Form S-B/A HYDRO QUEBEC

As filed with the Securities and Exchange Commission on June 5, 2026

Registration No. 333-295135

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 1

to

REGISTRATION STATEMENT

UNDER

SCHEDULE B

OF

THE SECURITIES ACT OF 1933

Hydro-Québec

(Issuer)

Québec

(Guarantor)

(Names of Registrants)

Name and address of authorized agent in the United States

David Brulotte

Québec Government Office

One Rockefeller Plaza, Suite 2600

New York, NY 10020-2102

Copies to:

Approximate date of commencement of proposed sale to public: From time to time after this Registration Statement becomes effective as described herein.

The securities registered by this Registration Statement are to be offered on a delayed or continuous basis pursuant to Releases Nos. 33-6240 and 33-6424 under the Securities Act of 1933, as amended.

CALCULATION OF REGISTRATION FEE

Pursuant to Rule 429 under the Securities Act of 1933, this Registration Statement contains a combined prospectus which also relates to the registration statement on Schedule B (File No. 333-112298) previously filed by the registrant. Upon effectiveness, this Registration Statement, which is a new registration statement, will also act as a post-effective amendment to such earlier registration statement and such post-effective amendment shall hereafter become effective concurrently with the effectiveness of this Registration Statement and in accordance with Section 8(c) of the Securities Act of 1933, as amended.

The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

CROSS REFERENCE SHEET

Between Schedule B of the Securities Act of 1933

and the Prospectus

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED JUNE 5, 2026

PROSPECTUS

Hydro-Québec

US$3,000,000,000

Debt Securities

Warrants

Guaranteed irrevocably and unconditionally as to principal,

premium, if any, and interest by

Québec

(Canada)

We may, from time to time, offer up to US$3,000,000,000 aggregate principal amount of debt securities, consisting of any combination of debentures, notes and bonds, or warrants to purchase debt securities, or the equivalent in other currencies (plus such additional principal amount as may be necessary such that, if the debt securities are issued at an original issue discount, the aggregate initial offering price will not exceed US$3,000,000,000).

This prospectus contains summaries of the general terms of these debt securities and warrants. We will provide specific terms of these debt securities and, as the case may be, warrants, in supplements to this prospectus. You should read this prospectus and any related prospectus supplements carefully before you invest. This prospectus may not be used to make offers or sales of debt securities or warrants unless accompanied by a prospectus supplement.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Prospectus dated     , 2026.

Prospectus Table of Contents

The prospectus supplement that relates to our debt securities or warrants, as applicable, may update or supersede any of the information in this prospectus.

Please note that in this prospectus, references to “we,” “our” and “us” refer to Hydro-Québec.

About this Prospectus

This prospectus is part of a Registration Statement that we have filed with the Securities and Exchange Commission (the “SEC”), under a “shelf” registration process. Under this shelf process, we may offer, from time to time, the debt securities (the “Debt Securities”) and warrants (the “Warrants”) described in this prospectus in one or more offerings for a total aggregate principal amount of up to US$3,000,000,000 (plus such additional principal amount as may be necessary such that, if the Debt Securities are issued at an original issue discount, the aggregate initial offering price will not exceed US$3,000,000,000). This prospectus provides you with a general description of the Debt Securities and Warrants we may offer. Each time we use this prospectus to offer Debt Securities or Warrants, as applicable, we will provide a supplement to this prospectus that will contain specific information about the terms of that offering. The prospectus supplement may also add to, update or change the information this prospectus contains. Before you invest, you should carefully read this prospectus and any related prospectus supplement together with the additional information contained in the documents we refer to under the heading “Where You Can Find More Information” below.

References in this prospectus to “$” or “Cdn$” are to lawful money of Canada and “US$” are to lawful money of the United States of America. The exchange rate between the U.S. dollar and the Canadian dollar published by the Bank of Canada on June 4, 2026 was approximately Cdn$1.00 = US$0.7196.

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Where You Can Find More Information

We have filed with the SEC under the Securities Act of 1933, as amended (the “Securities Act”) a Registration Statement, of which this prospectus forms a part, covering the Debt Securities and Warrants. The prospectus does not contain all of the information included in the Registration Statement. Any statement made in this prospectus concerning the contents of any contract, agreement or other document is not necessarily complete. If we have filed any contract, agreement or other document as an exhibit to the Registration Statement, you should read the exhibit for a more complete understanding of the document or matter involved. Each statement regarding a contract, agreement or other document is qualified in its entirety by reference to the actual document.

The Debt Securities and Warrants offered by this prospectus will be irrevocably and unconditionally guaranteed as to principal, premium, if any, and interest when the same shall become due and payable, whether at stated maturity, by acceleration or otherwise, by Québec.

We and Québec file annual reports, amendments to annual reports and other information with the U.S. Securities and Exchange Commission (“SEC”). These reports include financial information about us and Québec and may be accompanied with exhibits.

The Registration Statement, including its various exhibits, and any reports, statements or other information that we and Québec have filed with the SEC are available to the public from the SEC’s Electronic Document Gathering and Retrieval System website at http://www.sec.gov, which is commonly known by the acronym EDGAR. You may also obtain copies of these documents at prescribed rates from the Public Reference Section of the SEC at its Washington address or, without charge, from us or Québec at the address listed below.

The SEC allows us to “incorporate by reference” the information filed with the SEC, which means that we can disclose important information to you by referring to those documents. The documents listed below regarding Hydro-Québec and Québec are incorporated by reference in this Registration Statement:

We also incorporate by reference all of our future annual reports and those of Québec, and all amendments to our and Québec’s annual reports, and any other information we or Québec file with the SEC pursuant to Sections 13(a) and 13(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), until we sell all of the Securities (as defined below). Each time we or Québec file a document with the SEC that is incorporated by reference, the information in that document automatically updates the information contained in previously filed documents.

You may request a free copy of the annual reports, amendments to annual reports and other information mentioned above by writing to:

We are responsible for the information incorporated by reference or contained in this prospectus, any supplement to this prospectus, and any related free writing prospectus we prepare or authorize. We have not authorized anyone to provide you with different or additional information, and we take no responsibility for any other information that others may give you. We are not making an offer of these securities in any state where the offer is not permitted by law. You should not assume that the information in this prospectus or any prospectus supplement is accurate as of any date other than the date on the front of those documents.

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Forward-Looking Statements

Various statements made throughout this document are forward looking and contain information about financial results, economic conditions and trends, including, without limitation, the statements under the captions Corporate Outlook and Management’s Discussion and Analysis. The words “estimate,” “believe,” “expect,” “forecast,” “anticipate,” “intend” and “plan” and similar expressions identify forward-looking statements. You are cautioned that any such forward-looking statements are not guarantees of future performance. Forward-looking statements involve risks and uncertainties, and actual results may differ materially from those in the forward-looking statements as a result of various factors. Such factors may include, among others, business risks, such as variations in runoff that affect hydroelectric plant performance, and general levels of economic activity which affect demand for electricity, and risks related to economic parameters, such as changes in interest and exchange rates or risks related to the effects of adverse weather conditions or phenomena such as pandemics. In particular, statements about our expectations regarding our generation, transmission and distribution capabilities are subject to a number of factors, including, without limitation, the impact of weather events on our facilities and production capacity, the capacity of our partners to supply energy to us pursuant to long-term contracts, our expectations regarding future supply contracts, our ability to manage our reservoir storage and the accuracy of our reserve estimates. Statements about our forecasted expenditures and investments and the impact on our operations are subject to a number of factors, including, without limitation, the sufficiency of budgeted expenditures and investments in carrying out our planned activities, the results of environmental impact assessment studies, our ability to access capital on favourable terms and management’s assumptions regarding future requirements for the continued investment in and modernization of our generation, transmission and distribution facilities as well as in corporate and development activities.

