Do You Want Cheaper Electricity ?

Peter Mills stated during the debate that Hydro-Quebecs introduction of cheaper electricity into Maine would be a disadvantage to wind farm development in Maine......................... Hydro-Quebec’s move last month to boost its power exports to the United States by acquiring New Brunswick Power’s transmission lines has raised eyebrows in New England, where renewable energy ventures would face stiff competition from low-cost hydro generated north of the border.
Immediately after the acquisition was unveiled, Angie O’Connor, president of the New England Power Generators Association, warned that the deal could harm smaller American utilities looking to develop renewable energy projects.
But Mr. Vandal said the utility’s strategy going forward was to develop 4,000 megawatts of large-scale wind farms in conjunction with several new hydroelectric dams equipped with storage reservoirs that stabilize supply on low-wind days.
Close to 40 per cent of Hydro-Québec’s profits come from export sales. That’s only natural when your average cost of production is presently 2.2 cents per kWh and the retail cost of energy in New England is roughly between 15 and 20 cents U.S. for residential rates. However, the average retail cost of energy in New Brunswick is only 9.5 cents, giving a lower return than in the U.S. Perhaps New Brunswick is an export road to New England – or, as Newfoundland suggests, perhaps this is a way to tie up existing capacity through New Brunswick.
Under the tentative agreement between the provincially owned utilities, Hydro-Quebec will own NB Power's transmission system, which runs into the state of Maine.
"From Hydro-Quebec's perspective, this is about geography and access to northeast regional markets in terms of gaining further access to the New England market, but also supplying New Brunswick with power," Hydro-Quebec Chief Executive Thierry Vandal said in an interview.
Strategically, the deal makes sense as a way for Hydro-Quebec to make bigger inroads into the U.S. market, said Michael Caranci, an energy analyst at DBRS.
"Right now Hydro-Quebec has good connections to New England through Vermont, so this will expand that because they will have some going through New Brunswick into Maine."
Hydro-Quebec's Vandal said the new assets will initially add a little more than 500 megawatts transmission access to the New England market.
"In the overall scheme of things in Quebec, we have roughly 5,000 megawatts of interconnections, so this addition, it's important, but this is something that may grow over time also," he said.
have an American neighbor that needs energy, needs clean and renewable energy, and needs to obtain this energy fromafter the agreement was announced……….

BENEFITS VERMONT ENJOY FROM CONTRACTS WITH HYDRO_QUEBEC


Vermont currently enjoys long-term,
fixed price contracts with Hydro-Québec
and the Vermont Yankee Nuclear Power
Station, which combined meet two-thirds
of the state’s electricity needs.
The contract with Vermont Yankee is especially advantageous due to the current power purchase agreement.
Vermont Yankee sells power to Vermont utilities at 4.1 cents per kilowatt hour,
approximately half the national
average.
It is in part because of this contract that Vermonters have the lowest electric rates in the region, approximately 21
percent lower than New England.

· Vermont’s residential customers pay the lowest rates in New England, with an average of 13.54
cents/kWh. Vermont’s residential electricity costs are:
o 16.6 percent lower than New England (16.22 cents/kWh);
o 20.4 percent lower than Massachusetts (17.01 cents/kWh); and
o 8.9 percent lower than New Hampshire (14.85 cents/kWh).
Vermont's Power Supply, 2003
The following table shows how Vermont's instate electric demand was served in 2003. The Department of Public Service Biennial Report and the Vermont Electric Plan both contain a wealth of additional information about Vermont's electric supply.
Power Source Percent of Total Demand Gigawatt Hours Consumed
Vermont Yankee 35.5% 2,131
Hydro Quebec 28.2% 1,694
Other Purchase 20.4% 1,226
Instate Hydro 9.2% 554
McNeil Generator 4.9% 297
New York Power Authority 1.2% 73
Instate Thermal .6% 34
TOTAL LOAD 100.0% 6,009

a reliable source, and that source is here," Charest said

FERC found that competition in the Maritimes for electricity supply was sufficient to allow market-based rate setting for northern Maine. But the PUC asserts FERC failed to account for the unique circumstances that prevent competition from developing in northern Maine. The PUC also argues that FERC ignored the fact that most New Brunswick generation is owned by the province of New Brunswick and is not available at competitive prices, and that Boralex and Integrys are now the dominant owners of generation used to serve consumers in the area.

