Hydro-Québec - Sustainability Report 2009

SUSTAINABILITYRepoRT

2009

CONTENTS

1 MessagefromthepresidentandChiefexecutiveofficer

2 AboutThisReport

3 OurApproach

4 SustainabilityGovernance

7 Hydro-QuébecandItsStakeholders

9 OurAchievements

10 energyefficiencyandRenewableenergies

18 environmentalprotectionandQualityofLife

25 SocialCommitment

30 High-Quality,Customer-DrivenService

32 HumanResourcesDevelopment

34 ContributiontotheQuébececonomy

37 MajorFacilities(map)

38 GlobalReportingInitiative(GRI)Index

39 ourperformanceataGlance

40 Glossary

41 VerificationStatement

Hydro-QuébecProductiongeneratespowerfortheQuébecmarketandsellsits

surplusesonwholesalemarkets.Itisalsoactiveinarbitragingandpurchase/resale

transactions.

Hydro-QuébecTransÉnergieoperatesthemostextensivetransmissionsystem

inNorthAmericaforthebenefitofcustomersinsideandoutsideQuébec.

Hydro-QuébecDistributionprovidesQuebecerswithareliablesupplyofelectricity.

Tomeetneedsbeyondtheannualheritagepool,whichHydro-Québecproductionis

obligatedtosupplyatafixedprice,itmainlyusesatenderingprocess.Italso

encouragesitscustomerstomakeefficientuseofelectricity.

Hydro-QuébecÉquipementandSociétéd’énergiedelaBaieJames(SeBJ),a

subsidiaryofHydro-Québec,design,buildandrefurbishgenerationandtransmission

facilities,mainlyforHydro-QuébecproductionandHydro-QuébecTransÉnergie.

Hydro-Québecgenerates,transmits

anddistributeselectricity.Itssole

shareholderistheQuébecgovernment.

Itusesmainlyrenewablegenerating

options,inparticularhydropower,

andsupportsthedevelopmentof

windenergythroughpurchasesfrom

independentpowerproducers.It

alsoconductsR&Dinenergy-related

fields,includingenergyefficiency.

Thecompanyhasfourdivisions:

On the cover:In the Manicouagan-Uapishka region, a 114-km² reservoir stretches out above Manic-2 dam. The region was designated a Biosphere Reserve under UNESCO’s Man and the Biosphere program. A model of sustainability in the making.

H Y D R o - Q U É B e C

FewelectricitycompaniescanboastashighalevelofprofitabilityandassmallanenvironmentalfootprintasHydro-Québec.Weowethis

performanceinlargeparttotheabundant,powerfulhydraulicresourcesavailableinQuébecandthevisionshownbypastgenerations

whosuccessfullytappedthispotential.ouremployeesarefollowingintheirfootsteps,andtheSustainability Report 2009givesconcrete

evidenceoftheirachievementsintheareaofsustainabledevelopment.

InkeepingwiththeQuébecgovernment’spriorities,Hydro-Québecisworkingtoreduceitsgreenhousegasemissionsbyfocusingonthe

threeprioritieslaidoutinitsStrategicplan:energyefficiency,renewableenergiesandtechnologicalinnovation.

Theeconomicslowdownin2009resultedinasomewhatlowerrateofparticipationbybusinesscustomersinourenergyefficiencyprograms.

Theywereagreatsuccesswithresidentialcustomers,however.overall,theprogramsgeneratednewenergysavingsof946GWhoverthe

year.Thechallengefor2010willbetoencouragethebuildingindustrytoincorporateenergyefficiencymeasuresrightfromthedesignstage.

TheyearalsofeaturedthecommissioningoftheRupertdiversionandthelaunchofconstructionontheRomainehydropowercomplex—

animportantadditiontoourenergyreserves.Wehavecompletedthedraft-designstages, inconsultationwiththehostcommunities,

andsignedanumberofpartneringagreementswithAboriginalandotherlocalcommunities.environmentalstudiesandmeasurescarried

outbefore,duringandafterconstructionwillcostover$300millionaltogether.Inadditiontogeneratingapproximately$1.3billioninregional

economicspinoffs,theRomainecomplexwillprovideareliablesupplyofelectricitythatwillallowHydro-Québectoincreaseitsexports

tomarketsoutsidetheprovince.

IntheongoingrefurbishmentprojectatGentilly-2nucleargeneratingstation,weproceededwiththeengineering,procurementand

planningactivitiesbegunin2008.Atthesametime,welaunchedphaseIIoftheprojecttobuildwastemanagementfacilitiestostorethe

solidradioactivewasteproducedduringtheplant’srefurbishment.

Asregardstechnologicalinnovation,Hydro-Québec’sresearchinstitute(IReQ)andtheuniversitychairsassociatedwithitpursuedtheir

initiativestoimproveoverallpowersystemperformance.Theyalsohelpeddevelopmaterialsusedtomakebatteries,whileconducting

researchontheelectricalinfrastructurerequiredforgroundtransportationelectrification.

Lookingforward,weplantofurtherstepupoureffortstowork,withourstakeholders,towardourcommondevelopmentobjectives.

ThierryVandal

presidentandChiefexecutiveofficer

M e S S A G e F R o M T H e p R e S I D e N TA N D C H I e F e X e C U T I V e o F F I C e R

1H Y D R O - Q U É B E C | S U S TA I N A B I L I T Y R E p O R T 2009

TheSustainability Report 2009isdesignedtoinformourstakeholdersaboutourenvironmental,socialandeconomicperformance.Afterconsultingwithsomeofthesestakeholders,wehavedecidedtopresentourperformanceunderthefollowingsixheadings,whichencompassouractivitiesandchallengesintermsofsustainability:

› energyefficiencyandRenewableenergies

› environmentalprotectionandQualityofLife

› SocialCommitment

› High-Quality,Customer-DrivenService

› HumanResourcesDevelopment

› ContributiontotheQuébececonomy

S cope

Thisreportpresentsthe issuesandimpactsofHydro-Québec’sactivitiesinQuébecthroughout2009.Reportsfrompreviousyearsareavailableatthefollowingaddress:www.hydroquebec.com/publications/en/enviro_performance

Newfeatures

› Integrationofcertainstakeholders’expectationsintotheSustain-abilityReport.

› FirstperformancereportontheSustainable Development Action Plan 2009–2013.elementsthatcontributetoreachingActionplantargetsareidentifiedbythe 0 symbol.ThenumberindicatedreferstothespecificactionintheActionplan.

› Briefdescriptionofthepublic-involvementprocessappliedinconjunctionwithHydro-Québecprojects.

› performanceindicatorsaccompaniedbycomments.

Communicationtools

TheSustainabilityReportisHydro-Québec’smainvehicleforreportingonitsperformancewithrespecttosustainability.However,othersourcesofinformationarealsoavailable:

› AWebsiteonsustainabledevelopmentprovidesfurtherdetails.

› Asummarysheetpresents2009sustainabilityhighlights.

› AsectionoftheAnnual Report 2009isdedicatedtosustainability.

Dataveri f icat ion

FinancialdatawereprovidedbytheVice-présidence−ComptabilitéetcontrôleandverifiedusingthesameauditingstandardsasHydro-Québec’sAnnualReport. Inaddition,selectedquantitativedatawereauditedindependentlybyIntertek.Thesefactsandfiguresareidentifiedbythefollowingsymbols: reasonableassuranceandmoderateassurance.Formoreinformation,seepage41.

CompliancewithGRI guidel ines

ThisreportdrawsontheGlobalReportingInitiative(GRI)guidelinesanditsnewelectricUtilitySectorSupplement,whichHydro-Québechelpedproduce.Theseguidelinesensurethecredibilityandqualityof

sustainabilityreporting.TheGRIhascheckedthatthereportcomplieswithapplicationlevelBofitssix-levelguidelines.Tolearnmore,readerscanconsultthepartialGRIindexonpage38ofthisreportorthecompleteindexonHydro-Québec’sWebsite.www.hydroquebec.com/sustainable-development/griW

A B o U T T H I S R e p o R T

Opposite: Double-circuit 230-kV line between Mont-Joli and Sainte-Angèle-de-Mérici (Bas-Saint-Laurent), used to connect wind farms to Hydro-Québec’s grid.

“Effective participation in decision-making processes by local communities can help them articulate and effectively enforce their common interest.”

This statement from the 1987 Brundtland Report of the World Commission on Environment and Development highlights the importance of

processes involving the public in the search for sustainability.

Hydro-Québec has taken concrete measures to allow its stakeholders to express their expectations and concerns regarding the company’s

infrastructure projects and other activities. These measures are reflected in the Sustainability Report 2009.

2 H Y D R O - Q U É B E C | S U S TA I N A B I L I T Y R E p O R T 2009

oURAppRoACH

4 SustainabilityGovernance

7 Hydro-QuébecandItsStakeholders

3

AtHydro-Québec,allphasesofgovernance,fromplanningtoper-formancereporting,undergoaprocessofcontinuousimprovement.Thecompany’spoliciesguideitsactionsandreflectitscommitmenttothemajorsocial,economicandenvironmentalissuescurrentlyatplay.Theprinciplesstatedinitspoliciesaredefinedandimplement-edthroughguidelinesandcodesofconductwhichrequireeachindividualtobeaccountable.

Withcontinuousimprovementasitsobjective,theBoardofDirec-torsevaluateditsownoperations,maderecommendations,suchasupdatingtheCode of Ethics and Rules of Professional Conduct for Directors, Executives and Controllers of Hydro-Québec,andapprovedtheDonationandSponsorshippolicy.www.hydroquebec.com/profile

othermechanisms,includingourenvironmentalandqualityman-agementsystems,whichmeetISo14001andISo9001standards,alsoensureresponsiblegovernance.

Access to informationand protec t ionof personal information

Hydro-Québecmakeseveryefforttoprotectthepersonalinformationofitsemployees,customersandsuppliers,whilefulfillingitsobligationsintermsofaccesstoinformation.In2009,thecompanyreceived302requestsforaccesstoinformation.ofthese,49weredeniedforreasonsprescribedbylawsuchassecurity,industrialorcommercialconfidentiality,orthepresenceofpersonalinformation.www.hydroquebec.com/publications/en/act-access

W

SUSTAINABIL IT Y GoVeRNANCe

Strategic Plan

published inJuly, theStrategic Plan 2009–2013confirmsHydro-Québec’scommitment tosustainabledevelopment. Its threemainareasoffocusareenergyefficiency,renewableenergiesandtechnologicalinnovation.www.hydroquebec.com/publications/en/strategic_plan

S T R AT E G I C P L A N 2009 – 2013: M A I N A R E A S O F F O C U S

EnergyEfficiency RenewableEnergies TechnologicalInnovation

electricityisavaluableresource.

Thatiswhyenergyefficiencyisattheheartofthecompany’sbusinessobjectives.

Hydro-Québechassetanambitiousgoal:toachieve8TWhinenergysavingsby2013,withatargetof11TWhby2015.

electricityfromrenewablesourcesisanessentialcomponentofsustainabledevelopment.

ThatiswhyHydro-Québecisbeginninganewphaseoflarge-scalehydroelectricdevelopment,tofinishcarryingoutQuébec’senergystrategyandtoimple-menttheNorthernplan.

Thatisalsowhythecompanyiscontinuingtoconnectwindfarmsofnearly4,000MWresultingfromitstendercallsofrecentyears.

Technologicalinnovationisapowerfulengineforgrowthandperformance.

ThatiswhyHydro-Québeciscountingonnewtechnologiestoremainontheleadingedgeofitsindustry,improvecustomerservicesandfurtherenhanceitsperformance.

Thatisalsowhyelectricgroundtranspor-tationisbecomingathrustofthecompany’sgrowthandinnovationefforts.

SOCIALRESPONSIBILITYANDGOVERNANCE

Corporate Knights magazinerankedHydro-Québecasthe

fifth-bestcorporatecitizeninallofCanadain2009,based

onenvironmental,socialandgovernanceindicators.


BoardofDirectors

Madeupof17directorsfromvariousregionsandindustrysectors.

› Approvalof11corporatepolicies

› Approvalofcodeofethics

› Approvalorreviewofthefollowingpublications:Strategicplan,Businessplan,AnnualReport,SustainabilityReport,semiannualreportsonenvironmentallegislativecompliance

PresidentandChiefExecutiveOfficer

› Approvalofinternalguidelines

› ApprovalofCodeofConductforemployees

› ApprovalofSustainableDevelopmentActionplan

› Annualmanagementreviews

Hydro-QuébecProduction

Hydro-QuébecTransÉnergie

Hydro-QuébecDistribution

Hydro-QuébecÉquipementetservicespartagés

Groupe–Technologie

› procurementofgoodsandservices

› Adoptionandimplementationofbusinessplans

› environmentalimpactstudies

› Maintainingofcertifiedmanagementsystems

› Negotiationsandpartnershipswithgovernmentauthorities

› partnershipswithuniversities

› Researchontheenvironment,renewableenergiesandenergyefficiency

› Communityrelations

› Customerrelations

Vice-présidence–Ressourceshumaines

› Adoptionandimplementa-tionofbusinessplans

› Jointcommittees

› Supervisionandcoordinationoftraining,healthandsafety

› Corporatesuccessionplan

› employmentequityprogram

› Relationswithunionleadership

Groupe–Affairescorporatives etsecrétariatgénéral

› Accesstoinformationandprotectionofpersonalinformation

› Adoptionandimplementa-tionofbusinessplans

› Governmentalaffairs

› Legalaffairs

› ethics-relatedadvice

› Supervision,coordination,trainingandmonitoring(environment,communityrelations,communications)

› evaluationofpublicsatisfaction

› SustainableDevelopmentActionplan

› RegionalprofileofHydro-Québec’sactivities

› AnnualReport

› SustainabilityReport

› Facilitysecurity

Vice-présidence–Comptabilitéetcontrôle

Vice-présidence–Financement,trésorerie et caissede retraite

› Financialstatements

› Businessriskmanagement

CorporateOmbudsman

› Mediationfordisputesettlement

Hydro-Québec production

Hydro-Québec Distribution

Hydro-Québec TransÉnergie

Hydro-Québec Équipement et services partagés

Board of Directors

Groupe – Technologie

Groupe – Affaires corporatives et secrétariat général

Vice-présidence – Ressources humaines

Vice-présidence – Comptabilité et contrôle

Vice-présidence – Financement, trésorerie et caisse de retraite

president and Chief Executive Officer

M A I N AC T I V I T I E S O F S U S TA I N A B I L I T Y G O V E R N A N C E

Corporate Ombudsman

Internal Auditor

ThischartincludestheorganizationalchangesmadeinJanuary2010.


Sustainable DevelopmentAc t ionPlan

Alongsideourmanagementsystemsandinternalcoordinationmechanisms,theSustainable Development Action Plan 2009–2013,publishedinMarch,isatoolforachievingsustainability.ItexpressesourcommitmenttoQuébec’sGovernmentSustainableDevelopmentStrategy2008–2013.ThisSustainabilityReportdescribesourperformancewithregardtotheActionplan’sobjectives.

www.hydroquebec.com/publications/en/sd_action_plan

SUS TA I N A B L ED E V E LO PM E N TAC T I O NPL A N2 0 0 9 –2 0 1 3

Action Indicator Annualtarget

Achievedtodate

2009results

1 Buildhydropowerprojectsandcontributetothedevelopmentofwindpower.

Capacityandenergyavailable 138MW 138MW Romainecomplex(p.15,26-27,35)

eastmain-1-A/Sarcelle/Rupertproject(p.16,27,35)

Chute-AllardandRapides-des-Cœursdevelopments(p.16,35)

Windpowerpurchased(p.13)

2 Increasethecapacityofexistinghydroelectricgeneratingstations.

Gainsinpeakcapacity 35MW 52MW outardes-4generatingstation(p.13)

LaTuquegeneratingstation(p.17)

3 Stepupenergyefficiencyinitiatives. Recurringenergysavings 4.5TWh 4.3TWh energyefficiencyplan(p.11)

CATVARproject(p.12,26)

Corporateenergyefficiency(p.12)

4 Continuetohelplow-incomecustomers. Numberofarrangementswithlow-incomecustomersa

22,200 32,107 Supportforlow-incomecustomers(p.31)

5 Reducetransport-relatedGHGemissions. Atmosphericemissionsfromthevehiclefleet

53,500t 55,016t Co2emissionsfromourvehiclefleet(p.23)

Business-relatedtravel(p.24)

6 promotereductionatsource,reuseandrecycling.

Numberofat-sourcereductionorreclamationprogramsintroducedoroptimized

2 4 phaseIIoftheresidualmaterialsmanagementprogram(p.23)

Recycling(p.23)

7 establishspecificationsforsustainableprocurement.

