(Kahnawake) Hydro-Québec and the Mohawk Council of Kahnawake have confirmed their partnership in the electricity export project to New York State.
The community will hold a minority interest of at least 10% in the Hertel-New York interconnection line. The participation of the Mohawks of Kahnawake will allow them to earn dividend income.
The president and CEO of Hydro-Québec, Michael Sabia, spoke of a return of around 8% for the shares held by the community, at a press conference on Thursday in Kahnawake, on the South Shore of Montreal.
“The level of yield is consistent with the yield we ourselves earn on regulated activities. In other words, it’s about 8% to 8.2%,” he said.
Grand Chief Kahsennenhawe Sky-Deer said the returns from the joint venture would allow Council to invest in community services.
“Language and culture, sports, infrastructure,” she listed. We have housing needs. There are so many needs, it will be a question of the priorities of the day, because this is a 40-year agreement. »
The 10% stake is a minimum threshold, but the Mohawk Council of Kahnawake could take a larger stake, up to 49% of the project.
The Grand Chief said she would like Council to take a larger stake than the minimum of 10%, but that the issue was still under study.
We have the ability to go anywhere between 10% and 49%, it’s going to depend on our risk tolerance, interest rates. […] We hope we can take as much as possible and it will benefit the community.
Kahsennenhawe Sky-Deer, Grand Chief of Kahnawake
Hydro-Québec and the Mohawk Council of Kahnawake have not precisely quantified the amount invested by the community.
Mr. Sabia specified that the regulated value of the project was 345 million. Of this amount, 70% is financed by debt entirely assumed by Hydro-Québec. The remaining 30% represents equity. It is this 30% portion that forms the joint venture in which the Mohawks of Kahnawake will take a stake of at least 10%.
The value of the investment could thus vary between 10 million and 50 million, depending on the size of the share held by the Mohawk Council of Kahnawake.
Mr. Sabia specified that the cost of the Hertel-New York interconnection line is 1.13 billion.
No increases in exports
The line will be commissioned in 2026. The contract to export 10.4 terawatt hours (TWh) of electricity to New York will have a duration of 25 years.
The line will continue to be useful when the New York contract expires, assures Mr. Sabia.
He points out that the Hertel-New York interconnection line is bidirectional, which means that Hydro-Québec could also import electricity on this line in the future.
This line represents an opportunity for us to develop relationships outside of Quebec, which could well meet our needs in the future.
Michael Sabia, President and CEO of Hydro-Québec
Mr. Sabia defended the relevance of the contract with the State of New York and that with the State of Massachusetts at a time when Quebec is faced with the end of energy surpluses.
He explained that Hydro-Québec exported an average of 30 TWh. He added that the two projects represented around 20 TWh. The state-owned company would, however, have the flexibility to reduce its exports on the open market. “This is not an increase in exports to the United States,” he insists.