Statements about our outlook on electricity sales are subject to a number of factors, including, without limitation, the demand for electricity in Québec and in our principal export markets, our ability to source sufficient energy capacity to meet changing demand, our ability to implement and achieve the objectives of our long-term capital projects, the impact of temperatures and other weather events on the demand for electricity, export market prices for electricity, changes in domestic and international policies and regulations, including the imposition of trade tariffs or other restrictions on international trade and potential countermeasures, and the success of our long-term capital projects.

In addition, in recent years, the United States has introduced new tariffs on a variety of goods and services exports from different jurisdictions, including Québec. Economic and trade policies implemented by the U.S. administration, including tariffs and other trade barriers, as well as any countermeasures, may adversely affect our activities, including by affecting certain procurement categories, increasing costs or creating supply chain constraints. To date, these policies have not had a material impact on Hydro-Québec’s financial position. However, new tariffs, countermeasures or other trade restrictions could adversely impact our results of operations. We are closely monitoring the situation to assess any emerging impacts, including supply chain disruptions, electricity demand, and future investment needs.

You are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date of this document. We undertake no obligation to publicly release the result of any revisions to these forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

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Hydro-Québec

MAP OF HYDRO-QUÉBEC’S MAJOR FACILITIES^a

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OVERVIEW

We operate one of the major systems in Canada for the generation, transmission and distribution of electric power. We supply virtually all electric power distributed in Québec, the largest province in Canada in land area and the second largest in population.

Hydro-Québec was created in 1944 by the Hydro-Québec Act (R.S.Q. c. H-5) and is an agent of Québec. All capital stock of Hydro-Québec is held by the Minister of Finance on behalf of the Government of Québec (the “Government”).

Our head office is located at 75 René-Lévesque Boulevard West, Montréal, Québec, Canada. The following are the five groups that make up our organizational structure:

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As part of their activities, these groups are supported by the Groupe – Affaires corporatives (Corporate Affairs); Groupe – Affaires juridiques et gouvernance (Legal Affairs and Governance); Groupe – Talents et développement organisationnel (Talent and Organizational Development); Groupe – Technologies numériques (Digital Technologies) and Groupe – Audit interne (Internal Audit).

As at December 31, 2025, our core business is based on the following operations and activities, namely:

Our transmission and distribution activities are regulated by the Régie de l’énergie du Québec (the “Energy Board”). A legislative reform entered into force in 2025 through the Act to ensure the responsible governance of energy resources and to amend various legislative provisions (the “Energy Resources Governance Act” or “ERGA”), which modifies Québec’s energy governance framework, including several aspects of the regulatory framework applicable to our activities and the extent of our mission (see “Regulatory Framework – Recent Developments”).

The following subsidiaries, affiliates and interests are included as part of our operations and activities:

In line with priorities articulated in our Action Plan 2035, we take part in various project developments, namely wind power projects, through partnerships with industry partners, Indigenous communities and municipalities.

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BUSINESS

Generation Activities

We produce and purchase power to supply the Québec market and sell power on wholesale markets. We also export power to other provinces in Canada and to the United States.

Generation Operations

Facilities

We own and operate generating facilities in both Québec and the United States.

Generating Stations in Service in Québec

In Québec, our electric generation system comprises 88 generating stations currently in service, of which 62 are hydroelectric, 2 are photovoltaic solar and 24 are thermal, with a total installed capacity of 37,369 MW as of December 31, 2025. The following table lists the generating stations in service as of such date.

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Generating Stations in Service in the United States

In the United States, we own and operate 13 hydroelectric generating stations (589 MW) through our wholly-owned subsidiary GRH, as well as 2 hydroelectric generating stations jointly with Innergex Renewable Energy Inc. (“Innergex”), from which we are entitled to 50% of the installed capacity, or 30 MW. Consequently, the total installed capacity to which we are entitled as of December 31, 2025, is 619 MW.

In February 2025, Innergex and Caisse de dépôt et placement du Québec (“La Caisse” or “CDPQ”) announced that they had entered into a definitive agreement pursuant to which La Caisse would acquire all of the issued and outstanding common shares of Innergex (the “Innergex Sale”), including all of the common shares held by Hydro-Québec (representing 19.9% of all issued and outstanding common shares of Innergex) acquired in February 2020. On July 21, 2025, in connection with the consummation of the Innergex Sale, we closed the sale of our minority ownership interest in Innergex to La Caisse (see “Note 10 to the 2025 Consolidated Financial Statements”).

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Electricity Purchases

We purchase energy and capacity from the Churchill Falls generating station in Labrador through agreements with CF(L)Co. Under an initial power contract signed in 1969 with CF(L)Co, we agreed to purchase annually, through the year 2041, 4,083 MW of power (the “1969 Power Contract”). In June 1999, we signed an agreement with CF(L)Co to guarantee us the availability of 682 MW of additional power for each November 1 to March 31 period until 2041. In December 2021, we signed an agreement with CF(L)Co to purchase additional energy until August 2026, up to a maximum quantity of 2 TWh annually. In March 2024, we entered into a new short-term energy agreement to purchase a volume of banked energy in the Churchill Falls reservoir from Newfoundland & Labrador Hydro.

In 2025, the energy and capacity purchased from Churchill Falls totaled 22.2 TWh at a cost of $126 million as compared to 27.1TWh in 2024 at a cost of $197 million.

In December 2024, we signed a non-binding agreement in principle (the “MOU”) with Newfoundland & Labrador Hydro (“NLH”), CF(L)Co’s parent company, which sets out a framework for a new long-term energy purchase and development initiative. As part of this initiative, a new agreement would be negotiated to replace the 1969 Power Contract. In December 2025, the Government of Newfoundland and Labrador announced the creation of a review committee to conduct an assessment of the previously negotiated MOU from the perspective of the Province of Newfoundland and Labrador, the results of which were published on May 19, 2026, and included, as part of the broader findings, a recommendation that the Government of Newfoundland and Labrador reopen negotiations with Hydro-Québec. The Government of Newfoundland and Labrador appointed a new negotiating team to represent them in upcoming negotiations, and we expect to reengage with our counterparty.

We have a power purchase agreement with Rio Tinto Alcan Inc. (“RTA”), that was amended in 2006, for the purchase of 365 MW of peak power and 375 MW of additional peak power. Under this 2006 amendment, we also agreed to purchase from RTA an additional 150 MW of peak power and to extend the agreement until December 31, 2045.

On December 23, 2021, we entered into a 40-year escalating electricity purchase agreement with Evolugen, the Canadian operating business of Brookfield Renewable, pursuant to which we purchase the output of the Lièvre hydroelectric portfolio in Québec, representing a capacity of 263 MW.

In addition, we purchase energy and capacity under 53 long-term contracts with independent producers located in Québec. During 2025, 2.4 TWh were purchased under these contracts, at a total cost of $187 million. For 2026, we expect to purchase approximately 3.2 TWh. In our role as power distributor in Québec, we also have long-term contracts with independent producers (see “Distribution Activities”). We also purchase energy and capacity in connection with our energy marketing operations. In 2025, purchases made on a short-term basis in markets outside Québec represented 15.2 TWh at a cost of $1,151 million, compared to 9.4 TWh at a cost of $335 million in 2024.

Peak

We use energy purchased from our neighbouring systems, which experience different demand patterns, to meet a portion of our peak power needs in Québec (see “Wholesale and Energy Marketing Operations”). The following table summarizes our peak power demand in Québec and installed capacity as at December 31 for the years 2021 through 2025.