Numberofproductpurchasingguidesthatincludesustainablespecifications

1 2 Agreementforthepurchaseofabsorbentsandspillkits(p.23)

officefurniturepurchasingguide(p.23)

8 Informandeducateemployeesregardingsustainabilityandthecompany’sapproach.Helpemployeeslearntoapplysustainabilityprinciplestotheirdailyactivities.

percentageofemployeeseducated

40% 72% Results(p.33)

percentageofemployeeshavingsufficientknowledgeaboutsustainability

10% 10.5% Results(p.33)

9 Improvevegetationcontrolmethodsonthedistributionsystemtobetterprotectbiodiversity.

percentageofvegetationcontroloperationsperyearwithintegratedmeasuresforpromotingbiodiversity

80% 89% Results(p.24)

examplesofmeasures(p.22)

10 organizesustainableeventsandpromoteresponsiblemanagementofeventssponsoredbyHydro-Québec.

Averagenumberofcontributingmeasuresimplementedamongthoseselectedforthesustainablemanagementofevents

8/25 10.7/25 Resultdetails(p.23)

a) Includinglong-termarrangements.


Collaborationwithstakeholders

Acrediblesustainabledevelopmentapproachmustincludeongoingrelationswithprimarystakeholders.

overtheyears,Hydro-Québechasdevelopedavarietyofeffectivecollaborativeandinformativemechanismsforgaininginsightintoitsstakeholders’needsandconcerns.Thecompany’sobjectiveistoreconcilesometimesconflictingexpectations,whileremainingconsistentinitsactivitiesandprojects.

HYDRo-QUÉBeC AND ITSSTAKeHoLDeRS

CO L L A B O R AT I V EM E CH A N I S M SW I T HS TA K E H O L D E R S

Stakeholders Sustainabilityissues Examplesofinformativeandcollaborativemechanisms

2009results

Customers › Helpforlow-incomecustomers› Customersatisfaction› Increasingenergysavings

› Hydro-Québec–consumerassociationsworkinggroup

› Tableofcustomerexpectations› Surveyofcustomersatisfaction› Mechanismforhandlingcomplaints

andclaims› partnershipsfortheenergyefficiencyplan

› Numberofpaymentarrangementswithlow-incomecustomers(p.31)

› Customerexpectationsandpriorities(p.30)› Satisfactionindexespercustomercategory

(p.31)› AVeNUeprojects(p.12)

Communities,includingAboriginal

› Acceptabilityofprojects› Integrationoffacilitiesinto

theenvironment

› Liaisoncommitteeswithmunicipalassociations

› TeamsinchargeofcommunityandAboriginalrelations

› Supportforlocalinitiativesinconnectionwithprojectsandotheractivities

› partnershipagreementreachedwiththeInnucommunityofekuanitshitregardingtheRomaineproject(p.27)

› publicinvolvementprocess(p.25)› GowiththeFlowcampaign(p.11)› Integratedenhancementprogram(p.28)

employees › educationandawarenessregardingsustainability

› Succession› Healthandsafety› employeesatisfaction

› Corporatesuccessionplan› Workplacehealthandsafetycommittees› employeesatisfactionsurvey

› percentageofemployeeseducatedregardingsustainability(p.33)

› Work-relatedaccidentfrequency(p.33)› employeesatisfactionindex(p.33)

Suppliers › Introductionofsustainablespecificationsinprocurementpolicies

› ContributiontothedevelopmentofQuébec’selectricityindustry

› partnerships(e.g.,sustainableprocurement,energyefficiencyplan)

› DedicatedWebsiteforsuppliers

› Creationofanofficefurniturebuyingguide(p.23)

› partnershipundertheReCYC-FRIGoenvironnementTMprogram(p.11)

› procurementwithinQuébec(p.36)

Governments › Informationsharing› ContributiontoQuébec’sGovernment

SustainableDevelopmentStrategy

› partnershipsandparticipationinjointcommittees

› SustainableDevelopmentActionplan(p.6)

› Biodiversityandprotectedareas(p.22)

Investors › presentationofthecompetitiveadvantageofferedbyhydropowerinthecontextofclimatechange

› periodicmeetingswithinvestorsonresultsandriskmanagement

› DedicatedWebsiteforinvestorrelations› Financialprofile

› Financialresults(p.36)

educationalinstitutions

› Developmentofaskilledworkforce › Supportforuniversities› Conferencesandeducationalresourcekits› Technologicalpartnerships

› Researchongreenhousegases(p.19)› Supportforuniversities(p.35)› FundingofIepe(p.33)› Youthawareness(p.29)

Non-governmentalorganizations

› establishmentofmutuallybeneficialrelationships

› LiaisoncommitteewiththeUniondesproducteursagricoles(Québecfarmproducers’unionorUpA)

› Cooperationwithconsumerassociations› Variouspartnerships› Donationsandsponsorships

› partnershipwiththeCentrequébécoisd’actionsurleschangementsclimatiques(p.19)

› AgreementwiththeUpA(p.26)› Donationsandsponsorships(p.29)

Generalpublic › publicsatisfaction › Satisfactionandperceptionsurvey› Websiteandtoll-freeline(1800363-7443)

› Generalpublicsatisfactionindex(p.27)

Unions › Harmoniouslaborrelations › Healthandsafetycommittees› Jointcommittees

› Jointtrainingonharassmentprevention(p.33)


Opposite: Refurbishment of the underground distribution grid in Lorraine. Cable crew: Sylvain Thériault, Richard L. Robert, Pascal Kegyes and David Filiatrault.

I N T E G R AT I O N O F S TA K E H O L D E R S’E X P E C TAT I O N S I N TO T H E S U S TA I N A B I L I T Y R E P O R T

In2009,Hydro-Québecheldmeetingswithvariousgroupsandindividualstounderstandtheirexpectationswithregardtothecompany’sSustainabilityReport.

Uniondes produc teurs agricoles (UPA)

expectationscompiledfromtheHydro-Québec–UpAliaisoncommittee:

› Discussself-generationanddistributedgeneration.

› Includedataonenergyefficiencyinthefarmingsector.(p.11)

› presentthestepstakentominimizetheimpactonagriculturallandandforestswhenpassingtransmissionlines.(p.26)

› Addressthecontributionandcooperationoffarmersandforestproductproducerswhenpassingtransmissionlines.(p.26)

Employees

expectationexpressedinameetingwithemployeesintheDirection−expertiseetstratégiescorporativesenressourceshumaines:

› establishstrongerlinksbetweenhumanresourcedevelop-mentandsustainability.(p.32-33)

FédérationQ uébécoise des Municipal i tés (FQM)

expectationscompiledfromtheHydro-Québec–FQMliaisoncommittee:

› presentadefinitionandlong-termvisionofsustainabilityspecifictoHydro-Québec.

› Improvethepresentationoftheenergycontextthatjustifiestheprojects.(p.12-14)

› Usecomparisonswithenergysectorpeers.(p.33)

› Describethespecificnatureofenergyefficiencyprogramswhichtargetdifferentcustomercategories.(p.11-12)

› providemoreinformationoncommunity-basedenergydevelopmentprojects.(p.13)

› providemoreinformationonnuclearandthermalenergy.(p.18-20)

› Discusseconomicissuesandregionaleconomicspinoffsingreaterdepth.(p.34-36)

Transmissionlineconstructioncanhavevaluableregionaleconomicspinoffs.Forexample,whenthe230-kVRimouski−LesBouleslinewasbuilt,themunicipalityofSaint-octave-de-Métisreceived$135,364underHydro-Québec’sIntegratedenhancementprogram.

InthehistoricboroughofLaprairie(Montérégie),1.4kmofdistributionlineswereburiedaspartoftheQuébecgovernmentprogramforundergrounddistributionsystemsinheritage,culturalandtouristsites.Thisprogramallowsmunicipalitiestoenjoytheaestheticandadditionalbenefitsofundergrounding.


oURACHIeVeMeNTS

10 EnergyEfficiencyandRenewableEnergies

18 EnvironmentalProtectionandQualityofLife

25 SocialCommitment

30 High-Quality,Customer-DrivenService

32 HumanResourcesDevelopment

34 ContributiontotheQuébecEconomy

In2009,theeconomicslowdownledtoadeclineinthedemandforelectricity

fromQuébec’sindustrialcustomers.Nonetheless,thesecondannualprogress

reportontheElectricity Supply Plan 2008–2017,submittedtotheRégiedel’éner-

gie,forecastsariseintheneedforpowerandenergyby2017.Theincreased

demandisassociatedwithnewindustrialprojectsandthegrowinguseof

electricheating.ElectricitysalesinQuébectotaled165.3TWhin2009,andare

expectedtoreach175.7TWhin2013.Thisforecastincludesthe11-TWhtarget

ofrecurringsavingsby2015.

Inordertomeetdomesticelectricityrequirements,Hydro-Québecisfocusing

ontwomainstrategies:promotingenergyefficiency,andmeetingincreases

intheremainingdemandbyemphasizingrenewablesavailableinQuébec.To

handleveryshort-termelectricityneeds,one-timepurchasesofelectricityand

bilateralagreementshavebeenincludedintheSupplyPlan.Forshort-termpower

needs,thecompanyreliesoncommercialmeasurestakenwithourcustomers.

Forexample,wemayaskcustomersthathavesignedupfortheinterruptible

electricityoptiontoreducetheirpowerdemandduringpeakperiodsinreturn

forcompensation.

eNeRGYeFFICIeNCYANDReNeWABLeeNeRGIeS

Daniel-Johnsondam,builtin1968,istheworld’slargestmultiple-archdam.


P R O M OT I N G E F F I C I E N T U S E O F E L E C T R I C I T Y

Hydro-Québec’scommitmenttoenergyefficiencystartedover50yearsago.oureffortsinthelatterpartofthe20thcenturyledtosignificantlyhigherstandardsandregulationsforbuildingsaswellasforelectricalsystemsandappliances.Atthesametime,majorawarenesscampaignshelpedchangetheconsumptionhabitsofQuebecers.

In2003,Hydro-Québecintroducedtheenergyefficiencyplanwhichfocusesonenergyconservationmeasures.eventhoughthesimplestandleastcostlymeasureshadalreadybeenadoptedduringpreviousdecades,theprogramsrecommendedbytheenergyefficiencyplanweresuchasuccessthatthetargetsinenergysavingswererevisedupwardseveraltimes.our2015target,however,remainsunchanged:11TWhofrecurringsavings.

2009 H ighlights

Duetotheeconomicsituationoverthepastyear,theenergysavingsgeneratedbyourenergyefficiencyprogramsin2009areslightlylowerthanthoseachievedin2008.However,overall,our2009initiativesstillledtonewsavingsof946GWh.IfweexcludetheresultsassociatedwiththeCATVARproject,thesavingstotal912GWh(comparedwith1.1TWhin2008),meaning4.3TWhintotalannualsavingsgeneratedbytheenergyefficiencyplan.

› Closeto650partneringagreementswerereachedwithretailers,distributors,manufacturersortheiragents,andconsumerassocia-tions,inordertohelpuspromoteenergyefficiencyprogramsandsupportourstakeholdersintheirenergyconservationefforts.

Residential customers

› ReCYC-FRIGoenvironnementTMprogram, inpartnershipwithRecyclageÉcoSolutions:Since the launchof thisprogram inMarch2008,186,162energy-guzzlingrefrigeratorsandfreezershavebeencollectedthroughoutQuébecandrecycled,representingenergysavingsof147GWh.Alloftheappliances’componentsarerecycledinlinewithsustainabilityprinciples,includingthemotoroil,mercuryandhalocarbons—partofthechlorofluorocarbon(CFC)family.www.recyc-frigo.com/en

3

ENER

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EFFI

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CY A

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RE

NEW

ABL

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ERG

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E N E R G YE FFI C I E N C YPL A N (GW H)

Target Actuala

2006 2007 2008 2009 2006 2007 2008 2009Energysavingsb 523 661 745 985 740 900 1050 912

Residentialcustomers 257 301 352 485 376 359 403 528

Businesscustomers 126 191 222 272 177 197 222 256

Large-powercustomers 140 170 171 229 187 345 426 129

a) The2009actualresultsincludetheprogramsoftheAgencedel’efficacitéénergétique.Datafrompreviousyearsmayhavebeenadjustedfollowingprogramevaluation.

b) overalltotalandsumofsubtotalsmaydifferduetorounding.

3

› energyefficiencyRetrofitprogramforLow-IncomeHouseholds:In2009,initiativescarriedoutforsocialhousingunits,housingcooper-ativesandnon-profitorganizationsgenerated24.7GWhinsavings,comparedtoourobjectiveof12.1GWh.Theprogram’smostpopularfeaturesaretheinstallationofelectronicthermostatsandtheuseofmoreefficientlightingproducts.

› eNeRGYWISeHomeDiagnostic(launchedin2004):Thisyear,weperformedouronemillionthdiagnostic.Sinceoctober2007,communitieslocatedinall17administrativeregionsinQuébechaveworkedwithustopromotetheHomeDiagnosticaspartoftheGowiththeFlowcampaign.Inexchange,theyobtainfinancialsupportfromHydro-Québecforenvironmental,cultural,sportsandrecreationprojectsorforcommunityinitiatives.AsatDecember31,2009,morethan900communitieshadagreedtoparticipateinthiscampaign.www.hydroquebec.com/residential/diagnostic

Business and large -powercustomers

› empowerprogramforIndustrialSystems:Despitethedifficultiesfacedbytheindustrialmarketinearly2009,thenumberofprojectsregisteredforthisprogramwas17%higherthanlastyear. Infact,with255newprojects,webroketherecordforthemostregis-teredprojects,setin2004,bymorethan6%.In2009,thisprogramgeneratednetsavingsof42.9GWh.www.hydroquebec.com/business/appui_pmi

› Lightingcomponentoftheefficientproductsprogram:Inthespring,weannouncedthat,asofoctober1,wewouldbereducingtherebategivenfortheinstallationofcategory2ballasts.Themarketquicklyreactedtothisnewsand,bytheendof2009,theprogramhadgeneratednetsavingsof89.5GWh,closetofourtimesthetargetof23.5GWh.www.hydroquebec.com/efficientproducts/eclairage

› Farmequipmentcomponentoftheefficientproductsprogram:Wepromotedtherebatesofferedtofarmerswhentheybuyspecificfarmingproducts(heatpads,plateheatexchangers,fans)andlighting,motorandrefrigerationproducts.In2009,farmerssaved10.7GWh,whichismoreenergysavedthanin2006,2007and2008combined.www.hydroquebec.com/efficientproducts/agricole

› Large-powerCustomersprogram:111efficiencyprojectswereimplemented,generatingtotalsavingsof129GWh.Todate,86.5%ofcustomersinthiscategoryhaveparticipatedinatleastoneofHydro-Québec’sefficiencyprograms.www.hydroquebec.com/energywise

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Energyeff ic ienc yof H ydro - Q uébec ’ssystemandfaci l i t ies

› WepursuedtheCATVARproject(voltageregulationandreactivepowercontrol),whoseobjective istoreduceconsumptionandenergylossesonthedistributionsystem.Testsperformedthusfaratpierre-Bouchersubstation(Montérégie)confirmthepotentialforapproximately2TWhinoverallsavingsby2015.In2009,wefocusedonrevisingthevoltagesetpointsinall78satellitesubstations.

› Wefinishedinstallingefficientequipment(ventilation,lighting,etc.)inthebuildingsofHydro-QuébecDistribution,thuscompletingthesecondphaseinaprojectaimingatsavingsof24GWhperyear.Wehavemovedontothethirdphase,whichinvolvesinstallingefficientequipmentinallofthecompany’sadministrativebuildings.

› Adjustingthebuildings’temperaturesettings,aprocessinitiatedin2008andcontinuedin2009,leadstoannualenergysavingsof12.3GWh.

Technological innovation

› TheAVeNUeS(MarketplaceTestingforenergy-efficientTechno-logies)programcontinued.

- AnewenergyefficiencyprojectbeganwiththecommunityofMashteuiatsh.ThistypeofprojectcouldbecarriedoutwithotherAboriginalcommunitiesinQuébec.

- Weparticipatedinthecreationofacommonnetworkofgeother-malwellsaspartofaresidentialcondominiumconstructionproject.

- Under the Abondance Montréal and Alstonvale projects,eQuilibriumTMhomesweredesignedaccordingtothezero-energyconcept.

› ongoingresearchatHydro-Québec’senergy technologieslaboratory(LTe)lookedatoptimizingpowerconsumptionthroughenergymanagementsystems, lightingcontrolsystems,heating,ventilationandairconditioningsystems,etc.

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S U S TA I N A B L E G E N E R AT I O N

Todealwiththeenvironmentalandeconomicthreatsassociatedwithclimatechange,worldwideexpertsagreethat renewableenergiesmustbeusedtosupplyan increasingportionof theworld’senergy.

In2009,representativesofthee8,whichbringstogethertheworld’s10largestelectricitycompanies,includingHydro-Québec,metinRome.Theysuggestedvarioussolutionstofightclimatechange,suchaspromotingcommerciallyviablegeneratingoptionswithlowtonoemissions, includinghydropower,windpower,solarenergyandnuclearpower.

