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Hydro-Québec’s net income for the first three quarters of 2023 exceeds $3 billion

Press Release

November 20, 2023

Hydro-Québec posted net income of $3,050 million for the first nine months of 2023, a $554-million decrease compared to the historic $3,604 million recorded for the same period last year. This decrease is partly due to a decline in electricity sales in markets outside Québec as a result of lower-than-normal natural water inflows and to an increase in operational expenditure attributable mainly to growth in maintenance work to improve service quality and reliability. Nonetheless, the company still achieved good results as a result of the implementation of its risk management strategy, which enabled it to benefit from the high prices in its export markets in 2022.

“Net income for the first three quarters reached $3 billion for the second time in Hydro-Québec’s history. However, the third quarter of the year saw a drop in natural water inflows to our large reservoirs in northern Québec,” said Jean-Hugues Lafleur, Hydro-Québec’s Executive Vice President and Chief Financial Officer. “This low runoff had no impact on Québec’s energy supply or our long-term commitments with neighboring markets. We have, however, been reducing electricity sales on external markets in order to manage our resources optimally, which resulted in a drop in revenue from sales outside Québec.”

Focus on improving service quality

The quarter was marked by an increase in maintenance work to improve service quality and reliability.  The company continued its efforts in vegetation control projects and preventive maintenance, resulting in an increase in operating expenses, compared to the same period last year.  In addition, two thirds of investments were allocated to asset sustainment, representing an amount of $2.3 billion. Hydro-Québec recently unveiled its Action Plan 2035, in which the company commits to increase investments in the power grid to offer customers reliable, high-quality service at an affordable price.

Highlights of the first nine months

  • Markets outside Québec:
    • Context of low runoff
      • Sparse snow cover in late winter
      • Lower-than-normal spring runoff
      • Modest summer precipitation in northern Québec
    • Decrease of 9.0 TWh, or 32%, in volume of sales outside Québec compared to the same period in 2022
      • Volume of 19.0 TWh for the first three quarters of 2023
    • Positive impact of the risk management strategy more than offset the decrease in prices on export markets
      • Average price obtained (including hedging effect): 10.3¢/kWh
      • Average market price: 5.2¢/kWh
  • Québec market:
    • Stable revenue from sales in Québec
  • Investments:
    • More than $3.2 billion invested in property, plant and equipment and intangible assets across Québec
    • More than two thirds of investments allocated to asset sustainment

Electricity sales on markets outside Québec were $1,961 million, a decrease of $167 million from the $2,128 million posted for the same period in 2022. This decline is attributable to natural water inflows, which were well below the average recorded in the major hydroelectric reservoirs of northern Québec. As a result, Hydro-Québec limited its exports in order to optimize resource management, resulting in a 9.0-TWh decrease in sales volume, which stood at 19.0 TWh for the first three quarters of 2023. However, the positive impact of the risk management strategy that Hydro-Québec implemented to reduce price volatility more than offset the decrease in prices on the energy markets. One example is Hydro-Québec’s main export market, New England, where average electricity prices this year have fallen by more than 50% compared to the same period the previous year. In this context, implementing this strategy enabled the company to benefit from the high forward prices in 2022, which has had a positive impact on revenue this year.

Sales in Québec were $37 million higher than the $9,833 million recorded a year earlier. The indexation of rates on April 1, 2022 and 2023, resulted in additional revenue of $325 million, while the positive impact of the aluminum price hedging strategy on revenues associated with certain special contracts boosted electricity sales by $69 million. However, these two factors were mitigated by milder temperatures, which resulted in a decrease of $355 million. This effect was felt mainly in January, which was 9°C warmer, on average, than January 2022, which was exceptionally cold.

Operational expenditure increased by $169 million, due partly to the measures taken to improve service quality and reliability, in particular the increase in servicing and maintenance activities, in addition to  growth in expenditure related to digital services to meet Hydro-Québec’s increased business needs and support the company’s technological evolution. The impact of this increase was partially offset, however, by a decrease in the current service cost of the employee future benefit plans, related to the rise, in late 2022, in long-term interest rates on the capital markets, which determine the discount rates.

Lastly, recognition of the other components of future benefit cost led to a negative variance of $248 million, which is essentially due to the increase in the interest on bonds in the context of rising long-term interest rates.

Hydro-Québec invested $3,263 million in fixed assets in the first nine months of 2023, an amount comparable to the $3,132 million invested a year earlier. More than two-thirds of the amount invested in 2023 was allocated to large-scale sustainment of generation, transmission and distribution assets.

For more information on Hydro-Québec’s results for the first three quarters of 2023, visit


Caroline Des Rosiers
Tel.: 514 289-5005



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