First, you should know that Hydro-Québec has four divisions, including Hydro-Québec Distribution, which provides Quebecers with a reliable supply of electricity.
The rates are set in such a way as to allow Hydro-Québec Distribution to cover the expenses involved in providing electricity service to all of its Québec customers.
There are four major categories of expenses:
- Electricity purchases
- Power transmission
- Distribution system operation and maintenance
- Customer services
Only a small proportion (about 10%) of Hydro-Québec’s profits can be attributed to its electricity rates. Most of its earnings come from Hydro-Québec Production, which is in charge of exports.
There is no connection between the company’s annual profits and the rate application filed with the Régie de l’énergie.
Learn more about how rates are set:
Every year, Hydro-Québec files a rate adjustment application with the Régie de l’énergie, an independent regulatory body. This application is analyzed according to a rigorous process that includes public hearings in December, during which representatives from all stakeholders can express their views. In March, when the Régie de l’énergie has completed its analysis, it sets the electricity rates that will go into effect on April 1.