Hydro Ottawa says 'massive' investment needed to meet electricity demands

Hydro Ottawa says "enormous financial pressures" from severe weather and a greater reliance on electricity for heating and vehicles are forcing it to drastically scale up its capital spending.

"The level of capital to support the electrification plans we have in place is going to exceed anything we've ever seen before," CEO Bryce Conrad said Tuesday, after the company presented its annual report to city council.

He said Hydro Ottawa, which is wholly owned by the City of Ottawa, will have to build a new substation every year, where it once built one every five years.

The added demand is coming from fuel switching, EV charging and heat pumps, Conrad said, while the company also needs to invest to make the grid more resistant to what he called "nasty" and "cruel" weather that's only expected to get worse with climate change.

"We've become the weather-alert capital of Canada," he said. "Not a day goes by where I don't flinch when I see one of them."

'Massive investment' needed

Conrad said coping with those demands will mean a "massive investment" from Hydro Ottawa. He said system expansion alone will require him to double his capital spend, though he did not provide a specific overall figure when asked.

He said federal and provincial support is mostly going to generation and transmission infrastructure, and not to companies like Hydro Ottawa that deliver power directly to customers.

"Government funding needs to be made available to distribution companies like ours," he said. "The scale and scope of this transformation is simply too large to be borne exclusively by the people of Ottawa."

Mayor Mark Sutcliffe agreed that Ottawa can't keep up with those pressures on its own.

"The demands are rising. The pressure on the system is increasing, so we all have to work together, at all levels of government, to build the infrastructure, to build capacity, and I think the federal and provincial governments know how important that is," he said.

Hydro rates are set through a review process at the Ontario Energy Board. Conrad said Hydro Ottawa will soon submit its application for the period up to 2030, though he would not say precisely what he's asking for or what it could mean for customers.

Conrad said the company will also have to prolong the life of its existing assets.

"What is otherwise a 40-year lifespan will have to be dragged out to 45 or 50 years," he said.

No moratorium for Hydro Ottawa

He explained that other distribution companies are negotiating dividend moratoriums, but he said that option isn't now in the cards for Hydro Ottawa. The City of Ottawa received a $20-million dividend for the 2023 fiscal year.

That came as the company's net income actually dropped relative to the year before, with Conrad citing higher interest rates as a major pressure.

Conrad said last year's strike of Hydro Ottawa workers did not have a major impact on the company's bottom line.

Kanata South Coun. Allan Hubley worried that with all those challenges, Hydro Ottawa won't be able to keep up with investment needs in existing neighbourhoods. Conrad said that won't be the case.

"We are not sacrificing older communities for the sake of dealing with new growth," he said. "I need to do all of that."