AccordingtodatafromtheInternationalenergyAgency,renewablesaccountforbarely18%ofglobalenergyconsumption.InQuébec,where98%ofelectricityisproducedfromrenewablesources,thefigureisnearly50%.1

Tworenewables—hydropowerandwindpower—arethesourceofmostofQuébec’selectricity;athirdsource,nuclearpower,thoughnotrenewable,generatesnocarbonemissions.ThisexplainswhyGHGemissionsfromtheelectricitysectorareamere2%inQuébec,comparedto29%inontarioand42%inAlberta.2

Hydro-Québecisalsoinvolvedinresearchonauxiliaryrenewableslikesolar,biomassandgeothermalenergy,aswellasothermeansofgenerationsuchashydrokineticpower,salinitygradientpoweranddeepgeothermalenergy.

1. Québec’senergystrategy2006–2015.2. National Inventory Report 1990–2007: Greenhouse Gas Sources and Sinks in Canada,

April2009,environmentCanada.

E N E R G YE FFI C I E N C YPR O G R A M S– C U S TO M E RC AT E G O R I E S a

2006 2007 2008 2009Residentialcustomers(ENERGYWISEProducts)

electronicthermostats(number) 1,055,503 1,036,115 824,391 722,734

poolfiltertimers(number) 165,685 181,774 208,462 147,538

Householdappliances–Washersandrefrigerators(number) 46,409 152,737 183,787 149,717

Lighting–Compactfluorescentlightbulbs(number) 2,405,538 3,375,387 1,618,071 1,387,184

Residentialcustomers(other)

HomeDiagnosticquestionnaires(number) 227,119 39,450b 93,438 151,222

Recoveredenergy-guzzlingrefrigeratorsandfreezers(number) notapplicable notapplicable 66,493 119,669

Businesscustomers

empowerprograms(numberofprojectssubmitted) 636 795 752 681

Large-powercustomers

IndustrialAnalysisandDemonstrationprogram(numberofprojectsaccepted) 53 22 23 24

IndustrialInitiativesprogram(numberofprojectsaccepted) 157 109 82 75

BuildingInitiativesprogram(numberofprojectsaccepted) 65 51 40 36

a)Mayhavebeenadjustedfollowingprogramevaluation.

b)Dropduetoprogramoverhaul.


H Y D R O E L E C T R I C I T Y

Hydropoweraccountsforapproximately16%ofglobaloutput,andmorethan60%ofthepowergeneratedinCanada. Intermsofannualoutput,Canadaistheworld’ssecond-largesthydropowerproducer,3behindChina.Hydropowergeneration isontherisearoundtheworld,especiallyinAsiaandSouthAmerica.However,accordingtothe InternationalenergyAgency, inordertomeetthegrowingglobaldemandforelectricitybetweennowand2030,44%oftheworldwidegeneratingfleetisexpectedtobecoal-fired,representinga3%increasecomparedto2009.

Withwaterusedtogenerate98%ofHydro-Québec’soutput,thecompanyisthelargesthydropowerproducerinNorthAmerica.Inadditiontobeingrenewable,hydropoweriscleanenergy.Viewedfroma life-cycleperspective,GHGemissionsfromageneratingstationwithareservoirareabout40timeslowerthanthosefromagas-firedpowerplantand100times lowerthanthosefromacoal-firedplant.

2009 H ighlights

› Refurbishmentcarriedoutat10hydroelectricgeneratingstations,includingoutardes-4andLaTuque,yieldedgainsof33MWin2008(14MWatoutardes-4and19MWatLaTuque)and19MWin2009(atLaTuque),foratotalof52MW.

› Welaunchedaprogramforthepurchaseofelectricitygeneratedbysmallhydro(plantsof50MWorless),foratotalof150MW.Thegoalofthisprogramistoenable local, regionalandAboriginalcommunitiestodevelophydropowerprojects.www.hydroquebec.com/distribution/en/marchequebecois

› The33rdannualConferenceofNewenglandGovernorsandeasternCanadianpremierswasheldinSaintJohn,NewBrunswick.AresolutionwaspassedrecognizinghydropowerasarenewableenergyandrecommendingthatCanadianandAmericanlegislationgrantsimilarrecognition.

3. www.canhydropower.org

2

W I N D P O W E R

AccordingtostatisticspublishedbytheGlobalWindenergyCouncil,worldwidewindpowercapacityroseby31%in2009.Athirdofthis increaseisattributabletoChina,whichdoubleditscapacityforthefifthconsecutiveyear. InCanada, installedwindcapacitygrewby950MW,including128MWinQuébec,representinganincreaseof40%.

With659MWin installedcapacity,Québecrankssecondinthecountry,behindontario,intermsofwindpowerandaccountsforcloseto20%ofCanada’swindfarmcapacity.4

Hydro-Québecisdevelopingwindpowertocomplementitshydro-powerassets.Giventheuncertainandintermittentnatureofwindgeneration,abalancingserviceisrequiredtooffsetvariationsinoutput.Theflexibilityofhydropowerprovidesthisbalanceandmakestheintegrationoflargequantitiesofwindpowerpossible.

2009 H ighlights

› We issuedacall for thepurchaseof two250-MWblocksofQuébec-generatedwindpower,onereservedforAboriginalpro-jectsandoneforothercommunityprojects.TheseprojectsmusthaveaminimumQuébeccontentcorrespondingto60%ofthetotalcostsforeachwindfarm,andatleast30%ofthecostoftheturbinesmustbeincurredintheGaspésie−Îles-de-la-Madeleineadministrativeregion.www.hydroquebec.com/distribution/en/marchequebecois

› Wereceivedourfirstdeliveriesof127.5MWfromtheSaint-Ulric−Saint-Léandrewindfarm,thefourthwindfarmcommissionedinGaspésiefollowingthe2003tendercall(1,000MW).

› TheconstructionofLeplateauwindfarminGaspésie(138.6MW)wasapproved.

› publichearingswereheldonthedevelopmentofDesMoulinswindfarm(156MW) intheChaudière-Appalachesregion,andDeL’Érablewindfarm(100MW)intheCentre-du-Québecregion.

4. www.canwea.ca

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TheSaint-Ulric–Saint-LéandrewindfarmdelivereditsfirstkilowatthoursinNovember.

LesBrasseursduNordwasthegrandprizewinneroftheeNeRGYWISeCompetitionofexcellence.ThemicrobrewerywasrecognizedforhavingintegratedvariousenergyefficiencymeasureswhenitexpandeditsfacilitiesinBlainville.

175,000

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105,000

70,000

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HydroelectricityandtotalenergygeneratedbyHydro-Québec

Total net energy generated (GWh) Net hydroelectricity generated (GWh) Hydroelectricity/total net energy

generated (%)

150,

552

162,

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164,

678

166,

809

145,

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157,4

77

160,

792

162,

766

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photo:JoanSullivan


OT H E R R E N E WA B L E E N E R G I E S

Hydro-Québectakesanactiveinterestinotherrenewables,whichcanbeusedeitherforheatingorforpowergeneration.

2009 H ighlights

S olar energy

› WenegotiatedaprofessionalservicescontractbetweentheAgencedel’efficacitéénergétiqueandourenergytechnologieslaboratory(LTe)forthecollectingofenergyandcapacitydatafrom25residentialinstallationsofsolarwaterheatersinQuébec.

Biogasandbiomass

› Apilotprojectislookingintopowerandheatgeneratedfromfarm-basedbiogasthroughtheanaerobicprocessingofswineslurry.ItsgoalistoevaluatetheprofitabilityandefficiencyofsuchaprojectinQuébec.Afterseveralweeksoftrials,themeancapacitywentfrom25kWto40kW.

› Weissuedacallfor125MWofpowerproducedinQuébecbynewcogenerationfacilitieswithbiomassaccountingforatleast75%ofthefuelusedtogeneratetheelectricity.Weacceptedeightbidsfromsevenproponentsforatotalof60.7MW.www.hydroquebec.com/distribution/en/marchequebecois

S al init y gradient power, hydrok ineticpoweranddeepgeothermal energy

› Salinitygradientpower:Weareconductingacriticalevaluationofthisoptionanddeterminingoperatingconstraints.

› Hydrokineticpower:Wearecontinuingtoexplorethisoption.

› Deepgeothermalenergy:DataisbeingcollectedtodeterminethepotentialforthisoptioninQuébec.

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N E TE L E C T R I C I T YG E N E R AT E DA N DPU R C H A S E DBYH Y D R O - Q U É B E C (GW H)

2006 2007 2008 2009Hydropowergenerated 145,730 157,477 160,792 162,766

Windpowergenerated 2.0 1.3 0.4 0.0

Hydropowerpurchaseda 36,923 34,542 37,068 31,417

Biomassandwastereclamationpowerpurchased 1,303 1,468 1,439 1,319

Windpowerpurchasedb 421 666 810 1,131

Totalrenewables 184,379 194,154 200,109 196,633

Totalenergygenerated 150,552 162,062 164,678 166,809

Totalenergypurchased 45,684 46,094 41,925 36,372

Totalenergygeneratedandpurchased 196,236 208,156 206,603 203,181

Renewables/totalenergygeneratedandpurchased(%) 94 93 97 97

a) IncludespurchasesfromChurchillFalls(Labrador)CorporationLimitedandindependentpowerproducers,includingMcCormickgeneratingstation,inwhichHydro-Québecacquireda60%interestinDecember2009.

b) Doesnotincludewindenergypurchasesforwhichrenewableenergycertificatesweresoldtothirdparties.

EMERGINGENERGIES

Salinitygradientpowerisproducedbyaturbinedrivenbythe

pressurethatresultswhenfreshwatermigratestosaltwater

throughasemipermeablemembrane.Apilotgeneratingstation

wascommissionedinNorwayin2009.

Hydrokineticpowerisgeneratedbyaturbinesubmergedinthe

seaorinariver.AprototypebeingtestedintheUnitedKingdom

hasfourturbinesandatotalcapacityof4MW.

Deepgeothermalenergyinvolvesextractingtheheataccumu-

latedinverydeeprockformations(uptoadozenkilometres

belowground)andconvertingitintoelectricandusablether-

malenergy.InIceland,forexample,boreholesareusedtohar-

nessvaporinordertodriveturbinesandgenerateelectricity.

Morethan20countriesusedeepgeothermalenergyforpower

production.


D e V e Lo pM e N T p R o J e C T S

E N V I R O N M E N TA LM O N I TO R I N GATT H ER O M A I N ECO M PL E X – AFE WE X A M PL E S

Objective 2009activity

Maintainrecreationalandtourismactivities

CrossingconditionsoftheRomainewereestab-lishedtoconfirmthesitingofasnowmobilebridge.

MaintainInnulanduse Huntingandfishingsiteswerestudiedtopreventanyproblemsrelatedtonoiseandtraffic.

Maintainthewoodlandcariboupopulation

Thenumberofwoodlandcaribouwasrecordedandtheenvironment’scarryingcapacitywasestimated.Themovementsof15femalesweretrackedbymeansoftransmittercollars.

Monitorgreenhousegasemissionsassociatedwithworksiteactivities

emissionsassociatedwithfuelconsumptionbymotorvehicles,helicopterflightsandthelifecycleofconcreteweremonitored.

R O M A I N E CO M P L E X1

Projectdescription

Status:underconstruction

Cost:$6.5billion

Region:Côte-Nord

Construction:2009–2020

Installedcapacity:1,550MW

Plannedannualoutput:8.0TWh

Overalleconomicspinoffs:$3.5billionforQuébecasawhole,including$1.3billionforCôte-Nord

Completeprojectfactsheet:www.hydroquebec.com/romaine (AvailableinFrenchonly)

2009Highlights

› Jobscreated:377workers(monthlyaverage).

› Annualexpenditure:$175million,including$74millionintheregion.

› Constructionofaccessroadsandworkcampshasbegun.

› TheNishipiminan Agreement 2009wassignedwiththeInnucommunityofekuanitshit.

› Archaeologicaldigshaverevealednumerousartifacts.TheworkattheBassindesMuraillessiteuncoveredthefirstsignsofprehistorichumanpresencebetweenthemouthofthepuyjalonandthatofthepetiterivièreRomaine.

In2009,webrokegroundontheRomainecomplex,whichisconsideredtheprojectofthedecadeinQuébecandthelargestinfrastructureprojectinCanada.Itispartofthe4,500-MWportfolioofhydropowerprojectsincludedinHydro-Québec’sStrategicplanandSustainableDevelopmentActionplan.

TheRomaineprojectcallsfortheconstructionoffourgeneratingstationswithreservoirsandapermanent150-kmroad.

LikeallHydro-Québecprojects,itwasevaluatedonthebasisofthreecriteria.

Profitability

› TheRomaineprojectwillyieldsubstantialreturnsintheexportmarketaswellassignificanteconomicspinoffs.

Environmentalacceptability

› Anecologicalinstreamflowandanambitiousenhancementprogramextendingover20yearswillhelpmaintainorevenincreasetheAtlanticsalmonpopulation.

› Closeto$175millionwillbeallocatedtostudies,mitigationmeasuresandanenvironmentalmonitoringprogramduringconstruction.Thisnumberisinadditiontothe$145millionalreadyinvestedsincethebeginningofthedraft-designphase.The2009investmenttotals$5million.

› Duetothesteepterrain,theareaofthefourreservoirs(279km²)willbefairlysmallrelativetothequantityofenergygenerated.Inaddition,theprojectwillnotaffecttheArchipeldeMinganortheaquaticenvironment.

Favorablereceptionbylocalcommunities

› partneringagreementswerereachedwiththeregionalcountymunicipalityofMinganieandtheInnucommunitiesofekuanitshit,Nutashkuan,UnamenShipuandpakuaShipi.Throughtheseagreements,Hydro-Québecwillsupporteconomic,communityandculturalprojects,aswellaseducationandthepracticeoftraditionalactivities.

EXPANSIONOFTHETRANSMISSIONGRID

INTHEMINGANIEREGION

TolinktheRomainecomplextothemaintransmissiongrid,fourtransfor-mersubstationsandfourlinesrunningatotallengthof496 kmwillbebuilt.Thefacilitieswillbecommissionedinstagesfrom2014to2020.Studieswereperformedtodeterminethelineroutesandsubstationlocationsthatwouldminimizetheimpactonvaluedlandscapes,inhabitedareas,wildlifeandplanthabitatsofparticularinterest,andwetlands.

Theprojectwillcostanestimated$1.15billion,including$850millionforthelines.Theenvironmentalimpactstatementwasfiledin2009.ThepublichearingbytheBureaud’audiencespubliquessurl’environnement(BAPE)isscheduledfor2010.

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InstallationofafishbarrierontheRomaine.Thegoal:toestimatetheabundanceoftheadultsalmonpopulationmigratingupstreaminordertoevaluatetheimpactoftheoperationoffuturegeneratingstations.


E A S T M A I N - 1 - A / S A R C E L L E / R U P E R T P R O J E C T1

onNovember7,2009,theeastmain-1-A/Sarcelle/Rupertprojectcompletedacrucialstep:thecommissioningoftheRupertdiversion.

Theprojectincludestheconstructionofeastmain-1-A(768MW)andSarcelle(150MW)powerhouses,aswellasthediversionofpartoftheRupert’swaterstothesegeneratingstationsandontoRobert-Bourassa,LaGrande-2-AandLaGrande-1intheLaGrandecomplex,locatedfurthernorth.

Projectdescription

Status:underconstruction

Cost:$5.0billion

Region:Nord-du-Québec


Installedcapacity:918MW

Plannedannualoutput:8.7TWh

Economicspinoffs:$2.9billionforQuébecasawhole,including$640millionforNord-du-Québec

Completeprojectfactsheet:www.hydroquebec.com/rupert/en

2009Highlights

› Jobscreated:4,209person-years;Creesaccountedfor11%oftheworkforce.

› Annualexpenditure:$1,134million,including$240millionintheregion.

› Digswentonat29archaeologicalsites,includingamajorlocationthatcontains20areasofhumanoccupationspanningmorethanfourmillennia.

› Spawninggroundsandwetlandsweredeveloped,andwaterbodieswerestockedwithlakesturgeon.

› Anewdrinking-waterplantwasbuiltinWaskaganish.

› Approximately6,100haoflandwerecleared,correspondingto30%ofthefloodedlandarea.

› Aninventorywasmadeof189beavercolonies.Trappingin113ofthesecoloniesallowedCreetallymentobenefitfromsignificanteconomicspinoffs.

› Aquatichabitatsinthereduced-flowsectionoftheRupertandtraditionaluseoftheriverbyAboriginalsweremaintained.

› Webegancarryingoutourcommitmentswith35tallymen(workcamprelocation,remedialworks,etc.).

C H U T E - A L L A R D A N DR A P I D E S - D E S - Cœ U R S D E V E LO P M E N T S

1

ThecommissioningofChute-AllardandRapides-des-Cœursgeneratingstationswascompletedin2009(lastthreeunitsatChute-AllardandlastfiveatRapides-des-Cœurs).

