On June 6, 2024, the Minister of Economy, Innovation and Energy tabled Bill 69 - An Act to ensure the responsible governance of energy resources and to amend various legislative provisions (the "Bill"). Over the past year, the Bill was made subject to detailed consideration before the National Assembly, during which several amendments were considered. On June 7, 2025, the Bill, incorporating numerous amendments to the initial version presented in 2024, was finally passed under a gag order and was sanctioned that same day. The Bill amends several energy-related laws and regulations, including the Act respecting the Régie de l'énergie (the "ARE") and the Hydro-Québec Act (the "HQA"), with the aim of providing Quebec with the flexibility and tools it needs to achieve its energy transition and carbon neutrality objectives by 2050 while driving economic development.
The implementation of an integrated energy resource management plan (the "Plan") is the central point of the Bill and will be the guiding principle of Quebec's energy development. In addition to modifying the governance of the Régie de l'énergie (the "Régie") and Hydro-Québec, the Bill also provides for greater flexibility in the deployment of new energy projects and a modified framework for setting electricity rates.
Governance
Integrated energy resource management plan
As requested by most industry players in Quebec, Section 4 of the Bill requires the Minister of Economy, Innovation and Energy, in collaboration with Hydro-Québec, to establish a Plan over a 25-year period aimed at fostering Quebec's energy development. The Plan will be updated every six years, taking into account the public consultations, including those with Indigenous communities, to be carried out by the Minister in developing the Plan. As specified in Section 126 of the Bill, the first Plan must be submitted for government approval by April 1, 2026. The Plan will also be submitted to the Régie, for advisory purposes, but will not require its approval.
The Plan will have to include electricity and other energy supply targets to meet the needs of Quebec markets in an energy transition perspective. Until the first Plan is approved by the government, the Bill establishes a transitional target of 255 TWh of electricity generated per year by January 1, 2035, approximately 60 TWh more than current electricity generation. This target is also in line with what is set out in Hydro-Québec's 2035 Action Plan.
The implementation of the Plan demonstrates the Quebec government's desire to assume a more active role in the province's energy development, a role that Hydro-Québec has assumed in recent years. In the future, Hydro-Québec's actions will have to be aligned with the directions, objectives and supply targets set out in the Plan. Hydro-Québec will also be responsible for proposing the Plan’s electric component to the Minister, a central issue to be addressed in the Plan.
Transparency
With Section 43, the Bill requires Hydro-Québec, as electric power distributor, to provide a 15-year electric power supply plan prepared in accordance with the Plan. Section 58 of the Bill also requires Hydro-Québec, as electric power carrier, to provide a 15-year electric power transmission system development plan, which will be submitted for public consultations, based on the electric power supply plan and in compliance with the Plan.
The ARE already requires that Hydro-Québec provide a 10-year electric power supply plan. Hydro-Québec's development of an electric power transmission system development plan will, however, be a first, which notably justifies its submission to public consultations. In a context of growing energy demand and transmission system saturation, these documents will provide greater visibility of the actions to be taken by Hydro-Québec to meet the Quebec market's energy needs.
Section 74 of the Bill also amends Schedule II of the ARE to require Hydro-Québec, in its electric power distribution activities, to disclose specific information about its projects exceeding a value to be determined by the Régie, including a description of each project and their objectives, a breakdown of costs, and more.
Missions of the Régie de l'énergie and Hydro-Québec
Through Sections 13 and 111, the Bill adds meeting Quebec's energy needs and achieving the targets set out in the Plan to the missions of the Régie and Hydro-Québec, thus ensuring a combined effort by the key players in pursuit of the objectives set by the government.
Operation of the Régie de l'énergie
The Régie will continue to assume its regulatory role, but the application process before it is accelerated by Section 17 of the Bill, which allows an application to be heard by a single commissioner (instead of 3 prior to the adoption of the Bill). Also, Section 18 of the Bill requires the Régie's chairman to set management objectives to speed up the Régie's decision-making process.
These changes are in line with the government's objective of making such processes more flexible in order to meet ambitious electric power supply targets.
