2022 at a Glance

Net Income

$4,557M

28%1 ↑

Hydro-Québec posted the best financial performance of its history in 2022. In a context marked by a sharp increase in energy prices on export markets and cold winter temperatures in the first quarter, net income exceeded $4.5 billion for the first time, totaling $4,557 million. This nearly $1.0-billion increase over the $3,564 million recorded the previous year is mainly due to higher sales revenue, both in and outside Québec, which was, however, partially offset by an increase in electricity purchases.

In light of these results, Hydro-Québec will be able to pay a dividend of $3,418 million to the Québec government, its sole shareholder—the largest in its history.

Hikes in market prices drive up sales outside Québec

Electricity Sales Outside Qu Bec

$2,912M

59%1 ↑

Total volume of electricity sales reaches a new high

skills and efforts of its entire workforce, along with the reliability and smooth operation of its facilities.

2%1 ↑

8.2¢/kWh

62%1 ↑

On external markets, electricity sales generated unprecedented revenue of $2,912 million, mainly due to favorable market conditions during the year. Energy markets saw a marked rise in prices, in the midst of the energy crisis in Europe due to the conflict in Ukraine. The export volume remained high, at 35.6 TWh.

Cold winter contributes to unprecedented sales volume on the Québec market

Electricity Sales In Qu Bec

180.6

3%1 ↑

Electricity sales in Québec reached a record level of 180.6 TWh, up 5.4 TWh compared to 2021. This increase is in part attributable to the effect of cold temperatures, the impact of which was felt mainly in January—the coldest since 2004—when temperatures were 7°C colder, on average, than in 2021. It also results from higher energy consumption in the residential segment and in the commercial, institutional and small industrial segment.

Overall, the heightened needs of the Québec market and the high level of electricity exports to neighboring markets drove the total sales volume across all markets to a historic high of 216.2 TWh in 2022, an increase of 4.8 TWh over the previous record, set in 2021. Hydro-Québec succeeded in supplying reliable power to over 4 million customers in Québec and exporting significant electricity volumes to the wholesale markets in northeastern North America. This feat is a direct result of the

Extreme weather events lead to extensive damage

In 2022, Québec was the scene of several weather events, two of which caused widespread power outages that required major service restoration work. First, last May, a storm front, known as a “derecho,” over 300-km wide and with winds of 150 km/h resulted in thousands of power outages. Then, in late December, a winter storm with unusually violent wind gusts struck Québec, causing serious damage in many regions. Each of these storms deprived over half a million customers of power. Weather conditions also led to other, smaller outages throughout the year. Overall, these weather events led to restoration costs of $126 million, recognized in operational expenditure. This is the highest amount since the 1998 ice storm. In accordance with the regulatory framework, these costs are borne by Hydro-Québec, and will have no impact on the electricity rates.

Hydro-Québec rates remain among the lowest in North America

AVERAGE PRICE ¹

7.59¢/kWh

In keeping with An Act to simplify the process for establishing electricity distribution rates, Hydro-Québec’s rates applicable as of April 1, 2022, were indexed based on inflation. All rates were therefore increased by 2.6% except the large-power industrial rate (Rate L), which was increased by 1.7%. Year after year, Hydro-Québec’s electricity rates continue to be among the lowest anywhere in North America.

Hydro-Québec continues its major investment program across the entire territory

Saguenay–Lac-Saint-Jean region. This is the largest electricity transmission project underway in Québec. The line, which will run 262 km, is expected to help maintain the reliability and improve the operational flexibility of Hydro-Québec’s transmission system and reduce electrical losses associated with the distances covered. The new equipment is expected to be commissioned in 2023.

The company’s investments to ensure asset sustainment have increased significantly in recent years. In fact, funds allocated to sustainment in 2022 have increased by nearly 50% compared to five years ago.

The biggest construction project of the last decade has been completed

The company dedicated $4,271 million to its investments in property, plant and equipment and intangible assets in 2022. Most of this amount was allocated to large-scale projects aimed at ensuring the long-term operability of the company’s assets, as well as to major development projects.

The major projects include continuing the construction of the 735-kV line that will connect Micoua substation, in the Côte-Nord region, to Saguenay substation, in the

On the Romaine hydroelectric complex site, the last Romaine-4 generating station was commissioned in September. The complex is now fully operational, 13 years after breaking ground. With total installed capacity of 1,550 MW, it is intended to help the company meet Québec’s energy needs for several decades and export clean, reliable and renewable energy to markets outside Québec, in order to reduce greenhouse gas emissions in the northeastern part of the continent.

Hydro-Québec makes an acquisition of historic proportions

In September, Hydro-Québec entered into an agreement to acquire Great River Hydro LLC, which owns and operates the largest hydroelectric fleet in New England. This fleet, comprised of 13 hydropower generating stations with total installed capacity of 589 MW, located in the states of Vermont, New Hampshire and Massachusetts, powers over 213,000 households in New England every year. The acquisition cost, settled in cash, amounted to US$1.5 billion (C$2.1 billion). The transaction is intended to allow Hydro-Québec to diversify its sources of income in its main export market and also to combine its expertise in managing and leveraging hydroelectric facilities with Great River Hydro’s understanding of the New England market. Together, the two entities should be able to support the development of new renewable energy projects in a market where such resources are in high demand. The authorizations required from U.S. regulatory agencies were obtained before the closure of the transaction, which occurred on February 10, 2023.

The company makes it largest contribution yet to the Québec government’s revenue

Hydro-Québec’s contribution to the Québec government’s revenue for 2022 amounts to $6.0 billion. This substantial contribution, which includes the company’s net income of $4.6 billion, water-power royalties, the public utilities tax, and guarantee fees related to debt securities, benefits all Quebecers, as do the economic spinoffs of Hydro-Québec’s operations throughout the province.