InadditiontotheChute-Allard(62MW)andRapides-des-Cœurs(76MW)developments,thisprojectcallsfortheconstructionofanaccessroadandapermanentbridgeovertheSaint-Maurice.

Projectdescription

Status:inoperation

Cost:$1.0billion

Region:Mauricie


Totalinstalledcapacity:138MW

Totalannualoutput:0.9TWh

Economicspinoffs:$292millionforMauricie

Completeprojectfactsheet:www.hydroquebec.com/cardc(AvailableinFrenchonly)

2009Highlights

› Jobscreated:264person-years;Aboriginalsaccountedfor9%oftheworkforce.

› Annualexpenditure:$49million,including$23millionintheregion.

› Wecarriedoutremedialworkstorebuild1,730m²ofbrooktrouthabitatwhichwasdamagedbythespringflood.Weraisedtheweirsandusedcoarseraggregatetoreducetherisksofgraveldisplacement.

Sarcellepowerhouse. Rapides-des-Cœursgeneratingstation.


I N T E R CO N N E C T I O N W I T H O N TA R I O

In2009,the1,250-MWinterconnectionwithontariowascommissioned,enablingustosendmorepowertothatprovinceandonwardtoNewYorkStateandtheU.S.Midwest.Theinterconnectionincludesoutaouaissubstationandthe230-kVlinethatlinksthisconvertersubstationtotheontariogrid.Italsoincludesthe315-kVChénier−outaouaisline,currentlyunderconstruction,whichwillreinforcethenewsubstationandgivetheregionamoresecuresupplyofpower.

Projectdescription

Status:partI–315/230-kVoutaouaissubstationandextensionofthe230-kVlinetoontario:commissioningofthesubstationandlinewascompletedinNovemberpartII–Chénier−outaouaisline:underconstruction

Cost:$654million

Region:outaouais

Construction:partI:2006–2009partII:2009–2010

Interconnectioncapacity:1,250MW

Completeprojectfactsheet:www.hydroquebec.com/interconnexion(AvailableinFrenchonly)

2009Highlights

› Weinstalledalightingsystematoutaouaissubstationthatreducesthebrightnessofthetalllightingmastsby50%.

› Thelandscapingdesignwascompleted.

› WecarriedoutastudytobetterintegrateChéniersubstationoncetheChénier−outaouaislineisconnected.

› Special-statusplantspeciesweremonitoredafterthelandwasclearedinwinter2008–2009inpreparationforconstructionoftheChénier−outaouaisline.

› WebeganerectingtowersandinstallingconductorsontheChénier−outaouaisline.Toimprovethevisualintegrationoftheline,wheneverpossiblewearebuildingthetowersnexttothoseontheChénier−Vignanline.Wewillalsobeusingreduced-footprinttowersonfarmland.

G AT I N E AU S U B S TAT I O N

TherebuiltGatineausubstationnowcomprisesacontrolbuildingmadefromprefabricatedparts.

Projectdescription

Status:inoperation

Cost:$19million

Region:outaouais

Construction:MarchtoDecember2009

Voltage:120kV

2009Highlights

› SinceGatineausubstationislocatedinaresidentialarea,thecontrolbuildingwasconstructedfrompartsthatwereprefabricatedinaplant.Thisnewpracticecutdownconsiderablyonthenoiseanddustnormallygeneratedbybuildingprojects,inadditiontoreducingtheconstructiontimebyfourmonths.

› Theswitchingroomislocatedinsidethebuilding,thuslimitingthenoiseemittedbycircuit-breakeroperation.

› Allrecyclables(paper,cardboard,plastic)wererecoveredwiththehelpoftheGatineaucommunity’sservices.

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outaouaissubstation. Gatineausubstation,returnedtoservicein2009.


Whetheritisaquestionofreducingatmosphericemissions,complyingwith

environmentallegislation,mitigatingtheimpactsofitsoperations,encour-

agingsustainablepracticesorpreservingresources,heritageandbiodiversity,

Hydro-QuébecreliesonISO14001–compliantenvironmentalmanagement

systemsandtrained,environmentallyresponsibleemployeestoreduceits

environmentalfootprint.

Today,globalclimatechangeistheforemostenvironmentalchallenge.The

QuébecgovernmentiscommittedtoreducingGHGemissions,andHydro-

Québecplaysakeyroleinachievingthisobjective.Accordingtostatistics

publishedbytheMinistèreduDéveloppementdurable,del’Environnementet

desParcs,totalGHGemissionsinQuébecaccountfor11.8%ofemissionsacross

Canada.SincethemajorityofQuebecersheatwithcleanelectricity,percapita

emissionsinQuébecarehalfthelevelintherestofthecountry.1

P O W E R G E N E R AT I O N , P U R C H A S E S A N D E X P O R T S

AccordingtoenvironmentCanada,2in2007Hydro-Québecgenerated29%ofthetotalelectricityproducedinCanadaand0.21%ofthepowerindustry’sCo2emissions.Inadditiontomeetingdomesticelectricitydemandwithrenewableenergysources,bysellingpoweroutsideQuébecthecompanyhelpstoreduceGHGemissionsthroughoutnortheasternNorthAmerica.

1. www.mddep.gouv.qc.ca/changements/ges/2007/inventaire2007.pdf(AvailableinFrenchonly)2. National Inventory Report 1990-2007, Greenhouse Gas Sources and Sinks in Canada,April2009,environmentCanada.

eNVIRoNMeNTALpRoTeC TIoN ANDQUALIT YoFL IFe

ospreynestnearLemaredam(eastmain-1-A/Sarcelle/Rupertproject).


2009 H ighlights

› AtmosphericemissionsfromHydro-QuébecpowergenerationweresignificantlylowerthantheaverageforneighboringprovincesandstatesinCanadaandtheU.S.:65timeslessCo2(carbondioxide),51timeslessSo2(sulphurdioxide)and35timeslessNox(nitrogenoxides).www.hydroquebec.com/sustainable-development/documentation/pdf/etiquette_achats_en.pdf

› NetpowersalesoutsideQuébec replacedthermaloutput,therebyavoidingnearly9milliontonnesofCo2emissions.

› WecontinuedanextensivestudycomparingnetGHGemissionsfromeastmain1reservoirwithnaturalenvironmentemissionsovera100-yearperiod.FundedjointlywiththeCanadianFoundationforClimateandAtmosphereSciences,thisstudyisbeingconductedincollaborationwiththeUniversitéduQuébecàMontréal,McGillUniversity,environmentCanadaandenvironnementIllimité.In2009,grossemissionsfromthereservoirfellforthethirdconsecutiveyearto119,000tCo2eq.,a44%declinefrom2008and87%from2006.emissionsarecomparabletothosefromnaturalaquaticenviron-ments,indicatingthattheeffectofreservoirimpoundmentlastslessthan10years.ThepreliminaryfindingsshowthatGHGemissionsfromQuébecreservoirsare35to300timeslowerthanthosefromthermalpowerplantsofequivalentcapacity.Thestudywillrununtil2012andthefirstresultswillbeknownin2010.www.eastmain1.org

› ourvoluntarydeclarationtoenvironmentCanadareported1,543kgofsulphurhexafluoride (SF₆)emissionsand303kgoftetrafluoromethane(CF₄)emissionsfor2008.Theseemissionsaresimilarto2007levels.

› Thecompanyprovidedfinancialsupportandactivelypartici-pated in11climatechangeprojectswiththeCentrequébécoisd’actionsurleschangementsclimatiques,anumbrellaassociationof Équiterre, the Regroupement national des Conseils régio-nauxde l’environnementduQuébec, theConseil régionaldel’environnementdeMontréal,enjeu,VivreenvilleandtheCentredel’environnement–Écobâtiment.

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300,000

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7,200

5,400

3,600

1,800

0

06 07 08 09

AtmosphericemissionsfromHydro-Québecthermalgenerationoperations(tonnes)

Generating stations connected to the main grid Generating stations supplying off-grid systems

215,

243

245,

832

233,

054

390,

077

979

1,15

0

1,15

4

1,95

9

5,91

7

6,20

5

6,13

2 6,71

0

192,

470

199,

885

199,

286

200,

782

897

967

1,045

1,130

5,84

5

6,05

6

6,02

7

6,08

5

22,7

74

45,9

47

33,7

68

189,

295

82 183 10

9 829

72 149

105

625

AGREEMENTWITHT WOVERMONTPOWERUTILITIES

Hydro-Québecsignedamemorandumofunderstandingwith

two largepowerutilitiesinVermontinMarch 2010regarding

powersupplytoVermontcustomers.Thisagreementwillprovide

stable,clean,competitivelypricedrenewablepowerthrough2038.

Vermontplanstoenactlegislationtodesignatelarge-scalehydro,

which wouldincludeHydro-Québecpower,asrenewable.

The renewable-energycreditrevenuesforHydro-Québecpower

deliveredovertheHighgateInterconnectionwouldbeshared

betweentheVermontcompaniesandHydro-Québec.

Most of these emissions are from thermal generating stations supplying off-grid systems. The higher emissions in 2009 are mainly related to increased use of Tracy thermal power plant (Montérégie) owing to the unavailability of two units at Churchill Falls generating station and one unit each at La Grande-3 and La Grande-4, as well as the limited winter output of some generating stations in the Manic-Outardes complex.

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G E N T I L LY - 2: C L E A N , R E L I A B L E E L E C T R I C I T Y

Likeallothernuclearpowerplants,Gentilly-2generateselectricitywithoutGHGemissions.Sinceitislocatednearmajorloadcentres,theplantalsosupportstransmissionsystemstabilityandreliability.Ithasbeenoperatingsafelyforover25yearsandiskeptcontinuouslyrunningbyastaffof750employees.

Gentilly-2accountsforabout5%ofCanada’snuclearwaste,includinglow-andmedium-activitywasteandirradiatedfuel.Fortheshortterm,thiswasteisbeingstoredsafelyonthepremises,whereitiscarefullymonitoredbyHydro-Québec.Studiesonlong-termdisposalofirradiatedfuelarebeingconductedbythefederalNuclearWasteManagementorganization.www.hydroquebec.com/gentilly-2 (Available in French only)

2009 H ighlights

› Theprojectteamwascreatedforthepowerplantrefurbishmentscheduledfor2011and2012;engineeringandprocurementcontinued,asdidanalysisofthelessonslearnedfromtherefurbishmentofpointLepreaunuclearpowerplantinNewBrunswick.Therefurbishmentprojectwillcreateabout800jobsandgenerateeconomicspinoffsof$600millionprovince-wide,including$200millioninthearea.

› Thesolidradioactivewastemanagementfacilityisbeingexpandedtostorewasteproducedduringpowerplantrefurbishment.

› environmentalradioactivitymonitoring(groundwater,precipitation,ambientair,sediment,fodder,vegetables,maplesyrup,etc.)showsthatinmanysamples,theradioactivityreadingsareoftenbelowthedetectablelimitforlaboratoryequipment.Measurableconcentrationsarewithinregulatorylimitsanddiminishquicklyasthedistancefromthedischargepointincreases.

› Radiationexposureformembersofthepublicmostlikelytobeexposedtoplantwasteisestimatedat0.12%ofthemaximumexposuresetbytheCanadianNuclearSafetyCommission.

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G R O U N D T R A N S P O R TAT I O N E L E C T R I F I C AT I O N

InQuébec,40.7%ofGHGemissionscomefromtransportation.Roadtransportationalonegenerates32.5%ofallQuébecemissions.3Inlinewiththeprovince’sClimateChangeActionplan,Hydro-Québecpromotesgreateruseofelectricityforpersonalandpublictrans-portation.AnumberofrelatedinitiativesintheStrategicplanwerecompletedin2009.www.hydroquebec.com/transportation-electrification

2009 H ighlights

› ThecompanyisparticipatinginafeasibilitystudyforatrolleybusprojectbytheSociétédetransportdeLavalaswellasafeasibilitystudybytheAgencemétropolitainedetransporttoconvertcom-mutertrainstoelectricity.Hydro-Québecalsoagreedtoprovidefinancialsupportforphase2studiesofMontréal’sstreetcarproject.

› InJune,Hydro-Québecsignedathree-yearagreementwithFordMotorCompanyandtheelectricpowerResearchInstituteintheU.S.underwhichit isparticipatinginaNorthAmericantestanddemonstrationprogramforplug-inhybridelectricvehicles.Hydro-QuébecistheonlyCanadiancompanytakingpartinthesetests.

› AttheMontrealInternationalAutoShow2010,Hydro-QuébecandMitsubishiCanadaannouncedthefall launchofCanada’slargestall-electricvehiclepilotproject.Underthis$4.5-millionproject,tobecarriedout incollaborationwiththecityofBouchervilleandlocalcompanies,asmanyas50Mitsubishii-MieVelectricvehicleswillbetested.ThetestswillhelpHydro-Québecplanthenecessarycharginginfrastructureforhomes,officesandpublicplaces.

3. www.mddep.gouv.qc.ca/changements/ges/2007/inventaire2007.pdf(AvailableinFrenchonly)

Inenvironmentalfollow-upstudiesfortheRomaineproject,substratequalityismonitoredinAtlanticsalmonspawninggrounds.

AttheMontrealInternationalAutoShow2010,thelaunchofCanada’slargestall-electricvehiclepilotprojectwasannounced.Asmanyas50Mitsubishii-MieVswillbetestedinBoucherville.



› Thecompany’sTM4subsidiaryproducesandmarketsdrivetrainsbasedontechnologydevelopedbyHydro-Québec’sresearchinstitute(IReQ).TM4’slatest-generationelectricmotors,theMФTIVeTMseries,havethebestpower-to-weightratiointheirclass,withindustry-leadingefficiencyandautonomy.TheIndianautomakerTataMotorsanditsNorwegiansubsidiaryMiljoGrenland/Innovasjonselectedthesemotorsforthehundredall-electricvehiclesundergoingtrialsaspartofademonstrationprogramineurope.

E N V I R O N M E N TA L CO M P L I A N C E A N D E N V I R O N M E N TA L F O L LO W - U P S

Thecompany’s ISo14001−certifiedenvironmentalmanagementsystemssupportstrictcompliancewithenvironmentallegislation.Hydro-Québecalsoconductsdetailedenvironmentalfollow-upsinareasaffectedbyitsprojectsandoperations.

2009 H ighlights

› Thenumberofnoncompliancenoticesfellto20in2009from31in2008.Nomajorviolationswerereported.

› environmentalfollow-upswereconductedattheportneuf,SaultauxCochons,Sainte-Marguerite-3,Toulnustoucandeastmain-1facilities.Ateastmain-1,monitoringfocusedonlakesturgeonintheRivièreeastmainandeastmain1reservoir:spawningandlarvaedrift,telemetricmonitoringofsturgeonstaggedfrom2005to2008andmonitoringoffishpassuse.Thesuccessrateforallfishobservedatthepassentranceisnearly64%.

› environmental follow-ups were carried out for the RivièreManouanediversion,péribonkageneratingstation(Saguenay–Lac-Saint-Jean)andChute-AllardandRapides-des-Cœursgeneratingstations(Mauricie).Atpéribonka,thedevelopedwetlandhasbeenusedbywaterfowlforbreedingandrearing.

› Thiswasthelastyearofice-coverfollow-upduringoperationofRocher-de-Grand-Mèregeneratingstation(Mauricie).Thefollow-upshowedthatoperationsatthestationhadnosignificantimpactonicecover,evenathighoutputs.

WAT E R B O DY M A N AG E M E N T

Québechashalfamillionlakesand4,500riverscoveringabout12%oftheprovince.4Hydro-Québecoperates26largereservoirsand571damsandcontrolstructurestopreservethewaterbodies’qualityandsharetheiruse.

Anumberofstudiesareconductedtoensurethatthetemporaryincreaseinfishmercurylevels,aconsequenceofreservoirimpound-ment,doesnothaveanynegativeimpactonwaterqualityoraquaticorganisms.Fishconsumptionguidesareupdatedregularlyincooper-ationwithlocalpublichealthagencies,sothatpeoplecancontinuetoeatfishsafely.www.hydroquebec.com/sustainable-development/documentation/mercury.html

4. www.gouv.qc.ca/portail/quebec/pgs/commun/portrait/territoire/?lang=en

2009 H ighlights

› Weparticipatedinvariouswatershedcommitteeswithotherusers, includingthoseinGatineau,Saint-Maurice,MontmorencyandLesescoumins.

› Abrochureonwatermanagement inLacTémiscouatawaspublishedforlocalresidentsandusers.

› Afollow-upwasconductedonthedrinkingwaterprojectintheeastmainCreecommunityincooperationwiththeCreeNation.

› Thefollow-uponfishmercurylevelsinthewesternpartoftheLaGrandecomplexconfirmedthatfornon-piscivorousfishofstandardlength,mercurylevelsreturnedtothenaturalaverageabout20yearsafterimpoundment.Forstandard-lengthpiscivorousfish,thetrendinaveragelevelsindicatesthatmercuryconcentrationsshouldreturntonaturallevelsafter20to30yearsforwalleyeandafter30to35yearsfornorthernpike.

