Hydro-Quebec posted record profit last year after selling electricity to the U.S. at elevated prices, driven higher by impacts from the European energy crisis and an economic recovery.

Canada’s largest hydroelectric utility earned $4.6 billion in annual profit, a 28 per cent jump from the prior year, according to a Wednesday statement from the provincially owned corporation. The results translate into a record $3.4 billion dividend for Quebec’s provincial government.

Its outgoing chief executive doesn’t expect a repeat of such performance this year.

“The profit in 2023 will probably be lower,” Chief Executive Officer Sophie Brochu said Wednesday in a press conference, noting that last year’s results were driven by specific circumstances in what’s a cyclical business. “It comes, and it goes.”

Hydro-Quebec saw a 60 per cent surge in export sales last year to almost $3 billion, with added demand from the U.S. when Russia’s war in Ukraine escalated prices for natural gas, a common power plant fuel. That drove up electricity prices, boosting revenue from the U.S. spot market for the Canadian electricity provider.

“The economic recovery and energy crisis that hit Europe as a result of the conflict in Ukraine drove up natural gas prices, leading to higher electricity prices in northeastern markets of the United States given the significant use of this sector in the production of electricity on these markets,” Hydro-Quebec said in the statement.

Falling natural gas prices have cut the average selling price for Hydro-Quebec’s electricity to about 5 cents per kilowatt-hour, down from last year’s average of 8.2 cents, according to the utility’s executives.

Meanwhile, energy volumes reached an all-time high of 180.6 terawatt-hours, due in part to cold temperatures in early 2022. A terawatt-hour can power 60,000 homes continuously for a day.

Hydro-Quebec is seeing unprecedented demand for its renewable energy from Quebeckers seeking to reduce environmental impacts by adopting electric vehicles, as well as emerging industries such as EV battery manufacturers and hydrogen producers. Massive projects are also under development to send electricity to Massachusetts and New York City.


One long-term threat to Hydro-Quebec’s future profitability is the future of a power agreement from the Churchill Falls hydroelectric station in Newfoundland and Labrador. The Quebec utility currently pays around 0.2 cents per kilowatt-hour, without an inflation adjustment. Quebec Premier Francois Legault will visit his Atlantic Canada provincial counterpart Andrew Furey later this week to discuss a renewal of the contract, which expires in 2041.

“One-third of Hydro-Quebec’s profitability is based on the existing contract,” Brochu said. “It’s definitely going to cost more.”

Brochu, who led the $2 billion acquisition of New England’s Great River Hydro LLC in October, will step down in April after three years in the top job at the utility. She announced her resignation in January amid a dispute with the government on how aggressively Hydro-Quebec’s renewable power should be used as a bargaining chip to lure energy-intensive businesses to the French-speaking province.