Our electricity attracts businesses to our neighbors

Our electricity attracts businesses to our neighbors

BETTING À DAY

While Hydro-Quebec delays business investment projects here, American firms like Micron and IBM will take advantage of the state corporation's low-cost “green” electricity to coming years.  

“Are we helping competitors? The question is valid. We should help Quebec before New York State, right? asks Jocelyn B. Allard, president of the Quebec Association of Industrial Electricity Consumers (AQCIE). 

In early October, tech giant Micron said it would invest $20 billion dollars for a new semiconductor plant in Clay, upstate New York.

New York State Governor Kathy Hochul with Micron CEO Sanjay Mehrotra.

In an interview with Washington Post, New York Senator Charles E. Schumer said Micron chose the site in part because it is close to a hydroelectric plant in Niagara Falls , which produces inexpensive electricity. 

Another American giant, IBM, also announced earlier this month an investment of 20 billion US dollars in the Hudson Valley for the 10 years coming soon.

On its website, IBM specifies that its energy strategy aims to purchase electricity generated by power plants established in the same region where IBM consumes its electricity.  

Assumptions

“If Quebec did not sell its electricity to New York State, would green electricity from the same state have been available to Micron? I'm not sure, since decarbonizing New York City is a priority for them. So, could Micron have been attracted by our green electricity here, in Quebec? These are hypotheses, but this kind of questioning does not seem to be present in the not always transparent choices made by Hydro-Québec,” adds Mr. Allard.

Note that in December 2021, Hydro-Québec reached an agreement with the State of New York to supply the region, when the worksite is fully commissioned, with 1,250 megawatts, the equivalent of the consumption of more than a million homes. The contract is for 25 years.

In addition to low-cost electricity, President Joe Biden's CHIPS and Science Act, a subsidy program for semiconductor and computer chip makers , has contributed to the investment announcements of the two American giants. 

Brakes in Quebec

The situation is annoying for many Quebec companies , who have seen their ambitions hampered by Hydro-Québec for several months. 

Moreover, according to a document obtained from the Régie de l'énergie, subscriptions to Rate L and special contracts from Hydro-Québec, which represent industrial customers such as aluminum smelters and other large consumers, have stagnated for almost 10 years.

Many companies have decarbonization or industrial expansion projects. And new players would like to settle in Quebec. But those projects have to wait, because Hydro power is now in high demand. To achieve carbon neutrality in 2050, Quebec needs 100 terawatt hours (TWh) more, or 50% of Hydro-Quebec's current capacity, according to Hydro's strategic plan.

“For the past year, people have been told by Hydro-Québec: we cannot tell you if we are able to serve you for the project you intend to do. We do not know if we have electricity for your requests. We don't want to commit. At the same time, Hydro boasts of having export contracts that will be very profitable. It's a little disappointing,” says Jocelyn B. Allard.

“We want to do both, export and develop Quebec. These two fronts are not at all incompatible. We received a lot of project requests, and these projects will be done, it's a matter of time and choosing the most promising projects, “says Maxence Huard-Lefebvre, spokesperson for Hydro-Québec.

Hydro-Québec welcomed yesterday the establishment of an interdepartmental committee, which will be chaired by Prime Minister François Legault, responsible for defining a “prioritization grid” for industrial projects related to the energy transition.

The agreement between Hydro-Québec and the State of New York

  • 1250 megawatts of electricity supplied by Hydro-Québec to New York State.
  • A 25-year agreement.
  • Income potential for Hydro-Québec at nearly US$30 billion during this period.
  • A power line buried over a distance of 545 kilometers in the United States, much of it under Lake Champlain.

Do you have a scoop for us?

Do you have something to share with us about this story?

Do you have a scoop that our readers might be interested in?

Email us at or call us directly at 1 800-63SCOOP.