Hydro-Québec to face off against industry actors like Google in data centre hearing

A Hydro-Québec proposal to double the energy cost for large data centres is facing scrutiny in a public hearing in Montreal. The hearing will see tech giants like Google up against the provincial utility. Hydro-Québec seeks the Régie de l’énergie, Quebec's energy regulator, to adopt a new electricity rate for data centres that need more than five megawatts of capacity. This would raise energy prices to an average of 13 cents per kilowatt hour, effectively doubling the current rate for these facilities.

The utility claims this is roughly twice the rate paid by larger power customers. The public hearing, running until October 9, will include participants from various sectors, such as the Canadian Federation of Independent Business. Hydro-Québec argues that higher rates could help curb the impact of rising data centre energy demand on residential rates.

Energy analyst Jean-François Blain notes that current energy costs for data centres in Quebec are around six cents per kWh, significantly lower than in many other regions. "It creates an exceptional draw that benefits Quebec, as long as they can supply those companies," Blain explains. However, Blain warns that with growing energy demand and costs, Hydro-Québec might not be able to maintain such advantageous rates indefinitely.

According to Hydro-Québec, data centres subjected to the new rate currently consume 190 MW at peak demand, which could rise to 1,000 MW by 2035. The provincial energy regulator will assess whether the new rate is fair and sustainable for both the utility and the data centre operators.