Hydro-Quebec to sell stake in 27-MW plant to Hydro Ottawa

Hydro-Québec said June 20 that it and Hydro Ottawa have worked closely over the past few months to develop a mutually beneficial business opportunity, resulting in Hydro-Québec working out a deal to sell the Hull-2 hydro generating station and its assets to Hydro Ottawa.

Located in downtown Gatineau, Hull-2 is of one of the smallest facilities in Hydro-Québec’s generating fleet, with an installed capacity of 27 MW and an annual output of 0.15 TWh. This agreement is part of a resource optimization process, which aims to improve Hydro-Québec’s performance.

Hydro Ottawa, a longstanding business partner, was entitled to a right of first offer. This transaction will not result in any layoffs, since the Hydro-Québec employees who work at Hull-2 also work at other facilities in the region. The transaction should be finalized by the end of 2016, once all pre-conditions have been met.

Ontario Minister of Energy Glenn Thibeault and Ontario Minister of Infrastructure Bob Chiarelli joined Hydro Ottawa President and CEO Bryce Conrad and Chair of Hydro Ottawa Board of Directors Jim Durrell on June 20 to announce that Hydro Ottawa has entered into a purchase and sale agreement with Hydro-Québec to acquire the remaining 33% interest in the Ottawa River Ring Dam and the 27-MW hydroelectric station, Centrale Hull-2, located on the Gatineau side of Chaudière Falls.

Hydro Ottawa’s existing portfolio at Chaudière Falls includes six run-of-the-river hydroelectric plants, a 67% interest in the Ring Dam, and all water rights. In 2014, Hydro Ottawa announced a 40-year contract with the former Ontario Power Authority (now merged with the Independent Electricity System Operator) to expand its Chaudière Falls site with a new 29-MW facility scheduled to be completed in 2017.

Once this acquisition is complete, Hydro Ottawa will own 100% of the hydroelectric facilities at the Chaudière site on both sides of the Ottawa River – signifying even greater possibilities to grow Ottawa’s green energy capacity for the future.

Hydro Ottawa is already the largest municipally owned producer of green energy in Ontario with a generation capacity of 79 MW. The acquisition aligns with Hydro Ottawa’s 2012-2016 Strategic Direction to increase the utility’s supply of clean energy to customers, and by pursuing low-risk opportunities with stable long-term returns. The closing of this acquisition, subject to conditions, is expected to occur in the third quarter of 2016.

Negotiations are ongoing with the Independent Electricity System Operator to secure a power purchase agreement for Centrale Hull-2 and Gatineau No. 1 (already owned by Hydro Ottawa) to be connected to the Hydro Ottawa distribution system in order to sell electricity to the province of Ontario. The two hydroelectric stations have a total output of 39 MW.

In 2015, Hydro Ottawa acquired 10 run-of-the-river hydroelectric facilities from Fortis Inc. in Ontario and nearby New York State, representing installed green energy capacity of 31 MW. Hydro Ottawa’s other generation portfolio also includes majority shares in landfill gas-to-energy facilities at the Trail Road landfill site in Ottawa and the Laflèche landfill site in Moose Creek, Ontario.

“This acquisition opens up a world of possibilities to one of the largest remaining hydroelectric sites in the province, and we’re very excited about what the future has in store for our community, Ottawa residents and our shareholder, the City of Ottawa,” said Conrad.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.