Hydro-Québec, one of the world’s biggest hydro-power producers, will do something this week that it hasn’t done for as long as anyone can remember: engage its stakeholders in an in-depth exchange about how they see their collective energy future.
The goal is to reconnect with Quebeckers in a way that hasn’t happened since maybe the 1998 ice storm, when the corporation’s then-chief executive appeared on TV every day at 5 p.m. wearing his trademark white turtleneck to update an anxious population on the status of the grid. And maybe, just maybe, build the foundations for collective action – on how to move toward a lower-carbon economy and how to pay for it.
A special website will be created for this purpose, with conversations organized by three main themes: the green economy, sustainable mobility and responsible energy use. Individual customers, businesses and anyone else with project proposals, ideas and opinions will be invited to put them forward, with the utility pledging to analyze the results and incorporate them into its strategic planning later this year.
This initiative wasn’t dreamed up in the marketing offices of Hydro’s downtown headquarters on René Lévesque Boulevard as some random public-relations gimmick. It comes directly from the utility’s current CEO, Sophie Brochu. And it tells you a lot about her approach one year into the job – incidentally, she is the first woman to hold this post in Hydro-Québec’s 77-year history – that this sits top of her to-do list.
“For all sorts of good and bad reasons, there are people who have a lingering image of Hydro-Québec that dates from the 1990s,” Ms. Brochu said in an interview, describing that image as an opaque and complex organization obsessed with dam development “like a gang of beavers.” Times have changed, she said. “Hydro-Québec has, like all of us, grown up, evolved. And it’s at the dawn of an even wider opening of its walls.”
Ms. Brochu, 58, is an energy economist by training who previously ran natural gas distributor Énergir. Friends and associates describe her as a dynamic leader with a seemingly bottomless well of empathy and emotional intelligence, a measured thinker with a long-term field of vision who can rally people behind her.
She’ll need all the skills she can muster. At a time when Canada’s energy axis is slowly shifting away from the oil patch and the entire world is grappling with climate change, questions about how we generate power and how we use it have never been more urgent. If Quebec wants to succeed in steering toward a lower-carbon existence and help its neighbours do the same, it needs to prepare the ground for the tough decisions ahead.
Ms. Brochu sees Hydro-Québec as a powerful organization with world-class assets and capability that has nevertheless become detached in many ways from the population it serves. She says she wants to help Quebeckers “take ownership again” of the public utility, which means soliciting their input on major questions and sharing its own information to foster greater energy literacy.
In blunt numbers, Hydro-Québec is a giant. With an installed generation capacity of 37,231 megawatts from 61 hydroelectric stations and 24 thermal generating stations, it carries power over 261,578 kilometres of transmission and distribution lines at the last count. The corporation contributed $3.6-billion of revenue to Quebec government coffers in 2020 and made 202.7 terawatt hours of net electricity sales, including 31.3 TWh in exports. It offers the lowest residential power rates in North America at 7.3 cents a kilowatt hour, and its payroll includes engineers, anthropologists, fish experts and political relations people.
More than 90 per cent of Quebec’s electricity mix comes from massive hydroelectric dams built over decades by Hydro-Québec and from the partly owned Churchill Falls project in Labrador. The province wants to harness that hydropower, which it calls “clean” energy despite the considerable environmental impact from the initial infrastructure construction, to shift its economy away from oil while boosting electricity exports to the United States and help that country with its own decarbonization effort.
In that sense, the challenge for Ms. Brochu is really twofold: Secure additional long-term supply contracts from customers outside Quebec while guiding the province in its own internal energy transformation. There are significant costs and complexities involved with both of these things.
For example, Hydro-Québec would love to sell more power to Ontario, but the province’s reliance on nuclear energy and continued development of that industry muddies the picture. Similarly, Hydro-Québec’s efforts to cement a 20-year deal to provide power to Massachusetts are moving forward, but there is stiff opposition from Indigenous leaders and environmentalists to the transmission lines needed to carry those megawatts south.
The climate-change crisis has created postural extremes, Ms. Brochu says (“it’s either jovial or catastrophic”), when what’s needed is a balanced approach that acknowledges we have a responsibility to reduce greenhouse gas emissions and a responsibility to do it at the best cost possible. “We have certain ideas, but we realize that society does not have a big-picture understanding of what it will take to give life to these ideas. And I think Hydro-Québec can play a role in that as a catalyst but also to explain what’s possible and what’s not.”
The complexities of energy run big and small. Take heating. The City of Montreal decided in 2019 to ban the use of heating oil in a bid to lower greenhouse-gas emissions, giving home owners, businesses and other users until 2030 to switch to other alternatives such as electricity to power their furnaces. But doing that will also wipe out a tool Hydro-Québec uses in its own electricity delivery. The utility offers a special reduced tariff to Montreal customers that agree to use heating oil instead of electricity during the coldest winter days in order to ease demand on the grid. With that gone, Hydro-Québec can’t count on that and needs to build new and expensive infrastructure for that peak usage time, Ms. Brochu said.
“If Montreal was the only place that did that, and we incorporated the added cost into hydro tariffs across the province, that would mean that people in Gaspé would pay for the ban on heating oil for people in downtown Montreal,” Ms. Brochu says. “And I’m not saying that’s good or bad. I’m saying we’re not talking about it.”
