Bill 34 proposes substantial changes to the way electricity distribution rates are set in Quebec. To this end, changes are being made to the Act respecting the Régie de l'énergie (hereinafter referred to as the RREA), which will have the effect of removing important powers from the Régie de l'énergie. The Hydro-Québec Act and the Act respecting municipal and private electricity systems are also being adjusted to take account of the proposed new rate-setting method.
First, sections 5 and 6 of Bill 34 remove the Régie de l'énergie's current role in setting the Distributor's electricity rates (section 6), and its obligation to hold a public hearing when doing so (section 5). Sections 1, 2, 3, 4 and 8 introduce a new method for setting electricity rates by amending theHydro-Québec Act (sections 1 to 4), and by adding additional sections to the ERA (section 8). In short, electricity distribution rates would now be indexed to the Consumer Price Index for five years, after which the Régie would carry out the usual rate-setting exercise for one year.
Bill 34 also removes the Régie's powers to authorize major investment projects and commercial programs by the Distributor (sections 11 and 12). In addition, it removes the current opportunity for any interested person to apply for a rate change (section 6). Finally, the bill modifies the information that the Distributor must provide annually to the Régie de l'énergie (section 14), and also removes the obligation to establish incentive regulation mechanisms for the Distributor and the Régie de l'énergie.
for the Distributor and Hydro-Québec in its transmission activities (section 7).
These are major legislative changes, since they affect the very mission of the Régie de l'énergie, which is to reconcile the public interest, consumer protection and the fair treatment of energy carriers and distributors. Bill 34 also calls into question the principles behind the creation of the organization responsible for regulating Quebec's electricity distribution monopoly.
Bill 34 aims to simplify the rate-setting process. On the face of it, this objective is likely to be achieved. But does this simplification benefit consumers? We think not. We believe that Quebec households are best served by a neutral, independent body that reconciles public and private interests and sets the Distributor's rates and conditions following a rigorous, objective process. This brief explains why we believe this.
