Quebec Utility Aims to Expand

HUNGRY for industrial development and economic independence to match its political ambitions, Quebec wants to build a controversial electrical generation facility. The French-speaking province, now embroiled in a constitutional crisis with Canada's nine English-speaking provinces, built its industrial base on a steady supply of cheap electricity.

For instance, Quebec is the world's biggest aluminum producer even though it has no bauxite (aluminum ore). That's because the biggest cost in producing aluminum is electricity.

Alcan Aluminum, one of the world's largest aluminum companies, has its headquarters in Montreal and 48 percent of its aluminum smelting capacity in Quebec. Last year five new aluminum smelter projects were announced, all to produce ingots from imported ore.

More than 95 percent of Quebec's electricity is generated at huge hydroelectric sites in the north. And Hydro Quebec, the giant electricity utility, wants to build new capacity there to meet domestic and foreign demand. Construction on the final stage of the James Bay project is going on right now. Plans to expand it are drawing fire from federal officials, environmentalists, the native Cree inhabitants, and even lawmakers in New York state, which buys electricity from Hydro Quebec.

The first phase of the new project would affect five rivers and create three or four new reservoirs. The second phase, to be completed by 2006, would reverse the flow of three rivers to construct up to eight power stations. In all the James Bay II project would flood an area the size of Lake Ontario.

A parliamentary committee of the Quebec National Assembly held hearings on the environmental impact of the projects until June 1. Lise Bacon, Quebec's Minister of Energy, will issue a report this fall, when a decision will be made.

The controversy over northern development has happened before. In the early 1970s, then Premier Robert Bourassa was pilloried by his political critics for even thinking of building the first James Bay project. Its success allowed him to make an amazing political comeback and win two elections in the 1980s. Today he is still premier, and he is the force behind Quebec's expansion of its electric generating capacity.

The utility says it needs to start building the new project as soon as it can to produce more electric power before the end of the decade. ``We need a decision soon,'' says Jacques-Andr'e Couture of Hydro Quebec. ``We have to start building in the beginning of 1992 to produce power for 1998.''

Environmentalist Gordon Edwards, who is against the project, says, ``We've adopted a crisis-mentality approach: `If we don't do this right now, we're going to freeze in the dark.' We should be looking at energy as a whole, asking ourselves, `How much do we need?' ''

The utility says it will need 165 terawatt (billion kilowatt) hours by 1991. The utility produced 138 terawatt hours last year and sold it for C$5.5 billion.

The city of Montreal uses 35 terawatt hours a year. Foreign sales to New York and the New England states accounted for 10 terawatt hours. That was down from a peak in 1987 of 20 terawatt hours, because the Hydro Quebec reservoirs were low because of a five-year drought.

Industry now buys the same amount of Hydro Quebec's output - about 37 percent - as residential use. But the province plans to increase the industrial piece of the pie to 44 percent by end of the decade. It is attracting heavy energy-users: pulp and paper mills, car plants, and especially aluminum.

Environmentalists suggest that conservation could produce an extra 13 terawatt hours by the year 2000. But Energy Minister Bacon says that is not enough.

``Reducing our energy consumption here and there will not save us enough energy,'' Ms. Bacon told the committee hearing. She said the new James Bay project was already three years behind schedule. ``We'll never have enough energy without it. Do we want to be lighting our houses by candlelight by 1998? That's what we have to think about.''