The CEO wants to spark those difficult conversations. And she’ll be the public face of the utility as it works through the messy path forward.
In many ways, there’s no person better suited to the task. Ms. Brochu has literally lived with the energy industry her whole life. Born into a family of entrepreneurs from the Beauce region, she grew up in the shadows of the Ultramar refinery in Lévis and often watched the tankers come in as she played down by the river.
She didn’t like school, she says, and was still searching for her calling when she was admitted into the prestigious Conservatoire d’art dramatique du Québec to study acting. She quit after a year and pursued economics, saying she felt she wasn’t cut from the same cloth as the professional performers she worked with. She also plays piano and clarinet.
“I think she had some keen intuition in terms of where she thought she could make the most impact,” says Michèle Sirois, a long-time friend who was at the same academy. “I’m extrapolating a bit here, but maybe she said, ‘I’ll have more control over my destiny.’ Because as an artist, you’re always being chosen by someone else.”
Hydro-Québec’s CEO started in energy at Soquip, Quebec’s now-defunct state oil and gas developer, and went from there to Énergir, then known as Gaz Métro, where she helmed a doubling of assets to $6-billion as the gas company took over Vermont’s two big electrical utilities and pushed into wind power and biomethane. In her spare time, she retreats to her garden at her property near Bromont, Que., and devotes significant energy to community groups to an extent few senior corporate leaders do.
Robert Tessier, chairman of the Caisse de dépôt et placement du Québec, calls Ms. Brochu one of the most exceptional leaders he’s had a chance to know. She’s someone with staying power who is making a massive impact in several segments of society at once, he said.
Asked how she will change Hydro-Québec, Mr. Tessier said her talent is bringing ideas to fruition by finding common ground with stakeholders. Ms. Brochu told a business audience last month that Canadians, and Quebeckers, can’t oppose one another as we work through the energy transition, and that it’s not helpful to characterize energy in terms of good and bad industries.
“There’s nothing easier than to invest in a company that makes wind turbines or solar energy or renewables,” she said. “What’s hard, but necessary, is to help evolve the business models of companies that seem to be part of the past and need capital to evolve. So when people say ‘We shouldn’t invest any more in such or such an industry,’ I think that’s a big mistake.”
“She’s not a revolutionary. She will do things needed in the order needed but always with a vision behind it,” said Mr. Tessier, who hired Ms. Brochu when he led Gaz Métro and has remained close to her since then. “There’s no blind navigation. There’s a destination that will unfold with her vision.”
When Ms. Brochu was first approached to be Hydro-Québec CEO years ago, she didn’t want the job. Then COVID-19 happened, just as Hydro’s former top executive left for Bombardier. As a director on the board of Bank of Montreal, she could see the amplitude of the looming crisis. And this time, she says she felt she couldn’t refuse when she was asked again. The sabbatical she had planned would have to wait.
She took over as CEO in early April last year, while much of Quebec was under a government-mandated shutdown to reduce the spread of COVID-19. The resulting business slowdown chopped Hydro’s profit by $620-million from the year before, to $2.3-billion.
Beyond the emergency measures taken to dampen the impact of COVID-19 on its customers (the utility vowed not to cut off service for anyone who couldn’t pay their bill), Ms. Brochu has been busy plotting growth. Her team put in place a new rate for greenhouse growers to promote Quebec’s food self-sufficiency, and estimates power sales to that industry could triple over the next decade.
It also announced plans for a new electrolysis plant in Varennes to supply green hydrogen (made from renewable energy) and oxygen for waste recycling; launched a new battery storage subsidiary; inked a strategic alliance with renewable power producer Innergex Renewable Energy Inc.; and contributed to the revival of the $600-million Apuiat wind power project that will benefit Innu communities.
If the CEO has given up on calls for a national energy policy for Canada (“we’ve burned that possibility”), she now thinks in terms of regional superclusters, where neighbouring provinces and states can pool their respective assets and swap their energy freely. That doesn’t mean co-ownership of power infrastructure necessarily, she says. But it means electricity should move through a circuit that’s bigger than individual jurisdictions.
Right now, Hydro-Québec has the equivalent of about one year’s worth of Quebec’s power consumption sitting in its reservoirs. Historically, the utility has sold power outright to U.S. clients. Ms. Brochu’s vision, which is articulated in a study published last year by the MIT Center for Energy and Environmental Policy Research, is for a greater two-way exchange of power between Quebec and its neighbours.
As the MIT study authors explain, the setup would see Northeastern states buy and use Quebec’s hydroelectricity as a backup when their own renewable power is unavailable. Quebec, in return, would buy renewable power from its neighbours when needed, gaining more flexibility to meet its own internal power needs. Such interconnection has benefits that stretch past usage in normal times. If Texas had such a system, its isolated grid might have avoided the worst of its February power crisis.
All of this would require more transmission lines, of course. And there’s nothing stopping Canada’s western, central or eastern provinces from doing similar exchanges, Ms. Brochu says. The federal government’s role, she said, should be to support these pan-regional collaboration efforts.
“Today, it’s like there are 12 kids and 12 sandboxes and they each want their own toys,” she says. “There’s no money for that. Governments are tapped and indebted. They have to relaunch economies while fostering the energy transition. So we have to put our assets together.”
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