(Laval) Prime Minister François Legault intends to overhaul corporate hydropower tariffs, including the famous L tariff reserved for large industrial customers, to align them in particular with their efforts to decarbonize Quebec. It shifts the idea of forcing energy sobriety on residential customers.
Posted at 2:36pm Updated at 4:37pm
According to François Legault, it will soon be “very difficult for a company that emits greenhouse gases [gaz à effet de serre] get discounts on electricity. Such a company has to pay more for its energy.
“What we will propose are differentiated prices, lower or higher, depending on the decarbonization proposed by the company and the economic spin-offs, ie the cash inflows that we expect at the Treasury Department,” he said at a news conference on Friday at the end of the two-day meeting of his Group to prepare for the parliamentary session that will start on Tuesday.
This tariff revision will be the focus of the energy consultation to be carried out by Minister for Economy, Innovation and Energy Pierre Fitzgibbon in the spring – a consultation whose form has not yet been decided. In the fall, he will present a bill that will affect Hydro-Québec and the Régie de l’énergie and aims, among other things, to change the tariff table for companies.
The imposition of energy sobriety for individuals is postponed
However, François Legault does not intend to impose energy sobriety on residential customers in the near future. It dampens the zeal of Pierre Fitzgibbon, who suggested in December that Quebecers would have to wash the dishes at night to save on their electricity bills.
“It’s not something I want to see in the short term. If I tell you that Pierre Fitzgibbon plans to file a bill in the fall, it’s business rates. We have not reached the prices of individuals. Will we ever make it? Possibly as is being done in the Scandinavian countries, but in the short term that’s not in our intentions,” the prime minister replied.
Quebec needs 100 additional terawatt hours of energy to reach carbon neutrality by 2050. This is 50% of Hydro-Quebec’s current production. The issue is one of François Legault’s priorities at the beginning of his term in office. He focuses on the development of wind turbines and is considering building new hydroelectric power plants. Four or five sites have already been identified, Mr Legault said, without wanting to specify which ones. But we must also try to reduce the power consumption of companies, he believes.
“In the context where we lack the energy […]we need to look at business tariffs, including the famous L tariff,” argued François Legault.
From the moment there is a power shortage in Quebec, we need to look at the spin-offs of each of the projects. We need to look at the implications for Quebec’s decarbonization, but also the economic side effects. We will look at the tariffs on this basis in the future and no longer say: All companies are entitled to tariff L.
Francois Legault, Prime Minister of Quebec
He recalled that previous governments had granted rebates to aluminum smelters due to the low world market price for aluminum at the time and the threat of closure. “Back then, and that was also in 2018, there was a surplus of electricity. Today, […] We don’t have electricity,” he said.
With the development of green aluminum, this greener product is expected to be in demand and its price will be higher than that of gray aluminum in the years to come, he said. When determining the new tariff that will be imposed on the aluminum smelters, their spin-offs must also be taken into account because “these are important jobs in the region,” he qualified.
A year ago, Sophie Brochu, CEO of Hydro-Quebec, argued that Quebec could no longer afford to offer industrial companies low interest rates. They would have to be increased to avoid a financial hole, she said.
Last fall, she said she feared Quebec would become the “dollarama” of electricity by selling its power at a discount to energy-intensive companies. Minister Pierre Fitzgibbon’s intentions worried him. She announced her retirement earlier this month and will step down on April 11.
On January 18, François Legault said criticism of his energy strategy was “unfair”. “We will never give a rebate on the electricity price without ensuring that the additional revenue for the Quebec government is greater than that rebate,” he pleaded, citing the example of companies in the industry creating $100,000 a year jobs .