In October 2019, a coalition of organizations bringing together large businesses, SMEs and consumer protection groups jointly denounced Bill 34 (now the Act to simplify the process for establishing distribution tariffs). electricity, LQ 2019, c. 27), which would muzzle the Régie de l’énergie in addition to increasing Hydro-Québec’s electricity rates.
In this bill, the government decided to freeze tariffs in the first year and then increase them arbitrarily according to inflation in subsequent years. The Régie de l’énergie would set electricity prices every five years rather than every year. This bill was finally adopted without major modification in December 2019; we knew from that moment that the government would hit a wall and that the consumer would be the loser one day or another.
We are now hitting this wall: 2.6% increase in Hydro-Quebec rates for the next year. Asked about this increase, the Minister of Energy, Jonatan Julien, recently replied in a media interview that the Régie de l’énergie could reduce tariffs during its next review, in 2025, if it assesses that Quebecers have paid too much for their electricity.
An unsatisfactory response in our opinion. The repercussions of such an increase are real and immediate and further weaken low-income and middle-class Quebec consumers, who simply cannot afford to wait for a potential drop in prices in four years. , without the possibility of obtaining a refund of the amounts that would be paid in excess.
It is important to mention that linking electricity prices directly to the consumer price index is far from justified. The evolution of electricity tariffs should rather depend on the financial and economic contexts faced by energy distributors. Quebec households are better served when a neutral body sets prices as part of a rigorous process and reconciles the interests of all. Indexing electricity prices to inflation exposes consumers to variations in volatile components (food, oil, etc.) far removed from the reality of the electricity market.
Remember that the electricity supplied by Hydro-Québec is an essential service. Not only are consumers forced to consume it, but they do not have the luxury of choosing between different distributors. This is why a neutral, logical and independent mechanism, without politicization or partisanship, is necessary in setting Hydro-Québec’s rates. In wishing to simplify the process of setting electricity rates, the government has stripped the Régie de l’énergie of powers that are at the heart of its mission and that benefit all of Hydro-Québec’s customers.
We strongly suggest that the government reconsider its decision by allowing the Régie to decide on the merits of Hydro-Québec’s rates, starting next year. We believe that freezing or inflating tariffs are not viable long-term solutions.