Hydro-Quebec to build transmission line to energy-hungry Ontario

MONTREAL - June 8, 2006

Hydro-Quebec will build a $400-million transmission line to Ontario to sell the energy-hungry neighbouring province electricity, utility chairman Thierry Vandal said Thursday.

The transmission line will be ready by the end of the decade, Vandal told a news conference in Montreal.

The idea for such a transmission line dates back to the end of the 1990s.

Ontario experienced a major power failure in 2003 along with the Eastern United States and has experienced energy crunches since then as the province's generating system has had troubles keeping up with growing power demand from industrial and residential customers.

The construction of the 1,250-megawatt line had already been given regulatory approval but Quebec didn't have enough electricity to export at the time.

Vandal said new dams and energy conservation have made the project a reality. He added the electricity from Quebec could replace energy generated in Ontario by pollution-causing coal plants.

Ontario's Liberal government has promised to phase out the province's coal-fired plants in Kingston, Lake Erie and near Sarnia over the next few years but is looking for alternative supplies to offset the lost power and meet demand.

Many expect the government to announce a plan to build a new nuclear generating station in Ontario, a province where nuclear power already accounts for more than half of all the electricity generated.

As well, Manitoba Hydro is expected to build new generating capacity to export more power to Ontario.

In another development Thursday, Hydro-Quebec also said it plans to seek regulatory approval to boost electricity rates by 4.8 per cent next April.

In announcing its strategic plan until 2010, Vandal said the public utility also wants additional hikes of three per cent in 2008, 1.6 per cent in 2009 and 0.1 per cent in 2010.

Rates went up in Quebec this past April 1 by 5.3 per cent, pushed by increased customer demand.

Hydro-Quebec expects to achieve net profits of $2.5 billion a year between 2006 and 2010, about half of which will be handed to the provincial government.

The agency also expects to pay $2 billion in royalties to the government's Generations Fund designed to pay down the $117-billion provincial debt.

Vandal says the payments meet the government's objectives and will have no impact on electricity rates.

For far more extensive news on the energy/power visit: http://www.energycentral.com .