Hydro-Québec's board of directors
Section 109 of the Bill reduces the number of members on Hydro-Québec's board of directors from 17 to a total of between 9 and 13. One of these members will be the Deputy Minister of Economy, Innovation and Energy. This Section of the Bill is in line with the major reorganization of Hydro-Québec’s senior management in order to meet the objectives set out in its Action Plan 2035.
Hydro-Québec's special powers
The changes provided by Section 119 of the Bill to Section 39 of the HQA facilitate the creation of partnerships with First Nations and municipalities for the development of new projects, including large-scale wind power projects, as announced by Hydro-Québec in its Wind Power Development Strategy. Subject to government authorization, a legal person or partnership covered by the provisions of the new Section 39 of the HQA, including a legal person in which Hydro-Québec holds more than 50% of the shares, now has, in carrying out its activities, the same powers as those granted to Hydro-Québec under the HQA, unless its powers have been withdrawn or restricted by its constituting act.
Development of New Energy Projects
End of mandatory tendering
In order to accelerate and simplify the electric power procurement process, Section 45 of the Bill removes the obligation for Hydro-Québec, as electric power distributor, to proceed by tender in order to enter into power purchase agreements.
The government may, however, require Hydro-Québec, as electric power distributor, to issue calls for tenders in certain situations and under certain conditions. These changes considerably simplify the tendering process, since the government will be able to determine the conditions directly, without the Régie having to approve them. Calls for tenders were previously required to follow the following process: initiation by government decree, determination of tender process and specific conditions associated therewith by Hydro-Québec, as electric power distributor, approval of same by the Régie, completion of tender process and, ultimately, approval by the Régie of the power purchase agreements entered into by Hydro-Québec, as electric power distributor.
When the Bill was first introduced, the government estimated that delays in the electric power procurement process could be reduced by one year as a result of the various changes implemented by the Bill, which will help accelerate the addition of new energy sources and capacity, and enable Hydro-Québec to meet its objectives, particularly those under the Plan.
Bilateral power purchase agreements (by mutual agreement – without call for tenders)
With the adoption of the Bill, Hydro-Québec, as electric power distributor, can now enter into bilateral power purchase agreements, subject to Régie approval. However, contrary to what was initially proposed when the Bill was first introduced, the Régie will not have the authority to attach conditions to its authorization, thereby limiting its power. The Régie’s approval will, additionally, not be required in certain specific cases, such as in an emergency, for a contract lasting less than 3 months, or when a contract is authorized by the government.
As was already the case before the adoption of the Bill, we understand from the Bill that Hydro-Québec's generation activities will remain exempt from the application of the ARE. Considering that the changes provided in Section 45 of the Bill are limited to the electric power distributor, bilateral power purchase agreements entered into with Hydro-Québec, as power generator, will therefore remain exempt from Régie approval. However, power purchase agreements between Hydro-Québec, in its generation activities on the one hand, and its distribution activities on the other, to supply the Quebec market in excess of the heritage pool electricity, will remain subject to Régie approval.
Self-generation and private power purchase agreements
The Bill maintains permission for anyone to consume the electric power they produce. However, the Bill amends Section 60 of the ARE to allow renewable energy producers to enter into private power purchase agreements to sell their energy to a single consumer located on a site adjacent to the production site, with government approval. This type of agreement was, prior to the adoption of the Bill, only possible for electric power generated from forest biomass and did not require government approval.
We note that the notion of "adjacent site" is not defined in the Bill, so the government will be responsible for assessing this aspect when reviewing an application for approval of a private power purchase agreement. As mentioned in the government's press release when the Bill was tabled, the government's intention is to offer a degree of flexibility to enable the development of projects driving economic development that cannot be connected to the Hydro-Québec grid, or to make certain infrastructures of a producer with surplus energy profitable.
The Bill also grants Rio Tinto Alcan Inc. and Société en commandite hydroélectrique Manicouagan the right to distribute electricity to any party they were serving as of June 7, 2025, as well as to any other person that is not a domestic consumer, if authorized by the government. This change is noteworthy as it represents a departure from Hydro-Québec’s distribution monopoly in Quebec and could potentially pave the way for expanded private electric power distribution.