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Wholesale and Energy Marketing Operations

Québec Wholesale Market

The Québec wholesale electricity market has been open since May 1, 1997. This market is comprised of 11 distributors: Hydro-Québec (as part of its Distribution Activities), nine municipal systems and one regional electricity cooperative. As a result of the opening of the wholesale market, the municipal systems can, subject to the Government’s authorization, purchase electricity from suppliers other than us, and independent generators in Québec can sell their electricity on the wholesale market using our transmission system.

A part of our production is reserved to the Québec market with a base volume of up to 165 TWh of heritage pool electricity annually (the “Heritage Pool Electricity”). Since 2014, the Heritage Pool Electricity has been subject to a yearly indexation. The authorized average price was 3.46¢/kWh for 2024 and 3.59¢/kWh for 2025. With the entry into force of the ERGA, starting in 2026, the yearly indexation is to be determined on a three-year basis corresponding to our rate review cycle. The authorized average prices for the next three rate years (starting April 1st of each year) are 3.66¢/kWh for 2026, 3.74¢/kWh for 2027 and 3.81¢/kWh for 2028.

In addition to the Heritage Pool Electricity, we may also use our own generation assets to supply the Québec market (see “Distribution Activities – Electricity Supply”).

Markets Outside Québec

Our main markets outside Québec from which we buy and to which we sell energy and capacity consist of neighbouring networks located in Canada and the United States.

HQUS is a member of New York ISO, ISO New England (which includes all or parts of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont), Midcontinent ISO (which includes all or parts of Arkansas, Illinois, Indiana, Iowa, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, North Dakota, South Dakota, Texas, Wisconsin and Manitoba (Canada)) and PJM Interconnection (which includes all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia). HQUS is also a participant in the electricity markets operated by Southwest Power Pool Inc. (which includes all or parts of Arkansas, Iowa, Kansas, Louisiana, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas and Wyoming) and by ERCOT (which includes parts of Texas). ISOs, or Independent Systems Operators, and RTOs, or Regional Transmission Organizations, enable participants to buy and sell energy, schedule bilateral transactions and reserve transmission service. HQUS holds a permit from the U.S. Federal Energy Regulatory Commission to sell at market-based rates.

HQEM is a participant of the Ontario Independent Electricity System Operator (the “Ontario IESO”). HQEM sells and buys energy in Manitoba, Ontario, New Brunswick and Nova Scotia, and has transmission service agreements with Manitoba Hydro and New Brunswick Power Corporation to reserve transmission service on their respective systems.

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We have long-term export contracts for the sale of electricity. The following table summarizes our principal energy export agreements.

Principal Energy Export Agreements

Over the past decade, we participated in the development of two major transmission line projects to New England and New York.

In February 2018, Massachusetts Electric Distribution Companies selected the New England Clean Energy Connect transmission line project (the “NECEC Project”), led by our partner NECEC Transmission LLC, in which we are a partner to supply 9.45 TWh of clean hydroelectricity power annually over a 20-year period through a new transmission line from the Québec/Maine border to the City of Lewiston, Maine, built and operated by NECEC Transmission LLC. The NECEC Project was put into commercial operation on January 16, 2026, and deliveries have commenced since that date.

In September 2021, following a request for proposals issued in connection with New York State’s Clean Energy Standard, the New York State Energy Research and Development Authority (“NYSERDA”) selected our electricity and the Champlain Hudson Power Express (“CHPE”) line. We signed contracts with the CHPE line developer, Transmission Developers Inc., and NYSERDA in November 2021. Approval from the New York Public Service Commission for the agreement with respect to the sale of environmental attributes was obtained in April 2022. Construction work began late in 2022 in the U.S. In July 2023, the Québec government authorized construction of the Hertel-New York interconnection line that connects to the CHPE line. The Canada Energy Regulator also issued the permit authorizing the construction of the interconnection. Under the project, the 1,250-MW CHPE line is expected to bring up to 10.4 TWh of renewable energy to New York. The CHPE line was put into commercial operation on May 13, 2026.

Our subsidiary GRH owns and operates 13 hydroelectric generating stations in New England, located in the states of Vermont, New Hampshire and Massachusetts (see “Note 4 to the 2025 Consolidated Financial Statements”).

Electricity Sales and Revenue

The following table summarizes electricity sales and revenue outside Québec, for the years 2021 through 2025.

Electricity Sales and Revenue Outside Québec

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Transmission Activities

Through our Transmission Activities, we offer the following services:

Our Transmission Activities also include our holding in Cedars Rapids Transmission Company, Limited, a transmission provider that owns and operates a 370 MW interconnection line linking our grid at Les Cèdres and Langlois substations in Québec with the Cornwall Electric system in Ontario and the National Grid system in New York State.

Transmission System

Most generating complexes in Québec are located at substantial distances from consumer centers. As a result, our transmission system is one of the most extensive in North America, totaling approximately 22,000 miles of lines. The system includes the following facilities as at December 31, 2025.

We offer open access to our transmission grid in accordance with the Hydro-Québec Open Access Transmission Tariff. Consequently, electricity distributors, producers and marketers in and outside Québec have the option to enter into transactions with distributors, producers and marketers to buy or sell electricity and to wheel in, wheel out or wheel through our transmission grid at specified rates.

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The Direction principale – Contrôle des mouvements d’énergie et exploitation du réseau (System Control and Operations Unit) is responsible for energy dispatching, power flow supervision and system security monitoring. It also acts as Reliability Coordinator for transmission systems in Québec. Our transmission system is linked through interconnections with other major power systems in Canada (Ontario, New Brunswick and Newfoundland and Labrador) and the northeastern United States (New York and New England).

The following table shows existing interconnection capacity with neighbouring systems outside Québec as at December 31, 2025. Available transfer capacities (ATC) are posted on the OASIS (Open Access Same-Time Information System) website.

Interconnections with Neighbouring Systems Outside Québec

On January 16, 2026, the interconnection with the NECEC Project at the Québec/Maine border was put in service with a total voltage of 320-kV and capacity of 1,250 MW, increasing the maximum export capacity to New England to 3,537 MW.

Distribution Activities

Through our Distribution Activities, we are mandated to provide a sufficient, safe and reliable supply of electricity and related services to the Québec market at the lowest cost. To fulfill this responsibility, we rely primarily on our Heritage Pool Electricity. For supplies required in excess of the Heritage Pool Electricity, we may also use our own generation assets and purchase additional electricity at market conditions from suppliers in the market in compliance with applicable regulatory provisions (see “Regulatory Framework – Energy Board Act”).

Our distribution system is comprised of 75,652 miles of medium voltage lines (almost exclusively 25 kV), as well as 67,816 miles of low voltage lines. Approximately 10% of all such lines are underground.

We sell to a wide range of customers, from large industrial users, which accounted for 29% of sales volume in 2025, to residential customers, which represented 40% of sales volume in the same period. Revenues are also derived from sales to commercial, institutional and small industrial customers as well as distributors operating municipal electric systems.

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Electricity Supply

We rely on various internal and external sources to supply the Québec market. Primarily, we rely on the Heritage Pool Electricity of 165 TWh and, for supplies required in excess of the Heritage Pool Electricity, we may use our own generation assets, for which the electricity costs are set by the Energy Board based on the competitiveness of comparable products and services, or purchase additional electricity at market conditions from suppliers in the market. Short-term supplies are to be provided through our Generation Activities according to a pricing formula established by the Energy Board.

Our six agreements currently in effect for the supply via our Generation Activities of 1,259 MW annually, entered into prior to the Energy Resources Governance Act, remain in force. These include two agreements totaling 600 MW annually over a 20-year period, beginning in March 2007; three agreements totaling 500 MW annually over a 20-year period beginning in December 2018; and one agreement of 159 MW annually over a 20-year period which is expected to begin in December 2026. We also have 91 contracts in effect with independent producers for the supply of 7,432 MW (including 6,444 MW of wind-generated electricity) for deliveries beginning between 2006 and 2029. We also have long-term contracts established with independent producers in connection with our Generation Activities (see “Generation Activities – Electricity Purchases”).

