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Hydro-Quebec Rate Reforms Mean Renters & Low-Income Homes Pay More A New Study Shows

35% of Hydro-Québec customers are renters and 62% of them are considered low-income.
Hydro-Quebec Rate Reforms Mean Renters & Low-Income Homes Pay More A New Study Shows
  • A new study released by the Institut de recherche et d'informations socio-économiques (IRIS) has shown that despite Hydro-Québec's intentions, rate reforms have continued to put low-income homes at a disadvantage.
  • The study outlines how homes that must dedicate most of their electricity bill to heating inevitably spend more.
  • Renters are also at a disadvantage as they do not have the power to change how their homes are heated.

A newly-released study into Hydro-Québec's rate reform done by the Institut de recherche et d'informations socio-économiques (IRIS) shows that low-income households stand to gain the least from these changes, and higher-income houses stand to gain the most. This means Hydro-Québec has already failed in achieving its first objective, "which is to take into account the difficulty of low-income households in dealing with the rising electricity costs." 

To study the impact on various households, IRIS "calculated the impact of the reform on the annual bill of 12 customers," each who fit into one of four "consumption profiles."

They then tracked these customer profiles over "three volumes of annual consumption."

The major distinction that IRIS makes between high and low-income houses is that lower-income homes have "the least control over their heating consumption in winter."

This is because these lower-income homes are often rentals, where choosing a heat source is out of a tenants hands, and the heat source is often "the least efficient," and the dwellings are often "less-well insulated" and even more difficult to heat.

Hydro-Québec's reforms, which began on April 1, 2017, and have continued over the past two years were meant to achieve two objectives, one of which was to, "take into account the difficulty of low-income households in coping with the rising costs of electricity."

And this study by IRIS has shown that Hydro-Québec has failed.

The four "profiles" IRIS used to track this study were divided by how much of each household's electric bill was dedicated to heating. The first profile's electricity bill was 60% heating. The second was 50% heating and the third was 40% heating. The fourth profile was a "flat" profile with invariable consumption.

According to data included in the study, provided by Hydro-Québec, 35% of Hydro-Québec customers are renters, and 62% of those customers are considered low-income.

Currently, the reform of the rate structure that was recommended by Hydro-Québec and approved bt the Régie de l'énergie, was meant to raise the threshold between two tiers of usage. However, in going over the threshold into the next tear, a household would find themselves paying a higher rate.

This system has worked to disenfranchise low-income households, who were expressly named as the demographic Hydro-Québec claimed they were trying to help.

Since 2016, low-income houses who "cannot act on the heating consumption of their home, either because they are tenants, because their financial capacity is insufficient to allow investments required," are the homes that have seen the most increases in their electricity bills.

The study also notes that low-income homes are not necessarily small consumers, the same way that wealthier homes are not necessarily large consumers, which is why IRISs believes it is "wrong to argue, as a rule of general application, that a greater increase" in the price of the second tier, "Tariff D," benefits low-income homes or disadvantages better-off homes.

Just as heating puts low-income homes at a disadvantage, this pricing strategy "benefits costumers who spend small proportions of their total consumption on heating, or who consume a lot in summer," like those homes who heat a pool or run air conditioning in the summer months.s 

IRIS concludes the study saying, "in light of these results, it would be desirable to reconsider the domestic tariff reform and establish a pricing structure that does not disadvantage customers devoting the highest proportions of their consumption to heating, customers including the low-income households."

It also notes that "the passing of Bill 34 will, therefore, perpetuate the situation created by the current reform."

Hydro-Québec has since responded to the study with the response below:

To see the study in full (in French) head to this page where it is published on IRIS' website.

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