The head of Hydro-Quebec says local consumers won’t get any break on their already low electricity rates from a massive export deal with Massachusetts.
However, Eric Martel says winning the biggest export contract in its history will allow the public utility to keep its promise of keeping domestic rate increases below inflation.
The project, run by Hydro-Quebec and U.S. partner Eversource, would bring up to 9.45 terawatt hours of electricity per year from Quebec’s hydroelectric plants to Massachusetts.
The 20-year contract is expected to be signed in March and could generate up to $500 million in revenues for Hydro-Quebec per year or about $10 billion overall.
In 2017, Hydro-Quebec’s exports represented $803 million of its $2.86-billion profit.
Massachusetts officially selected Northern Pass on Thursday out of 46 submissions presented to the state last year, including six by Hydro-Quebec and partners.
Martel told reporters Friday that the contract will be profitable, largely because electricity prices are stable and it already has the available production capacity.
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Despite the size of the deal, he said Hydro-Quebec still has room for one or possibly two more deals of such size.
He says the contract could put pressure on neighbouring jurisdictions like New York and Ontario to decide if they want more of the province’s hydroelectricity.
Ontario has a surplus of power right now but could use Quebec’s clean power to replace other sources along its current interprovincial transmission line, Martel says.
Even though the project received approval from former president Barack Obama, he doesn’t foresee any objections from the current administration because the $2 billion that will be spent in the United States will create thousands of engineering and construction jobs.
The project still needs to be approved by New Hampshire as well as by Canada’s National Energy Board.