High Energy: Hydro-Québec’s Relationship with Vermont

By James Morgan

During the 1960s and 1970s, Hydro-Québec rose to prominence as a major producer and exporter of hydroelectric power. This later led to a mutually beneficial economic relationship with the State of Vermont when it needed electricity and Québec wanted to sell electricity. The exchange of power from Québec to Vermont changed diplomacy from the federal to provincial and state level, which served Québec’s political, economic, and cultural objectives. Particularly relevant in light of recent debates over oil dependency, as well as ongoing discussions of Québec nationalism, the technological, political, and social challenges encountered during the process demonstrate how energy strategies are often caught up within broader cultural politics. The rise of Québec as a prominent source of hydroelectric power coincided with a rapid and profound political, economic, and cultural modernization that took place in the province.

In the early 1960s, electricity in Québec remained largely under private control until 1962 when nationalization of the private utilities by Hydro-Québec was the major issue of the provincial election campaign for Liberal Premier Jean Lesage. The Liberals won and the nationalization process began in 1963. René Lévesque was Lesage’s Resources Minister who had the responsibility for implementing the nationalization. The nationalization led to massive expansions of generation and transmission, including the Daniel Johnson Dam and Generating Station, and leadership in high voltage transmission in North America—735 kilovolts Alternating Current. The James Bay power project, centered on the La Grande River, was announced in 1971 by Liberal Premier Robert Bourassa.

Sharp rises in oil prices in the 1970s posed a considerable challenge for Vermont utilities and consumers. The state was almost entirely dependent on oil for power generation. Republican Governor Richard A. Snelling looked to Québec for affordable, reliable electricity. Between 1978 and 1980, the Vermont Public Service Board (the state energy regulator) reached an agreement with Hydro-Québec to wheel power from the Beauharnois station to Vermont through New York over existing interconnections with the Power Authority of the State of New York (PASNY). In 1979, a small contract between Québec and Vermont was reached, however Governor Snelling wanted Vermont to receive more power from Québec and become a major conduit for power to reach other New England States. René Lévesque, leader of the separatist Parti Québécois, was now Premier and wanted Québec to export more power for economic and political reasons.

In 1980, Snelling presented his “Electric Community” plan. He called for creation of a North Atlantic Energy Organization, a NATO-like effort to secure affordable, reliable electricity for New England, mostly through power from Québec. The plan was only realized in a figurative sense, as no formal organizations were established. Discussions about possible exports began with the New England Power Pool (NEPOOL), then the regional system operator for New England. In 1983–1984, Hydro-Québec and the Vermont Department of Public Service reached a 10-year contract for 150 megawatts. The power enters Vermont at a station in Highgate near the border with Québec.

In 1983, Québec signed the first agreement with NEPOOL in Boston worth $400 million (Canadian) in revenue for Hydro-Québec. A 735 kilovolt AC line to Des Cantons substation that enters the US through Vermont and terminates near Boston was built to supply the power.

Robert Bourassa returned as Premier in 1985 with a vision for more hydroelectric development in the James Bay region that would require more dams and generating stations on more rivers. This plan was outlined in his book Power from the North. In December 1987, Vermont Joint Owners (VJO), a consortium of Vermont utilities, reached an agreement for 500 megawatts from Hydro-Québec. VJO negotiated directly with Hydro-Québec, the state was only involved as a regulator. In 1990, VJO was approved by the National Energy Board of Canada. The government announced the Great Whale/Grande Baleine power project the same year. All power from it was to be for export markets.

These rapid developments were not free from controversy, however. The Great Whale project instantly became a point of contention due to cultural and environmental concerns involving the indigenous Cree people of the James Bay region. The Canadian government ordered a full environmental assessment of Great Whale, which had not happened with La Grande. There was considerable public protest. Letters showed up in the offices of politicians and a group of Cree people actually canoed from northern Quebec to New York City to make their case to the United Nations. The Vermont Public Service Board responded with strict conditions—Hydro-Québec had to prove that VJO power would come from existing dams and not require Great Whale. Largely due to widespread opposition, the Great Whale project was cancelled by Premier Jacques Parizeau soon after taking office in 1994. Also, VJO was not perfect financially. Price increases were not adjusted to inflation and Hydro-Québec could not renegotiate the price if interest rates fell.

The modernization of Québec during and following the Quiet Revolution was reflected through the rise of Hydro-Québec as a major producer of hydroelectric power and a world leader in long distance transmission. Québec was able to demonstrate its newfound expertise by exporting electricity to the United States—particularly Vermont, at a time when the need there for reliable and affordable electricity was increasing. The modernist achievements of Québec through power generation and transmission, and the ability for Vermont to purchase power from Québec were however greatly challenged and curtailed due to opposition to the Great Whale project by environmental activists and indigenous people concerned about negative effects on their traditional land.

James Morgan is a Ph.D. candidate with the Department of History at the University of Ottawa.