April 2,1998

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Hydro-Québec welcomes competition

by Sylvain Comeau

Would open competition in Quebec's electricity market be good for Hydro-Québec and for the province? A spokesperson for the utility told a Concordia audience recently that it would.

At a panel discussion on March 18 at the School of Community and Public Affairs (SCPA), Hydro-Québec director of strategic planning Roger Lanoue said that Quebec has a natural competitive advantage that can be used to turn the province into a continental energy centre.

"The opening of [electricity] markets offers tremendous growth opportunities," he said. "Electricity rates in the U.S. are as high as 9.5 cents per kilowatt-hour in Maine, and 11.7 cents per kwh in New Hampshire. We see a unique opportunity to produce electricity at 3 cents per kwh and sell it outside of Quebec at an average price of over 4.9 cents."

Lanoue added that the electricity market in the American northeast alone is $55 billion, so that even a one-per-cent market share would mean a tremendous, job-creating $550-million windfall for Hydro-Québec. Even the prospect of American competition, similar to the current long-distance telephone wars, doesn't worry the crown corporation.

"Hydro-Québec is freezing domestic electricity rates for the next four years, so our prices will remain competitive both inside and out of Quebec."

But Manon Lacharité, a spokesperson for the energy portfolio at the Union québécoise pour la conservation de la nature, said that deregulation in the American market is not an opportunity for Quebec.

"American deregulation is aimed at reaching what we already have: parity of electricity rates," Lacharité said. "Our system is the envy of everyone, so why should we change it?" She feels that there is a lot more to the deregulation issue than lucrative American contracts and the price of kilowatt hours.

"We will have to kill more rivers to supply the American demand. In many places in the U.S., they are tearing down dams to give life back to their rivers. Meanwhile, to show how smart we are, we will destroy our rivers to provide them with hydro-electricity."

Quebec's deputy minister of natural resources, Jacques Lebuis, who was also on the panel, answered that financial cost will limit the environmental impact.

"We won't be developing hundreds of rivers," Lebuis said. "The high cost of new projects will be a strong brake on this kind of development. Market forces will have an influence, but so will environmental rules. We are not planning to deplete our hydraulic heritage for export purposes."

But Lacharité answered by quoting from an article in Le Devoir that stated that "one or many rivers will be developed" to make Hydro-Québec's expansion possible.

Jean-François Blain, vice-president of the Parti Québécois for Vaudreuil-Soulanges, unexpectedly sided with Lacharité, "so this won't be a three-against-one debate." Blain wants his party to avoid blindly following the lead of our southern neighbors.

"Governments today are taking a fatalistic attitude towards deregulation and privatization, saying that the opening of markets is an inescapable global phenomenon," Blain said. "So our political representatives, whether they are PQ, Liberals, or PC, are abdicating their responsibility to launch a debate on everything that is at stake. We have to ask whether the risks of opening the market outweigh the benefits."

Lebuis answered that privatization is not on the agenda, and that the government has guaranteed an open debate "if we decide to move ahead with opening the market."

The panel was organized by SCPA students Régis Loreau, Julian Cleary and Alex Schmidt.

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