› MinorchangesweremadetothefishconsumptionguidefortheRivièreManouaneareaasaresultofthefollow-upofmercurylevelsandconcernsexpressedbyHealthCanadaregardingfishconsumptionbypregnantwomen.ThenewversionenablespregnantwomentoeatfishwhilekeepingtheirmercuryexposurebelowthelimitsrecommendedbyHealthCanada.

S O I L A N D G R O U N D WAT E R M A N AG E M E N T

Inadditionto itsongoingcontaminatedsiterehabilitationpro-grams,Hydro-Québecendeavorstoreducetheenvironmentalandhuman-healthrisksofitsoperationswhenselectingandmanagingtreated-woodpolesusedtocarrydistributionandtransmissionlines.Whenlargequantitiesofpolesarestoredforalongperiod,leachingofwoodpreservativesfromthepolesmaycontaminatethesoil.

2009 H ighlights

› TheCentredeservicespartagésconducted30operationson26differentsites:environmentalassessments,characterizations,rehabilitationsandenvironmentalfollow-ups.ThepolestorageyardinLavalandthegasstationinAnjouwererehabilitated.

› environmentalassessmentorcharacterizationwasperformedattheKuujjuarapikandInukjuak(Nord-du-Québec)andBlanc-Sablon(Côte-Nord)thermalpowerstations.

› Thefollow-uponsoilremediationbynaturalattenuationwascompletedat thepontardtelecommunicationssite (Nord-du-Québec).Whenremediationended,atotalvolumeof115m³ofcontaminatedsoilhadbeenexcavated.Analysisoftheditchwallsindicatesthatthesiteisnowfreeofresidualcontamination.

› protectivemeasureswereimplementedattheLavalandSaint-Jérômepolestorageyards.Thepolestoragearea inLavalhasahigh-performancebituminousgeomembraneprotectedbyablan-ketofrecycledrubber.ThestorageareainSaint-Jérôme(Laurentides)ispavedwithasphaltandrunoffischanneledintoanundergroundfiltrationsystem.Twomorepilottestsarescheduledin2010.

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› AprototypemethoddevelopedbytheHydro-Québecresearchinstituteusesalesstoxicpreservativetotreatwoodpoles;perform-ancetrialsinactualweatherconditionsareplanned.Thismethodwillbemarketedinpartnershipwithaworldleaderinwoodpreservation.

B I O D I V E R S I T Y P R E S E R VAT I O N

Initsoperationsandprojects,Hydro-Québecendeavorstopreservebiodiversityandconsidersthephysical,biologicalandhumancom-ponentsoftheenvironmentaswellastheirregulatoryprotection.Inaccordancewiththecorporatebiodiversitystrategy,thecompanyalsohelpstorestorethreatenedandvulnerablespeciesinQuébec.

Inaddition,thecompanyplaysanactiverole inthenetworkofprotectedareasinQuébecandassessessitesthatcouldbecomeprotectedareas. In2009,theQuébecgovernmentincreasedtheprotectedlandareato135,763km²,or8.14%oftheareaoftheprovince,therebyexceedingthe8%objectivethathadbeenset.

Biodiversitypreservationalso involvesresponsiblemaintenanceof33,244kmoftransmissionlinerights-of-way,120,000hectaresofwhicharewoodedandahighpercentageofwhichareinremoteareas.Inaddition,morethan100,000kmofoverheaddistributionlinescrossfarmland,forests,andresidentialandurbanareas,mainlyinthesouthernpartoftheprovince.

Vegetationcontrolisnecessarytoensurepowersystemreliabilityandworkerandpublicsafety,maintainclearancebetweenlinecon-ductors,provideaccesstolinesandprotectequipmentfromforestfires.ItissubjecttoastandardissuedbytheNorthAmericanelectricReliabilityCorporation(NeRC),whichgovernspowertransmissioninNorthAmerica.

2009 H ighlights

› Baffleswere installedto increaseflowvelocityandpreventfinesedimentaccumulationinabrooktroutspawninggroundaspartofadikestabilizationprojectatBersimis-2generatingstation(Côte-Nord).

› eelmigrationwasmonitoredatBeauharnoisgeneratingstation(morethan61,000eelsusedtwofishpasses)andatChamblydam(619eelsusedthefishpass).ThesearethebestresultsatBeauharnoisgeneratingstation(Montérégie)since1994.

› Thepresenceandmovementsofturtles inBeauharnoiscanalwerestudied.

› The identificationguideforthreatenedandvulnerableplantspecieswasupdated.Thisguideis forprojectdesigners,serviceagentsandforest techniciansworkingonvariousdistributionsystemprojects.

› Avegetation-controlstudyusingcompetingplantswascon-ductedbytheUniversitédeMontréalplantbiologyresearchinstitute.Theresultsindicatethatapplicationofablendofselectedseedslimitstreegrowthinlinerights-of-way.Thestudyalsorevealedthatcuttinginrights-of-wayandtreatingthestumpswithherbicidereducesinvasionbyincompatiblespeciesandfosterstheestablish-mentofcompatiblespecies.www.hydroquebec.com/vegetation/en

› Theintegratedvegetationcontrolprogramfortransmissionlinerights-of-waywasupdatedtomeetNeRCrequirements.Herbicideusestillcausesconcern,buteffortsarebeingmadetoexplainHydro-Québec’smethodofensuringthatthesechemicalsareusedinaresponsiblemanner.

› Measuresintendedtoreinforcebiodiversityindistributionlinerights-ofwayweremonitored (selectiveclearing,debriswind-rowingandsnagpreservation).The findingsshowthat thesemeasuresareusefulformaintainingandimprovinghabitatsinornearrights-of-way.www.hydroquebec.com/trees

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20,000

15,000

10,000

5,000

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06 07 08 09

500

375

250

125

0

06 07 08 09

Vegetationcontrolalongtransmissionlinerights-of-way(ha)

Vegetationcontrolondikesanddams(ha)

Area treated mechanically Area treated selectively with herbicides Total area treated

Hydro-Québec uses less than 0.4% of the pesticides sold annually in Québec.

15,0

67

15,7

87

20,6

92

19,2

04

279

318

457 48

3

10,8

65

12,0

40

16,4

02 13,9

48 125 153

184

245

4,20

2

3,74

7

4,29

0

5,25

6

154

165

273

238

Hydro-Québecwasawardedfirstprizeinthe2009Leaders in Sustainable Transportation contestorganizedbytheCentresdegestiondesdéplacementsdeMontréal.Thecompanyencouragesitsemployeestousemoreenvironmentallyfriendlymodesoftransportationthansingle-occupantcars.Amongtheinitiativeswerefreebicycletune-ups.


S U S TA I N A B L E P R AC T I C E S

Throughenergyefficiency,reductionatsource,reuse,recyclingandsustainabletransportation,Hydro-Québecencouragesitsemployeestoreducetheenvironmentalfootprintoftheiractivitiesandthecompany’soperations.

2009 H ighlights

› over13,000tonnesofhazardousresidualmaterialswererecovered,and95%wererecycled.› AtCarillongeneratingstation(Montérégie),1,060m³ofchipsfrom

floatingwooddebriswererecycled.Thisinitiativewillbeexpandedtootherfacilitiesin2010.

› Inthesecondphaseof theresidualmaterialsmanagementprogram,recyclingstationsforvariousmaterialshavebeensetupinmeetingandtrainingroomsinadministrativecentresservicedbyanoutsiderecyclingfirm.

› Aninternalrecoveryandrecyclingprogramforcompactfluores-centlightbulbswasimplemented.

› Usedornoncompliantclothingwasrecoveredincooperationwiththebusinessandrecyclingtrainingcentres(CFeR)inAlmaandDrummondville.Thecentreshelpyouthsindifficultybyenablingthemtodevelopjobskills.

› Arecoveryservicewassetuptorecyclepreciousmetalscontainedinelectroniccomponents.partswerepreviouslycollectedbyscrapdealers.

› Athree-yearagreementworth$750,000wassignedwithtwosup-pliersforthepurchaseofabsorbentmaterialsandspillresponsekits.Inadditiontootheritems,wechoseabsorbentpadsmadeof100%recycledunbleachedcottonfibretoreplacetheuniversalabsorbentsmadeofpolypropylene,apetroleumderivative.Cottonisarenewablematerialandthecottonpadscost10%lessthanthesyntheticpads,withcomparableefficiency.

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› Anewofficefurnitureprocurementguidecontainsspecificationsonmaterials,chemicalcontaminantemissionsthatcouldaffectambi-entairquality,repossessionoffurniturebysuppliersandrecoveryofpackagingmaterials.

› Sustainablemeasureswereappliedat51internalandexternalevents.Amongthemweretheuseofelectronicmediaforcom-municationstoreducepaperuse,locationselectiontolimittravel,promotionofpublictransitandactivemodesoftransportation,reductionoffoodwaste,anddonationofsurplusfoodtocharities.

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PR O C U R E M E N T, R E COV E RY, R E U S EA N DR E C YC L I N GO FR E S I D UA LM AT E R I A L S

Procurement Recovery Notes

2009 2006 2007 2008 2009

printercartridgesandaccessories(units) 23,728 13,297 15,823 18,040 13,199

Cellphonesandaccessories

purchased(units)

Recovered(kg)

2,816

notapplicable notapplicable 3,737 178

purchasesequalthenumberofunitsreplacedandactivated

The2008statisticincludesquantitiesaccumulatedforseveralyears

Insulatingoil(litres)

Internalreuse(%)

1,010 4,748,375

94.5

4,367,048

91.4

2,989,876

92.7

4,574,504 88.4

Regeneratedoilsufficedforalmostallrequirements

Metal(tonnes) notavailable

7,801 8,309 13,123 8,227 In2008,farmoreferrousmetalsweresoldbecauseofdisman-tlingprojects.The2009statisticexcludes450tonnesofpower-linehardware

Woodenpallets(units) notavailable

4,100 11,647 13,015 20,266 employeesaremoreawareoftheimportanceofrecycling

paperandpaperboard(tonnes)

447 871 1,002 1,474 1,166 paperpurchased:447tonnes

paperrecycled:425tonnes Ringbinders(units) 13,008 12,869 12,907 16,660 18,191

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45,000

30,000

15,000

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CO2emissionsfromHydro-Québec’svehiclefleet(tonnes)

Total CO2 emissions from the vehicle fleet Target Total number of vehicles

Overall emissions have increased 1.1% since 2008, due to the use of more vehicles.

56,6

83

54,0

82

54,4

26

55,0

16

53,5

00

51,2

00

5,10

3

5,11

2 5,25

5

5,30

9


› TheCarpoolingNetworkisanorganizationthatworksasafacilita-torforpeopleinterestedincarpoolingforthecommutetoworkandbusiness-relatedtravel.Weformed68teamsfor171employees.

› Twohundredlight-dutyvehicles,or44%ofthelight-dutyvehiclesreplacedduringtheyear,werereplacedwithmoreenergy-efficientmodels.

› Basedontheresultsofapilotprojectconducted in2009,aswitchwillbeinstalledonthebucketcommandconsoleofaboutfortybuckettrucksin2010toturnoffthetruckmotorwhileworkisinprogress.

› Speedlimitersinstalledtolimitheavy-truckspeedto90km/hcouldreduceCo2emissions forHydro-QuébecDistributionbyabout2%.

L A N D U S E

Hydro-Québecwishestomaintainapleasant,attractive livingenvironment:itsfacilitiesvisuallyblendinwiththeirsurroundingsandmeasuresareimplementedtoreduceequipmentnoise.www.hydroquebec.com/municipal/hq_peut_aider.html(Available in French only)

2009 H ighlights

› Systematic internalenvironmentalassessments integratedacomputerapplicationdedicatedtotransmissionlineprojectstoapplymitigationmeasuresthathavebeentriedandtestedoverthepast30years.

› Thetelecommunications toweronMontKékéko inRouyn-Noranda(Abitibi-Témiscamingue)wasdismantledanditsreflectorpanelwasconvertedintoanatureobservatorynamedLeNiddel’épervier(hawk’snest).

› Vaudreuil-Soulangessubstation(120/25kV)andtheDorion−Rigaudlineloop(Montérégie),whichconnectsthissubstationtothegrid,weredesignedtoavoidimpactsonwetlandsandtookfarming,landscapingandnoise-relatedconcernsintoaccount.Somerareplantspecieswererelocatedandanunderpassforamphibianswasconstructedbeneaththeaccessroad.

› IntheSaint-SacrementneighborhoodinthecityofQuébec,weparticipatedinCitéverte,aprojectof800housingunitsthatincorporatessustainableurbandevelopmentmeasures:mixeduse,greenspaces,walkingandcyclingfacilities,urbanheatingsystemconnectedtoathermalpowerplantfuelledbyforestbiomass,useoflight-emitting-diode(LeD)trafficsignalsandinnovativeresidualmaterialsmanagement.

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› AdozenkilometresofdistributionlineswereburiedinseveralQuébecmunicipalitiesundervarioussystemundergroundingprograms.www.hydroquebec.com/municipal/programme_enfouissement_reseaux.html (Available in French only)

› Mont-Tremblantsubstation(Laurentides)wascommissioned;itissurroundedbya45-mbufferzoneandnightlightingwillnotinterferewithoperationoftheneighboringastronomyobservatory.

› over$2millionwasinvestedintheongoingequipmentnoisereductionprojectatLévissubstation.Theprojectwilltakeseveralyearstocomplete(Chaudière-Appalaches).

› Wesigned211contractsforpublicorprivateuseofHydro-Québecpropertyarounditsfacilities.Inadditiontoroadconstruction,develop-mentofgardensandpublicparks,andcreationofpark-and-ridelotsforpublictransit,thecompanyalsoallowstheuseofitsrights-of-wayforcertainresidentialandbusinesspurposes.

P R E S E R V I N G H E R I TAG E

Hydro-Québecendeavorstoprotectandenhancethebuilt,techno-logical,naturalandarchaeologicalenvironment.

2009 H ighlights

› InadvanceofthedistributionsystemundergroundingprojectalongthemainstreetintheAylmersectionofGatineau(outaouais),archaeologicaldigsuncoveredanAboriginalhearthdatingfromthemid-19thcentury.

› TheCanadaResearchChaironBuiltHeritageattheUniversitédeMontréalassessed36ofHydro-Québec’sadministrativebuildingsthathaveheritagevalue;thisisafirstforthecompany’sreal-estateproperties.

› ThebuiltandtechnologicalheritageofDrummondville,Chute-HemmingsandRobert-Bourassageneratingstationswasinventoried.Thesegeneratingstationscontainoriginalequipmentofgreathistoricalvalue;someofitisstillinoperation.

› TheouterenvelopeofChute-Hemmingsgeneratingstationwasrefurbished:masonrywasrestoredinkeepingwiththeoriginalfeaturestoretaintheheritagevalueofthebuilding.

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PE R C E N TAG EO FV E G E TAT I O NCO N T R O LO PE R AT I O N ST H AT I N CO R P O R AT EB I O D I V E R S I T YPR OT E C T I O NM E A S U R E S (%)

2009 2010 2011 2012 2013

Target 80 82 85 87 90

Resulta 89 a) Themeasureusedin2009ispruning.othermeasureswillbeadoptedin2010.

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Withoperationsthroughouttheprovince,Hydro-Québecstrivestotakeinto

accounttheexpectationsandconcernsofitsstakeholdersincarryingoutits

projectsandactivities.

P R O J E C T ACC E P TA B I L I T Y A N D CO M P E N S AT I O N F O R I M PAC T S

Allstagesofinfrastructureprojectsundergoavoluntarypublicconsultationprocess.Ineachregion,acommunityrelationsteammaintainsadialoguewithstakeholdersthroughouttheprocess.Thecompanycanthereforetakethehostcommunity’svalues,interestsandconcernsintoconsiderationandmakedesiredadjustmentstoprojectswheneverpossible.Thevoluntarypublicconsultationprocessincludesthefollowingsteps:

› Generalinformation–projectdescription,rationaleandplannedstudies

› Informationandconsultationregardingprojectvariants

› presentationofthesolutionwiththeleast impactbasedonthesocial,environmental,technicalandeconomicdatacompiled

Dependingontheprojectstageandspecificfeatures,variouscommunicationmethodsareused,includinginformationanddiscussionpanels,informationbulletins,technicalcommittees,privateandpublicmeetings,andsoforth.Duringtheconstructionphase,communicationtakestheformofopen-houseeventsanddistributionofinformationonregionaleconomicspinoffstodesignatedrepresentativesofthehostcommunity.Uponprojectcompletion,thecompanyreviewscompliancewithitscommitmentstothehostcommunityandtheresultsoftheenvironmentalfollow-ups.

