Hydro-Québec is a government-owned corporation whose profitability is a key asset for the province. Since it was established in 1944, the company has consistently generated a profit, much of which has been reinvested to ensure reliability and quality of service, or paid to its shareholder, the Québec government, to benefit the province as a whole.

Hydro-Québec purchases goods and services and pays municipal and school taxes throughout Québec. We thus support the creation of direct and indirect jobs and play an important role in regional development.

Hydro-Québec generates, transmits and distributes almost all the electricity consumed in Québec, using facilities located throughout the province, and its transmission system is one of the most extensive in North America.

Energy Demand The number of Québec customer accounts in 2007 was 3,868,972, an increase of 53,846 over 2006. In 2007, our total electricity sales were 173.2 TWh in Québec and 19.6 TWh outside Québec, for a total of 192.8 TWh.

Sales

Electricity sales inside and outside Québec brought in $12 billion, up $1.4 million from 2006. Revenue from electricity sales in Québec amounted to $10,368 million, compared with $9,402 million in 2006, an increase of $966 million due essentially to colder temperatures in 2007, higher revenue from special contracts with large industrial customers and rate adjustments. On markets outside Québec, revenue totaled $1,617 million, a $468-million increase.

Electricity Rates

	Electricity rates increased 2.8% in 2007, compared to 4.3% in 2006.
	Despite these adjustments, our residential rate remains one of the lowest in North America. For typical consumption of 1,000 kWh per month, Montréal ranks third among all major North American cities, after Winnipeg and Vancouver.

More information on the comparison of electricity prices in major North American cities

Income from continuing operations totaled $2,882 million, compared with $2,797 million last year, when a $234-million non-recurring foreign exchange gain was recognized. This result is primarily attributable to a $290-million increase in net electricity exports by Hydro-Québec Production. Net income declined by $834 million from 2006 to total $2,907 million, mainly because of gains of $917 million on the sale of assets in 2006, including $813 million for the sale of our interest in Transelec, in Chile. The $2,095-million dividend declared in 2007 brings the total from 2003 to 2007 to $7.9 billion. The return on equity was 15% compared to 20.6% in 2006. This indicator is evidence of our healthy financial performance. The exceptional return on equity in 2006 included gains of $917 million on the sale of foreign interests.