The following table summarizes these contracts as at December 31, 2025.

Long-Term Contracts Awarded

Our objective is to have a flexible and diversified energy portfolio to deal with fluctuations in demand. Prior to the enactment of the Energy Resources Governance Act, every three years, we prepared electricity supply plans covering the following 10 years. Such supply plans presented forecasts of our customers’ electricity requirements, taking into account energy efficiency measures, along with the various means that we intended to use to ensure a secure supply of electricity for Québec. Our current supply plan, the “Electricity Supply Plan 2023-2032”, was filed with the Energy Board in November 2022, with decisions on phases 1 and 2 rendered in 2023 and 2024. We file progress reports on our Electricity Supply Plan 2023-2032 to the Energy Board annually since November 2023 and the last progress report was filed November 1, 2025.

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The Energy Resources Governance Act requires us to file our next electricity supply plan covering the next 15 years to be prepared in compliance with the Québec Energy Management Plan detailing Québec’s energy transition objectives for the next 25 years (see “Regulatory Framework – Recent Developments”). We are awaiting the publication of the initial Québec Energy Management Plan in order to prepare and file our next electricity supply plan.

We have taken various measures with the goal of achieving a balance between supply and demand in Québec, including:

New electricity from our generation activities, as well as additional electricity procurement could be solicited in the coming years in order to maintain this balance (see “Regulatory Framework – Energy Board Act”).

Demand Response and System Management

In order to support our demand response during the winter period (typically extending over the calendar months of December to March), we have developed some flexibility in the management of our system and currently have planned 3,036 MW of demand response from various programs and rates for winter 2025-2026. Specifically, an interruptible power rate option is offered to medium and large customers and expected to deliver 1,088 MW. In addition, the residential, commercial and institutional sectors are expected to deliver 1,948 MW through various initiatives. These include dynamic rates, winter credits, additional electricity options tailored for specific needs (for instance, photosynthetic lighting or space heating to raise crops), demand response options and mandatory demand reductions (specifically relating to third party data centers specialized in cryptographic use). We also offer various energy efficiency and demand response programs providing financial support to purchase and install equipment lowering energy consumption or managing power demand during winter peaks. Furthermore, in addition to demand response initiatives, 400 MW of concurrent peak-saving capacity in our residential dual-energy market is planned for winter 2025-2026.

We have entered into special agreements with six industrial customers for whom electricity costs represent a substantial proportion of total production costs. Some of these agreements provide for the sale, on a long-term basis, of firm energy at prices that vary in accordance with a formula based on the market price of aluminum. We manage the exposure to fluctuations in aluminum prices resulting from these contracts by entering into financial transactions, such as futures or swaps (see “Note 14 to the 2025 Consolidated Financial Statements”). In 2025, deliveries under these agreements accounted for 51.9% of the total energy deliveries to large industrial users.

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Electricity Rates

Under the applicable provisions of the Energy Board Act, rates are fixed or modified by the Energy Board (see “Regulatory Framework – Energy Board Act”).

Until June 2025, the Act to simplify the process for establishing electricity distribution rates (the “Rates Simplification Act”), enacted in December 2019, specified that electricity distribution rates were to be set or modified by the Energy Board every five years as of April 1, 2025, and indexed annually in the interim, based on the annual change in the average Québec Consumer Price Index. After February 2023, pursuant to the Act mainly to cap the indexation rate for Hydro-Québec domestic distribution rate prices and to further regulate the obligation to distribute electricity (the “2023 Domestic Rates Indexation Act”), the indexation rate for residential electricity rates was to be based on the lesser of the average Consumer Price Index (the “CPI”) and the top rate of the Bank of Canada’s inflation-control range.

Pursuant to the Energy Resources Governance Act, electricity rates are now established according to the cost-of-service method over a three-year rate cycle. Rates are determined on a cost-of-service basis, including a reasonable return on the rate base (see “Regulatory Framework – Energy Board Act”).

In July 2025, we presented a new rate application to fix distribution rates for the years beginning on April 1, 2026, April 1, 2027, and April 1, 2028. In October 2025, as permitted by the ERGA, the Québec Government issued an order establishing the maximum rate increase for residential customers at 3% for those rate years. In March 2026, the Energy Board determined increases on a provisional basis for the next three rate years, with residential customers rates to be increased by 3.0% for 2026, 2.9% for 2027 and 2.6% for 2028, and all other customers distribution rates to be increased by 3.8% for each of 2026, 2027 and 2028. The Energy Board’s final approval is expected during the second quarter of 2026.

Past Energy Board decisions for the rate year 2025 are currently the object of administrative and judicial proceedings to challenge certain elements of the decisions; however, we do not expect these proceedings to have a material impact on our business.

The following table shows the rate changes that took effect in each year and the average yearly rate increase, from 2021 to 2026, as well as annual inflation rates:

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Electricity Sales and Revenue

The following table summarizes consolidated electricity sales and revenue in Québec, by customer segments, for the years 2021 through 2025.

Operating Statistics

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REGULATORY FRAMEWORK

Recent Developments

On June 7, 2025, the Energy Resources Governance Act received royal assent. The ERGA modifies Québec’s energy governance framework by introducing a government-approved integrated energy resource management plan which will include electricity supply and energy efficiency targets to meet the needs of Québec markets while considering the province’s energy transition and sustainable development goals (the “Québec Energy Management Plan”). Every six years, the ERGA requires that the Minister of Economy, Innovation and Energy (the “Minister”), in collaboration with various stakeholders, including Hydro-Québec, prepare a 25-year plan. We are responsible for proposing the Québec Energy Management Plan’s electric component to the Minister.

The ERGA significantly amends the regulatory framework applicable to electricity supplies, in particular by allowing us more flexibility in our choice of strategy and sources of supply with respect to our electricity distribution activities. We are no longer required to use calls for tenders to meet the needs of the Québec market beyond the Heritage Pool Electricity of 165 TWh, which constitutes its main source of supply. As a result, it will now be possible for us, as needed, to use calls for proposals or enter into direct contracts in order to implement our wind power strategy, or even meet post-heritage requirements by relying on our own generating assets. The ERGA also allows activities related to short-term energy market transactions to be replaced with a new approach. As a result, the short-term supplies required to supply the native load, beyond the Heritage Pool Electricity, contracts and other long-term supplies, are now provided by Hydro-Québec. In a manner similar to all new supplies provided by the company, the cost of short-term supplies will be established at a cost reflecting that of the market for a comparable service or product.

The ERGA also amends the Hydro-Québec Act and the Energy Board Act to, among other things, (i) facilitate the development of new energy production and transmission infrastructure, (ii) introduce a three-year rate setting process and more flexibility for demand-based electricity pricing and rate innovation; and (iii) facilitate the creation of economic partnerships with Indigenous and municipal partnerships for major power projects.

Hydro-Québec Act

Under the provisions of the Hydro-Québec Act, as amended by the ERGA, Hydro-Québec’s mission has been broadened to act and innovate in the field of energy or in any related field, for instance with respect to research. We are required to ensure, in a sufficient, safe and reliable manner and at the lowest cost, that the electric power needs of Québec markets are met. We are required to ensure that Québec has the electric power supplies required to achieve the supply target established by the Québec Energy Management Plan. We are also required to contribute to the energy transition, promote sound management of energy consumption and act in a manner that maximizes the economic, social and environmental benefits in Québec.

Under the Hydro-Québec Act, the Government is entitled to declare a dividend from Hydro-Québec when certain financial criteria are met (see “Note 15 to the 2025 Consolidated Financial Statements”). Our dividend policy is to distribute 75% of our net income.