Majorgenerationandtransmissionprojectsarealsosubjecttoanenvironmentalassessmentprocedurethatincludesapublichearingsprocess.AfteradirectiveisissuedbytheMinistèreduDéveloppementdurable,del’environnementetdesparcs,anenvironmentalimpactassessmentmustbeconducted.Whenthestudyisdeclaredcompliant,theBureaud’audiencespubliquessurl’environnementbeginsitsprocess.IfinformationisrequestedfromtheMinister,publichearingsareheld.Thisconsultationprocessenablesmanypartiestoexpresstheirconcerns.

SoCIAL CoMMITMeNT

Montérégiehassome7,200farms,andfarmlandcovers75%oftheregion.everyyear,Hydro-QuébecorganizesmeetingswithlocalbranchesoftheUniondesproducteursagricolestokeeptheminformed,discussplannedprojectsandlistentotheirconcerns.


Hydro-Québec,withateamofspecialists,endeavorstoaddressthequestionsraised.

FortheRomaineproject,Hydro-Québecobtainedgovernmentapprovalswithintheplannedtimebecauseof themeticulousstudiesandtheexperienceofemployeeswhowereabletorespondtoconcernsraisedbythepublicandbygovernmentauthorities.

E X A M PL EO FCO M M U N I T YD I A LO G U E

Project Region Achievement

Romainecomplex Côte-Nord Activitiestomakethejobsiteacceptabletothecommunityincludedjobsitetoursbyelectedofficials,communityorganizationsandthemedia,communityrelationsfollow-upmeeting,publicmeetings,jobfairandmediainterviews.

315/25-kVSaint-Bruno-de-Montarvillesubstationand315-kVline

Montérégie Activitiestoobtainthegreatestpossibleconsensuswithcommunityrepresenta-tivesonthesubstationlocationandlinerouteincludedtheprojectannounce-mentandgeneralinformation,sixpublicconsultationmeetingsandtwoinformationbulletins.

120-kVBeauceville−Sainte-Marieline Chaudière-Appalaches Atechnicalcommitteewasformedofcommunityrepresentativestooptimizetheproposedsolutionandmakeitmoreacceptable.Hydro-Québecrevieweditsprojectanddecidedtobuildadouble-circuitlineabout30kmlongbetweenBeaucevilleandSainte-Marie,asolutionfavorablyreceivedbythecommunity.Thisisalsothebestenvironmentalchoicebecauseitallowsanexistinglinetobedismantledanditaffectsfewproperties.

230/25-kVLimoilousubstation Capitale-Nationale SustainedcooperationwiththecityofQuébeconthesitinganddesignofthisurbansubstation.

CATVARproject Montréal Activitiestomaketheprojectacceptabletothecommunityincludedaprojectpresentationtoacommitteeofthemanagersof19Montréalboroughsand8citiesonMontréal’sWestIsland.

120-kVsupplylinefortheCanadianMalarticminingproject

Abitibi-Témiscamingue Differentvariantswereproposedtostakeholders(municipalities,governmentdepartments,interestedorganizations,landowners)andinformationbulletinswerepublished.

161/25-kVWaconichisubstationand161-kVline

Nord-du-Québec presentationtothetallymenandtheirfamilies:theprojectwillimprovethepowersupplytotheCreecommunityofMistissini.

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2009 H ighlights

› our liaisoncommitteeswiththeUniondesmunicipalitésduQuébecandtheFédérationQuébécoisedesMunicipalitéscelebratedtheir10thanniversary.Thesecommitteeshavedevelopedpartnerships,solvedproblems, improvedapproachesandexploredinnovativemethodsinamultitudeofareasrelatedtorelationsbetweenHydro-Québecandmunicipalities.Theanniversarywascommemoratedwithaspecialeditionoftheirannualreportsoutliningachievementssince1999.

› TheliaisoncommitteewiththeUniondesproducteursagricoles(inexistencefor13years)empoweredatechnicalcommitteetoreviewtheagreementonthepassageoftransmissionlinesthroughfarmlandandforests.Thisagreementpromotesdialogueoninfrastructuresiting,choiceofmitigationmeasuresforconstructionandmaintenanceimpacts,andcompensationmethodforlandowners.

Preliminarystudies Post-projectDraftdesign Permitting Project

Mainstagesofamajorgenerationortransmissionproject

Need identified

project notice

Impact statement guidelines

Environmental impact assessment

Filing of environmental impact statement

public hearings

Screening analysis

Government authorizations

Recommendations to authorities

Engineering

procurement

Construction

Hydro-Québec

Authorities and government bodies

Commissioning Summary and follow-up


R E L AT I O N S W I T H A B O R I G I N A L CO M M U N I T I E S

Québecishometo11Aboriginalnationsin55communities.Anumberofthesecommunitiesareinareaswithhighhydropowerpotential,andHydro-Québecdevelopsmutuallybeneficialpartnershipswiththem,particularlythroughformalagreements.Theirknowledgeofthenaturalenvironmentcontributestoenvironmentalinventoriesandthedevelopmentofmitigationmeasures.

2009 H ighlights

Eastmain-1-A/S arcel le/Ruper t projec t(Nord- du- Q uébec)

› Weh-SeesIndohounCorporation,aCree–Hydro-Québecjointventure,overseessporthuntingandfishingbyworkersandotheruserstopromotewildlifeandecosystemconservationduringprojectconstruction.

› Twiceayear,theenvironmentalMonitoringCommitteetourssixCreecommunitiestomeetwithtallymenandlandusersdirectlyaffectedbytheproject.Duringthemeetings,otherCreecommunitymembersareinvitedtolearnabouttheprojectandenvironmentalfollow-upactivitiesbyattendingpublicmeetingsoropen-houseevents.

1

› ThequarterlyBoumhounan Newsletter wascirculatedandaradioreportwasbroadcasttoinformCreecommunitiesaboutprojectprogress.

› Wemetwith428studentsinfourCreecommunities(eastmain,Nemaska,WaskaganishandWemindji)affectedbythisprojecttoinformthemaboutthebenefitsofhydroelectricity,theenvironmentalimpactsandtheprotectivemeasuresplannedbyHydro-Québec.

Romainecomplex (Côte -Nord)

› CommitteeswerecreatedtoactasdiscussionandcollaborationforumswiththeInnu,andcarryoutenvironmentalstudiesandfollow-upattheRomaineComplex.

› TheNishipiminan Agreement 2009wassignedtoreconciletheinterestsofHydro-QuébecandtheekuanitshitInnu.Thisagreementprovidesfundingforeconomic,culturalandcommunitydevelopmentprojects,andwillenabletheInnutoparticipateinprojectconstructionandenvironmentalfollow-up,promotethepracticeoftraditionalactivitiesandmeettrainingneeds.

› AfundestablishedundertheagreementssignedwiththeInnucommunitieswillbeusedtopromotepracticeoftheInnuwayoflife(Innu Aitun).

Employmentandtraining

› 89employeesreceivedtrainingonHydro-Québec−Aboriginalrelations.› NinepermanentCreeemployeeswerehired,foratotalof41Crees

employedbyHydro-QuébecinBaie-James.

› Hydro-Québecpaid$90milliontoprocuregoodsandservicesfromAboriginalcompanies,organizationsandindependentworkers.WorkfortheSociétéd’énergiedelaBaieJameswasvaluedat$268million.

1

SOCI

AL

COM

MIT

MEN

T

100

75

50

25

0

06 07 08 09

Overallpublicsatisfaction(%)

Very and somewhat satisfied Very satisfied

91 91

31

92

36

93

36 35

FONDSRECYCFLUO

TheFédérationQuébécoisedesMunicipalitésandthecompany

PeinturesrécupéréesduQuébecreceiveda$100,000grant

fromHydro-QuébectoestablishtheFondsRecycFluo.Thegoal

ofthisinitiative—thefirstofitskindinCanada—istohelp

municipalitiesthatwanttoenableconsumerstorecyclecompact

fluorescentlightbulbs.AsatDecember 31,2009,159municipal

organizationsrepresenting389municipalitieshadtaken

advantageoftheserviceand15,722compactfluorescentshad

beenrecovered,diverting47,166 mgofmercuryfromlandfillsites.

Surveys were conducted by SOM. The sample consisted of 10,837 telephone interviews. Data were collected for 13 months from December 2008 to December 2009. The margin of error for the annual results is ± 1% (19 times out of 20).

InaugurationoftheTommy-Neeposhsceniclookout,inmemoryofthisfamilymanwhodiedin2008andwasatallymanonlandusedintheeastmain-1-A/Sarcelle/Rupertproject.


I N T E G R AT E D E N H A N C E M E N T P R O G R A M

Inadditiontoharmonizingtransmissionfacilitieswiththeirsurroun-dings,Hydro-Québecearmarkspartoftheircostforhostcommunitydevelopmentascompensationforresidualimpacts.TheIntegratedenhancementprogram(Iep)providesfinancialsupportforvariouslocal initiatives involvingtheenvironment, landuseorregionaldevelopment.Sincethisprogramwasintroducedin1985,Hydro-Québechasinvested$103millionin1,029initiatives.www.hydroquebec.com/municipal/pmvi.html (Available in French only)

2009 H ighlights

› Wemindjisubstation:$142,747wascontributedtodevelopabaseballfieldinthemunicipalityofWemindji(Nord-du-Québec).› péribonka–Simard lineandSimardsubstation:$222,308was

contributedtobuildaseniors’ residence inthemunicipalityofSaint-Honoré(Saguenay–Lac-Saint-Jean).› Rimouski−LesBoulesline:$74,894wascontributedtothecityof

RimouskitorefurbishtheRivièreRimouskipier(Bas-Saint-Laurent).

W

SecondaryschoolstudentsworkinginBois-de-Liessenatureparkeradicatedeuropeanbuckthorn,ahighlyinvasiveshrubthatwasreplacedwithnativetreesandshrubs.ThisbiodiversityrestorationandenhancementprojectreceivedfundingfromtheFondationHydro-Québecpourl’environnement.

P U B L I C H E A LT H A N D S A F E T Y

Yearafteryear,Quebecersratesecurityatthecompany’sfacilitiesatthetopoftheirexpectationsforHydro-Québec. In2009,theimportanceofthisaspectwasrated9.38onascaleof10.publicsatisfactionwiththisitemwas7.7in2009,comparedto7.6in2008.

2009 H ighlights

› Asecurityawarenesscampaignthatinvitesemployeesandthepublictoreportanysituationthatposesarisktoemployeesafetyorthesecurityofthecompany’sassetsresultedin2,029callsin2009,comparedto1,741in2008.

› AmessagewasbroadcastonFrenchandenglishtelevisiontopromotesafetynearpowerlinesandanadcampaignonprecautionstotakewhenpruningtreeswascontinued.www.hydroquebec.com/security

FU N D I N GA N DFI N A N C I A LCO M M I T M E N T SU N D E RT H E I N T E G R AT E DE N H A N C E M E N TPR O G R A M

2006 2007 2008a 2009

Numberofinitiatives 11 24 8 26 Hydro-Québecfundingandcommitments($’000) 1,143.6 4,533.8 208.2 1,652.7 Communityfundingandcommitments($’000) 549.4 2,866.9 106.6 1,719.3

projectvalue($’000) 1,693.0 7,400.7 314.8 3,372.0

a) The2008figureswereadjustedtoincludeanagreementsignedin2008,butrecordedin2009,fora$29,384initiative.

Hydro-Québec’s annual funding and commitments vary depending on the number of transmission projects in progress. In 2009, nearly half of the IEp-eligible transmission projects involved connecting wind farms in the Gaspésie–Îles-de-la-Madeleine and Bas-Saint-Laurent regions to the main grid.

50

40

30

20

10

0

06 07 08 09

Electricity-relatedaccidentsamongthepublic(number)

Deaths Electrical accidents

Deaths–source:Bureauducoroner.

electricalaccidents–source:externaldatacompiledbyHydro-Québec.

33

31

50

31

6 4

7

3

27 27 43 28


LookoutbuiltwithfundingfromHydro-QuébecbytheregionalcountymunicipalityofArgenteuilonthesiteofCarillongeneratingstationintheoutaouaisregion.

CO M M I T M E N T SO FT H EFO N DAT I O NH Y D R O - Q U É B E CP O U RL’ E N V I R O N N E M E N T

2006 2007 2008 2009 Numberofprojectssupported 22 15 20 19

Numberofregionsinvolved 12 8 12 11

Totalamountofcommitments($’000) 1,009 1,493 1,302 1,021

S O C I A L , C U LT U R A L A N D H U M A N I TA R I A N CO M M I T M E N T

FondationH ydro - Q uébecpour l ’environnement

Sinceitbeganoperationin2001,theFondationHydro-Québecpourl’environnementhassupportedcommunitiesthatareimplementingpractical initiativestoprotect,restoreandenhancetheirnaturalsurroundingsinaspiritofsustainabledevelopment.

2009 H ighlights

› InconjunctionwiththecityofMontréal,aprojectwasdevelopedtorestoreandenhanceurbanbiodiversityonpartofMontRoyalandintheÎle-de-la-VisitationandBois-de-Liessenatureparks.Theseareaswerethreatenedbyanextremelyinvasivealienshrub,europeanbuck-thorn.Afterthisshrubwaseradicatedbytrainedsecondaryschoolstudents,nativetreesandshrubswereplantedtohelprestoreplantandanimalhabitats.Abuckthornmonitoringandfollow-upsystemhasbeenestablishedandawarenessactivitieswereconductedtoexplaintheimpactofinvasiveplantsonnaturalenvironmentstousersofthethreeparks.TheFoundationcontributed$121,300.www.hydroquebec.com/fondation-environnement/en/index.html

F U N D I N G F O R O R G A N I Z AT I O N S A N D T H E A R T S

Hydro-Québec’seffortsgobeyondharmonious integrationofitsoperations: itactivelycontributestovariousaspectsofsocial,culturalandcommunity life. In2009,thecompanyrevieweditsdonationandsponsorshippolicyinordertotakeitsstakeholders’expectationsintoaccount.

2009 H ighlights

› Donationsandsponsorshipstosupportorganizationsandprojectsamountedto$22.5million,including$3.2millionfortheUnitedWay/Centraidecampaign,inadditiontothe$3.0millioncontributedbycompanyemployeesandpensioners.

› Hydro-Québec’sartcollectionsupportstalentedQuébecartistsworkinginvariousmedia.Thecollectionacquired27newworksofartandisdisplayedinrecentlyrenovatedareasofthecompany’sheadofficebuilding.

Youthawareness

Formanyyears,Hydro-Québechasofferedteachersatallelementaryandsecondaryschool levelsvarioustoolstohelpthemeducatechildrenaboutelectricityandhowtobehavesafelyaroundit.www.hydroquebec.com/teachers

2009 H ighlights

› Aneducationalkit,Les Zénergétics – À la découverte de l’énergie et de l’environnement,wasdistributedtoover47,000childrenage10to12.

› TheEnvirovoltgamekitwasdistributedtomorethan3,000childrenage9to12.

› The00Watt ClassroomToolkitwasgivento19,000childrenage10to12.

W

Breakdownofdonations Breakdownofsponsorshipsa

a) excludesfundingbytheFondationHydro-Québecpourl’environnement.

45% Social and humanitarian aid, including United Way/Centraide

28% Education27% Health

4% Science19% Socioeconomic

partners12% Sports

3% Environment and sustainable development

62% Culture

SOCI

AL

COM

MIT

MEN

T


Hydro-Québec’sfundamentalreasonforbeingistoprovideahigh-quality

productandservicessuitedtoitsvariousclienteles.Thecompanystrivesto

fulfillitsmissionwithstable,competitiverates,fairtreatmentforitscustomers

andasecure,reasonablereturntoitsshareholder.

Theglobaleconomicrecessioncontinuedin2009,affectingallofthecompany’s

customerstovaryingdegrees.Duringtheyear,Hydro-Québecproposedmeasures

totheRégiedel’énergietosupportcertaincustomercategoriesthatareexpe-

riencingfinancialdifficulty.Electricityisanessentialservice,sothecompanypaid

specialattentiontolow-incomehouseholdswhoseelectricitybillaccountsfora

substantialportionofthefamilybudget.

C U S TO M E R E X P E C TAT I O N S A N D S AT I S FAC T I O N

Inaconstantlychangingmarket,Hydro-Québecusesvarioustoolstodeterminecustomerexpectationsanddetectanyshiftsinthoseexpectations,identifystepstotaketomaintainorboostcustomersatisfaction,andmeasureitsongoingprogress.

Withregardtoourproduct—electricitydelivery—customers’basicexpectationsrelatetosecurity, reliability,metering,meterreading,theenvironmentandfuturesupply.Service-relatedexpectationsfocusonprice,telephoneresponse,billing,respect,fairnessandenergyefficiencyprograms.

Tomaintainanaveragetelephone-responsetimecomparabletotheNorthAmericanindustryaverage,Hydro-Québecisenhancingitsinteractiveservicesandcontinuingtooptimizeitsoperationstoimprovethecustomerexperienceandfacilitateproblemsolvingwiththefirstcall.

