Editorial: Many challenges forward for Hydro-Québec and its subsequent CEO

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Hydro-Québec has lengthy been the crown jewel of the sociétés d’état created through the Quiet Revolution.

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It has performed a important function in making Quebecers “maîtres chez nous.” Most people typically views it with delight.

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The utility can also be a money cow that contributed a whopping $3.4-billion dividend to public coffers final 12 months, whereas charging Quebecers the bottom electrical energy charges in North America. Because the world seeks to wean itself off fossil fuels and transition to scrub power to deal with the specter of local weather change, Hydro-Québec has turn out to be a strategic asset.

However the state energy monopoly can also be at a crossroads. Its subsequent chief, by all accounts Michael Sabia, may have his work minimize out for him.

Hydro-Québec is, in fact, the centrepiece of the federal government’s plans to decarbonize the province by 2050. The electrification of transport, together with the phasing out of heating oil, are essential for assembly these goals. However greater than that, the Quebec authorities additionally sees a possibility on this world inexperienced shift to draw funding and promote financial development — utilizing low-cost, clear hydro energy as a draw.

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The one hitch: Quebec’s power surplus is projected to fizzle out by 2026, and it’ll want an estimated 50 per cent extra capability on the way in which to carbon neutrality to fulfill rising home demand whereas additionally honouring just lately inked worldwide contracts to produce electrical energy to New York Metropolis and Massachusetts.

The federal government of Premier François Legault has raised the spectre of constructing new hydro dams. However the environmental and social acceptability of diverting rivers and flooding habitat could be extra elusive as we speak than in previous a long time, amid rising consciousness of ecology and Indigenous rights.

In the meantime, the Churchill Falls power-sharing deal signed with Newfoundland and Labrador expires in 2041 and have to be renegotiated. Quebec depends on Churchill Falls for 15 per cent of its electrical energy. This course of will take some delicacy, as Newfoundlanders really feel cheated by the extraordinarily advantageous phrases Quebec solid in 1969. Legault has already made overtures to ink a brand new settlement sooner, if Quebec can safe beneficial charges.

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A violent microburst in Might 2022, together with April’s damaging ice storm, led to important energy outages that highlighted each the fragility of Hydro-Québec’s getting old community and the vulnerability to excessive climate occasions, which might turn out to be extra frequent as a result of local weather emergency.

Quebecers additionally have to resist the actual fact they’re the largest per capita shoppers of electrical energy in Canada, sucking up 60 per cent greater than the nationwide common. That’s due partly to industrial operations like aluminum smelters and since the next proportion of Quebecers warmth their houses with electrical energy. However low charges have however made folks wasteful. Hydro-Québec and the Legault authorities have began elevating the difficulty of “power sobriety,” however getting Quebecers to just accept they could should pay extra and/or use much less of this treasured useful resource shall be a tricky promote.

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Sabia ran the Caisse de dépôt et placement du Québec for 10 years, rescuing the pension fund from the monetary disaster, tripling its portfolio and broadening its worldwide investments. Earlier than that he helmed CN and Bell; since then, he has been deputy minister of finance in Ottawa.

Sabia has a confirmed observe document strengthening and solidifying one other pillar of recent Quebec. However it’ll take all of his formidable expertise, acumen and expertise to information Hydro-Québec into an period the place its mission is extra essential than ever.