Hydro-Quebec History

Address:

75 Boulevard Rene Levesque West
Montreal, Quebec H2Z 1A4
Canada

Telephone: (514) 289-2211
Fax: (514) 289-3658

Joint-Stock Company Owned by the Government of the Province of Quebec
Incorporated: 1944
Employees: 19,500
Sales: $8.8 billion (1998)
NAIC: 221111 Electric Power Generation, Hydroelectric

Company Perspectives:

Hydro-Quebec's mission is to supply power and to pursue endeavors in energy-related research and promotion, energy conversion and conservation, and any field connected with or related to power and energy. Key Dates:

Key Dates:

1898:: Construction begins on Quebec's first large dam.
1901:: Montreal Light, Heat & Power Company is formed.
1930:: MLH & P has a monopoly on gas and electric light.
1944:: Quebec Hydro-Electric Commission (Hydro-Quebec) is created, taking over the assets of MLH & P.
1962:: Government nationalizes the electricity industry under Hydro-Quebec.
1967:: Construction begins on the Churchill Falls project.
1971:: James Bay Development Corporation is created to develop natural resources.
1994:: Great Whale project is canceled.
1997:: Hydro-Quebec wins approval to sell power in the United States at market rates.

Company History:

Hydro-Quebec is one of the world's largest generators of 'green' energy. With its subsidiaries, the company constitutes the third largest electric utility in North America. In 1998 Hydro-Quebec provided electricity to more than 3.5 million customers in the Canadian province of Quebec and also supplied electricity to nine municipal systems, one regional cooperative, and 15 electric utilities in the northeastern United States, Ontario, and New Brunswick. As a power marketer, Hydro-Quebec made direct sales to U.S. power wholesalers; through its high-voltage, high-power research center, IREQ, the company was involved in energy-related research and testing. Sales outside Quebec accounted for nearly 11.5 percent of the company's total in 1998.

Montreal Light, Heat & Power Company: 1901-18

The province of Quebec emerged as one of the world's major producers of hydroelectricity in the late 19th century. Construction of the province's first large dam began in 1898, just three years after completion of the world's first hydroelectric plant at Niagara. Hydroelectricity was a powerful force behind the development of Quebec's economy, since many other industries, including aluminum and carbide production, relied on the cheap, abundant power produced on Quebec's raging rivers.

Montreal Light, Heat & Power Company (MLH & P) was formed in 1901 under the leadership of two powerful Montreal financiers, Louis-Joseph Forget and Herbert S. Holt, from three electric companies (Royal Electric Company, Montreal & St. Lawrence Light & Power Company, and Imperial Electric Light Company) and one gas company (Montreal Gas Company). The new organization soon dominated power distribution in and around the city of Montreal.

In 1916 the Civic Investment & Industrial Company, a holding company, was created to acquire the capital stock of MLH & P and the Cedars Rapids Manufacturing & Power Company. The company name was changed to Montreal Light, Heat & Power Consolidated in 1918 to reflect the incorporation of practically all the gas, electric light, and power business in Montreal as one enterprise.

Consolidation and the Great Depression: 1920-41

During the 1920s many energy companies were absorbed by MLH & P, and by 1930 the company owned or controlled six of its former competitors, an electric railway, and a coal and coke plant. The monopoly allowed MLH & P to set prices and reap big profits. From 1910 to 1930, domestic electric rates dropped from nine to three cents per kilowatt hour, and costs fell even faster. Holt held Quebecers' domestic rates at twice those offered in Ontario. Opposition to the 'electricity trust' focused on these big profits and came primarily from local businessmen. Others were outraged at the perpetual land leases granted to the MLH & P along with rights to use the streets in suburbs within 100 miles of Montreal.

The Great Depression undermined the finances of many hydroelectric companies around Montreal during the 1930s. MLH & P gained control of Beauharnois Power Company, a large producer of energy on the St. Lawrence River, in 1933. It also took advantage of the economic opportunity to acquire municipal utility companies in Pointe Claire, Baie d'Urfe, and St. Anne de Bellevue. By 1941, MLH & P owned three hydroelectric plants and operated a fourth in cooperation with Shawinigan Water and Power.

Provincial Control: 1940s

The Lapointe Commission, formed in 1934, recommended the creation of an Electrical Commission in 1935. The Electrical Commission (later named the Provincial Electricity Board), regulated electric distribution, focusing on rates and services. In 1937 the provincial government adopted a bill that favored municipal control of electrical service.

The Quebec Hydro-Electric Commission, better known as Hydro-Quebec, was created on April 14, 1944, and took over the assets of Montreal Light, Heat & Power Consolidated the next day. The new commission compensated MLH & P shareholders in 1947 but did not settle contracts with minority shareholders in MLH & P subsidiaries Beauharnois Light, Heat & Power and Montreal Island Power until 1953. By 1948 the government had gone a long way toward achieving its goals of reducing rates and standardizing service: residential rates were cut by 20 percent and commercial power prices went down 26 percent.

Building to Meet Demand: 1950s

Demand for cheap power was driven by the defense industry. Aluminum, copper, and nickel refining were in high demand during World War II and on into the military build-up during the Cold War. As a result, many major hydro projects were undertaken in the 1950s.

Hydro-Quebec's first bond offering to U.S. markets was used to finance a project on the Bersimis River. In 1953 Hydro-Quebec undertook a project to widen the Beauharnois canal, which diverted water from the St. Lawrence River to drive hydroelectric plants. The project kept Quebec in the forefront of hydroelectric development in Canada. The next year, the company installed the world's largest submarine power cable, connecting the Bersimis generating facility with the Gaspe Peninsula. The discovery of rich copper mines in this previously undeveloped region raised demand for inexpensive power. The area had been electrified by diesel generators, which cost two to three times as much as hydropower. The cables provided for the complete electrification of the area, 20 percent of which had been without power up to that time.

In 1957 the company sold its gas system to concentrate on water power. After that year, virtually all of Hydro-Quebec's generating capacity came from hydroelectric generators. By the end of the decade, the province of Quebec produced 48.9 percent of Canada's hydroelectricity and was the greatest producer of power per capita in the country. Hydro kept costs low, too: the price per kilowatt hour in Quebec was 33 percent less than that of the United States.

Government Nationalization of Electricity: 1960s

The 1960s were characterized by the purchase by Hydro-Quebec of the private electrical distribution companies. The Shawinigan Water & Power Company, Quebec's largest non-government hydroelectric company, was bought out in 1963 in an effort to standardize rates and services throughout the province. Between 1963 and 1965, 45 rural electrical cooperatives and 19 municipal systems came under government control. They had constituted about one-third of Quebec's power sources. The 1960s also brought technological strides for Hydro-Quebec. In 1963 the company co-sponsored extra-high voltage experiments with Pittsfield Massachusetts's General Electric Company. The 700-kilovolt tests surpassed U.S. voltage limits by 200 kilovolts.

During the 1950s an unfavorable balance of trade with the United States led the Canadian Exporters Association to discourage electric exports because of U.S. quotas and tariffs on many Canadian products. But in 1963, the federal government began to encourage the export of hydroelectricity to U.S. markets. In 1966, after two years of talks, Hydro-Quebec entered into agreements with British Newfoundland Corporation (Brinco) to begin a massive project at Churchill Falls of Newfoundland. The falls at Churchill were a tremendous untapped re

Hydro-Quebec History

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Key Dates:

Company History:

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