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Québec has the cheapest electricity in North America, Hydro-Québec pays the provincial government a dividend of several billions a year (3.4 last year), the exp

Québec has the cheapest electricity in North America, Hydro-Québec pays the provincial government a dividend of several billions a year (3.4 last year), the expertise they developed in hydroelectricity is unrivalled anywhere on the planet. Any business will fail in the face of technical or financial incompetence. Your argument is quite tautological in that regard.

sidewndr46 3y ago
I'm still perplexed how anyone thinks it is OK for a public utility to pay "dividends". If a public utility is paying dividends, it must be collecting more income that it's expenses. That obviously comes from ratepayers. In any other world that'd be a tax. But when it is a public utility doing it is "dividends".
- selectodude 3y ago
  Quebec sells a huge amount of electricity to New York at market rates. They then take that money and give it back as a dividend.
  - sidewndr46 3y ago
    "give it back" - to whom?
    - deleted 3y ago
      [deleted]
    - e40 3y ago
      The tax payers in Quebec.
- nick__m 3y ago
  The public utility in question also export to other markets, do you expect them to subsidies electricity consumption in Ontario and New-York ? As a Québécois I prefer it that way, even if a small part of my electricity bill is used as a disguised tax on energy consumption.
  - sidewndr46 3y ago
    In the case of New York it's a foreign country, so I could care less. But if the government sets up from what I understand is a monopoly and then uses that monopoly to sell to another country, of course it should be used to subsidize that same service that the citizens utilize. Otherwise the government is just capturing part of the economy and using it for whatever purposes they desire. Which is in fact, the definition of a tax.
- sokoloff 3y ago
  I think it’s okay and even desirable for a public utility to charge more than today’s costs and build up a surplus to cover the inevitable investments and expenses that will hit in the future. When that accumulated surplus gets too large, paying a dividend feels like obviously the right thing to do as well.
  - Johnny555 3y ago
    Why wouldn't the right thing to do be giving it back to the ratepayers through reduced rates or credits? If the utility underestimated the cost of providing service, they'll petition the PUC to raise rates, so if they overestimated the cost of providing service, why shouldn't they give it back rather than treating it as a windfall to be distributed to investors? I'm fine with a public utility getting a reasonable regulated profit, but if they collect more money than they needed to cover expenses, it should go back to the ratepayers. Otherwise the company is just being rewarded for overestimating expenses.
    - sokoloff 3y ago
      > reasonable regulated profit, but if they collect more money than they needed to cover expenses I’m not seeing a categorical difference between these two things, assuming the utility tariffs are subject to approval. The money they receive that is more than their expenses is their profit. Over time, you tweak the rate increases to get the same outcome as “reasonable profit”
      - Johnny555 3y ago
        What's why I said "regulated profit" -- if they get to keep all money received above expenses, then they'll do what PG&E did and ask the PUC to set rates to include money for pipeline improvements or tree trimming, but then not actually spend the money and instead return it to investors.
        mistrial9 3y ago
        when Enron took advantage of California market deregulation, and the consumer power market actually failed.. a scramble ensued in Sacramento and elsewhere.. many rocks were turned over in short order. It was discovered that, despite countless regulations, full-time oversight and public review, the upper management at PG&E had found a way to transfer real assets to the books of a second groups of companies, and expanded that to purchase power generation facilities across the US. It was expressly forbidden at every step, and it was discovered because the de-regulation failures had made an actual panic situation. The "left" press in San Francisco had run accusatory media stories for thirty years, but yet management was able to do this. source- attorney involved in private hearings in Sacramento on the PG&E company structure
- lmm 3y ago
  > I'm still perplexed how anyone thinks it is OK for a public utility to pay "dividends". If a public utility is paying dividends, it must be collecting more income that it's expenses. That obviously comes from ratepayers. In any other world that'd be a tax. If it's ok for a utility to be publicly subsidised (and I think it is) then by the same token it's ok for it to contribute to the public purse. Setting rates as a matter of public policy means rate revenue might end up being more or less than the cost of supply. So what?
- eganist 3y ago
  Sounds like a tax, then. Except it's a tax that's functionally invisible because an equivalent public company would've distributed that same profit to shareholders. So the end result is that the local government charges less taxes because some of their funding comes from utility profits.
cik 3y ago
This is a misnomer. The only reason is because Quebec gets dirt cheap power from an agreement signed with Churchill Falls, Nfld. Quebec buys energy for $0.02 cents per kilowatt hour. https://www.cbc.ca/news/canada/newfoundland-labrador/quebec-newfoundland-labrador-churchill-falls-talks-1.6743849 https://www.cbc.ca/news/canada/newfoundland-labrador/quebec-...

