Hydro-Quebec’s profits crossed the $2 billion mark in the first quarter alone, as several electricity consumption records were broken due to the cold weather and the economy was booming.
Posted at 11:00 a.m.
Net profit for the first three months of the year reached 2.06 billion, up 421 million compared to the same period last year.
“We are starting the year with a noteworthy financial performance,” commented Jean-Hugues Lafleur, Executive Vice-President and Chief Financial Officer of Hydro-Québec. The volume of sales in all of our markets reached an all-time high for the first three months of the year”.
Electricity demand has repeatedly exceeded a record set in 2004 due to cold weather this winter. The average temperature in January was -14 C, compared to -7 C in January 2021.
Several other factors also worked in favor of Hydro-Québec. Energy consumption increased in the commercial and industrial sectors due to the solid growth of the Quebec economy.
Also, the price of aluminum reached record levels on the international market, which inflated the profits generated by special contracts with aluminum smelters that are tied to the price of the metal.
In total, revenues from electricity sales in Québec are up $546 million compared to last year.
War in Ukraine
Hydro-Québec also benefited indirectly from the war in Ukraine, which caused the cost of energy to soar, including that of natural gas, which serves as the basis for that of electricity exported to the American market.
The Crown corporation earned an average price of 7.4 cents per kilowatt hour compared to 5.1 cents for the first quarter last year. However, the volume of exports fell compared to last year, due to the cold weather, which mobilized more electricity for Québec’s needs. The average temperature in January was -14 C, compared to -7 C in January 2021.
Exports still brought in 115 million more than last year, or 646 million.
The vice-president of Hydro-Quebec pointed out that the company was able to export significant quantities of electricity, even with the significant increase in demand in Quebec.
To satisfy this record demand recorded in Quebec in January. Hydro-Québec had to buy more electricity on neighboring markets. These imports cost 269 million more than in the first quarter of last year.
In the first quarter of 2022, the Crown corporation invested more in its facilities, 856 million compared to 717 million last year.