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New Study Accuses Hydro-Quebec & CAQ Of Misleading Customers About Overcharge Payments

We spoke with a Hydro-Quebec spokesperson and they denied these claims.
Staff Writer
New Study Accuses Hydro-Quebec & CAQ Of Misleading Customers About Overcharge Payments
  • A new voice has emerged in the discussion over Hydro-Québec and the reimbursement of the $1.5 billion owed to Quebec hydro clients.
  • A new report by the Institut de recherche et d'information socio-économiques is accusing Hydro-Québec and the CAQ of misleading customers.
  • Hydro-Québec categorically refutes the report that states that Bill 34 "does not actually offer any advantage to electricity consumers."

A report from the Institut de recherche et d'informations socio-économiques (IRIS) accuses Hydro-Québec and the CAQ government of misleading customers and giving false information regarding Bill 34 which guarantees a fixed rate on hydroelectricity in Quebec for the next five years.

Along with that, all Hydro customers across the province will be eligible for a rebate in April 2020, taken from a $500-million dollar reimbursement package. The IRIS report claims that "the $500M rebate is neither a gift nor a discount."

According to the IRIS report, Hydro's claims are "false" and that the Régie de l'énergie would've implemented a rate freeze regardless, perhaps even reducing rates after 2020.

The report says that "Bill 34 does not actually offer any advantage to electricity consumers since it exposes them to future arbitrary and costly tariff increases." They also note that Bill 34 also, "deprives [electricity consumers] of a watchdog - the Régie de l'énergie - which guarantees independence and rigour in fixing Hydro-Québec rates. We recommend that this Bill is cancelled."

Hydro-Québec categorically denies these claims and even says that the report contradicts itself. 

We spoke with Cendrix Bouchard, Strategic Communications Councillor for Hydro-Québec to find out more about the issues raised in the IRIS report.

If you recall, Bill 34 will be implemented in April 2020 and puts a limit on rate increases to the rate of inflation.

The Bill states that: 

"(1) Hydro-Québec is no longer required to obtain the authorization of the Régie de l’énergie for its infrastructure investment projects and the other reorganization initiatives of the electricity distribution network or to submit its commercial programs to the Régie for approval. 

"(2) Hydro-Québec must apply to the Régie de l’énergie to
request it to set new electricity distribution rates, or modify the existing rates, every five years. Hydro-Québec may also apply to the Régie de l’énergie to request it to set a new rate or modify existing ones during that five-year period, but only to the extent that certain circumstances warrant such an application, and 

"(3) the bill contains consequential, penal and transitional
provisions, including a provision requiring Hydro-Québec to grant, before 1 April 2020, a rebate on electricity distribution rates."

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“One thing that they do recognize in the IRIS technical brief is that since the Regie de l’energie was introduced in 2003, rate increases followed the rate of inflation.

But they also say that with the new system, customers should expect increases that are really hard to predict. Really, they say one thing and say then the other," says Mr. Bouchard.

"It’s been the same case since 2003 and even if we go further back, for the last 60 years or so, rate increases have followed inflation.

We believe that Bill 34 is simplified and [the rate] is predictable which will help people plan their budget. In that regard, we think it’s a really good thing".

The report, however, tells a different story. IRIS claims that rather than saving customers money, implementing the Bill could potentially cost customers another $500 million.

"A conventional tariff review by the Régie would be as advantageous, and probably more than, the tariff freeze as proposed by the government for 2020.

There is no justification whatsoever for claiming that the Régie's tariff increases of 1.7% per year. In fact, the claim that the tariff freeze of 2020 would produce savings additional $1 billion over the next four years does not rely on any valid demonstration," says the report.

Mr. Bouchard and Hydro categorically refute that, however.

"The authors of the study are saying that if it wasn’t for the changes in the system, there would’ve been a decrease in the rates anyway.

We disagree with that - our numbers show that without the $500 million being returned and the rate freeze, there would’ve been a rate increase of 2%", says Mr. Bouchard. 

Furthermore, Mr. Bouchard says that the $500 million is coming from accounts that are no longer needed, not last year's earnings.

"The $500 million that’s being returned in 2020 is by no means the earning variances in the past year. That money has already been returned to the clients."

Ultimately, there are a lot of moving parts and for many customers, this might seem like a convoluted and needlessly complicated method of paying back overcharge fees. 

"In the perspective of this story - we’re not analysing the same criteria that they do," says Mr. Bouchard.

"All this needs to be taken in context as far as rates go." 

This article has been updated.

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