Energy Board Act

The Act respecting the Régie de l’énergie (the “Energy Board Act”) grants the Energy Board exclusive authority to fix or modify our rates and conditions for the transmission and distribution of electric power in Québec. Our Transmission and Distribution Activities in Québec are therefore regulated. The ERGA has modernized the role of the Energy Board to facilitate the implementation of the Québec Energy Management Plan’s energy transition and economic development objectives. This will enable the development or revision of existing rates and programs to keep pace with our evolving business context and help mitigate financial risk.

The ERGA also requires the Chair of the Energy Board to establish management objectives intended to expedite decision-making.

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The Energy Board consists of up to twelve full-time members appointed by the Government and, in the exercise of its functions, is charged with reconciling the public interest, consumer protection and the fair treatment of the electric power carrier and of distributors.

Under the Energy Board Act, we are granted exclusive rights for the distribution of electricity across Québec, except in territories served by municipal or private systems operating as of May 13, 1997.

In 2019, the Rates Simplification Act (see “Electricity Rates”) was adopted to specify that electricity distribution rates were to be set or modified by the Energy Board every five years starting April 1, 2025, and indexed annually in the interim based on the annual change in the average Québec Consumer Price Index.

The ERGA has changed this indexation mechanism and rate review cycle. Starting for the rate year 2026, electricity distribution and transmission rates are to be set by the Energy Board every three years based on the cost-of-service method, which marks the end of inflation-based indexation for Distribution Activities. To ensure that rates remain aligned with the realities of our business context, it will be permissible, subject to authorization by the Energy Board, to introduce or modify specific rates at any point during the rate cycle. The Energy Board may also spread, or level, any rate increase over the three-year rate cycle to provide greater price stability and predictability for consumers in Québec. Additionally, the ERGA allows the Government to set a maximum rate increase in residential electricity distribution rates.

The ERGA provides the implementation of a new mechanism to consider surpluses or losses of revenue accumulated during the rate cycle. We expect to file a docket in this regard with the Energy Board in 2026.

In addition to rate setting powers, the Energy Board has the authority to: (i) approve our electric power supply plan; (ii) designate a reliability coordinator for Québec and adopt the reliability standards submitted by the coordinator; (iii) authorize our transmission investment projects; and (iv) rule upon complaints from customers concerning application of rates or conditions of services.

The ERGA maintains the obligation to obtain prior authorization from the Government for any new request, any customer request for an additional load or any request from a customer having a special contract for 5,000 kilowatts (kW) or more of power. Similarly, ERGA requires us to obtain prior authorization from the Government to distribute electric power to any person requesting 5 megawatts (MW) or more. Finally, ERGA requires us to obtain prior approval from the Government for any cryptocurrency mining-related electricity demands of 50 kW or more. In all cases, the Government may attach conditions to its approval based on the economic, social and environmental impacts of the electric usage.

Generation Activities

The Energy Board does not regulate our generation activities.

Transmission Activities

Transmission rates and service conditions are subject to approval by the Energy Board.

In accordance with its authority relating to rate determination, the Energy Board implemented a performance-based regulation mechanism for our Transmission Activities, effective in 2019. The regulation mechanism came to an end on December 31, 2022.

Surplus earnings realized from carrying on transmission activities in Québec are subject to an earnings sharing mechanism. Earnings in excess of the authorized rate of return are shared with customers in the following proportions:

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Any shortfall is absorbed by Hydro-Québec.

In March 2025, the Energy Board approved the following transmission rates effective on January 1, 2025: $78.10/kW/year for firm long-term point-to-point transmission service and an amount payable for the native-load transmission service of $3,143.2 million per year. The revenue for rate-setting purposes totaled $3,517.1 million for short- and long-term point-to-point transmission services and native-load. Transmission rates were later declared provisional by the Energy Board as part of applications for revision that are still pending.

In March 2026, the Energy Board approved the following transmission rates for 2026, 2027 and 2028, respectively: $77.82/kW/year, $79.73/kW/year and $81.86/kW/year for firm long-term point-to-point transmission service and an amount payable for the native-load transmission service of, respectively, $3,154.4 million per year, of $3,258.4 million per year and of $3,395.8 million per year. The revenue for rate-setting purposes totaled for 2026, 2027 and 2028, respectively: $3,685.4 million, $3,856.1 million and $4,031.6 million for short- and long-term point-to-point transmission services and native-load.

The Direction principale – Contrôle des mouvements d’énergie et exploitation du réseau (System Control and Operations Unit) is the Reliability Coordinator for transmission systems in Québec as designated by the Energy Board.

Under the ERGA, a 15-year plan is to be filed detailing the transmission infrastructure required to connect the new generation approved as part of our 15-year electricity supply plan (see “Distribution Activities – Electricity Supply”). This transmission infrastructure plan will have to be submitted six months after our electricity supply plan is authorized by the Energy Board.

Distribution Activities

Under the ERGA, Hydro-Québec has more flexibility to meet its responsibility for supplying Québec’s electricity needs in excess of the Heritage Pool Electricity. It will now be able to meet post-Heritage needs directly or through the most appropriate contractual method, namely calls for tenders or negotiated contracts with third parties or partnerships.

Effective April 1, 2026, electricity rates for 2026 have been increased by 3.0% for residential customers and by 3.8% for both business and Rate L customers.

Canadian Energy Regulator Act

Our exports of electricity are subject to the Canadian Energy Regulator Act (S.C. 2019, c. 28, s. 10) and its applicable related regulations which provide that a permit or license must be obtained from the Canada Energy Regulator for such exports.

We hold the following permits for exports of electricity for which there are no specific contracts or export sales arrangements in place and for a term of ten (10) years or less:

Each of these permits allows us to take advantage of short-term transactions and the spot market transactions in the United States.

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We also hold the following permits for exports of electricity for which there is a specific contract or export sales arrangement in place and for a term of more than ten (10) years:

The Canada Energy Regulator also regulates international power lines, and we operate our interconnections with the United States in accordance with the terms and conditions of all applicable authorizations concerning those international power lines.

Environmental Regulation

Our activities are subject to federal and provincial environmental laws and regulations, as well as certain municipal bylaws. Most construction projects require environmental impact assessments, together with consultation processes and approval from relevant governmental authorities. Some projects may also be subject to public hearings by an independent body.

As a government-owned corporation, we are subject to the Sustainable Development Act and the Government Strategy. We adhere to the 2030 Plan for a Green Economy (2023–2028 implementation cycle) and have adopted our own Sustainable Development Plan (2024–2028) and Biodiversity Action Plan (2024–2028). We are also updating our Climate Change Adaptation Plan.

We operate facilities across more than 31,000 km², encompassing most of Québec’s ecosystems. We have committed to integrating biodiversity considerations throughout project planning and operations to reduce environmental impact and support the protection of Québec’s ecosystems.

Our environmental management system complies with ISO 14001:2015, recertified in December 2025 for a period of three years. Environmental impacts and risks are reviewed annually.

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CORPORATE OUTLOOK

Action Plan 2035

At the end of 2023, we presented our Action Plan 2035 – Towards a Decarbonized and Prosperous Québec (the “Action Plan 2035”), which revolves around two pillars: electricity service quality and the energy transition. The Action Plan 2035 is structured around five main priorities, which were each supported in 2025 by corresponding strategic initiatives to help achieve our goals:

Development Strategy

In 2026, we plan to make investments of approximately $10.0 billion. These investments are expected to be mainly composed of investments in property, plant and equipment and intangible assets, as well as investments in the regulatory asset with respect to costs related to energy efficiency and demand response initiatives, most of which are expected to be allocated to the Transmission Activities ($3.8 billion), the Generation Activities ($2.1 billion) and the Distribution Activities ($2.4 billion). Increased investments in Corporate and Other ($1.7 billion) are expected to be allocated to strategic investments for prospective projects, including wind power projects, and other capital expenditures. More than half of the total amount to be invested will be used to increase the reliability and resilience of the power system to provide improved customer service.

