PEI's Power Struggle

Most people don’t spend their days thinking about energy rate structures. We have so much else to deal with in our lives that thinking about how to make these structures more fair just doesn’t top the list for many people. But with my background in energy, I’ve spent a lot of time thinking about it.

I feel strongly that those who use less energy, should pay less. They should not have to pay more. The proposal I put forward at last year's rate hearing with IRAC had a lower cost first block and a higher cost second block. This proposal would lower energy rates for the vast majority of Islanders. This would be so very helpful, especially now when so many are finding it harder and harder to pay the bills.

This is also the reason why I introduced a bill in the legislature to amend our current approach. As it stands right now, the first "block" of power we all pay is the most expensive which means for the majority of Islanders, they are stuck with a higher cost for electricity. The cost only gets cheaper after you use more energy than a typical user would.

Under the current structure, users are actually encouraged to use more power so they can access cheaper rates. But doesn’t that defeat the purposes of conservation and responsible stewardship of our resources? Shouldn’t we instead be encouraging efficiencies in our use of power? Also, using less power would mean we will put less demand on the energy grid. That would lead to additional savings on infrastructure costs. So why aren’t we making the first block less expensive?

My bill, if passed, will stop Maritime Electric from making the first block of energy so much more expensive from the second. Importantly, because there are already limits on what percentage of profit Maritime Electric can earn from selling power, they cannot just raise the rates in the second block to match the first. It essentially forces Maritime Electric to bring down rates in that first block. This would benefit the vast majority of Islanders since we all pay for first block power and some pay second block.

I was disappointed to see a Summerside city councillor take to social media and spread misinformation about what the impacts of this change would mean. If I had been contacted directly with their concern, I could have explained to them the legislation that already exists which regulates the profit margin of Maritime Electric. Without that existing law, their claim that prices would increase could be true. But that is simply not the case.

What’s more, there is nothing stopping Summerside city council from making power cheaper for their residents. Their own utility is not regulated and they have the authority to set their own rates. They have not done this. Even if my bill passes, they will still have the authority to keep rates higher or lower for all residents, with exception to those who are served by Maritime Electric. A problem easily solved with some accounting effort.

The public benefits when elected representatives from all levels of government work together to improve the lives of Islanders. Misinformation and misrepresentation benefits no one.


Steve Howard is the MLA for Summerside-South Drive and the Official Opposition critic for transportation, infrastructure and energy. Contact him at [email protected] or call 902-620-3977.