IERN International Energy Regulation Network

The sector is partially privatised.

In 2003, provincial generation amounted to 177 850 GW.h of which 95.3 percent was hydro. Nuclear generation accounted for 2.0 percent of the total, while oil, gas, wind and biomass generation accounted for the remainder.

Hydro-Québec (HQ), a Crown corporation wholly-owned by the Government of Québec, owns and operates through its unbundled divisions (generation, transmission and distribution) most of the provincial electricity sector.

HQ Production, the principal power producer in the province, generates electricity and sells it on the wholesale markets both inside and outside of Québec. There are also several IPPs.

Inside Canada, Québec has interconnections with Ontario, New Brunswick and Labrador. By virtue of a long-term supply contract, Québec receives significant transfers from Labrador, averaging 30 000 GW.h annually. In 2003, transfers from New Brunswick have been less than 2 000 GW.h annually compared with 3 400 GW.h from Ontario.

Considering trade with the U.S., total exports from Québec have declined in recent years. Most exports are for short-term spot transactions. HQ Production has only two remaining long-term export contracts.

Québec legislation introduced in 2001 established the heritage electricity pool whereby HQ Production must supply to HQ Distribution up to 165 000 GW.h per year at a fixed price of 2.79 cents per kW.h. To meet demand in excess of this amount, HQ Distribution must enter into supply contracts by issuing calls for tenders to interested power suppliers.

Functional unbundling along the supply chain.

The sector is partially privatised.

In order to gain access to the U.S. market, HQ TransÉnergie operates and administers HQ’s transmission grid, which includes 18 interconnections allowing power interchange between Québec and electrical systems in Labrador, New Brunswick, Ontario and the U.S. Northeast. Québec provides open access to its transmission network pursuant to the U.S. FERC Order 888.

Hydro-Québec, through its division HQ Distribution has the exclusive right to distribute electricity throughout the territory of Québec, excluding the territories served by a distributor operating a municipal, cooperative or private electric power system. Municipal systems also have exclusive distribution rights within the territories they serve.

The Régie has the authority to fix the rates and conditions for the transmission of electric power by the carrier and the distribution of electric power by the distributor, after holding public hearings.

The sector is partially privatised.

In 2003, Québec’s end-use electricity demand amounted to 193 797 GW.h of which 31 percent was consumed by the residential sector, 18 percent by the commercial sector and 51 percent by the industrial sector.

Two industries, smelting and metal fabricating, and pulp and paper, accounted for about 70 percent of industrial demand.

HQ Distribution has the exclusive obligation to provide electricity to Québec customers with the exception of one cooperative and nine municipal networks that together serve about 125 000 customers, or four percent of the market.

End-user prices are regulated by the Régie de l’Énergie.

The sector is partially privatised.

The province of Quebec represents a vast territory where hydrocarbons potential is still largely underdeveloped. Recent prospecting works have proven the presence of hydrocarbons in six basin (corresponding approx. to 200 000 km2): St-Lawrence Lowlands, Lower St-Lawrence, Gaspesia, St-Lawrence Estuary, St-Lawrence Gulf and North of Quebec.

These three deposits were discovered Pointe-du-Lac (production of 2,5 Bcf), developed by Laduboro, Saint-Flavien (5,7 Bcf) developed by SOQUIP and Galt ( estimated well reserve to nearly 1 Bcf) developed by Junex. The first two ones are depleted and now converted in natural gas underground storage while the third one is now in operation and in development under the supervision of Junex a privately-owned company.

The sector is partially privatised.

Two transport and distribution companies operate within the province: Gaz Métro Limited Partnership (GMLP) servicing both residential and commercial consumers) and Gazifère Inc(servicing nearly 32,000 residential, commercial, instituttional and industrial customers).

GMLP is owned 28.99% by the public and 71.01% by Gaz Métro inc., which is 100% owned by Noverco Inc, which in turn, is owned by Trencap S.E.S. (50.38%), Enbridge (32.06%) and Gaz de France (17.56%). Gazifère Inc is private corporation and a subsidiary of Enbridge Inc.

There are currently two natural gas underground storage fields in operation Point du-lac and Saint Flavien, operated by Intragaz controlled at 60% by Gaz Métro Limited Partnership (GMLP) . Both were natural gas deposit field, now converted in underground storage.

The Régie has the authority to fix the rates and conditions for, transmission, distribution and storage of natural gas by a distributor, after holding public hearings.

The sector is partially privatised.

GMLP and Gazifère Inc serve residential and commercial customers at regulated rates.

• Several IPP are developing IPPs 990 MW of wind power capacity subject to the Régie de l’énergie’s approval. These wind energy facilities are expected to be commissioned during the 2006 to 2012 time period.
• HQ, in partnership with the Québec government, is currently assessing how much wind power can economically be incorporated into HQ’s system.
• HQ Distribution contracted for 39 MW of biomass-based capacity to be added to its supply portfolio by 2008. Another call for tenders was issued in 2004 for 350 MW of power to be produced from cogeneration.
• The Energy Strategy is expected to establish the framework for the development of long-term generation options (natural gas and nuclear generation options under study)
• HQ Production continues to develop its hydro generation base with a number of new project initiatives.
• Junex Natural gas storage project in Becabcour under development.
• Few projects to extent GMLP transmission network (Monteral-East Gas Pipeline; Rabaska; and Sant-laurent Boulevard in Montréal).
• Several natural gas exporating activities under development.