Quebec "Clean Energies" Bill Serves to Integrate Quebec's Resources into U.S. Energy, Transportation and Trade Corridors
François Legault's government has tabled Bill 69, An Act to ensure the responsible governance of energy resources and to amend various legislative provisions, in the Quebec National Assembly.
The 56-page Bill 69 was introduced on June 6 by Pierre Fitzgibbon, Minister of the Economy, Innovation and Energy. It contains 157 sections, amending 15 statutes and seven regulations. The 15 amended laws include the following:
- Electricity Export Act;
- Hydro-Québec Act;
- An Act to reduce the debt and establish the Generations Fund;
- Act respecting the Energy Regulator (Régie de l'énergie);
- Act respecting the Water Regulator (Régie des eaux); and
- Act respecting municipal and private electricity systems.
The amended regulations include:
- Regulation respecting the conditions and cases requiring authorization by the Energy Regulator;
- Regulation respecting the procedure of the Energy Regulator; and
- Regulation respecting the annual fee payable to the Energy Regulator.
The following two regulations would be repealed:
- the Regulation respecting the maximum production capacity covered by a power purchase program for small hydroelectric generating stations;
- the Regulation respecting the conditions and cases in which the conclusion of a supply contract by an electricity distributor requires the approval of the Energy Regulator.
Public Consultations in 2023
The Quebec government's June 6 document announcing Bill 69 states:
"Quebec is committed to a collective energy transition and intends to decarbonize its economy by 2050, while respecting environmental standards and aiming for social acceptability. Remember that around 50 per cent of the energy consumed in Quebec still comes from fossil fuels. The challenge is immense, but within our grasp, given our natural wealth."[1]
Before introducing its bill, the government held a "Consultation on the Framework and Development of Clean Energy in Quebec" in the spring and summer of 2023, inviting what it called "the general public" to submit briefs. The Quebec government received 100 briefs, including 31 from members of the public and 69 from organizations.
Among the briefs received was one from a resident of the Lower St. Lawrence area, who denounced the Legault government's lack of vision in choosing a single type of European-designed horizontal-axis wind turbine, more than 75 per cent of which is subsidized by the state. He pointed out that there is a prototype vertical-axis wind turbine, which has been designed in Quebec and is more versatile and better adapted to the natural and social environment, and whose components are all recyclable, which is not the case for the huge blades of horizontal-axis wind turbines. A request to Hydro-Québec to finance the construction of a large-scale prototype of this vertical-axis wind turbine was refused in 2020 on the grounds that the project would be "too costly and not sufficiently advanced."[2]
As for the 69 briefs submitted by organizations, many of them were produced by organizations and/or companies or groupings of them together representing major private interests that are themselves either commercial users, producers or distributors of electricity or natural gas. These include: the Aluminium Association of Canada, Canadian Association of Petroleum Producers, Association of Energy Distributors of Quebec (ADEQ), Quebec Energy Association (l'AEQ), Quebec Electric Industry Association (AIEQ), Quebec Mining Association (AMQ), Canadian Nuclear Association, Quebec Council of Employers (CPQ), Evolugen, Glencore, Utica Resources, Rio Tinto, Shell, and TC Energy Corporation.[3]
What is remarkable is that the text in Bill 69 is almost a copy and paste of the recommendations made by the Quebec Council of Employers, in its brief presented August 1, 2023, entitled "Prospering Together."
Legault Government's Integrated Energy Resources Management Plan
The document from Quebec's Ministry of the Economy, Innovation and Energy promoting Bill 69 refers to "the implementation of an integrated energy resources management plan (PGIRE) to guide the actions and decisions of the government, local and regional partners, energy distributors and energy project promoters, among others."
In other words, private-public partnerships are being sought in everything to do with Quebec's energy resources related to the production and distribution of electricity.
What's more, the Legault government is committed to meeting the significant demands of major foreign private interests for the production of "green energy" to satisfy their growing needs for "clean" electricity linked to the extraction and/or refining of critical minerals, including aluminium, titanium, scandium, nickel, copper, graphite and lithium. Hydro-Québec will also have to supply electricity to all the new battery component production plants in the Bécancour region, which are planned for the next few years.[4] In addition, the Northvolt mega-plant for the production of electric batteries will be operational by 2026, and the transmission line for exporting electricity to New York State will be commissioned in 2025.
All this will create a difficult situation for Hydro-Québec, which could find itself in an electricity supply deficit as early as 2026-27. The state-owned company could be forced to buy electricity on the spot market at exorbitant prices.[5]
For these reasons, "The government will assess, as part of the preparation of the bill, the various possible options for meeting the growth in demand for clean energy in Quebec in an orderly, predictable and sustainable manner." The bill provides for rate increases "in a context of rapid change in the energy landscape," proposing "to modify the process for setting electricity distribution and transmission rates in order to provide greater predictability and flexibility."
