The successor to Sophie Brochu at the head of Hydro-Québec has not yet been officially named as the files are already piling up on his desk. Overview of the task awaiting Michael Sabia at the head office on René-Lévesque Boulevard.
At the top of the pile is certainly the renegotiation of the Churchill Falls supply contract. This contract, concluded in 1969 under conditions that proved to be very advantageous for Hydro-Quebec, ends in 2041 and preliminary discussions have already begun between Quebec and Newfoundland for its renewal. With his experience as a great federal mandarin, Michael Sabia could well have been chosen by Quebec expressly to carry out these perilous discussions. Newfoundland has only one buyer for electricity from Churchill Falls, which produces 15% of Quebec’s electricity needs and generates one-third of Hydro-Quebec’s profits.
The one who is still the Deputy Minister of Finance in Ottawa is well aware of the federal government’s efforts to help New Brunswick and Nova Scotia, which depend on coal for electricity, to have access to renewable energy from Quebec and Newfoundland. This project, known as the Atlantic Loop, is based on the construction of transmission lines that would allow energy exchanges between the four provinces. The latest federal budget, which bears the mark of Michael Sabia, also provides that the Canada Infrastructure Bank will finance this project, estimated at 5 billion. There is no doubt that Mr. Sabia, who served as Chairman of the Board of Directors of the Canada Infrastructure Bank, has an interest in advancing this project which would benefit Hydro-Québec.
Quebec must decide whether to rely on energy savings to avoid building new facilities or whether to increase its production capacity to meet the demand of companies attracted by its renewable energy. By agreeing to become the boss of Hydro-Québec, Michael Sabia seems to have the same vision as the Legault government and its Minister of Energy, Pierre Fitzgibbon, who want to use the energy lever to attract investment. Mr. Sabia is well acquainted with Minister Fitzgibbon, who was a member of the board of directors of the Caisse de dépôt under his leadership, and the other big gun of the government, Christian Dubé, who was its vice-president from 2014 to 2018. .
The next CEO of Hydro-Québec could therefore kick off the first project to build a hydroelectric plant in 20 years. This additional production could also come from Lower Churchill, where there is still potential for hydroelectric development, if the negotiations on the Churchill Falls contract and the Atlantic loop are successful.
The last federal budget, in which Michael Sabia made a point of participating before accepting the post of CEO of Hydro-Québec, grants for the first time to the Quebec state company the right to benefit from a federal credit of 15% on any investment in green energy in Quebec or elsewhere in Canada.
