Plan to reimburse Hydro over payments could cost you more: study
The CAQ government's proposed legislation aimed at paying back Hydro Quebec customers for years over overpayments may actually cost customers hundreds of millions of dollars.
In a new study released by the Quebec Institute for Socio-Economic Research (IRIS), the group accuses the provincial government of lying to Quebecers.
Francois Legault promised to repay overpayments made to Hydro Quebec by customers since 2007-2008 by passing a series of rate freezes. Bill 34, introduced in June, would keep Hydro rates as is in 2020 and limit increases from 2021 to 2024 to the rate of inflation (1.7%).
Legault and Energy Minister Jonatan Julien claimed their plan would save Quebecers $1.5 billion on their Hydro bills, offsetting the years of overpayments.
Jean-François Blain, researcher and analyst at IRIS, called the claims "completely fictitious." Blain said based on Hydro Quebec's increased sales and profits ($3.2B in 2018) the Régie de l'énergie would have implemented a Hydro rate freeze for 2020 on its own and could have possibly gone as far as reducing rates for next year.
The study also indicated that capping Hydro rate increases at the rate of inflation for four years will cost customers more money. Blain said the CAQs estimated savings are based on averages dating back nearly two decades. But recent history, where the Régie has approved much smaller yearly hikes, shows the average Hydro increase over the past four years is 0.65 per cent, less than half of the increase being proposed by Legault and his team.
According to IRIS, rather than saving Hydro Quebec customers more than one billion dollars the CAQs proposed legislation could end up costing Quebecers an additional $500 million.
"[With Bill 34] we just eliminated the consumers' only watchdog that provided a rigorous and independent review of the justifications for Hydro-Quebec's annual rate applications," said Blain. "It's a very big step backwards."
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