The 2026 borrowing program is expected to total approximately $9.0 billion. The funds raised are intended to be used for the repayment of our long-term debt and to finance our ongoing needs, including a large part of the investment program and our general corporate purposes.

Among the major projects are the addition of two converter units to Châteauguay substation to increase its interconnection capacity with the New York system, as well as the ongoing refurbishment work at Rapide-Blanc and Carillon generating stations to optimize the generating activities.

The balance of the planned investments is expected to be dedicated to development activities to meet growing demand in Québec, intensify our activities on neighbouring markets and contribute to the decarbonization of the economy. We plan to pursue these objectives, in particular by connecting new customers to the distribution system and integrating wind power projects. Other planned investments include the improvement of transmission capacity via the construction of the Hertel–New York interconnection line, which was connected with the CHPE line in May 2026, the completion of work on projects to increase the capacity of certain hydroelectric generating stations, including René-Lévesque, Jean-Lesage and Outardes-2, and the launch of the St. Lawrence Valley reinforcement project.

Water-Power Royalties

As stipulated in the Watercourses Act (Québec), we pay the same statutory royalties as those paid by private producers of hydroelectricity in Québec. These water-power royalties, earmarked for the Government’s Generations Fund, consist of a statutory royalty for the electricity delivered during the year and a contractual royalty payable pursuant to the contract awarded for the operation of a generating station.

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For 2026, these royalties, indexed annually to the Consumer Price Index, consist of:

These royalties totaled $752 million in 2025, $717 million in 2024 and $734 million in 2023.

Investment Program

Our investment program mainly includes capital expenditure for fixed and intangible assets as well as investments in the regulatory asset with respect to costs related to energy efficiency and demand response initiatives. The following table is a summary of our investments for the years 2021 through 2025. Over the 2026-2030 period, we plan to invest approximately $13.7 billion per year on average in property, plant and equipment and intangible assets, as well as investments in the regulatory asset with respect to costs related to energy efficiency and demand response initiatives, including an estimated $10.0 billion in 2026, as stated in the table below.

Investments

In 2025, we invested $7,842 million in property, plant and equipment, intangible assets and regulatory assets, compared to $6,533 million in 2024. The 20% increase reflects our commitment to provide reliable, high-quality service through sustained investment in generating, transmission and distribution facilities, as well as to helping customers consume energy more efficiently and achieve significant savings on their electricity bills. The accelerated plan of recent years has enabled the company to increase the value of its assets to over $100 billion during 2025.

A large part of the $4.4 billion total investment in property, plant and equipment and intangible assets was devoted to large-scale projects aimed at ensuring long-term operability of the company’s assets. The investments contributed to improving the grid’s robustness, modernizing it and replacing equipment nearing end of service life.

In addition, $2.5 billion was allocated to development projects to increase generation capacity, handle the growing customer base in Québec, and increase the energy exchange capacity with neighbouring markets. As a result, the 320-kV direct-current line in the Chaudière-Appalaches and Estrie regions, connected to the NECEC Project, was completed and achieved commercial operation on January 16, 2026, and the Hertel–New York interconnection line, connected to the CHPE line to deliver electricity to the heart of New York City, was completed and achieved commercial operation on May 13, 2026.

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Allocation of Expenditure for the Generation, Transmission and Distribution Activities

The following tables summarize the allocation of estimated expenditure for 2026 among our three major activities:

Generation

Transmission^a

Distribution^a

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Cash Requirements

The total estimated cash requirements for 2026 are approximately $14.5 billion, including approximately $10 billion for investments and approximately $2.2 billion for the payment of the dividend declared for 2025. The remainder is expected to be used to repay long-term debt and for other general corporate purposes.

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CAPITALIZATION AND INDEBTEDNESS

The following table sets forth the consolidated cash and cash equivalents and capitalization of Hydro-Québec as of March 31, 2026, without giving effect to any transaction since that date. The historical financial information of Hydro-Québec has been derived from Hydro-Québec’s financial statements included elsewhere in this prospectus. This table should be read in conjunction with the “Management’s Discussion and Analysis” and the financial statements included elsewhere in this prospectus.

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LITIGATION

Innu of Uashat mak Mani-Utenam

The Innus of Uashat mak Mani-Utenam (the “Uashaunnuat”) have filed lawsuits before the courts of Québec against the federal government, Québec and Hydro-Québec seeking judicial recognition of Aboriginal rights and title as well as $1.5 billion in damages relating to an area of land in Québec where some of our hydroelectric facilities are located, part of which is within the territory subject to the James Bay and Northern Québec Agreement (the “JBNQA”). The Uashaunnuat, who claim not to be party to the JBNQA, allege that the JBNQA and certain federal and provincial laws are illegal, inoperative, unconstitutional and not binding upon them. They also seek various orders, including rendering of accounts and revenue sharing for the alleged unlawful use and management of the lands, notably in respect of hydroelectric facilities on these lands. While the portion of the proceedings relating to the territory overlapping with the JBNQA territory is suspended, the rest of the proceedings are ongoing. Along with the Attorney General of Canada and the Attorney General of Québec, we are contesting these claims.

Innu of Uashat mak Mani-Utenam and Innus of Matimekush-Lac John

In January 2023, the Uashaunnuat filed new proceedings before the courts of Québec against Hydro-Québec and CF(L)Co regarding the Churchill Falls hydroelectric complex in Labrador, which is owned and operated by CF(L)Co. In October 2023, the Innus of Matimekush-Lac John joined as plaintiffs in this action. The two Québec Innu communities allege that the Churchill Falls hydroelectric complex infringes on their Aboriginal rights and title, as well as their treaty rights. In addition to various judicial declarations and permanent injunction orders, they are claiming from Hydro-Québec $2 billion in compensatory damages, $200 million in punitive damages, and additional damages in the form of an annual payment equivalent to 12.5% of 15% of Hydro-Québec’s annual profits from the date of the commencement of the proceedings. We are contesting these claims.

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Innu of Pessamit

The Innus of Pessamit have filed lawsuits before the courts of Québec against the federal government, Québec and Hydro-Québec seeking judicial recognition of Aboriginal rights and title as well as $500 million in damages relating to an area of land in Québec where some of our hydroelectric facilities are located. They also seek compensation based on revenue sharing to be determined by the Court for the revenues generated by our facilities located in the contested area. Along with the Attorney General of Canada and the Attorney General of Québec, we are contesting these claims. On February 15, 2024, Québec, Hydro-Québec and the Innus of Pessamit have signed a framework agreement which provides for a temporary suspension of the proceedings to enable out-of-court settlement negotiations.

Innu Nation Inc.

In an action brought before the courts of Newfoundland and Labrador in October 2020, Innu Nation Inc. alleges that the construction and operation of the Churchill Falls hydroelectric complex amount to a “common enterprise” of CF(L)Co and Hydro-Québec, and allegedly infringe on the Aboriginal rights and title of the Labrador Innu. Innu Nation Inc. seeks a disgorgement of the profits that CF(L)Co and Hydro-Québec have derived from the operation of this hydroelectric complex or, failing that, monetary compensation of $4 billion from Hydro-Québec. On June 4, 2025, Hydro-Québec and Innu Nation Inc. agreed on a memorandum of understanding (MOU) in which the parties committed to settling their dispute and establishing the foundations and principles of a new relationship. In September 2025, an agreement to this effect was submitted to the two communities that make up Innu Nation Inc. with a view to ratification. As elements required to ratify the agreement are currently pending, Hydro-Québec and Innu Nation Inc. are pursuing their collaboration and will decide on future steps together. A liability in the discounted amount of $67 million and a corresponding regulatory asset of the same amount were recognized, in connection with the MOU.

