Hydro-Quebec might have to settle for a 5 per cent rate increase in April, instead of the 5.8 per cent they were asking the provincial energy board for.
The board has reined in the utility's profit margins — Hydro had sought a 9.2 per cent rate of return, while it has only been authorized 8.2 per cent — which means that the board will most likely authorize that rates be hiked by only 5 per cent.
The five per cent rate hike takes effect on April 1.
The Consumers Union of Quebec had proposed that the rate of return remain at 6.4 per cent, because the utility continues to purchase electricity at a high price despite an energy surplus.
The energy board however, held that a rate of 8.2 per cent is fair and reasonable for 2014. If the real rate of return exceeds this percentage, Hydro will have to pass along the savings to customers.