The Crown corporation reports record profits of $2.2 billion in the first quarter of 2023, or $169 million more than the same period last year, but clouds are looming on the horizon.
The risk management strategy more than compensated for lower prices in export markets, according to Jean-Hugues Lafleur, executive vice-president and chief financial officer of Hydro-Québec.
The average export price obtained by Hydro-Québec was 13.2 cents per kilowatt hour. “However, our results for the rest of the financial year should not be expected to be as favorable, given that the fall in market prices should be felt more in the coming months”, warns -he.
In Quebec, electricity sales fell due in particular to a mild winter. The results were also weighed down by the increase in operating expenses, such as payroll and employee benefits, including pension plans.
Hydro-Quebec justifies these expenses by “the growth of the activities of the company aimed at improving the quality and the reliability of the service”.
- Listen to the explanations of journalist Alexandre Moranville in his news brief broadcast live every day 12:55 p.m. via QUB-radio:
Great River Hydro
Note that the recent acquisition of Hydro-Québec in the United States, Great River Hydro, resulted in losses of $4 million during the quarter, among other things because of the financial and legal costs associated with the acquisition.
“But Great River Hydro, we don’t look at it on a profit basis. It doesn’t have much of an impact on our bottom line and that wasn’t the goal when we acquired it. We are aiming for the long term with this acquisition. Building 13 hydroelectric plants in New England would have been impossible. However, we succeeded in acquiring these power stations, which had already been built,” explains Jean-Hughes Lafleur.
A Response to Maine’s Elected Officials
Moreover, Mr. Lafleur described the exit of the four elected officials from Maine, whose Journal reported yesterday that they want to cancel the contract for the export of Quebec electricity to Massachusetts, as a last resort attempt to stop the construction of the transmission line that will cross their state. Mr. Lafleur was blunt: “We have enough electricity and we don’t need to build new dams,” he said.
In addition, Hydro-Québec devoted $847 million to its investments in property, plant and equipment and intangible assets during the first three months of 2023, an amount comparable to the $856 million invested a year earlier. More than two-thirds of the amount invested in 2023 was allocated to major works aimed at sustaining production, transmission and distribution assets, according to a press release from the company.