Anishinabeg of Kitigan Zibi

On October 27, 2025, the Kitigan Zibi Anishinabeg instituted proceedings before the Québec Superior Court based on the claims of Aboriginal rights and title, targeting the Canadian and Québec governments as well as Hydro-Québec and the National Capital Commission, for damages totalling $5 billion. Regarding Hydro-Québec, they allege that economic benefits were gained from the Mercier hydroelectric dam and are asking for compensation for loss of profits along with punitive damages. We are contesting this claim.

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EMPLOYEES

We had 23,915 employees as at December 31, 2025, including 21,146 permanent employees and 2,769 temporary employees (but excluding employees of our subsidiaries and joint ventures). Unionized employees represent 82.7% of our total work force.

Currently, eight collective bargaining agreements govern their working conditions. We recently renewed five of these agreements, representing approximately 65% of our total workforce. Negotiations are ongoing with the last three unions. Some of the unions involved in ongoing negotiations have delivered a notice of strike limited to overtime work. As our operations are covered by laws intended to ensure the continuity of essential services, we do not expect these labour actions to have material adverse effects on our business at this time. Bargaining discussions with these unions remain ongoing and we expect to reach a settlement in 2026.

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INTEGRATED RISK MANAGEMENT

For many years, we have applied an integrated risk management process as part of our ongoing activities. This process is supported by various control, communication and assessment mechanisms intended to ensure dynamic monitoring of risk developments.

All our groups have a role to play. As part of their activities, they manage the risks relevant to them and reassess them at regular intervals, daily in some cases, using, in particular, the tools developed by the Groupe – Stratégie d’entreprise et finances. This approach makes it possible to create an enterprise risk portfolio during the annual planning process. The portfolio is presented to the Board of Directors with the business plan, which includes a sensitivity analysis indicating the impact of certain risks on our capacity to attain our net income target.

Integrated Risk Management Process

Financial Risks

In the course of our operations, we carry out transactions that expose us to certain financial risks, such as market, liquidity and credit risk. The adoption of strategies that include the use of derivative instruments and systematic monitoring considerably reduces exposure to such risks and their impact on our results.

To manage market and credit risks, a team of specialists that is independent from the teams carrying out the transactions constantly monitors a number of indicators related to financial and energy transactions, recommends strategies and applies controls aimed at reducing risk.

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Market Risk

Our results are subject to three main types of market risk: currency risk, interest rate risk and risk associated with energy and aluminum prices. Fluctuations in the Canadian dollar’s exchange rate relative to the U.S. dollar affect revenue from sales denominated in U.S. dollars as well as the cost of U.S. dollar–denominated debt. Interest rate fluctuations affect financial expenses and pension costs. Lastly, energy price fluctuations affect revenue from wholesale markets, while aluminum price fluctuations have an impact on revenue from special contracts with certain large industrial customers in Québec.

We mainly use derivative financial instruments to manage our market risks. The purpose of this management approach is to limit the impact of risk on our results, according to strategies and criteria that are established based on its risk tolerance. In addition, market risk over the medium and long term is mitigated by the offsetting effect between the impact of a general increase or decrease in interest rates on financial expenses, on one hand, and the impact of such an increase or decrease on pension costs, on the other.

Our pension costs are also subject to the risk of fluctuation in the fair value of investments held in the Pension Fund portfolio. To manage this risk, we rely on asset diversification and on investment management strategies that include the use of derivatives.

Liquidity Risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with its financial liabilities. This type of risk may arise from difficulties obtaining sources of financing to carry out its investment program.

Our liquidity risk is mitigated by several factors, including substantial cash flows from operating activities, access to a preauthorized standby credit facility and a diversified portfolio of highly liquid financial instruments.

Credit Risk

Credit risk is the risk that a counterparty may not meet its contractual obligations.

We are exposed to credit risk related to accounts receivable and other financial assets in the course of our day-to-day electricity sales inside and outside Québec.

We are also exposed to credit risk related to cash and cash equivalents, short-term investments, sinking funds, deposits and derivative instruments we trade with financial institutions and other issuers and, to a lesser extent, with North American energy companies. These derivative instruments are associated with power purchase agreements we conclude to supply the Québec market and with energy transactions on markets outside Québec.

Exposure to credit risk is reduced by putting in place frameworks and limits related to risk concentration and counterparty exposure. To ensure compliance with such limits and frameworks, we take a proactive approach based on various controls and monitoring reports. These enable us to react quickly to any event that could have an impact on the financial position of our counterparties. In addition, we generally do business with counterparties that have a high credit rating. We also enter into agreements to keep the market value of the main derivative instrument portfolios below a predetermined threshold.

Regulatory Risks

We are exposed to regulatory risks because, under the Energy Board Act, our electricity transmission and distribution operations are regulated. The decisions handed down by the Energy Board may therefore affect the results associated with these activities. In particular, the Energy Board Act stipulates that rates are determined on a basis that allows for recovery of the cost of service and provides a reasonable return on the rate base.

Various measures have been put in place in an attempt to reduce the impact of risk on the revenue and expenditure related to regulated activities. These measures include submitting complete and well-argued files to the Energy Board and maintaining a dialogue with the latter and the intervenors, particularly during working sessions. For more details, see “Regulatory Framework”.

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Operational Risks

Managing an electric power system like ours poses many technical challenges associated with the growth in operating assets, technological progress and changing customer needs, particularly in the context of the energy transition. We must make informed decisions to plan our short- and long-term investments.

Generation Activities

One of the principal uncertainties related to generation activities is in connection with natural water inflows. We must maintain sufficient energy reserves to meet our commitment to supply an annual base volume of up to 165 TWh of heritage pool electricity while still fulfilling our contractual obligations. In concrete terms, this means being able to cover a natural inflow deficit of 64 TWh over two consecutive years, and 98 TWh over four consecutive years. To manage this risk, we rely on several mitigation measures that we adhere to rigorously. We manage our reservoir storage on a multiyear basis and maintain an adequate margin between commitments and generating capacity. This margin allows us to compensate for variations in runoff, replenish our reserves or take advantage of business opportunities. We regularly report to the Energy Board on our generating capacity and our energy reserves.

Moreover, we operate multiple generating stations, dams and spillways in southern Québec, particularly on the Rivière Saint-Maurice, the Rivière des Outaouais (Ottawa River) and the Fleuve Saint-Laurent (St. Lawrence River), along which a number of urban centres and other agglomerations are located. These rivers experience major spring flooding. To reduce the impact of flooding on communities, we plan ahead and manage our facilities in such a way as to maximize public safety, by carrying out rigorous monitoring and by working closely with the authorities. For example, various reservoirs are used to limit the risk of flooding. We also hold numerous information sessions each year to educate the public about the key role that our reservoirs and control structures play in managing floods.

Temperature variations, low runoff and the difference between actual demand on the Québec market and projections represent other elements of risk, as these factors impact energy sales in Québec and the volume available for export.

Transmission Activities

Several factors, such as extreme weather events and equipment failure, may cause service interruptions or result in the unavailability of part of the transmission system. The multifaceted strategy adopted by us to prevent these problems includes compliance with the standards of the North American Electric Reliability Corporation (NERC) as well as various measures to maintain and reinforce our power system in order to ensure that assets continue to operate smoothly throughout their useful lives. It is worth noting in this regard that the Direction principale – Contrôle des mouvements d’énergie et exploitation des réseaux of the Groupe – Exploitation et infrastructures serves as the Reliability Coordinator for transmission systems in Québec, a role it was assigned by the Energy Board in 2007.

