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Hydro-Québec’s executive vice-president and CFO says that the utility’s two long-term supply contracts have built-in elasticity mechanisms allowing the power producer to adjust deliveries if needed, depending on the circumstances.Graham Hughes/The Canadian Press
Hydro-Québec says it could suspend its contractual power deliveries to the United States for brief periods to protect the province’s own energy security as it faces unprecedented pressure on its northern water reservoirs.
The utility, Canada’s biggest producer of hydroelectricity, says it is dealing with its four driest consecutive years since hydrological data began to be compiled in the 1940s. Record-low runoff conditions that started in 2023 have not let up and reservoirs have not filled back up significantly, the provincial Crown corporation said in quarterly results released on Friday.
Demand for Hydro-Québec’s power continues to increase, forcing the company to carefully manage its resources. The utility is limiting its power sales on spot markets outside Quebec and using rebates to incite customers to use less electricity in their homes and businesses.
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Last winter, during two multiday cold snaps in January and February, Hydro-Québec halted energy deliveries to three electric utilities in Massachusetts to protect the safety and reliability of its grid. Deliveries stopped a little more than a week after they started under a new 20-year supply contract using a transmission line known as the New England Clean Energy Connect.
Hydro-Québec says it pulled back power deliveries under “emergency reliability curtailments,” and that the prolonged and life-threatening cold weather at the time amounted to a “force majeure” event that suspended its obligations under the U.S. contract. The New England utilities counter that Hydro-Québec is under an obligation to deliver “firm” and “uninterrupted” power under the pact, which they allege it failed to do.
The two sides are now suing each other in U.S. federal court.
Maxime Aucoin, Hydro-Québec’s executive vice-president and chief financial officer, told reporters on Friday that the utility’s two long-term supply contracts have built-in elasticity mechanisms allowing the power producer to adjust deliveries if needed, depending on the circumstances.
In the New England contract, “it really was in the face of major cold” that Hydro-Québec halted power shipments going south last winter, he said. A separate contract with New York State authorities – to deliver 10.4 terawatt-hours a year of electricity to New York by way of the Champlain Hudson Power Express line – also allows for adjustments, including low water levels, he said.
“We’ll use that flexibility to ensure the energy security here in Quebec” if needed, Mr. Aucoin said.
Critics have questioned whether Hydro-Québec, and by extension, the Quebec government, made the right move in signing these long-term export pacts, given the province faces increasing demand and pressure on its power-generation resources. The utility is now carrying out an ambitious investment plan worth $200-billion to develop new clean-power-generation facilities and improve the reliability of the grid.
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Hydro-Québec has 28 large reservoirs that it uses to produce hydropower, fed by rain and snow melt. The largest is the Caniapiscau Reservoir, with a surface area of 4,359 square kilometres, that supplies the power stations of La Grande in the James Bay region.
Water cycles are unpredictable, but Hydro-Québec has insisted it has the resources necessary to handle them, with multiyear reservoir-storage capacity and connections to grids outside the province. To control its available resources and maximize profitability, the utility tries to export electricity when prices are high and import it when they’re lower, to replenish its stocks.
Hydro-Québec on Friday reported net income of $2.6-billion for the first three quarters of 2026, down $230-million from a year ago. The company sold $1.85-billion worth of power through exports for the period at an average price of 15 cents per kilowatt-hour, earning nearly double what it paid out for the electricity it imported.