In a rare move, Hydro-Québec is going to court to overturn the Régie de l’énergie’s decision preventing it from increasing its customers’ rates to compensate for Énergir’s losses in converting heating to gas to dual energy.

Hydro-Québec has filed an application for judicial review with the Superior Court to have the decision of the Régie de l’énergie quashed, which obstructed the completion of its agreement with Énergir to convert residential heating from natural gas to dual-energy .

Under this agreement, Hydro-Québec proposed to increase electricity rates to compensate for the gas distributor’s loss of revenue resulting from this conversion. The cost to electricity consumers was estimated at 400 million in the short term, but could have climbed to 1.7 billion over a 15-year horizon.

An initial decision rendered by the Régie de l’énergie, which approved the terms of the agreement, was successfully challenged by several organizations, including the Association québécoise des consommateurs Industriels d’Electricité and the Regroupement des Organismes Environnementaux en Energie.

In a second decision that overturned the first, the Régie de l’énergie, while approving the principle of converting natural gas heating to dual energy, considers that the government corporation cannot charge consumers for electricity the compensation it plans to pay to the gas distributor whose revenues will decrease.

Hydro-Québec is asking the court to annul this second decision and restore the first, which allowed it to pass on the cost of the agreement for Énergir to electricity consumers. The Crown corporation estimated that Quebecers’ electricity rates should increase by 1.4%, in addition to the annual increase, to absorb this additional cost for Hydro-Québec.

When the Régie handed down its second decision prohibiting it from passing on this cost to its customers, the Crown corporation had indicated that it would still go ahead with the dual-energy agreement and that it would bear the cost out of its annual profit.

This second decision is “incoherent, irrational and unreasonable”, Hydro-Québec now pleads in its motion to quash before the courts.

Those who challenged the agreement had argued that making electricity consumers pay for Énergir’s losses went against the polluter-pays principle.