H IGH-QUALIT Y, CUSToMeR-DRIVeNSeR VICe

Hydro-Québecparticipatesinanumberofevents,suchasenergy-efficiencyinitiatives,toinformthepublicaboutitsservices.


R E S I D E N T I A L C U S TO M E R S

Toimproveservicesforlow-incomecustomers,Hydro-Québecworkscloselywithconsumerassociations.Aworkinggroupsetupin2000experimentswithnewapproachesandsuggestsmoresuitableservices.Itwasinstrumentalinthedevelopmentandintroductionoflong-termpaymentarrangementscustomizedtocustomers’abilitytopay.Adedicatedtelephonelineenablesconsumerassociationsandelectedrepresentatives’officestosubmitcasesofcustomersinveryprecarioussituationssothatpaymentarrangementscanbetailoredtosuittheircircumstances.

2009 H ighlights

› Improvedaccesstoourcustomerservicesreducedtheaveragetelephone-responsetimeto190secondsfrom379in2008.

› 32,107paymentarrangementswerereachedwithlow-incomecustomersforatotalof$189million.ofthese,3,491arrangementstargeteddebtreductionand,whennecessary,loweredthecurrentpaymentforenergyconsumption.› Forresidentialcustomersoverall,paymentarrangementshelped

tosettle257,287overdueaccountstotaling$515million.› 9,559complaintsandclaimswererecordedanddealtwith

in2009(12,826in2008);219appealswerefiledwiththeRégiedel’énergie.

› Serviceagreementsweremaintainedwithorganizationsthathelpnewimmigrantswithpaymentdifficulties,intheirownlanguage.

› over82,000customerschosetoreceiveonlinebills:atotalof3,149,713billswerenotprintedbyHydro-Québecthisyear.

4

› TheTimeItRightpilotprojectcontinuedwith2,200residentialcustomersinSaint-Jean-sur-Richelieu,Sept-Îles,Val-d’orandTrois-Rivièrestodeterminewhetherarateoptionbasedontime-of-dayandseason-of-useencouragescustomerstoshiftsomeoftheirconsumptiontolow-demandperiods.Thepreliminaryresultsshowthatparticipantsrealizemodestgains.

B U S I N E S S A N D L A R G E - P O W E R C U S TO M E R S

Industrial,commercialandinstitutionalcustomerswithapowerdemandof5MWormoreconsume38%oftheelectricitydeliveredinQuébec.

Hydro-Québecusesvariousmeasurestopersonalizerelationswithmajorcustomers,suchasdesignatingaspecificcommercialofficertohandletheiraccounts.

2009 H ighlights

› TheQuébecgovernmentauthorizedHydro-Québectoenterintospecialagreementswithindustrialcustomers(powerconsumptiongreaterthan50MW)affectedbytherecession.Thismeasureresultedinsavingsof$21millionforthesecustomersduringtheyear.

› Hydro-QuébecaskedtheRégiedel’énergieforauthorizationtocreateanaccountfordeferredexpensestofacilitatetheapplicationoftheLoadRetentionRatedesignedforRateLcustomersexperiencingfinancialdifficulties.Tobeeligible,customersmustdemonstrate,amongotherthings,thattheyobtainednonrefundabledeductionsfromtheirothersuppliersorpartnersandthatstepswillbetakentoimprovetheirprofitability.

HIG

H-Q

UA

LITY

, CU

STO

MER

-DRI

VEN

SER

VICE

35,000

28,000

21,000

14,000

7,000

0

07 08 09 10 11 12

Agreementsforlow-incomecustomers(number)

4

Number of agreements Target

2009 was a difficult year for the economy and consequently, collections activities increased.

22,6

70

21,9

09

32,1

07

22,2

00

23,8

00

24,7

00

24,8

00

SATISFACTIONINDEXES(SCALeoF10)

› ResidentialCustomers:7.39

› CommercialandAgriculturalCustomers:7.38

› BusinessCustomers:7.40

› Large-PowerCustomers:9.21

operatorSylvainSincernyattheSaint-Jérômedistributioncontrolcentreobtainsfastaccesstosystemstatusandkeepstrackoftheavailableoperatingmarginatalltimesinordertodetectreal-timerisks.Themaingoalisgoodcustomerservice.


Acompany’seconomic,environmentalandsocialperformancedependsfirst

andforemostonhavingwell-qualified,dedicatedemployees.Theday-to-day

activitiesofthepeopleintheworkforcemakeasignificantdifference.Toensure

thatitsemployeesdotherightthingspontaneouslyandenthusiastically,Hydro-

Québecfosterstheirawareness,motivationandskillsdevelopment.

Thecompany’scommitmenttosustainabledevelopmentisamajorassetfor

recruitingandretaininghumanresources,giventhelaborshortagethatthe

powerindustryisfacingbecauseofthemanyexperiencedworkerswhoare

retiring.1

E M P LOY E E M OT I VAT I O N A N D S AT I S FAC T I O N

ListeningtoitsemployeesenablesHydro-Québectoadapttotheexpectationsofthenewgenerationsofrecenthires.Forinstance,youngemployeeshaveverydifferentexpectationsfrombabyboomers.Independenceandinnovationareimportanttothem,asareanimprovingwork/familybalanceandsincererecognitionofpersonalcontributions.

1. electricitySectorCouncil.

HUMANReSoURCeS DeVeLopMeNT

TechniciansCarlCyrandRobertDuboisworksidebysideinthetelecommunicationscontrolcentre.Theobjectiveisknowledgetransfer.


2009 H ighlights

› Newhiresratedtheirsatisfactionwithemployeeinductionandintegrationproceduresat8.4outof10,thesameresultasintheprevioustwoyears.Inductionandintegrationofnewemployeesarekeyfactorsinensuringworkforcerenewalandemployeeloyalty.

› Morethan550employeesparticipatedinharassmentpreventiontrainingofferedbyHydro-Québecandthetradeunion(SCFp1500).Atleast350managershavebeentrainedinharassmentprevention.

› TheMérite de l’environnement et du développement durable contestrecognizesemployeesfortheiroutstandingactionsoraccomplish-ments.In2009,nineprojectswererewarded;amongthem,projectManagerBernardCyrwasrecognizedforhisworkonrehabilitationofthesmallhydroelectricgeneratingstationinSault-Mathurine,Haiti.

S K I L L S D E V E LO P M E N T A N D S U CC E S S I O N P L A N N I N G

Giventhefasterpaceofretirementsandtheintensifieddemandforskilledworkers,Hydro-Québechasdeployedaseriesofmeasurestomaintainaskilledandcompetentworkforceanditsknow-how.Internshipsprovideawaytorenewskills.ThecompanythereforeintendstocontinuefundingfortheInstituteofelectricalpowerengineering(Iepe),giveitsinternshipprogramquantitativeannualtargets,makediversityanintegralpartofHydro-Québec’ssuccessionmanagementstrategiesandpreparefuturemanagersforvariousmanagementlevels.

2009 H ighlights

› Fundingof$2millionwasgrantedtotheIepefor2009–2013and52studentsreceivedscholarshipsandtravelfunding.Atotalof125IepegraduateswererecruitedbyHydro-Québecbetween2002and2009(18in2009).› Annual internalsurvey:72%ofemployeessaidtheyhadan

excellentorgoodunderstandingoftheconceptofsustainability,comparedto58%in2006.Inaddition,81%ofemployeesconsiderthattheirworkcontributestosustainabledevelopment.

› employeetrainingprogramfundingwas3.9%ofthepayroll.› Thepercentageofemployeeswithspecificsustainabledevelop-

menttrainingortrainingthat includessustainabledevelopmentwas10.5%asatDecember31,2009.› Therewere241universityinternshipsin2009,versus163in2008

(excludingIepe).Inasurvey,79%ofinternssaidtheyhopedtoapplyforajoboranotherinternshipatHydro-Québec.Theirsatisfactionwiththeiroverallinternshipcontentwas8.6outof10.

O CC U PAT I O N A L H E A LT H A N D S A F E T Y

Hydro-Québechasitsemployees’well-beingatheart,andwillcon-tinuetoprovideahealthyandsafeworkenvironment.

2009 H ighlights

› 10,715employeesparticipatedinworkplacehealthandsafetytrainingorawarenessandhealthpromotionactivities.

› Inoccupationalsafety,therewerenoemployeefatalitiesonthejob.Regretfully,threeemployeesofcontractorsdiedonconstructionsites.

› Aconfidentialemployeeassistanceserviceisavailablefreeofchargeand isprovidedbyexperiencedprofessionalswhoarealwaysavailableanywhereinQuébec.In2009,theusagerateforthisprogramfellslightlycomparedto2008,from7.88%to7.64%.

› earlyintheyear,theemergencybiohazardresponseplaninsti-tutedbyHydro-QuébecwasrolledouttoensureservicecontinuityintheeventofaninfluenzaA(H1N1)pandemic.

8

8

8.5

8.0

7.5

7.0

6.5

6.0

06 07 08 09

Employeemotivationandsatisfaction(scaleof10)

Satisfaction index Employee motivation

and satisfaction

In 2009, 15,052 participants representative of the job groups and units were surveyed, mostly by e-mail.

8.46

6.92

8.39

6.93

8.42

6.87

8.42

6.94

3.5

3.0

2.5

06 07 08 09

Work-relatedaccidentfrequencya

In 2008, the frequency for all injury categories combined for corporate members of the Canadian Electricity Association was 2.88.

3.33

3.24 3.

29

2.83

H Y D R O - Q U É B E CWO R K FO R C E

2006 2007 2008 2009 permanentworkforce(number) 19,116 19,459 19,297 19,536

Averageage 45.8 45.7 45.6 45.4

permanentemployeeseligibleforretirement(number) 2,845 2,860 2,835 3,036

Retirements(number) 664 758 896 1,072

Newhires(number) 1,360 1,151 1,252 1,844

percentageofnewemployeesunderage35(%) 64 67 66 70

Targetgrouprepresentation(%)

Women

Aboriginals

ethnicminorities

Visibleminorities

peoplewithdisabilities

30.6

0.7

1.0

1.8

1.6

31.3

0.7

1.0

1.9

1.5

30.9

0.7

1.0

2.0

1.4

30.6

0.8

1.0

2.2

1.3

HU

MA

N R

ESO

URC

ES

DEV

ELO

pMEN

T

a) (Lost time + Medical assistance) X 200,000

Hours worked


TheelectricityindustryisofcapitalimportanceinQuébec.Intheforefrontofthe

province’sindustry,itseconomicimpactistwicethatofagricultureandforestry,

pulpandpaperoraeronautics,andeighttimesgreaterthantheminingindustry.1

ThevitalityofQuébec’selectricityindustryislargelyfoundedonHydro-Québec’s

operations,whichcontributeanestimated3%totheprovince’sgrossdomestic

product.Thecompany’sprocurementpolicypromotesacquisitionofQuébec

goodsandservices,atthebestpossiblecostandincompliancewithstrict

procurementcriteria.

E CO N O M I C S P I N O F F S

Inresponsetotheseverityofthefinancialcrisisandtheresultingeconomicslowdown,manycountriesdecidedtoinvestininfrastructureprojectstostimulatetheireconomies.InQuébec,majorpowergenerationandtransmissionprojectsannouncedbeforetherecessionaregeneratingconsiderableeconomicspinoffsthroughouttheprovince.

Forexample,weestimatethatinvestmentsof$4billionto$5billionperyearwillbemadefrom2009to2013.Theseinvestmentsincludegeneratingfleetexpansionandrefurbishment,transmissionanddistributionsystemdevelopment,maintenanceandimprovement,andinvestmentsundertheenergyefficiencyplan.Inall,from2009to2013,Hydro-Québec’sbusiness,includingtheseinvestments,aswellasoperatingcostsandpurchasesfromprivateproducers,willrepresentabout271,400person-yearsindirectandindirectjobs.

1. InstitutdelastatistiqueduQuébec.

CoNTRIBUTIoN ToTHeQUÉBeCeCoNoMY

In2009,Hydro-Québecworkedonover1,000projects,including800inthetransmissionsector,liketheChénier−outaouaislineproject.Thisvolumeofactivityrepresents$2.7billion.


2009 H ighlights

› Anagreementtomaximizetheregionaleconomicspinoffsoftheeastmain-1-A/Sarcelle/RupertprojectwassignedwithComaxNord.Todate,over$188millionhasbeendisbursedtocontractorsandworkers intheNord-du-Québecregion, including$40millionin2009.Acontractclausemotivatinggeneralcontractorstoconsiderlocalsubcontractinggeneratedone-thirdofthespinoffs.

www.comaxnord.com (Available in French only)

› AspartoftheRomaineproject,aregionaleconomicspinoffcommitteewassetuptopromoteparticipationbyCôte-Nordcom-paniesandworkers,includingtheInnuofekuanitshit,Nutashkuan,UnamenShipuandpakuaShipi.Businesspracticeswereintroducedtoencouragelocalsubcontracting,tendercallsreservedforlocalcompaniesandcontractsnegotiateddirectlywithInnubusinesses.

› IncollaborationwiththeComitédemaximisationdesretombéeséconomiquesrégionalesdesgrandsprojetsduSaguenay–Lac-Saint-Jean,theregionaleconomicspinoffoptimizationcommittee,encouragingresultswereachieved:42.8%inregionaleconomicspinoffsand80%localhiringforthepéribonkaproject,34%inregionaleconomicspinoffsfortheChute-AllardandRapides-des-Cœursprojectand,asatDecember31,2009,over$349millioninlocalcontractsandpurchasesfortheeastmain-1-A/Sarcelle/Rupertproject.

1

W

1

1

S H A R I N G O U R E X P E R T I S E

ontheinternationalscene,Hydro-Québecmaintainscloserelationswithanumberoflargeorganizationstocontributetoknowledgedevelopmentandforgebusinesspartnerships.

2009 H ighlights

› Aspartofaresearchprojectongreenhousegases(GHGs)coor-dinatedbyUNeSCoandtheInternationalHydropowerAssociation,Hydro-QuébecorganizedaworkshoponmethodsformeasuringGHGemissionsfromreservoirs.Theworkshopattractedspecialistsfrom10countries.

› Hydro-Québecheadedupaworkinggroupofe8expertstoshareexperiences,knowledgeandthebesttechnical,commercialandregulatorypracticesontheuseofelectricvehicles.

› Hydro-Québechostedthe2009conferenceoftheAssociationquébécoisedelagestiondelavégétationtopromotetheexchangeofinformationbetweenvariousvegetation-controlspecialists.Thecompanywasabletosharetheproceduresitinstitutedfollowingvegetation-relatedoutagesonitstransmissionsystemin2008and2009.Scholarshipswerealsoawardedtouniversitystudents.

S U P P O R T I N G U N I V E R S I T I E S

Byprovidingfundingforuniversities, includingresearchchairs,Hydro-Québecfostersstudentexcellence,furtherstheadvancementofknowledgeinscienceandtechnology,encouragesuniversityexpertiseandparticipatesintrainingahighlyqualified,promisingworkforce.

CON

TRIB

UTI

ON

TO

TH

E Q

UÉB

EC E

CON

OM

Y

CO N T R I B U T I O N S , CO M M I T M E N T S , C H A I RE N D OWM E N T SA N DR E S E A R C HCO N T R AC T S ($’0 0 0)

2006 2007 2008 2009 8,927.5 8,380.3 8,892.5 9,599.5

Hydro-Québecisafoundingmemberoftheouranosconsortium,createdin2001tostudyregionalclimatologyandadaptationtoclimatechange.Theconsortiumbringstogethersome250expertsfromQuébec,therestofCanadaandabroad,includinganumberofscientistsfromourresearchinstitute,IReQ.InMarch2009,thecompanyreneweditscooperationagreementwithouranosforfiveyears.

TheShandongelectricpowerResearchInstitutepurchasedthemarketingandindustrialdevelopmentrightsforourLineRoVerrobottoproduce,sellormodifythistechnology,whichhasmanymaintenanceapplications.


I N D U S T R I A L TO U R I S M

AwareoftheinterestthatitsfacilitieshavefortouristsfromQuébecandelsewhere,Hydro-Québecopensitsdoorstovisitorsin11regions.High-qualityvisitorinfrastructuresstimulateregionaltourism.

F I N A N C I A L R E S U LT S

In2009,Hydro-Québecpostedverygoodfinancialresultsdespiteadifficulteconomy.

› Incomefromcontinuingoperationsrose$23millionto$3,035million,anewrecord.Netincomewasalso$3,035million.

› electricitysalestotaled$12,055million,down$309million.Saleswere$10,549millioninQuébecand$1,506millionoutsideQuébec.

› Netexportsaccountedfor10%ofsalesvolumeandgenerated22%ofnetincome.

› Dividendsdeclaredtoourshareholderwere$2,168million.Divi-dendsfor2006to2009totaled$8,857million.

