Message from the President and Chief Executive Officer

A Remarkable Year

Thierry Vandal

In 2014, Hydro-Québec posted the best result from continuing operations in its history—$3.4 billion, enabling us to pay a record dividend of $2.5 billion to our shareholder, the Québec government. This result, which represents a 15% growth in profitability compared with 2013, is attributable to the solid performance shown in all our lines of business during a year marked by cold weather that hit both Québec and outside markets early on, and to sound management of our operating expenses. Our success is a product of the expertise, professionalism and determination of all our employees.

The increased contribution by our markets outside Québec stems largely from the efficiency of our generating facilities and transmission system, the attractive cost of our hydropower output and the skillful deployment of our sales programs. Our exports benefited from more favorable prices, particularly early in the year when intense cold gripped the continent.



Several major achievements stand out as highlights of 2014. We commissioned both units at Romaine-2 generating station (640 MW), the first in November and the second in December. Of the four facilities that will make up the Romaine complex (1,550 MW), this is the first to be connected to the grid.

Phases two and three of the rollout of our advanced metering infrastructure got under way. Since this program began in February 2013, more than 2.5 million next-generation meters have been installed. By the end of 2016, a total of 3.8 million such meters will be serving our customers. Establishing this type of infrastructure is a clear sign of our determination to continually improve our operating efficiency and the quality of our customer service. The smart grid will allow us to reduce operating expenses, offer new services and optimize management of the distribution system.

Technological innovation, a key component in Hydro‑Québec’s strategic development, helps extend the company’s reach in various ways. For example, we launched a joint venture in 2014 with Sony, called Technologies Esstalion, with a view to designing large-scale energy storage systems for power grids. As well, the SUMO systems developed by our subsidiary TM4 were selected by two of China’s largest bus manufacturers, who ordered several hundred of them from Prestolite E-Propulsion Systems, a joint venture between TM4 and a Chinese partner, Prestolite Electric (Beijing). Finally, under a U.K. licensing agreement, British company National Grid will operate the LineScout, a remote-controlled robot designed by Hydro-Québec to inspect high-voltage transmission lines, for a 10-year period.

In February 2015, we reached an agreement with the Syndicat des technologues d’Hydro-Québec. This new collective agreement, like those of the company’s other unions, will expire in December 2018.

Ongoing generation projects

Work is proceeding according to plan at the other three sites in the Romaine complex ($6.5 billion), one of the largest construction projects in Canada. Assembly of the generating units at Romaine-1 (270 MW) is in progress and the first structures at Romaine-3 (395 MW) are being built. The 144-km road, which already linked the first three developments in the complex, now reaches the Romaine-4 (245 MW) site, where preliminary work was carried out during the summer and fall.

In the Baie-James region, refurbishment of the first unit at Robert‑Bourassa generating station—the world’s largest underground hydroelectric facility—was completed. In the coming years, all of this facility’s units will undergo similar overhauls.

We made a substantial contribution to the province’s public finances, paying $656 million in water-power royalties earmarked for the Generations Fund.

An evolving transmission system

In 2014, our capital projects in transmission totaled $1.6 billion, including $776 million for growth and $851 million for asset sustainment and reliability. These investments enable us to ensure compliance with North American standards and regulatory requirements.

To handle growing electricity output and consumption in Québec, we are optimizing the grid and adding new equipment to it. In October, for example, we commissioned the 262-km, 735-kV line connecting Romaine-2 generating station to Arnaud substation, in the Minganie region.

In addition, Hydro-Québec had some 1,300 transmission projects under way throughout the province in 2014. One of them entailed modifying the architecture of the 315-kV grid linking Québec and Montréal in order to maintain service quality and reliability in eastern Montréal. In the Capitale-Nationale region, the new Lefrançois substation, commissioned in December, will secure the supply for current loads and meet native-load growth.

Continued investments in distribution

We invested close to $826 million in distribution all across Québec in 2014, more than half of which went to maintaining or improving service reliability and quality. Capital projects over the last decade totaled $7 billion, including $3 billion to meet demand growth and $3 billion for asset sustainment. Our residential electricity rate is among the lowest in North America: for a monthly consumption of 1,000 kWh, Montréal once more ranked first this year.

Comparative index of electricity prices at April 1, 2014 – residential customersa

City Index
Winnipeg 112
Toronto 195
New York435

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

Combined efforts

The remarkable results we achieved in 2014, which benefit Québec as a whole, were made possible by the steadfast support of the women and men who work for Hydro‑Québec or its partners. They have my deepest thanks.

A notable contribution

Finally, I would like to salute Pierre Karl Péladeau, outgoing Chairman of the Board of Directors, who served us with distinction from April 2013 to March 2014, and welcome his successor Michael D. Penner, who brings us extensive entrepreneurial experience on the North American scene. I extend sincere thanks to all the Board members for their contribution to Hydro‑Québec’s ongoing success.

Thierry Vandal
President and Chief Executive Officer

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