Hydro-Québec wants to double data centre costs, Google and others prepare rebuttal

MONTREAL – Analysts for Hydro-Québec made the case Thursday morning that the utility needs to act urgently to limit the impact of the growing data centre industry on energy costs for Quebecers. 

In a public hearing in Montreal, the provincial utility called for a new rate that could double the cost of energy for data centres.

“I don’t think I will surprise anyone by saying that the context has changed deeply and that the era of energy surpluses is now behind us,” Sarah Trabelsi, chief of costs and pricing at Hydro-Québec. 

This was part of the utility’s first presentation at a provincial energy regulator hearing. It is pitting Hydro-Québec against tech industry actors like Google as well as environmental advocates like Greenpeace.

Hydro-Québec is asking the Régie de l’énergie — the regulator — to consider a new electricity rate for data centres that require a capacity of over five megawatts. 

The proposal would raise energy prices to an average of 13 cents per kilowatt hour. Data centres currently pay an average of 6.82 cents per kWh, according to Hydro-Québec’s calculations.

With the average cost of energy at around 12 cents per kWh and increasing, Hydro-Québec said it wants to ensure it does not keep selling energy to data centres at a discount that will leave other customers footing the bill.

“We’re proposing these rates in an effort to manage and mitigate, or control, the impact on our customer base as a whole,” said Trabelsi.

Hydro-Québec said data centres that would be subject to the new rate currently consume 190 MW at peak consumption and could reach 1,000 MW by 2035.

Trabelsi said the goal of increasing rates for data centres was not to slow down the growth of the sector.

“This is clearly not a moratorium, this is clearly not a brake on this growth,” she said, in response to questions from Dominique Neuman, a lawyer representing the development corporation of the Cree First Nation of Waswanipi.

Trabelsi said the government considers issues like digital sovereignty when deciding whether to approve energy allowance for large projects.

“We are aware of the importance of this sector,” she said.

Marie-Pierre Boudreau, a lawyer representing a coalition of data centres, questioned Hydro-Québec’s experts on whether they had considered how these costs would trickle down to consumers using services that rely on data centres.

Trabelsi answered that the utility only considered its immediate clients.

Boudreau also highlighted that Hydro-Québec had campaigned to attract data centres to the province in 2017, giving these projects discounts on industrial rates.

“We were in a completely different time” where the utility produced a surplus of energy, said Trabelsi.

Energy costs for data centres in Quebec are much lower than in most other jurisdictions, said energy analyst Jean-François Blain in an interview.

“It creates an exceptional draw that benefits Quebec, as long as they can supply those companies,” he said. 

The new rate would bring their rates closer to those of other jurisdictions. They will also influence the provincial government’s decisions when approving data centre projects, said Blain.

“Is — or was — our government willing to put all its eggs in one basket and forgo the tens or hundreds of megawatts offered (to data centres) for other economic developments in other sectors?” he said.

However, the energy regulator will have to evaluate the fairness of creating a piecemeal rate applying only to data centres, said Blain.

The first part of the hearing is scheduled to last until Oct. 9, with a second part planned in December. 

Representatives from Google as well as a coalition of environmental groups including Greenpeace and Nature Québec are scheduled to question Hydro-Québec’s experts next week.

In the documents submitted to the regulator, Google requested that Hydro-Québec’s rate proposal be rejected. It also asked that the utility allow existing data centres to keep their current rate until it conducts a thorough re-evaluation of its rates.

The provincial energy regulator will be reviewing whether a new rate for data centres is fair and sustainable.

This report by The Canadian Press was first published Oct. 1, 2026.