We must ensure adequate transmission capacity to supply our distribution system and the facilities of other customers, as well as transmission system security and reliability. To do so, we apply optimal management of the annual peak load and invest in modernizing our transmission facilities based on an asset management model. We have also undertaken major projects to replace the grid control systems, special protection systems and substation protections and controls.

Distribution Activities

The continuity of the electricity distribution service is a critical issue for us. However, as climate change becomes apparent around the world, it is also having a very real impact on our power grid and on the daily activities of our customers due to the power outages that come with it, among other things. That is why we are planning to increase investments in our power grid to offer reliable, high-quality service at an affordable price.

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We deal at all times with demand fluctuations (in normal weather conditions) related to the economic and energy-related situation that have an impact on our results. Since the Rates Simplification Act came into force, we have also been exposed to risks associated with weather conditions, namely revenue variances related to temperature fluctuations and variances in electricity supply costs. To limit the impact of all these risks, we constantly fine-tune our method of forecasting electricity demand.

Export Activities

In addition to runoff and temperature uncertainties, export activities on wholesale markets are subject to market risk and the risk of unavailability of generating and transmission equipment. Market risk is the result of fluctuations in energy prices on markets outside Québec. It is mitigated by the ongoing monitoring of trends in wholesale markets and the use of hedging derivatives. The risk of unavailability of equipment is reduced through the implementation of maintenance and upgrade programs.

The risks related to export activities are quantified in an integrated fashion by a team of specialists that is independent from the team carrying out the transactions. This team sees to the application of controls, submits daily reports to the managers who oversee these activities and ensures compliance with the limits approved by Management and the Board of Directors.

Construction Activities

Pressure on construction project costs is a risk to which we are constantly exposed. This pressure stems from such factors as market conditions, labour availability resulting from, among other things, the boom in Québec’s construction industry, the increase in prices for certain materials and products, as well as various factors like late deliveries, poor quality and work stoppages, which affect project schedules.

To meet our commitments and continue to apply high safety and quality standards, we implemented a number of measures to reduce our exposure to risk. For instance, teams analyze occupational health and safety (OHS) risks and then develop integrated solutions to eliminate or mitigate these risks in the early stages of engineering. In addition, we closely monitor project schedules, costs, accidents and risks specific to each project or key deliverable, an approach that enables us to ensure that projects are progressing as planned and to take any necessary corrective action. We also maintain ongoing relations with the relevant organizations and government departments to stay abreast of future amendments to laws and regulations that could affect our activities. Finally, we monitor markets and develop strategies to foster competition, increase our attractiveness (as a customer), ensure the sustainability of supplies and maintain expertise in our markets. We also adjust our project completion strategies based on economic conditions, in consultation with our partners.

Corporate and Other Activities

Occupational Health and Safety

We continue to implement game-changing tools to improve our OHS performance in order to protect all staff members and suppliers. We now incorporate psychological health into our preventive measures, both in our operations and in our construction projects, on the same basis as other safety risks.

We continue to take concrete steps to control the main hazards in order to prevent potentially serious incidents, both in day-to-day operations and on construction projects. Even when these incidents have no consequences, they are thoroughly investigated to establish their root causes, and reviewed to examine in detail the recommendations made and to extend the scope of the corrective measures put in place. We rely on manager accountability as well as the leadership of our field crews, and continuously monitor the control of hazards through inspections and other prevention activities. We prioritize the principal identified hazards and have established clear, consistent requirements for these hazards, and support our suppliers to help them fulfill their OHS role. In a context marked by growth in operations and investments, new worker orientation, qualification and support are a very high priority.

OHS performance indicators continue to be monitored in dashboards and performance reviews. As required, new indicators are measured, in line with the control of the principal hazards.

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Safety of Personnel and Assets and Protection of Reputation and Revenue

We are committed to ensuring the safety of all assets needed to carry out our mission, as well as that of our employees and the public, and to protecting our reputation and revenue.

To provide optimum protection, we foster a culture focused on safety, in order to increase public and employee awareness of good habits to secure assets and reduce electricity-related hazards. This culture also enables us to anticipate, evaluate, monitor and prevent risks and threats, as well as to implement adapted measures in line with best practices, and to respond effectively in the event of incidents and attempts that cause harm, damage or threat to individuals, assets, revenue or reputation in order to limit impacts, in compliance with legal, regulatory and contractual safety requirements.

In particular, we ensure that patrols are carried out on a daily basis to ensure effective surveillance. In addition, we secure our buildings and facilities in accordance with established standards, and maintain protective equipment and mechanisms. We also oversee the development and sustainability of technology security systems.

Concerning protection of reputation and revenue, we pay particular attention to electricity theft, fraud, intellectual property infringement and possible attacks on the grid. To counter these risks, we rely on a series of measures, including an analytical method for detecting electricity theft, the creation of a team dedicated to investigating collusion, corruption, fraud and economic integrity, the proactive verification of security risks, as well as continued active surveillance in collaboration with our partners. To mitigate the risk of damage to our reputation in relation to the establishment of a business relationship with an external company or partner, we carry out risk assessments and verifications when necessary.

Security of Digital Technologies

Cybersecurity is a key concern for us. To manage this issue, we rely on a multidisciplinary team that works closely with a network of external collaborators. These stakeholders analyze risks, protect the work environment, identify incidents and implement solutions.

The cybersecurity program that was developed and the measures taken are based on industry best practices and the recommendations of government security and intelligence agencies. We monitor the evolution of external threats, compare our situation with that of our peers, carry out incident simulations to improve our resilience and ensure compliance with applicable regulatory and legal frameworks. We regularly assess the mitigation measures in place and deploy new strategies based on changes in the business environment and emerging trends. Specifically, the current program is based on the following orientations:

Lastly, the cybersecurity coordinator frequently reports on our main risks and actions to members of the Management Committee and the Board of Directors.

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Demand Management

In line with decarbonizing the economy, we are called on to play a central role in the electrification of Québec and intend to leverage our expertise in renewable energy to contribute to the continuing reduction of the use of fossil fuels. The energy transition presents its own unique challenges, such as the tightening of energy and capacity balances, the increased investments required to meet the increase in demand and the need to use energy wisely. To this end, we are looking to our Action Plan 2035, which aims to reduce greenhouse gases, meet expected growth in electricity demand and offer customers a simpler, more reliable and more affordable service.

Environment

Every year, we review our identification of environmental risks and opportunities using our ISO 14001:2015–certified environmental management system. We thereby seek to better control the impact of our operations and projects on biophysical and human environments and to maximize the positive environmental spin-offs of our presence throughout Québec.

Climate Change

The nature of our activities, namely the generation, transmission and distribution of hydroelectric power, means that we are exposed to the effects of climate change. An unforeseen extreme weather event that impacts the generation, transmission or distribution assets could significantly reduce the capacity to supply energy within and outside Québec, and could result in a substantial increase in costs to replace damaged assets. In 2022, we released our first Climate Change Action Plan, which sets out measures to take into account the impact of climate change in the design and operation of facilities, to limit the impact of outages and to ensure compliance with the highest standards of worker health and safety. These measures contribute to achieving the objectives of the Action Plan 2035, in particular to increase system reliability and further develop the network in light of climate change. In 2025, the focus was on developing the process for updating the Climate Change Action Plan.

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Selected Financial and Operational Information

You should read the following summary financial data and other information in conjunction with our Financial Statements included elsewhere in this prospectus, including the notes thereto, and the information set forth in the section “Management’s Discussion and Analysis” appearing elsewhere in this prospectus. The financial information and tabular amounts presented herein are expressed in Canadian dollars, unless otherwise indicated.

Five-Year Review

Consolidated and Selected Financial Information

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Five-Year Review (Continued)

Operating Statistics

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Five-Year Review (Continued)

Operating Statistics (Continued)