Hydro-Quebec to appeal energy board’s 3.6 per cent residential rate hike

Quebec's energy board has rejected Hydro-Quebec’s proposal to cap the increase in residential electricity rates at 3 per cent, against government wishes.

The provincial energy board has rejected Hydro-Quebec’s proposal to cap the increase in residential electricity rates at 3 per cent, opting instead for a 3.6 per cent increase as of April 1.

The Crown corporation will contest the decision, which also goes against the wishes of the government.

The Régie de l'énergie presented its conclusions on Hydro-Quebec’s rate applications for 2025-2026 on Thursday afternoon, following a hearing held in December.

The electricity distributor announced that it would be appealed, “in order to limit residential rate increases to 3 per cent.”

“This decision is not consistent with the social, economic and political context in Quebec.

“Hydro-Quebec will continue to analyze the other elements of this decision over the next few days,” Hydro-Quebec said in a press release.

The energy board explained it supported the recommendations of several stakeholders, including Option consommateurs.

In the summary of its decision, it stated that it wished to “recover all costs required to deliver electricity service.”

“The Régie is of the opinion that rate increases that do not reflect the growth in Hydro-Quebec’s required revenues are arbitrary and do not allow it to set rates that are fair and reasonable,” it stated.

Hydro-Quebec forecast an estimated shortfall of $60 million in 2025 with a rate cap.

The Crown corporation argued that its request was “consistent with its commitment to maintain affordable rates for all Quebec households,” the decision states.

The supplier was also responding to the government’s desire to limit rate increases to 3 per cent for residential customers.

Premier François Legault had made this promise.

The energy board noted that “the Quebec government has not indicated any economic, social or environmental concerns to the Régie by decree.”

It is also opposed to rate increases differentiated by consumer category, and is calling for uniformity instead.

Hydro-Quebec had applied for a 3.9 per cent increase in general rates for its commercial and institutional customers.

Instead, the board ruled in favour of an increase similar to that for residential customers, i.e. 3.6 per cent.

For large-power industrial customers under Rate L, Hydro-Quebec proposed 3.3 per cent. The board set the increase at 1.7 per cent.

On average, the rate increase amounts to 3.3 per cent.

This “can be explained essentially by growth in demand and inflation, which are reflected in electricity supply costs,” the administrative tribunal said.

The energy board points out that its decision reduces the revenue requested by Hydro-Quebec by $73.1 million.

This report by The Canadian Press was first published in French March 6, 2025.