It remains that, contrary to what has been hoped for by some players in the energy industry, private power purchase agreements are therefore not authorized on an extensive basis, as they are limited to those between neighbours or predetermined producers and subject to government approval. Moreover, the use of private power purchase agreements could be further limited by the type and specific features of certain energy sources, such as wind power, which is dependent on its intermittent nature.
Industrial demand (5 MW or more)
The Bill provides that Hydro-Québec must obtain prior authorization from the government to distribute electric power to any person requesting 5 MW or more with whom Hydro-Québec did not enter into an agreement providing for a financial commitment from that person before December 2, 2022. The Bill also provides that Hydro-Québec must obtain prior approval from Quebec for any cryptocurrency mining-related electricity demands of 50 kW or more and grants the Minister the right to attach conditions to its approval based on the economic, social and environmental impacts of electricity use. This procedure therefore gives the Minister important control over industrial and commercial developments in Quebec.
Small hydroelectric power stations
The Bill also allows Hydro-Québec to dispose of assets intended for the operation of hydroelectric facilities with a capacity of 100 MW or less, and to lease the corresponding hydraulic power, subject to government approval. It is interesting to note that Hydro-Québec's portfolio currently includes 17 small hydroelectric facilities of this type.
The sale of these hydroelectric facilities could enable Hydro-Québec to monetize these assets while focusing on larger-scale projects. It could also give Hydro-Québec the opportunity to strengthen its relationships with municipalities and First Nations, thereby facilitating the social acceptability of new major development projects.
Natural gas from renewable sources
Regarding natural gas from renewable sources ("GRS"), the adoption of the Bill encourages innovation and the transition to low-carbon solutions. As such, the Plan will, in part, address targets for the natural gas market and, as mentioned by the government in its press release about the adoption of the Bill, the Bill leads to better cost-sharing for the connection of GRS production sites to the gas grid and greater flexibility in setting the GRS supply rates to encourage voluntary consumption.
Pricing
Three-year rate review
Section 27 of the Bill requires that the Régie conduct a rate review every three years (instead of the previous 5-year period), at which time it will establish, for the three rate years in question, the annual revenue required by Hydro-Québec, as electric power distributor and electric power carrier, to operate its system and set the applicable rates. Hydro-Québec may nonetheless ask the Régie to set or modify a rate or conditions of service at other times, depending on certain circumstances.
As part of its first rate review, the Régie will set one or more modulated rates or conditions of service applicable as of April 1, 2026 to promote the reduction of electric power consumption during peak periods and varying according to energy intensity. It shall also fix one or more rates applicable to large-power consumers from and after such date to encourage adequate assessment of their power needs and allow Hydro-Quebec to reduce available power when a portion is unused.
With these amendments, the government removes the changes made by the 2019 Bill 34, which previously tied electric power rates to inflation, thereby giving the power to adjust rates back to the Régie, subject to the Régie’s obligation to comply with the rate increase cap established by the government for residential rates, as detailed in the following section.
Abolition of Rate L protection and limitation of residential rate increases
Commercial and industrial rates for each of the three years covered by the rate review will be set on the basis of Hydro-Québec's annual revenue required for its distribution activities (which shall notably include electric power supply costs, transmission costs, and certain amounts related to financial assistance and to agreements with First Nations), thus replacing the prior indexation mechanism. The Bill also abolishes the special protection enjoyed by Rate L against indexation of Hydro-Québec's heritage pool, so Rate L will increase as of April 1, 2026.
In addition, to provide greater stability for consumers, the Bill allows the Régie to spread any rate increase over the three years covered by the rate review. It also provides for the implementation of a program to limit the impact of any electricity rate increase on residential customers, while avoiding any effect on other categories of consumers. The Bill further allows the government to impose a cap on residential rate increases during rate reviews, with the current policy limit being set at 3%. As often promised by the government, residential rate increases will remain limited thanks to the creation of the Fonds d'aide à la clientèle domestique d'Hydro-Québec in Section 75 of the Bill and in accordance with the cap set by the government.
Although desired by certain players in the energy industry, the Bill does not modify the cross-subsidization between rates applicable to different categories of consumers.
Key developments related to the Bill include the publication of the first Plan, expected by April 2026, and the adoption of various regulations in the coming months, which may offer further insight into the recently enacted changes
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