(Montreal) The Régie de l’énergie gives the green light to the partnership between Hydro-Québec and the natural gas distributor Énergir, an agreement that had been criticized by consumer groups and environmentalists.
Updated yesterday at 5:04 p.m.
The agreement, announced last July, aims to reduce greenhouse gas (GHG) emissions by converting gas heating systems to dual energy. To do this, Hydro-Québec will first have to compensate Énergir and pay it 400 million for its lost revenue.
In a split decision, the Régie agreed with Hydro-Québec’s arguments that it would have been “significantly” more expensive to completely electrify the markets in question than to adopt dual energy, in its decision rendered Thursday. Hydro-Québec estimates that dual energy will save $1.7 billion by 2030.
Registrar François Émond, however, issued a dissenting opinion. He considers that the costs of this agreement “cannot be considered an expense necessary for the provision of electricity distribution service”.
Hydro-Québec and Énergir welcomed the decision in a press release issued jointly after the announcement of the decision. “We welcome the recognition of the principle that this transition [du gaz naturel à l’électricité] must be done at the best possible cost for society,” said Énergir President and Chief Executive Officer, Éric Lachance.
A matter of public interest
The administrative tribunal also rules that the agreement is “in the public interest”. “The Régie considers that the estimated pricing impacts […] are balanced and reasonable with a view to reducing 2.7 million tonnes of GHG emissions by 2030.”
The rate impact of the agreement on Hydro-Québec customers is around 1.43% by 2030, according to the Régie. An estimate similar to that provided by the Crown corporation. “Thus, the residential customer with a 5 1/2 dwelling would have a tariff impact on his annual electricity bill of the order of $2.84, starting in 2025”, is given as an example in the judgment. . “This amount is estimated to be $12.71 per year in 2030.”
The Régie arrives at a different conclusion from that of the detractors of the agreement, which had been criticized by groups of environmentalists, scientists and consumer protection.
The agreement between Énergir and Hydro-Québec is a bad solution, deplores the head of the Climate-Energy campaign at Greenpeace, Patrick Bonin. “It will perpetuate the use of gas which will tie us for years while there are solutions which would allow us to free ourselves completely, to switch to electrification”, he denounces in an interview.
Opponents of the agreement are evaluating the possibility of making a request for review, says Jean-Pierre Finet, of the Regroupement des organizations Environnementaux en Energie, in an interview. He believes that the Régie has taken a wrong turn by allowing Hydro-Québec to “write a check” to a “polluter” to compensate for its losses.
A request for review is possible under Article 37 of the Act respecting the Régie de l’énergie. Plaintiffs must, however, demonstrate that there was a defect in substance or procedure.
Barring a review, the Régie’s decision was the last regulatory step before allowing the state-owned company and Énergir to implement their agreement. Now that the decision has been made, customers will be able to sign up for the dual-energy offer in June 2022, the two partners said.