Hydro-Québec and its New England partners are facing off in a US$40-million legal dispute over a service outage during the polar vortex last January and February.
The Crown corporation was forced to carry out service interruptions during peak periods from Jan. 26 to Feb. 9. The interruptions occurred only a few days after the start of the line’s commissioning on Jan. 16.
Hydro-Québec accuses the three distributors of taking the law into their own hands by withholding a payment of “approximately” US$40 million, the equivalent of nearly $55 million, according to documents filed in a Massachusetts court seen by The Canadian Press.
The news was first reported by the Boston Globe and American media specializing in the energy industry.
Hydro-Québec has a contractual obligation to supply its customers in Massachusetts.
The dispute concerns a clause that allows Hydro-Québec to temporarily suspend delivery for reasons of “force majeure.”
The Crown corporation considers that the period of extreme cold in January was a case of “force majeure.” Electricity distributors Eversource, National Grid and Until are of the opposite opinion.
In their own lawsuit, the three distributors claim that Hydro-Québec acted in a discriminatory manner by prioritizing the needs of its local market, Quebec. “These circumstances were foreseeable and did not constitute an emergency,” the American partners say.
New England was also experiencing a period of high demand due to cold weather, which forced distributors to turn to more expensive sources of supply, they lament.
For its part, Hydro-Québec pointed out to the court that 15,000 households were affected by an outage in Montreal and that the Red Cross opened shelters for people without power. Two seniors also died due to the outage.
“Hydro-Québec’s position is simple: the energy has been delivered and received, so it must be paid for,” the Crown corporation said in a written statement. “Hydro-Québec is asking the courts to enforce the contractual obligations of the parties.”
It says it remains a “reliable” supplier and a “long-term partner” in the region.
The issue is of importance beyond this single episode, according to Eversource spokesman William Hinkle. “It is important to resolve this dispute because there are still 19 years left in the contract and consumers have the right to have a clear picture of Hydro-Québec’s obligations,” he said in a written statement.
The goal of the three distributors is for a court to rule on the interpretation of what is “force majeure” and validate their assessment of the financial damages incurred, he said.
–This report by La Presse Canadienne was translated by CityNews
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