3,000

2,000

1,000

0

06 07 08 09

15,000

12,000

9,000

6,000

3,000

0

06 07 08 09

Incomefromcontinuingoperations($M)

Revenuefromelectricitysales($M)

Revenue from electricity sales outside Québec

Revenue from electricity sales in Québec

2,79

7

2,88

2

3,01

2

3,03

5

10,5

51 11,9

85

12,3

64

12,0

55

1,149 1,6

17

1,919

1,506

9,40

2

10,3

68

10,4

45

10,5

49

H Y D R O - Q U É B E C ’ S CO N T R I B U T I O NTOT H EQ U É B E CE CO N O MY

2006 2007 2008 2009

Capitaltax($M) 261 278 202 132a

publicutilitiestax($M) 230 240 302 188

Water-powerroyalties($M) notapplicable 263 546 567

Municipal,schoolandothertaxes($M) 36 35 37 35

procurementofgoodsandservices(insideandoutsideQuébec)($M)b 2,673 2,586 2,660 2,925

percentageofgoodsandservicesprocuredfromQuébeccompanies 92 94 89 87

Directjobssustainedbyprocurement,includingprocurementoutsideQuébec(person-years) 14,000 13,000 11,462 12,333

a) Thelowercapitaltaxistheresultofthelowertaxrate:0.24%in2009,versus0.36%in2008. b) excludesprocurementbySociétéd’énergiedelaBaieJames.

N U M B E RO FV I S I TO R STOH Y D R O - Q U É B E CFAC I L I T I E S

2006 2007 2008 2009

Facilitiesforthegeneralpublica 60,071 60,852 62,303 66,112

Facilitiesforthegeneralpublicoperatedaspartnershipsb 83,176 80,425 70,051 72,799

Researchanddevelopmentfacilitiesc 5,157 6,266 3,234 3,038

Total 148,404 147,543 135,588 141,949

a) Facilitiesthatthegeneralpubliccanvisitfreeofcharge. b)Sitesmanagedinpartnershipthatareopentothegeneralpublicbutchargeanentrancefee.

c) Sitesthathavenotourisminfrastructureorstaffandarenotopentothegeneralpublic(examplesareHydro-Québec’sresearchinstitute,IReQ,anditsenergytechnologieslaboratory,LTe).

everyyear,over100,000peoplevisitHydro-Québecfacilitiesandotherlocationsoperatedaspartnerships.Carillongeneratingstationisoneofthefacilitiesthatthegeneralpubliccanvisitfreeofcharge.


MA J o R FA C I L I T I e S

La Citière

40°

Baie James(James Bay)

Baie d’Hudson

(Hudson Bay)

(St. Lawrence River)

Romaine-2

1927 Privy Council border

(not final)

Îles de laMadeleine

Île d’Anticosti

Generating station rated 300 MW or more

Hydro

Nuclear

Thermal

Other facilities

Generatingstationunderconstruction

plannedgeneratingstation

735-kVsubstation

735-kVline

450-kVdirect-currentline

Interconnection

Neighboringsystemfacility

HY D RO - QU É B ECG E N E R AT I N GFACI LIT I E S–20 0 9

Facilities Number MW Netoutput(GWh)b Hydroelectricgeneratingstationsa 60 34,499 162,766 97.6%

Nuclearpowerplant 1 675 3,596 2.2%

Thermalpowerplantsa 27 1,634 446 0.3%

Windfarm 1 2 0 0%

Total 89 36,810 166,809 100%

a) onehydroelectricgeneratingstationand23ofthe27thermalpowerplantsarenotconnectedtothemainHydro-Québecgrid.

b) overalltotalandsumofsubtotalsdifferduetorounding.

Hydro-QuébecalsohasaccesstoalmostalltheoutputfromChurchillFallsgeneratingstation(5,428MW).


G Lo B A L R e p o R T I N GI N I T I AT I V e ( G R I ) I N D e X

a) Disclosurenumberinbold:coreindicatorDisclosurenumberinregulartype:additionalindicator

AllGlobalReportingInitiativeperformanceindicators, includingthenewelectricUtilitySectorSupplement,aredealtwithfullyontheHydro-QuébecWebsiteat:www.hydroquebec.com/sustainable-development/gri

ThefollowinglistshowstheindicatorsthatarecoveredintheSustainability Report 2009.

DisclosureNumbera G3Indicator Page

ECONOMIC pERFORMANCE INDICATORS

EC1 Economic value generated and distributed 36, 39

EC2 Climate change 7, 12-14

EC6 procurement from local suppliers 34-36, 39

EC7 Local hiring 27, 35

EC8 Infrastructure investments that benefit local communities 28

EC9 Indirect economic impacts 15-17, 28-29, 34-36, 39

ENVIRONMENTAL pERFORMANCE INDICATORS

EN1 Materials used by weight or volume 23

EN2 Use of recycled materials 23

EN4 Indirect energy consumption 14

EN5 Internal energy efficiency 12

EN6 Energy efficiency of products and services 12

EN7 Reduction of indirect energy consumption 22, 24

EN11 Land near biodiversity areas 15-17, 22

EN12 Description of impacts on biodiversity 15-17, 22

EN13 Habitats protected or restored 15-17, 22

EN14 Management of impacts on biodiversity 15-17, 22

EN16 Greenhouse gas (GHG) emissions 19, 39

EN17 Other relevant GHG emissions 19

EN18 Initiatives to reduce GHG emissions 19-21, 23-24

EN20 Emissions of NOx, SO2 and other pollutants 19

EN22 Total quantity of waste 23

EN23 Number and volume of spills 39

EN26 Environmental impact management 19-24

EN28 Non-compliance with environmental regulation 21, 39

EN29 Environmental impacts of transportation 22, 24

SOCIAL pERFORMANCE INDICATORS

Labor practices and Decent Work

LA1 Total workforce 33, 39

LA6 Joint health and safety committees 33

LA7 Work-related injuries, diseases and absenteeism 33

LA8 Assistance with serious diseases 33

LA10 Training 33

LA11 Skills development and training 33

LA13 Diversity and equal opportunity 33

Society

SO1 Management of impacts on communities 24-29

product / Service Responsibility

PR1 Life-cycle analysis for health and safety of products/services 28

pR5 Measurement of customer satisfaction 31

pR8 Customer privacy 4

DisclosureNumbera G3Indicator Page

ELEC TRIC UTILIT Y SEC TOR SUppLEMENT

Company profile

EU1 Installed capacity 37

EU2 Net energy output 37

Economy – Management Approach

EU7 Demand-side management programs 11-12

EU8 Research and development activity and expenditure 12, 14, 20, 22

Social – Society – Management Approach

EU19 Stakeholder participation in decision-making process 25-26

Social – product Responsibility – Management Approach

EU23 Access to electricity and customer support services 30-31

EU24 practices to address language and cultural barriers 31

Social – product Responsibility – performance Indicator

EU25 Injuries and fatalities involving company assets 28


o U R p e R F o R MA N C e AT A G L A N C e

2006 2007 2008 2009

ENVIRONMENT

Net electricity generated by Hydro-Québec (GWh) 150,552 162,062 164,678 166,809

Total net electricity generated and purchased (GWh) 196,236 208,156 206,603 203,181

Renewable energy/Total energy generated and purchased (%) 94 93 97 97

Atmospheric emissions of CO2 from thermal electricity generation (tonnes) 215,243 245,832 233,054 390,077

Atmospheric emissions of SO2 from thermal electricity generation (tonnes) 979 1,150 1,154 1,959

Atmospheric emissions of NOx from thermal electricity generation (tonnes) 5,917 6,205 6,132 6,710

Atmospheric emissions of CO2 from the vehicle fleet (tonnes) 56,683 54,082 54,426 55,016

production of low- and medium-activity radioactive waste (m³/reactor) 40 16 39 90

Energy Efficiency plan: energy savings (result/target) (GWh) 740/523 900/661 1,050/745 912/985

Employees governed by an environmental management system (number) 18,292 18,469 18,228 18,757Environmental non-compliance notices (number) 17 32 31 20

Spills reported to the authorities (number) 574 624 583 529

Insulating oil recovered (thousands of litres)/Internal reuse (%) 4,748/94.5 4,367/91.4 2,989/92.7 4,575/88.4

Area of transmission-line rights-of-way treated mechanically (%) 72.1 76.3 79.3 72.6

Area of dikes and dams treated mechanically (%) 44.7 48.0 40.3 50.7

New underground hookups (%) 25 28 30 32

SOCIAL

public satisfaction index (very and somewhat satisfied) (%) 91 92 93 91

Contracts and procurement − spinoffs for Aboriginals ($M) 156 237 310 358

Funding and financial commitments under the Integrated Enhancement program ($M) 1.1 4.5 0.2 1.7

Fondation Hydro-Québec pour l’environnement ($’000)/projects funded (number) 1,009/22 1,493/15 1,302/20 1,021/19

Donations and sponsorships ($M)a 23.0 24.7 25.9 22.5

Overall customer satisfaction index − other than Large-power Customers (scale of 10) 7.25 7.39 7.42 7.39Special payment arrangements for low-income customers (number) 22,475 22,670 21,909 32,107

Customer complaints and claims (number) 12,862 10,884 12,826 9,559

permanent workforce as at December 31 19,116 19,459 19,297 19,536

Temporary workforce (annual average) 3,799 3,910 4,048 4,080

Work-related accident frequencyb 3.33 3.24 3.29 2.83

Employee motivation and satisfaction (scale of 10) 6.94 6.92 6.87 6.93

percentage of payroll invested in training 3.9 4.2 4.0 3.9

ECONOMY

Electricity sales in Québec (TWh) 167.3 173.2 170.4 165.3

Revenue from electricity sales inside and outside Québec ($M) 10,551 11,985 12,364 12,055

Income from continuing operations ($M) 2,797 2,882 3,012 3,035

Net income ($M) 3,741 2,907 3,141 3,035

Dividends declared ($M) 2,342 2,095 2,252 2,168

Total procurement of goods and services ($M)/Québec only (%) 2,673/92 2,586/94 2,660/89 2,925/87

Direct jobs sustained by all procurement, including purchases outside Québec (person-years)c 14,000 13,000 11,462 12,333

Capital tax ($M) 261 278 202 132

Municipal, school and other taxes ($M) 36 35 37 35

public utilities tax ($M) 230 240 302 188

Funding for universities − contributions, chair endowments and research contracts ($M) 8.9 8.4 8.9 9.6

a) IncludesHydro-Québec’sdonationtoUnitedWay/Centraide.

b) (Losttime+medicalassistance)x200,000/Hoursworked.

c) excludesprocurementbySociétéd’énergiedelaBaieJames.


G Lo S S A R Y

biomassorganicmattercomposedofliveplantmatter,farm,forestorurbanwaste,ororganicwastefromwatertreatmentorpurificationplants;itisausableenergysourcelikewater,sunandwind.

CF₄(tetrafluoromethane)Syntheticchemicalcompoundandpotentgreenhousegasthatremainsintheatmosphereforalongtime.

CO2(carbondioxide)The principal greenhouse gas, mostly generated by fossil fuelcombustion.

cogenerationMethodofsimultaneouslyproducingelectricityandusefulther-malenergy(steam,hotwater)fromafuel(coal,naturalgas,biogas,biomass).

environmentalimpactassessmentStudythatpredicts,describes,organizesandevaluatesthephy-sical,chemical,biological,aesthetic,socialandculturaleffectsofaconstructionproject,andproposesmeasurestomitigatetheseeffects.

environmentalsiteassessmentprocessofdeterminingwhetherasiteneedstobedecontaminated,howthedecontaminationshouldbedoneandtheprobablecostoftheoperation.

halocarbonSyntheticchemicalcompoundthatisusedindomesticappliancesasarefrigerantandisanozone-depletingsubstanceandgreenhousegas.

herbicideChemicalorbiologicalproductthatdestroysvegetationorinhibitsitsgrowth.

Innu Aitun ActivitiesrelatingtotheInnuculture,basicvaluesandtraditionalwayoflife,andtiedtotheoccupationanduseofancestrallands(Nitassinan);thesepracticesinvolvetheuseofanimalandplantspeciesandminerals,aswellaswaterandothernaturalsubstances.

naturalattenuationNaturalprocesses(chemical,physical,biological)thatreducepol-lutantconcentrationsinsoilandgroundwater.

NOx(nitrogenoxides)Chemicalcompoundsthatcontributetotheformationofsmogandacidicdeposits.

publichearingSessionoftheBureaud’audiencespubliquessurl’environnement(BApe),opentothepublic,thatisorderedbytheMinisteroftheenvironmentorbytheBApeitselforrequestedbyaperson,groupormunicipality,involvingadevelopmentprojectwithintheterritorygovernedbyChapterIoftheEnvironment Quality Act.

publicinvolvementparticipationbythepublic,asastakeholder,inprojectdevelopmentandpublicdecisionmakingthathaveanimpactonhealth,lifestyleortheenvironment.

right-of-wayStripoflandusedforinstallation,operation,maintenanceandpro-tectionofoneormorepowerlines.

SF₆(sulphurhexafluoride)Chemicalcompoundwidelyusedinheavyindustrytoinsulatehigh-voltageequipment;itisapowerfulgreenhousegas.

sitecharacterizationInvestigationofcontaminatedenvironmentstoidentifythetypesofcontaminantsandtheextentofcontamination,estimatepotentialimpactsanddetermineremedialmeasures.

siterehabilitation,siteremediationoperationsperformedonacontaminatedsitetomakeitfitforfutureuse.

SO2(sulphurdioxide)Chemicalcompoundthatcontributestotheformationofacidicdeposits.

stakeholderGrouporindividualthathasamoreorlessdirectinterestinthelifeofanorganizationorislikelytobeaffectedbytheorganization’sdecisions.

tallymanTrapperwhosupervisesothertrappersandwhoseprimaryrespon-sibilityismanaginganimalpopulationswithinthetrapline.

weirLowdamorwallbuiltacrossarivertoregulatewaterlevel.

windrowHeaped,uniform-widthrowofwooddebrisfromloggingorclearingoperations.


U N I T S O F M E A S U R E

$M : millions of dollars$B : billions of dollarsV : volt (a unit for measuring voltage)kV : kilovolt (one thousand volts)W : watt (a unit for measuring power)kW : kilowatt (one thousand watts)MW : megawatt (one million watts)GW : gigawatt (one million kilowatts)

Wh : watthour (a unit for measuring electric energy)kWh : kilowatthour (one thousand watthours)MWh : megawatthour (one million watthours)GWh : gigawatthour (one million kilowatthours)TWh : terawatthour (one billion kilowatthours)

kg : kilogrammg : milligramt : tonne (metric ton)t CO2 eq. : tonne of CO2 equivalent

The following documents may be obtained from our Web site www.hydroquebec.comor by calling 1 800 ÉNERGIE (363-7443):

Sustainability Report 2009(this document)

Annual Report 2009

Profil régional des activités d’Hydro-Québec – 2009

Financial Profile 2009–2010

© Hydro-Québec Affaires corporatives et secrétariat général

Reproduction authorized with acknowledgment of source

Legal deposit – 2nd quarter 2010Library and Archives CanadaBibliothèque et Archives nationales du Québec ISBN 978-2-550-58104-8ISBN 978-2-550-58105-5 (pDF)

2009G312A

Ce document est également publié en français.

To H y d r o - Q u é b e c M a n a g e m e n t ,

Intertek has been commissioned to carry out an independent verification of the validity of certain information in Hydro-Québec’s Sustainability Report 2009, which covers the period from January 1st to December 31st, 2009.

M a n d a t e

Our responsibility consists in expressing an opinion on the accuracy of selected quantitative data, which are identified with an appropriate sign. In that regard, we have substantiated the origin, the collection process and the exactitude of these data. The report and the results of environmental, social and economic performance remain the sole responsibility of Hydro-Québec.

M e t h o d o l o g y

We carried out our verification and review in accordance with standard ISAE 3000. Consequently, our work was planned and performed in such manner as to provide reasonable or moderate assurance regarding the quantitative performance indicators selected. Since this is a combined certification mandate, our opinions are given separately.

The verification process included a risk analysis and sampling method, interviews with staff responsible for the information, analysis of the information selected, corroboration of supporting documents and other procedures deemed necessary.

The review proces included collection of information, analytical processes, review of the controls used and discussions about the data submitted.

O p i n i o n

Ve r i f i c at i o n

In our opinion, the selected quantitative data identified in the Sustainability Report 2009 with the symbol are accurate in all material respects, according to the relevant criteria.

R ev i ew

Upon completion of our work, we had no reason to believe that the selected quantitative data identified in the Sustainability Report 2009 with the symbol are not presented, in all material respects, according to the relevant criteria.

Calin Moldoveanpresident, System CertificationIntertek Testing Services NA Ltd.March 22, 2010

TOCOMM ENTO NTHISR EPO R T

w w w. hydro queb e c .com/sust ainable - development

VE R IFIC ATION STATE ME NT

www.hydroquebec.com/sustainable-development

2009

G31

2A

Documents

Hydro-Québec - Sustainability Report 2009