A contract with New York does not mean a new project, says Eric Martel

MONTREAL – Even by signing a supply agreement with New York City, it would be “premature” to discuss new projects to increase Hydro-Québec’s generation capacity, believes its president and CEO, Éric Martel. .
With its current surpluses, the state-owned company can supply Massachusetts, with which it already has an agreement in its pockets, as well as New York, in addition to being able to meet the needs of a smaller contract, he explained on Friday.

Mr. Martel went there from this observation on the sidelines of an address to the Board of Trade of Metropolitan Montreal (CCMM), where he discussed topics such as climate change, the objectives of Hydro-Québec and its challenges. come.

He wanted to calm the game when New York Mayor Bill de Blasio wants to reach an agreement before the end of 2020 to allow his city to be 100 per cent powered by Canadian hydropower.

“I think talking about a new dam, adding capacity, is a bit premature,” said Martel. Of course this (a possible contract) brings us closer to that (a surplus flow). ”

Earlier this week, Energy and Natural Resources Minister Jonatan Julien raised the possibility that this contract, if it materializes, could help revive the Apuiat wind project, set aside by the Caquist government last year.

In addition to the surpluses, electricity sales have stagnated since 2007 in Quebec, Mr. Martel said in his speech, adding that there could even be a decrease in internal consumption due to increasing energy efficiency and growth self-production at home.

“It’s been 10 years that we are on the flat,” he said. Today, we consume 170 terawatt hours (TWh). If it drops to 160 TWh or 150 TWh, that means we will have up to 20 TWh to redistribute. ”

For this reason, the decision on a potential new project will only come in 2020-2021 and take into account factors such as the timing of the Churchill Falls contract and the demand from large industrial customers.

Not done yet

Moreover, while he welcomed the interest of Mr. De Blasio, the Hydro-Québec executive reiterated that there were still many steps to go before signing a formal agreement. . It is possible that we can not agree on the price, mentioned Mr. Martel.

It is unclear what price will pay New York. For its part, Massachusetts will pay 4.8 cents US per kilowatt hour – which does not include transportation costs.

If both parties agree, hydro power will be routed through the Hudson Power Express Champlain Line (CHPE), a project that has all the necessary approvals and has been completed with Transmission Developers Inc. (TDI).

“If you do it, it has to be profitable,” said Mr. Martel, when asked if a contract with New York would be enough to finance the construction of the line. I will not negotiate in the public square. We have a price with which we are comfortable. ”

Moreover, although he did not refer to the possibility of seeing Hydro-Québec return to the international scene as part of his speech, the head of the Crown corporation assured that this project was still part of his plans.

As part of its growth plan to double revenues by 2030, Martel wanted to make acquisitions abroad, which has yet to materialize.

“Our priority was on exports in the last few years,” he said. We have the ability to do it, we have the knowledge, but we are not in a hurry. ”

Right now, there is fierce competition in the markets, while assets are expensive and capital is available, said the crown corporation’s big boss.

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