Annual Report 2013

Message from the President and Chief Executive Officer

Photo PDG
A Successful Year
In 2013, Hydro-Québec posted a result from continuing operations of $2.94 billion, a new record for the company. We are very proud of this increase in our profitability, which is attributable to growth in our export revenues as well as cost reductions at every level of the organization. This result speaks well for the expertise, professionalism and determination of Hydro-Québec's entire workforce.

In Québec, revenue from electricity sales was up, mainly because of a return to near-normal winter temperatures in 2013 after a mild winter in 2012, and also due to higher demand.

The solid performance of our generating facilities and transmission grid, attractive cost of our hydropower output and skillful deployment of our sales programs also enabled us to increase the contribution of our markets outside Québec. Our exports benefited from slightly higher prices in 2013, especially at the end of the year, when very cold weather swept across the continent.


Three events in particular stand out as highlights of 2013. In December, we commissioned the third bulb-type generating unit at Sarcelle powerhouse (150 MW), thereby completing the Eastmain-1-A/Sarcelle/Rupert complex (918 MW), which was begun in 2007. Considered one of the largest construction projects in Canada—with as many as 3,700 workers on the job at its peak—this complex was built at a cost of less than $4.7 billion, under its original budget of $5.0 billion, and is a prime example of Hydro-Québec's finely honed skill in managing major infrastructure projects.

Rollout of an advanced metering infrastructure, which started in February 2013, passed a major milestone with the installation of the millionth next-generation meter. More than 65% of the 1.7 million meters in phase one of the project, scheduled to end in June 2014, are already serving customers in the greater Montréal area. Ultimately, we plan to deploy 3.75 million next-generation meters throughout the province. In a determined effort to improve operating efficiency, Hydro-Québec is gradually establishing a smart grid that will allow the company to reduce operating costs, offer new services and optimize management of the distribution system.

In the area of labor relations, it is noteworthy that seven of Hydro-Québec's eight unions, representing 85.7% of its unionized employees, signed new collective agreements in December following several months of negotiations. The resulting stability will enable us to maintain solid labor relations and achieve Hydro-Québec's objectives, for the benefit of the shareholder and our approximately 4.1 million customers.


While the completion of the Eastmain-1-A/Sarcelle/Rupert project was one highlight of 2013, another was the continuing progress of work at the Romaine complex, a vast project estimated at $6.5 billion.

On the Romaine-2 jobsite (640 MW), construction of the dam and retaining structures was finished in November. Assembly of the two generating units is proceeding according to plan, with commissioning slated for 2014. At Romaine-1 (270 MW), concreting on the generating station got under way, while at Romaine-3 (395 MW), excavation and concreting began on the temporary diversion tunnel. Additionally, the Route de la Romaine, also built by Hydro-Québec, now runs a total of about 130 km and will reach the Romaine-4 jobsite in 2014.

In the Baie-James region, refurbishment of the units at Robert-Bourassa generating station—the world's largest underground hydroelectric facility—will take place over a number of years.


In 2013, our investments in transmission rose to a record $1.9 billion, including $917 million devoted to maintaining and improving the grid, and replacing some of its assets. These investments are intended to ensure compliance with North American standards and regulatory requirements, provide customers with high-quality service and meet growing transmission needs on the grid arising from increased domestic power generation and consumption.

Hydro-Québec had more than 1,300 transmission projects under way throughout Québec in 2013. A number of these have been completed and the new facilities added to the assets we operate. Other projects will continue in 2014 and subsequent years. These include construction of the 735-kV line that will link Romaine-2 generating station to Arnaud substation, addition of a 735-kV section to Bout-de-l'Île substation—making it the first facility to operate at that voltage on the island of Montréal—and construction of Duchesnay substation to meet demand growth in the northwest portion of metropolitan Québec.


Hydro-Québec invested close to $800 million in electric power distribution throughout Québec in 2013, more than half of which went to maintaining or improving service reliability and quality. Investments in distribution over the last decade total $7 billion, including $2.8 billion for meeting increased demand and $1.3 billion for asset sustainment. In addition, our vegetation control operations, such as tree pruning next to the distribution grid, have grown substantially over time. In 2013, this activity accounted for about $66 million in spending.

Comparative index of electricity prices at April 1, 2013 – residential customersa

Montréal - 100, Winnipeg - 111, Vancouver - 130, Ottawa - 180, Toronto - 182, Calgary - 216, Boston - 240, New York - 317

a) Monthly bill (before taxes) for a consumption of 1,000 kWh.


The remarkable results we achieved in 2013, which benefit Québec as a whole, were made possible by the ongoing support of the women and men who work for Hydro-Québec or its partners. I am deeply grateful to them all.


Finally, I would like to salute outgoing Chairman Michael L. Turcotte, who left the Board of Directors after more than seven years of distinguished service, and welcome his successor Pierre Karl Péladeau, who brings us vast experience in business and corporate governance. I thank all the Board members for their contribution to Hydro-Québec's many accomplishments.

Thierry Vandal
President and Chief Executive Officer


Hydro-Québec at a glance. Note: Certain comparative figures have been reclassified to conform to the presentation adopted in the current year.
  2013 2012
Operations and Dividend ($M)  
Revenue 12,881 12,136
Operating result 5,371 5,177
Result from continuing operations 2,938 2,736
Result from discontinued operationsa 4 (1,876)
Net result 2,942 860
Dividend 2,207 645
Balance Sheets ($M)  
Total assets 73,110 70,508
Property, plant and equipment 59,077 57,174
Long-term debt, including current portion and
     perpetual debt


Equity 19,394 18,982
Cash Flows ($M)  
Operating activities 5,017 4,768
Investing activities (5,386) (3,321)
Financing activities (127) (639)
Cash and cash equivalents 1,695 2,183
Financial Ratios  
Interest coverage 2.09 2.02
Return on equity from continuing operations (%) 14.6 14.6
Profit margin from continuing operations (%) 22.8 22.5
Capitalization (%) 30.5 30.6
Self-financing (%) 68.3 55.4

a) The discontinued operations are related to the 2012 decision to abandon the project to refurbish Gentilly-2 nuclear generating station and to terminate nuclear power operations.

Hydro-Québec is innovating The Annual Report is now available exclusively in electronic formatDownload  [PDF – 9.17 MB]

Earlier annual reports

  • 2012  [PDF – 8.71 MB]
  • 2011  [PDF – 5.53 MB]
  • 2010  [PDF – 6.5 MB]
  • 2009 [PDF – 6.1 MB]
  • 2008 [PDF – 7.2 MB]

© Hydro-Québec, 1996-2015. All rights reserved.

Logo Hydro-Québec