Hydro Ottawa is currently experiencing a significant surge in power demand from large customers, particularly data centers, creating what CEO Bryce Conrad describes as “extraordinary pressure” that is anticipated to continue growing. According to Conrad, the company is currently fielding requests for connections to 34 major projects, collectively demanding 1,075 megawatts of power, which amounts to about 86% of Hydro Ottawa’s average system load in the previous year.
This level of demand is unprecedented in the company’s history, with most customers aiming to establish connections within the next two years. Conrad foresees a continual rise in demand and predicts that by the end of the year, the requests for connections will surpass the total power consumption of all residents and businesses in Ottawa.
Approximately 60% of the requested 1,075 megawatts come from data centers, though not from major companies like Amazon or Microsoft, but rather from smaller firms, including those involved in generative AI. Additionally, government clients, such as those in national defense, are also seeking substantial power connections.
However, Hydro Ottawa is encountering delays in making these connections due to disruptions in the supply chain. Equipment that used to take six to nine months to procure, such as transformers, now require up to two years or even four years in some cases. The competition with larger U.S. entities for the same equipment poses a challenge for the company.
Despite the challenges, Conrad views the growing demand as a positive sign for Ottawa, indicating economic growth and activity within the city. He emphasized the need to support this growth by addressing the associated infrastructure requirements.
In response to the pressure to keep up with population growth, electrify Ottawa’s transit system, upgrade infrastructure, and mitigate cyber risks, Hydro Ottawa is planning to double its capital investments over the next five years compared to the previous cycle. This significant investment in critical electricity infrastructure is seen as essential for sustaining the city’s development.
Conrad defended the utility’s recent rate increase, stating that it was necessary to support the increased demand and infrastructure improvements. While the rate increase was lower than initially sought, Conrad criticized the Ontario Energy Board’s processes, accusing them of hindering Hydro Ottawa’s progress.
Despite the challenges, Hydro Ottawa remains profitable, as evidenced by the $22-million dividend being paid to the city this year. The utility’s financial performance surpasses the TSX, offering a stable return on investment for stakeholders.
While councillors praised Hydro Ottawa’s efforts, concerns were raised about service reliability, particularly regarding power outages. Conrad highlighted the company’s 99.97% service reliability rate but acknowledged the impact of even brief outages on customers, emphasizing the team’s commitment to restoring power promptly in such instances.