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The study of Bill 69 on energy, a vast reform signed by Pierre Fitzgibbon, is to begin tomorrow in the National Assembly despite the resignation of its conductor.
A host of experts, business associations, environmental organizations and citizen and political groups are expected to parade during the consultations, which will run until September 19, to formulate their critiques and recommendations on proposals likely to change the face, cost and use of our electricity.
What to expect and how to navigate? Insights into the important elements of the bill that are likely to fuel debate.
A new minister
From the outset, Pierre Fitzgibbon’s resignation prompted several opposition parties, as well as organizations such as Greenpeace, the CSN and the Union des consommateurs, to call for the suspension of parliamentary procedures regarding Bill 69. They believe that the minister taking over, Christine Fréchette, has not had the time to familiarize herself sufficiently with this extremely complex issue.
Moreover, many believe that this bill was rushed, because it should have been preceded by a broad debate on how Quebec society wants to use its resources for an energy transition. “The groups argue that the government must take advantage of Mr. Fitzgibbon’s departure to rework this file for several reasons,” reads an open letter signed last Wednesday by about twenty organization representatives.
Double electricity production
“More wind turbines, more solar and new dams.” One of the main goals of the bill, coming from the mouth of the former “super minister”, is to facilitate the rapid addition of new electricity generation capacity.
This allows the government to avoid tenders for the conclusion of supply contracts. The production limit of small private hydroelectric plants is increased to 100 megawatts. Private producers of electricity from renewable sources are encouraged to increase their capacities by allowing them to sell their surplus to their neighbours.
The bill modifies the mission of the Minister of Energy by adding the responsibility “to support, stimulate and promote energy production and the development of new energy sectors.” It is therefore assumed that it will not be possible to meet the needs of Quebecers with current assets.
In its latest action plan, Hydro-Québec estimated that Quebec’s electricity consumption would double by 2050 due to decarbonization and economic growth. But many citizens are skeptical about the need to build so much new infrastructure. Couldn’t we focus more on energy sobriety and efficiency to contain demand? And what are the repercussions of the major energy-intensive industrial projects announced in recent years by the government, such as those of Ford and Northvolt?
Until now, the Crown corporation has always reported surpluses because it overestimated its sales growth. Jean-François Blain, an independent energy sector analyst, is convinced that future electricity demand is also overestimated by the authorities. He points out that the volume of sales in Quebec increased from 166.7 TWh in 2003 to 177 TWh in 2023, an increase of just over 10 TWh. Hydro-Québec is now forecasting an increase of 60 TWh between 2022 and 2035, under the pretext of the eventual electrification of transportation, buildings and industries.
And what about decarbonization in all this?
There are fears, however, that this additional electrical energy will simply be added to rather than replacing fossil fuels, which currently account for half of our energy consumption.
“No indicator points to the beginning of decarbonization in Quebec,” says Blain, who published a report on the subject with a colleague from the Institute for Socioeconomic Research and Information, Bertrand Schepper. According to him, the CAQ government has failed to put in place robust fiscal, legal and regulatory measures to encourage the abandonment of fossil fuels. He is thinking in particular of taxes on oil and gas products or equipment that uses them.
The bill assigns the minister the responsibility of creating a roadmap for the energy transition, called an “integrated energy resource management plan.” Mr. Blain believes, however, that such a plan should have been determined before and not after the tabling of a bill that guides future electricity supplies.
The thorny question of tariffs
One of the most contentious questions remains: who will pay for all this, including the $155 to $185 billion in investments planned by Hydro-Québec by 2035? For now, the answer seems to be: all of Hydro-Québec’s customers, to varying degrees.
Premier François Legault assures that it will be possible to cap rate increases at 3% for residential customers “in the foreseeable future.” However, several experts believe that the real cost will easily be twice as high.
To alleviate this problem, the bill provides for the creation, from public finances, of the Domestic Customer Assistance Fund, which will compensate Hydro-Québec until at least 2026 for the losses caused by these artificially low rates.
This idea is far from unanimous. In a brief to be presented to a parliamentary committee, the Trottier Energy Institute calls this aid fund a “very bad idea” since it “transfers the cost of electricity to taxpayers, who have no control over consumption.” However, the idea of strengthening support programs for low-income households is being floated. Pierre-Olivier Pineau, holder of the Energy Sector Management Chair, also believes that people should be made aware of the real costs of electricity, particularly so that they are encouraged to consume less.
Companies, for their part, deplore being treated differently. They are worried about a possible tariff shock that would harm their profitability and competitiveness.
More private
Several business associations have welcomed the additional leeway granted to private electricity producers. Companies want above all to be able to guarantee supplies for their various business projects.
In addition, some observers consider that the bill provides tools for the privatization of several Hydro-Québec assets.
Mr. Blain, for his part, criticizes the creation of financial partnerships with municipalities and indigenous communities for the operation of certain production infrastructures, such as wind turbines or power plants. “The community will continue to be called upon (through its rates) to finance energy development […]but the profits will be distributed selectively,” it is written in his report.