Hydro-Québec announced net income for Fiscal Year 2020 was $2,303 million, down $620 million from the previous fiscal year, and said this decrease is mainly explained by the impact of the COVID-19 pandemic on the company’s activities and by the mild temperatures of 2020.
The Quebec market experienced a 4% drop in electricity consumption due to sanitary measures; a 7% decrease in basic demand from the commercial, institutional and small industrial sector and that of large industrial customers; and a 4% increase in demand from the residential sector. In addition, milder temperatures were experienced in winter and fall (respectively 3° C and 2° C higher than in 2019).
Markets outside of Quebec contributed $537 million to net income, with the volume of net exports dropping by 2.4 TWh compared with 2019 (31.3 TWh in 2020). Additionally, there was a 25% drop in prices in major export markets.
“Not surprisingly, the health crisis and the economic slowdown weighed on our results. In this difficult context, we fully assumed our role within Quebec society by implementing exceptional measures totaling $90 million to help our clients who needed it to get by. We have also launched several initiatives that will contribute both to the development of Quebec’s economy and to the acceleration of the energy transition in the northeast of the continent,” summarized Sophie Brochu, president and chief executive officer of Hydro-Quebec.
In the Quebec market, net electricity sales fell by $146 million, mainly due to the effect of the milder temperatures during most of the months when heating needs affect energy consumption. In markets outside Quebec, net electricity exports fell by $116 million due to the effect of first quarter temperatures, which resulted in lower demand and prices in export markets, as well as the impact of the pandemic, which also led to a drop in prices and needs.
As for operating expenses, they increased by $328 million compared to 2019. This difference is due, among other things, to the repercussions of the pandemic, Hydro-Quebec said.
“Despite the headwinds we faced in 2020, we will still be able to pay a dividend of over $1.7 billion to our shareholder, the Government of Quebec,” said Jean-Hugues Lafleur, executive vice president and chief financial officer. “This sum, combined with the economic spinoffs from the activities we carry out across the country, makes Hydro-Québec a major contributor to the Québec economy. “
Despite the slowdown in the pace of work on construction sites caused by the health crisis, the investment program totaled $3.4 billion in 2020. Most of this was allocated to major development projects in production and transport, as well as large-scale work aimed at maintaining and improving the quality of the company’s assets.
Among the most important projects is the construction and connection of the 1,550-MW Romaine hydroelectric complex, which is under way on the North Shore. On the 245-MW Romaine-4 development site, the dam and related structures were put into operation in the third quarter of 2020.
In the U.S., the New England Clean Energy Connect (NECEC) project has completed all the necessary steps in the regulatory authorization process, so the American partner of Hydro-Québec was able to undertake the work. In Quebec, regulatory assessments are continuing for the Appalaches-Maine line, which will connect to the NECEC line.