Hydro Rates Dependent on Hydro-Québec's Project Construction Costs
In the same Quebec government document promoting Bill 69, it is stated that "in order to offer greater predictability and flexibility," Hydro-Québec must now "provide for amendments [that] are aimed in particular at reducing the electricity rate-setting cycle by providing for a rate review every three years rather than every five years by the Energy Regulator, while allowing Hydro-Québec to apply to the Energy Regulator, at any time, to set or amend a rate or conditions of service."
"For each year of this three-year period, rates will henceforth be set by the Energy Regulator on the basis of the revenue required by the government corporation.
"The main components considered in determining revenue requirements include:
"The cost of supplies (purchases of heritage pool and post-heritage pool electricity); electricity transmission charges for Québec customers; distribution-related expenses (salaries, depreciation, etc.)." In 2000, the Quebec government designated the energy produced by hydroelectric plants built in the last century as the "heritage pool."
Electricity transmission costs is the new standard that the government wants to introduce for setting residential electricity rates. In 2023, this notion that it costs more to transmit electricity to a residential dwelling than to a business was presented to justify higher residential rate increases than for industrial users who consume large quantities of electricity from the same site.
Privatization of Power Generation and End to Calls for Tenders in Name of "Increasing Flexibility" of Hydro-Québec to Follow "Changes in Demand"
The government document promoting Bill 69 states, "The bill also opens up the possibility of the sale of electricity from renewable sources between a producer and a single consumer located on land adjacent to the production site, subject to the approval and conditions determined by the government."
The document states, "It is proposed that Hydro-Québec no longer be obliged to proceed solely through calls for tenders. For example, it will be able to enter into supply contracts by mutual agreement, [...] develop new supplies itself or establish partnerships," In some cases, projects will not have to go before the Energy Regulator for approval.
Redefining Role of Energy Regulator to Speed up Project
Approval and
Raise Electricity Rates
The government document states, "The bill also amends the Act respecting the Energy Regulator, in particular to promote the speed and efficiency of the decision-making process.
The Energy Regulator will now be responsible for "approving the development plan for the electricity transmission system and determining the costs of supplies provided directly by Hydro-Québec."
The Legault government has opened the door to the possibility of Hydro-Québec charging consumers different electricity rates depending on "the time of day" as a way of "meeting the challenge of reducing consumption and doubling its electricity production over the next 25 years." Minister Fitzgibbon said at a press conference to explain Bill 69, "We will encourage people (to save energy) with a carrot, not a stick." But section 130 of his legislation on rates is clearly worded. It stipulates that the Energy Regulator must set "one or more electric power distribution rates or conditions of service applicable from April 1, 2026 to the domestic clientele in such a manner as to promote the reduction of electric power consumption during peak periods." Such language suggests that Quebeckers would pay more for electricity at certain times of the day.
Already, the Montreal Economic Institute, a think tank and ardent advocate of anti-social measures, is recommending that residential electricity rates in Quebec be doubled to bring them closer to what the Institute calls the average rate in Eastern Canadian cities, which would allow Hydro-Québec and the Quebec government to reap "additional profits of between $4.6 billion and $5.2 billion." According to the Institute, this rate increase should be accompanied by "tax cuts to reduce the tax burden on the population and businesses, and would also make it possible to start paying down the public debt again." Not a word, however, about the major schemes to pay the rich, financed with billions of dollars taken from the public purse. This is the case with the GM-Posco and Ford electric battery component plants in Bécancour, the 'decarbonization' of the Rio Tinto plant in Sorel-Tracy, and the construction and production of electric batteries at the Northvolt plant.
Integrating Hydro-Québec's Infrastructure into U.S. Energy Corridors
All the measures put in place in Bill 69 are in line with the plans put in place during the negotiations held in March 2018 for the renewal of the Canada-U.S.-Mexico Free Trade Agreement. During discussions held privately in Montreal, there was talk of integrating the energy resources and infrastructure of Canada, the United States and Mexico under the control of large private energy interests dominated by the United States.
The U.S. Secretary of State at the time, Rex Tillerson, said, "North America is also a major player, as [Mexican Foreign Secretary] Videgaray highlighted, in energy markets. And we discussed what we believe are unique opportunities to promote market-based energy development and to further energy integration throughout North America and the hemisphere."[6]
The point remains that it is up to the working class and people of Quebec to formulate their demands for a new direction for the economy that aims first and foremost to satisfy the energy needs of the people of Quebec and Canada and helps guarantee the well-being of all. Such a direction will be in opposition to plans to integrate the energy sectors of Quebec and Canada into what is, more and more, the U.S. war economy.
Notes
2. "Une éolienne nouveau genre à la recherche de financement," Le Placoteux, March 29, 2020.
4. See "Processing Critical Minerals in Bécancour Region" by Pierre Chénier, TML Daily, December 3, 2022.
6. See "Control Over Energy Resources and Their Transport," TML Weekly, March 3, 2018.
(With files from the Government of Quebec, TML, The Gazette, Le Placoteux. Quotations translated from original French by TML.)
This article was published
in
Volume 54 Number 6 - June 2024
Article Link:
https://cpcml.ca/Tmlm2024/Articles/M540065.HTM
Website: www.cpcml.ca Email: editor@cpcml.ca