EXCERPTS FROM PETER MILLS WEBSITE
Maine is sometimes called New England’s “Saudi Arabia” of renewable power. We have 17 million acres of forest, dozens of hydro dams, numerous bio-mass plants, and a high potential for wind, tidal, bio-diesel, and solar sources. Yet we pay some of the highest electricity rates in the nation. Although conservation is crucial, cheaper power is even more important.
Maine is in the center of an energy sandwich with cheap power to our north and a high priced market to our south. We have access to electricity that could cost as little as a nickel per KWH, but we in Maine are paying 10¢, the same price paid by residents of Boston and New York. By paying a nickel too much, we are losing $600 million per year, equal to half the burden of Maine’s state income tax. To reduce our costs, we must take better advantage of our natural resources and our closeness to Canada’s cheap power. We must drive hard bargains with the multinational companies that seek to dominate our energy markets, deals that tangibly benefit Maine people.



EMAIL ANSWERS TO QUESTIONS I ASKED OF HYDRO_QUEBEC IN JANUARY

Hello,

Thank you for having taken the time to contact us.

In regards to your comment, it is important to understand that we are not in a position to comment the rise of electric rates in Maine, which are unrelated with our activities and our legislation. We hope you will find in this email elements to help you understand the context in which Hydro-Québec operates.

As general information, hydroelectric generation in Québec has an average cost of 3¢ per kilowatthour (kWh), compared to an average of 8,3¢/kWh for wind power. This cost includes 6,5¢/kWh for the energy itself, added to the cost of transport (1,3¢/kWh) and the cost of integration to the grid (0,5¢/kWh). All rates of electricity distributed in Québec need to be approved by the Régie de l'Énergie du Québec, an independent economic regulation agency. Electricity exported follows market rates and may therefore be higher: For instance, if Hydro-Québec exports on the New York market, which has an average of 25.32¢/kWh, the exportation rate will be close, if not higher, to that rate, whereas Québec’s residential tariff is 6,87 ¢/kWh. We suggest you consult the document Comparison of electricity prices in North America to obtain more details on rates: http://www.hydroquebec.com/publications/en/comparison_prices/index....

Also, It is important to understand that any new generation project, wind or hydroelectricity, will be at high cost. If our new projects in wind energy have a higher price than the average energy available, so do our new hydroelectricity projects. For instance, the Romaine project currently under construction will have a final price of 9.2¢/kW/h including the cost of transport in 2015 when it will be commissioned.

To be more precise, it is not the cost of wind power in particular that causes the rise of electricity prices but rather the prices of new projects undertaken to meet the rising demand, caused by new buildings, houses and industries. For instance, from 2002 to 2008, 50 000 new residential connections were made each year in the province of Québec on a total of 3,6 millions residential customers. This rise was occasioned by low interest rates providing a boom in residential construction but also by customers turning to electricity heating because of rising costs for gas and fuel.

In regards to your question about increasing exportation in the USA and in Maine particularly, we do plan to use our extra generation occasioned by the commissioning of our projects to export electricity. You will find more information about those projects by following this link: http://www.hydroquebec.com/projects/index.html

Hydro-Québec has many interconnexions with the USA and the rest of Canada that allows us to export or import electricity. You can consult a live diagram about interchanges by visiting the following website: http://www.transenergie.com/oasis/hqt/en/schemas.htmlx

Whereas your suggestion that a representative from Hydro-Québec attend your debate forum, please note that your email was transferred to the competent person. This person will made contact if judged necessary.

We hope you will find this satisfactory. Please do not hesitate to contact us again should you have any other questions or comment.

Best regards,

  Chloé Dumas-Berger
Publicité, communication interne et accueil
Direction principale – Communications
Hydro-Québec
Courriel : accueil@hydro.qc.ca
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