Hydro Quebec project will pump more power to Northeast US

Quebec is going ahead with a new hydroelectric project aimed at feeding the energy-hungry states of the Northeastern United States. It will mean building three new dams and a transmission line to carry the power south. The construction will be the second phase of the James Bay hydroelectric project, which is already the largest producer of hydroelectric power in Canada.

The government plans to spend $7.5 billion (Canadian; US$6 billion) over the next 10 years to develop 2,500 megawatts of power.

Hydro Quebec is going to need it. Over the past year the government-owned utility sold 2,400 megawatts of power to New England and New York State. There are plans to sell even more power, up to 4,500 megawatts, to the United States so Quebec can finance even more hydroelectric sites.

Long-term plans call for further development of the James Bay area, in northern Quebec. In addition to the new project, the government wants to spend an additional C$25 billion to develop the full potential of the northern rivers.

All that building means money, and it is hoped that American consumers of Quebec electricity are going to finance the bulk of it. Hydro Quebec will be looking for more electricity sales to the United States soon.

Quebec consumers are also going to pay. On the same day the construction announcement was made, Hydro Quebec said it would raise residential electricity rates by 4.9 percent. Increases in overall consumer prices - the inflation rate - are running at 4.1 percent.

Hydro Quebec is making money. It had a profit of C$508 million in 1987, compared with C$303 million in '86. The utility will have to borrow to meet construction costs, despite its profitability.

Hydro Quebec has a long-term debt of C$22 billion but a top-flight credit rating, because it has the electricity to generate the cash to repay the money.

As with the first stage of the project, there are environmental worries. The James Bay project has already flooded 4,300 square miles of northern wilderness. New construction will flood an additional 400 square miles.

About 10,000 Indians and Eskimos live in the James Bay region; so does a variety of wildlife, including the largest caribou herd in the world. Environmentalists say the project will partly destroy the natives' hunting grounds.

``The basic environmental studies have already been done,'' says Quebec's energy minister, John Ciaccia. There are no hearings planned to look into any environmental impact, and it is doubtful that environmental or native groups could stop the project.

The new development was announced last month by Quebec Premier Robert Bourassa, the man who started the first James Bay hydroelectric project 17 years ago.

Mr. Bourassa fell from political grace in 1976 when the separatist Parti Qu'eb'ecois defeated his government. Now he is the popular, businesslike leader of the province, whose vision with the first hydro mega-project has helped him politically.

The James Bay project will create 6,000 jobs a year for seven years. The full complement of workers will be on site just about the time the next provincial election is called. Once again, electricity will help Robert Bourassa's political prospects.