example of collaboration, enabling Quebec and Ontario to meet the challenges of the energy transition while decarbonizing our economies," he added.

Ontario will also be able to bank unused energy to save capacity until it's needed in future years, Smith said.

Both provinces are gearing up to meet their future energy needs, as electricity demand is expected to grow significantly over the next few years due to increased demand from industry and the rise of electric vehicles.

This report by The Canadian Press was first published in French on Aug. 30, 2023.