Quebec in talks to sell surplus hydro power to Ontario

By Kevin Dougherty QUEBEC CITY, Quebec (Reuters) - Quebec is in talks with Ontario to sell Hydro-Québec’s surplus hydroelectrical power to the neighboring province and hopes to have an agreement soon, a senior government minister said on Tuesday. Canada's two most populous provinces are linked by transmission lines, but in the past provincially-owned Hydro-Québec has sold most of its surplus to neighboring U.S. states. "I have been discussing with the Ontario government," Quebec Energy Minister Pierre Arcand said in a telephone interview from New York. Arcand, meeting with U.S. officials and energy executives in New York and Washington on his first visit to the United States as Quebec energy minister, said he hopes for an agreement with Ontario "in the next few months." Arcand said he is also discussing more hydro sales to Vermont, New York and New Hampshire. "My job is to let people know that we have a good price and we have energy available." Last year Transmission Developers Inc, which is partly owned by Blackstone Group, cleared regulatory hurdles for a new transmission line from the Quebec border to New York City. But Hydro-Québec has not yet applied for regulatory approval to connect its grid to the proposed line. Arcand said that Hydro-Québec still has to negotiate a sales contract with Transmission Developers and potential customers in New York. "Now the question is trying to come up with a project that is the right project," he said. While Quebec played host on Tuesday to a summit of Canada’s provinces and territories to discuss climate change, Arcand said the province is still considering developing new sources of oil in its eastern regions. Sedimentary basins have been identified on Anticosti Island and deposits of sweet crude oil, pumped in Quebec’s Gaspé Peninsula, are being refined at the Valero Energy Corp refinery in Lévis. Arcand said his Liberal government is honoring a commitment by the previous Parti Québécois government to determine the hydrocarbon potential of Anticosti, adding that Quebec still needs oil. "We're going to need oil for the next 30 years at least, no matter what we do," Arcand said. "Instead of importing oil from elsewhere, if we have it at home, let’s use it." (With additonal reporting by Scott Haggett in Calgary; Editing by Jeffrey Hodgson and Ken Wills)