Hydro-Québec analysts emphasized the urgent need 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 electricity rate that could potentially double the energy costs for data centers.
Sarah Trabelsi, the chief of costs and pricing at Hydro-Québec, highlighted the significant shift in the energy landscape, signaling the end of surplus energy. This marks Hydro-Québec’s debut presentation at a provincial energy regulator hearing, where it faces off against tech giants like Google and environmental advocates such as Greenpeace.
The utility has urged the regulator, Régie de l’énergie, to consider implementing a new electricity rate for data centers with a capacity exceeding five megawatts. This proposal aims to increase energy prices to an average of 13 cents per kilowatt-hour, up from the current average of 6.82 cents per kWh paid by data centers.
With energy costs hovering around 12 cents per kilowatt-hour and on the rise, Hydro-Québec seeks to avoid selling energy to data centers at discounted rates, which could result in other customers subsidizing these operations. Trabelsi stated that the proposed rates are designed to manage the impact on the broader customer base effectively.
Data centers subject to the new rate presently consume 190 MW at peak usage, with projections indicating a potential increase to 1,000 MW by 2035. Despite offering lower energy costs compared to other regions, Quebec’s data centers could see their rates align more closely with those in other areas if the new rate is approved.
The regulatory hearing, which commenced on October 9 and is set to continue in December, involves stakeholders from various sectors, including the Canadian Federation of Independent Business and environmental groups like Greenpeace and Nature Québec. The provincial energy regulator will assess the fairness and sustainability of implementing a new rate structure for data centers.