Hydro-Québec wins contract to deliver power to New York

Hydro-Québec has won a multibillion-dollar contract to deliver power into the heart of New York City, in a deal that helps cement the provincially owned corporation as a key supplier of clean electricity in North America.

New York State authorities chose Hydro-Québec and Blackstone-owned Transmission Developers Inc. to supply the most populous city in the United States with up to 1,250 megawatts of renewable power, the partners said in a joint news release Monday. That’s enough electricity for about 1.2 million homes, and it will replace the current fossil-fuels-based supply as soon as 2025, the companies said.

“New York is taking a bold step towards decarbonization,” Hydro-Québec chief executive Sophie Brochu said in a statement.

With its decision, the state is “building the long-term backbone infrastructure needed to support local renewable energy, all the while making sure that local communities receive direct benefits,” she said.

Ms. Brochu, an energy economist who previously ran natural gas distributor Énergir, is trying to boost Hydro-Québec’s electricity exports to the U.S. by striking multiyear supply agreements she says have wide environmental benefits. Winning the New York supply contract is a major coup for the utility, which is also set to supply Massachusetts with power in a separate project known as New England Clean Energy Connect.

The export effort faces significant resistance, however, as Hydro-Québec becomes the target of established U.S. oil and gas players and other opponents.

Ms. Brochu, normally reflective and mild-mannered, has lashed out in recent months against what she has called misguided attacks against the utility by fossil fuel producers.

Hydro-Québec’s New York proposal, known as the Champlain Hudson Power Express, offered the city two alternatives for electricity supply. The chosen method will deliver power that comes entirely from Quebec via a direct transmission line stretching 545 kilometres.

The proposal was for a term of 25 years, at a rate of about 10.4 terawatt hours a year, representing about a fifth of New York City’s consumption, Hydro-Québec has said. The utility did not make public financial details – but, in a tweet, Quebec Premier François Legault valued the deal at more than $20-billion.

Hydro-Québec said its project comes with several economic benefits for New York residents, including a $40-million fund designed to support people living along the route of the transmission line by providing them with new job training opportunities. The utility has also promised a separate environmental trust fund worth $117-million and focused on improving the health of Lake Champlain and the Hudson and Harlem rivers.

In Canada, Hydro-Québec has struck a deal to share ownership of the transmission line on this side of the border with the Mohawk Council of Kahnawake. That agreement “will secure economic benefits for the community over a 40-year period,” the utility said.

Winning the New York supply contract is a major coup for the utility, which is also set to supply Massachusetts with power in a separate project known as New England Clean Energy Connect.