Hydro-Qubec seeks to hike rates by 3.9% in 2015

Hydro-Qubec is asking the province's energy board for another rate increase just five months after its last one came into effect and is attributing the hikes to the Quebec governments investment in wind power.

The provincial utilityis asking thatcustomerspay 3.9 per cent more in 2015-2016. Thats on top ofa 4.3 per cent increase which went into effect last April.

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Hydro-Qubec spokesman Patrice Lavoie said the increases are due to the governments wind power project.

Its mostly because of the cost of new supplies, mainly wind power, that are being integrated into the grid under purchasing programs established by the Quebec government that put an upward pressure on the overall electricity supply cost for Quebec, Lavoie told CBC Daybreak on Wednesday.

Also, were asking for an increase because of the increase of the price of the heritage pool, he continued.

The heritage pool is the power supplied to Quebec customers at a reduced rate. Hydro-Qubec then sells its surplus energy to other provinces and U.S.states at a higher price.

Hydro-Qubec estimates that the 3.9 per cent increase will translate to about $62 a year morefor the average household.

Consumer-protection group Option Consommateurs is concerned about the proposed rate hike.

Lisanne Blanchette, the groups budget consultant, said Hydro-Qubec is asking for a rate much higher than the cost of inflation.

Wind power project a 'white elephant'

Marc-Olivier Moisan-Plante of Union Consommateurs, another consumer-protection group, called the provinces wind energy project a white elephant.

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Lavoie said that unless the governments wind power project is cancelled, the utility would be asking for similar hikes over the next two to three years.

Wind energy advocates said Hydro-Qubec is using wind power as a scapegoat.

"They say any time you add a new kind of energy to the grid, there's going to be a cost...It's disappointing that we see such an argument brought forward by Hydro-Qubec," said Jean-Frdrick Legendre, Quebec's regional director for the Canadian Wind Energy Association.

Wind farms are planned for December 2016 and December 2017.

Last March, hydroelectric company Innergex Renewable Energy Inc. struck a $365-million, 20-year power purchase agreement with Hydro-Qubec and moved ahead with plans for a wind farm in partnership with three Mi'kmaq communities.

Lavoie said that, while its more expensive to produce, wind power is a good source of environmentally sustainable electricity.

The Quebec Energy Board is expected to make a decision on Hydro-Qubec's rate increase in early 2015.