We don’t know what, when, or how, but the Quebec government is preparing to cede part of its power transmission grid to the Mohawk community of Kahnawake, a decision that marks a first and is intended to facilitate the export of energy from New York.
Posted at 6:00 am
The 58-kilometer line, which will be partially privatized, will connect Quebec to the US border and will be owned by a new corporation owned by Hydro-Quebec and the Mohawk Council of Kahnawake under an unspecified ownership division, but which includes the Crown Corporation will be the majority.
The construction of the underground link, which will be owned by this new company, will cost $1.14 billion. The splitting of the investment costs between the two partners as well as the splitting of any income that the transmission line is intended to generate are and will remain confidential.
This was stated by Secretary of Commerce Christopher Skeete during the investigation of Bill 13, which aims to allow Hydro-Québec to transfer part of its transmission network to third parties.
This is strategic information that must remain confidential, the minister told opposition lawmakers concerned about what could be the start of a privatization of Hydro-Québec’s operations.
The agreement that will be reached between Hydro-Québec and the Mohawk Council is a historic first, he said, which will serve as a model because there will be others, hence the need not to give further information. “It’s a new way of doing things that we want to emulate,” he said.
The new company can be a corporation, a limited partnership or a partnership. Bill 13 leaves all these possibilities open because there is no agreement yet.
The government must move quickly to allow the formation of the joint venture because the contract with New York State is on a very tight schedule, according to the minister.
“It’s always difficult to draft legislation before a deal is reached, but again, we cannot predict the outcome of this meeting, we cannot predict how Mohawk Council attorneys will proceed [conseiller] their clients about what this future society should look like. So we [exprime] our intention clear: we have to stay in the majority, that’s non-negotiable, so let’s root it in a bill. After that, we allow ourselves the necessary openness to satisfy our partner,” he argued in the Bundestag committee.
The line will not pass through the reserve area
The Bill 13 study was conducted at a brisk pace and met with little resistance. According to Jean-François Blain, independent energy analyst, more transparency was needed given the importance of the issues. “This is an act of tremendous consequence that Hydro-Québec and the government have knowingly scrutinized,” he said.
There is a lot of money at stake in this deal. Construction of the transmission line, estimated at $1.14 billion, is a necessary condition to fulfill the contract to export 10.4 terawatt-hours of electricity to New York, the largest in Hydro-Québec’s history, which is expected to bring in $30 billion over 25 Years.
SOURCE HYDRO-QUEBEC / INFOGRAPHIC LA PRESSE
Under the terms of the agreement, the joint venture formed by the Mohawk Council of Kahnawake and Hydro-Québec will be called Horizon Kahnawake Hydro-Québec. It will own the 58-kilometer line and sell its transmission capacity to Hydro-Québec. The income generated in this way is shared according to the participation of both partners.
The Mohawk Council expects guaranteed revenue for a period of “at least 40 years”.
“The 40-year period represents the estimated average payback period for the line,” said Hydro Quebec spokeswoman Lynn St-Laurent.
After the expiration of the 25-year contract with New York, this line could be used in the short term for the export and import of electricity or for another export contract, she said.
During their appearance in the National Assembly in support of Bill 13, representatives of the Indigenous community argued that the project will both provide clean energy for New York City and create a new source of income and employment for members of their community.
The transmission line between the Hertel substation in La Prairie and the US border will not pass through the Kahnawake Reservation area. After 58 kilometers it will join the American part of the interconnector at a point below the River Richelieu and Lake Champlain. Commissioning is planned for 2026.
The Quebec portion of the collaborative project was examined by the Bureau d’audiences publiques sur l’environnement, which found no major environmental issues but raised concerns about Quebec’s future electricity needs.
“The commission of inquiry believes that given the climate emergency and the imminent need to increase Quebec’s energy supplies, the energy transition should be based on a plan that balances its supply needs and electricity export projects,” the report concludes.
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545-kilometer length of the Americas portion of the transmission line being built by Hydro-Quebec’s partner Transmission Developers between the Quebec border and New York City
Source: Hydro Quebec