Hydro-Québec analysts emphasized the need for urgent action to address the impact of the expanding data center industry on energy costs for Quebec residents during a public hearing in Montreal. The provincial utility proposed a new energy rate that could potentially double the current energy costs for data centers.
Sarah Trabelsi, Hydro-Québec’s Chief of Costs and Pricing, highlighted the shift in energy dynamics, signaling the end of energy surpluses. This presentation marked the utility’s debut at a provincial energy regulatory hearing, where it faces opposition from tech giants like Google and environmental advocates such as Greenpeace.
Hydro-Québec urged the energy regulator, Régie de l’énergie, to consider implementing a new electricity rate specifically for data centers with a capacity exceeding five megawatts. The proposed rate adjustment would elevate energy prices to an average of 13 cents per kilowatt-hour, significantly higher than the current average rate of 6.82 cents per kWh paid by data centers.
The utility justified the rate increase by citing the rising average energy cost of 12 cents per kWh and the need to prevent data centers from benefiting from discounted rates, leaving other customers to cover the shortfall. Trabelsi emphasized that the rate adjustments are aimed at managing the impact on the overall customer base.
According to Hydro-Québec, data centers subject to the new rate currently consume 190 MW at peak times, a figure projected to escalate to 1,000 MW by 2035. Energy analyst Jean-François Blain noted that energy costs for data centers in Quebec are notably lower compared to many other regions, providing a competitive advantage for the province if adequate supply is maintained.
The proposed rate adjustment aims to align data center energy costs in Quebec more closely with those in other jurisdictions. The regulatory hearing, spanning until October 9 with a follow-up session in December, will involve stakeholders from various sectors, including the Canadian Federation of Independent Business and environmental organizations like Greenpeace and Nature Québec.
The provincial energy regulator will evaluate the proposed new rate for data centers to determine its fairness and sustainability.
