Hydro-Quebec rate hike approved

Electricity rates will go up by 0.4 per cent effective April 1 after the province's energy board approved Hydro-Québec's latest request for an increase.

The hike will mean an additional cost of 43 cents per month for the average residential customer.

Hydro-Québec requested the increase to compensate for a drop in commercial sales and a change in accounting methods, spokesperson Josée Morin said.

The higher rate was approved even though residential customers should have been entitled to a 2.2 per cent cut in energy rates, said Charles Tanguay of the consumer advocacy group Union des consommateurs.

The energy board seems to accept Hydro-Québec's requests without question, Tanguay said.

"Hydro-Québec makes enormous profits - $3 billion a year," he said. "Increases like this amount to taxing electricity.

"Provinces like Ontario pay much more for their electricity because it costs them more to produce it."

Tanguay predicts that the real debate over energy costs will happen after the upcoming provincial budget.

He expects the government will announce an increase in the rates for the so-called heritage block of energy, which is not subject to the board's approval.

"An increase of one cent per kWh would represent a 15 per cent increase of our rates," said Tanguay. "We're not just talking crumbs here - that is a lot of money."

The board has also authorized the utility to spend $294 million on an energy efficiency plan, including $81 million aimed at its residential clientele.