sidewndr46 3y ago

I'm still perplexed how anyone thinks it is OK for a public utility to pay "dividends". If a public utility is paying dividends, it must be collecting more income that it's expenses. That obviously comes from ratepayers. In any other world that'd be a tax. But when it is a public utility doing it is "dividends".

selectodude 3y ago
Quebec sells a huge amount of electricity to New York at market rates. They then take that money and give it back as a dividend.
- sidewndr46 3y ago
  "give it back" - to whom?
  - deleted 3y ago
    [deleted]
  - e40 3y ago
    The tax payers in Quebec.
nick__m 3y ago
The public utility in question also export to other markets, do you expect them to subsidies electricity consumption in Ontario and New-York ? As a Québécois I prefer it that way, even if a small part of my electricity bill is used as a disguised tax on energy consumption.
- sidewndr46 3y ago
  In the case of New York it's a foreign country, so I could care less. But if the government sets up from what I understand is a monopoly and then uses that monopoly to sell to another country, of course it should be used to subsidize that same service that the citizens utilize. Otherwise the government is just capturing part of the economy and using it for whatever purposes they desire. Which is in fact, the definition of a tax.
sokoloff 3y ago
I think it’s okay and even desirable for a public utility to charge more than today’s costs and build up a surplus to cover the inevitable investments and expenses that will hit in the future. When that accumulated surplus gets too large, paying a dividend feels like obviously the right thing to do as well.
- Johnny555 3y ago
  Why wouldn't the right thing to do be giving it back to the ratepayers through reduced rates or credits? If the utility underestimated the cost of providing service, they'll petition the PUC to raise rates, so if they overestimated the cost of providing service, why shouldn't they give it back rather than treating it as a windfall to be distributed to investors? I'm fine with a public utility getting a reasonable regulated profit, but if they collect more money than they needed to cover expenses, it should go back to the ratepayers. Otherwise the company is just being rewarded for overestimating expenses.
  - sokoloff 3y ago
    > reasonable regulated profit, but if they collect more money than they needed to cover expenses I’m not seeing a categorical difference between these two things, assuming the utility tariffs are subject to approval. The money they receive that is more than their expenses is their profit. Over time, you tweak the rate increases to get the same outcome as “reasonable profit”
    - Johnny555 3y ago
      What's why I said "regulated profit" -- if they get to keep all money received above expenses, then they'll do what PG&E did and ask the PUC to set rates to include money for pipeline improvements or tree trimming, but then not actually spend the money and instead return it to investors.
      - mistrial9 3y ago
        when Enron took advantage of California market deregulation, and the consumer power market actually failed.. a scramble ensued in Sacramento and elsewhere.. many rocks were turned over in short order. It was discovered that, despite countless regulations, full-time oversight and public review, the upper management at PG&E had found a way to transfer real assets to the books of a second groups of companies, and expanded that to purchase power generation facilities across the US. It was expressly forbidden at every step, and it was discovered because the de-regulation failures had made an actual panic situation. The "left" press in San Francisco had run accusatory media stories for thirty years, but yet management was able to do this. source- attorney involved in private hearings in Sacramento on the PG&E company structure
lmm 3y ago
> I'm still perplexed how anyone thinks it is OK for a public utility to pay "dividends". If a public utility is paying dividends, it must be collecting more income that it's expenses. That obviously comes from ratepayers. In any other world that'd be a tax. If it's ok for a utility to be publicly subsidised (and I think it is) then by the same token it's ok for it to contribute to the public purse. Setting rates as a matter of public policy means rate revenue might end up being more or less than the cost of supply. So what?
eganist 3y ago
Sounds like a tax, then. Except it's a tax that's functionally invisible because an equivalent public company would've distributed that same profit to shareholders. So the end result is that the local government charges less taxes because some of their funding comes from utility profits.

cik 3y ago

This is a misnomer. The only reason is because Quebec gets dirt cheap power from an agreement signed with Churchill Falls, Nfld. Quebec buys energy for $0.02 cents per kilowatt hour. https://www.cbc.ca/news/canada/newfoundland-labrador/quebec-newfoundland-labrador-churchill-falls-talks-1.6743849 https://www.cbc.ca/news/canada/newfoundland-labrador/quebec-...