Hydro-Québec, a government-owned corporation, presented its financial results for 2022 on Wednesday, boasting a net income of $4.557 billion, compared with $3.564 billion for the previous year.
The $993-million increase is mainly attributable to higher sales revenue, both within and outside the province.
Hydro-Québec officials say the results represent the best financial performance in the corporation’s history.
“The year that just ended was remarkable in more ways than one,” Jean-Hugues Lafleur, Hydro-Québec executive vice-president and chief financial officer, said in a news release.
Lafleur explained that 2022 was marked by a sharp increase in energy prices in export markets, fuelled by the Russian war in Ukraine.
More specifically, the energy crisis in Europe drove up the price of natural gas, impacting electricity production in the northeastern United States, where gas-fired plants are widespread.
According to Hydro-Québec, the average annual price of electricity in New England — the corporation’s main export market — was almost double what it was in 2021, leading to higher sales revenues.
“Soaring prices on our export markets contributed to the nearly $1-billion increase in our net income,” Lafleur said.
“In light of these unprecedented results, Hydro-Québec will be able to pay a dividend of ($3.418 billion) to the Québec government, its sole shareholder—the largest ever.”
Gains are also attributable to cold winter temperatures in Quebec at the beginning of 2022, with January being the coldest on record since 2004.
Hydro-Québec said the cold contributed to “an unprecedented sales volume” in the province.
Other contributing factors at home were an increase in baseload demand across all sectors and an increase in the price of aluminum.
Some of those gains, however, were offset by Hydro-Québec’s need to increase its electricity purchases to $665 million.
The purchase of electricity was required not only to meet demand during the cold spells but also because of higher transmission costs for out-of-province sales amid high energy prices.
Extreme weather events also caused extensive damage, with Hydro-Québec incurring service restoration costs of $126 million.
The May Derecho and a cocktail of winter weather just before Christmas left half a million customers without power in both instances.
Hydro-Québec said that while the storms had no impact on electricity rates, the cost of restoring power was the highest since the 1998 ice storm.