P.E.I. paying for replacement electricity

Teresa Wright
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John Gaudet, vice-president of Maritime Electric

Provincial cabinet has approved $5.5 million in funding for Maritime Electric to cover replacement energy costs while the Point Lepreau nuclear power plant continues working toward achieving full generating capacity.

The plant’s refurbishment has been plagued by years of delays, spills and a billion dollars more than the original $1.4 billion price tag.

It was scheduled to re-open in September, but that was once again pushed back to December as the plant continues to test its ability to safely operate at over 35 per cent of its full capacity.

In the meantime, Maritime Electric must continue to purchase replacement energy. The P.E.I. utility has had to do this for the last four years while the power station has been offline.

That’s why this $5.5 million payment is the latest in over $43 million in similar payments made to cover energy cost overages as well as operation and management commitments related by Point Lepreau being offline.

“It’s been an onerous task to keep this money going in,” Finance Minister Wes Sheridan said Tuesday.

“But while (the plant) is down, we have to provide for that.”

Sheridan said he hopes to recover these costs from Atomic Energy of Canada Ltd. (AECL), the federal Crown corporation doing the refurbishment.

The contract with AECL states it must shoulder these kinds of added costs caused by delays.

“(The contract) specifically states that they will be compensating us if it goes overtime, and we’re three years over so we’ve had conversations with them and we fully expect that we’re going to be compensated,” Sheridan said.

“But for this time and to get us past this last hump where expectations were (opening) the end of September, we are now going to be on the hook for six to eight weeks more.”

The plant is now scheduled to be up and running at full capacity December 1st.

Sheridan said he is very excited to see the plant has begun generating energy and is working toward revving up to 100 per cent power generation.

“That means the extra costs for replacement energy will be no longer needed.”

Don’t expect to see a drop in energy prices in December when the plant is providing its cheaper power to P.E.I.

When electricity rates were stabilized with the 2010 Energy Accord, major jumps or dips in energy costs for consumers were replaced with a 14 per cent rate reduction in rates as part of a five-year power purchase agreement with NB Power.

After the deal's first two years, power rates were set to increase with the rate of inflation, which the government expected to be about 2.5 per cent annually.

With the HST on the way, which will mean a nine per cent tax increase on electricity, Sheridan said government is still trying to decide what to do with the previously planned 2.5 per cent increase that would take effect in the coming year.

“We’re in the midst of trying to make that decision right now… trying to decide exactly where that’s going to fall out and what’s the best way in which to ensure Islanders that continuity will be followed,” Sheridan said.

twright@theguardian.pe.ca

Organizations: Maritime Electric, Atomic Energy of Canada Ltd., NB Power

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Recent comments

  • SG
    November 22, 2012 - 19:06

    To IRA: Good Idea. I will be there and I hope there is Big Crowd. I would suggest that someone creates a Sheet (s) stating Islanders Against HST and have everyone who attends the Rally Sign their name. Supply an email address for those who can't attend so they can submit their name as well by email. Or better still ask for Volunteers to go door to door across the Island to collect Signatures re: those against HST. The On-Line Websites seem to create controversy and suspicion Re: comments that those who used the Website entered their name more than once etc.

  • ira
    November 22, 2012 - 07:54

    I wholeheartedly agree with SG, jammering gets us nowhere. Top stop the HST we need action. BUT have we ISLANDERS GOT IT IN US? I suggest we combine efforts with the already established group, that a rally recently. ---- Let's join forces. Let's plan a demonstration flor New Years Day at 2 p.m. on Queen Street in front of the Confederation |Centre, - in other words lt's peacefully block Queen Street and the entrance to the Premier's leve. - Let's get out by the thousands, - let's show we have had enough, - what do you say, people?????

  • Cindy
    November 21, 2012 - 19:23

    This in addition to the more than $30 Million of Maritime Electric debt that PEI has taken on to get them to sign the Accord!!!! Unbelievable. Not to mention the fact that Islanders will be paying that $30 Million debt off over the next 25 years. So, our taxpayer dollars paid Maritime Electric debt, and taxpayers are repaying the Govt loan for this debt over the next 25 years...good deal - we pay for it twice!!

  • SG
    November 21, 2012 - 18:22

    Maybe we should be asking ourselves what we can do to achieve change. Maybe we should be doing what B.C. did.They went out house to house and obtained signatures from residents to put a stop to HST and they were able to Repeal the HST although they will have to wait until April 2013 to revert back to GST/PST. I certainly wouldn't mind the wait. We can post as many comments as we want, we can criticize our Government and All Powers that be but the bottom line is If We Want Change We Have To Do Something To Achieve Change! No amount of comments on this site, Facebook et al or Letters to the Editor will achieve Change. We don't have many Opposition Members but maybe they would provide support or work with us. Nothing was ever accomplished by doing nothing.

  • merge with nb power
    November 21, 2012 - 16:01

    A place with an electricity market as small as PEI should never have its own separate power utility, especially when it buys almost 100% of that electricity from a neighbouring jurisdiction's utility. PEI should expropriate Maritime Electric from Fortis and then merge it with NB Power. It is absolutely stupid that my cousin who lives in Port Elgin, 10 minutes from the Confederation Bridge on the NB side, pays almost 50% less in electricity than I do in Kinkora, 10 minutes from the Confederation Bridge on the PEI side. The electrons going to her house and the ones coming to my house are generated in the same places (Point Lepreau, Belledune, Mactaquac, Coleson Cove, etc.). Just because there is a stupid provincial border between us and 2 underwater cables doesn't mean that Fortis should be allowed to charge such a premium on our power in order to satisfy its private shareholders. Electrical generation and transmission in PEI, NB and NS should all be publicly owned as one regional public utility. If we can have an Atlantic Lottery Commission, we should be able to have an Atlantic Electrical Power Commission. And if Robert Ghiz can expropriate a few property owners in New Haven to satisfy his patronage paving buddies, then he should be able to expropriate Maritime Electric's transmission assets and then merge them with NB Power.

    • Merge - ouch.
      November 21, 2012 - 17:26

      Merge - ouch. That's too much common sense to fit into one box. Of course, your prescription breaks down when you suggest that Robert Ghiz can expropriate a few property owners in New Haven to satisfy his patronage paving buddies, then he should be able to expropriate Maritime Electric's transmission assets and then merge them with NB Power. Ghiz is willing to bully or as they say, planb the small guy in the back of the head, but to stand up to a major for-profit corporation? Not a chance . . .

  • seriously
    November 21, 2012 - 11:52

    This is so crooked and backwards I don't even know what to say. So we pay our bill, the government gives our tax dollars away and then we'll get a bill for that too? On what planet does this makes sense? I truly DETEST this government!

  • UNBELIEVABLE
    November 21, 2012 - 11:15

    How can the PEI Government justify GIVING 43 million DOLLARS to a private company to pay for their product that they sell back to us at over inflated rates while at the same time giving their shareholders a 10 per cent yearly increase in their stocks. A sixth grader would have more sense then that. The people of this province should be signing petitions to have this whole Government investigated by the Federal authorities. If not for being corrupt then at least for stupidy.

  • Bill
    November 21, 2012 - 11:03

    This is ludicrous, a very large corporation gets hand outs, meanwhile other small companies are struggling to stay afloat. There are many islanders also struggling to pay their bills for their families, and it seems this Provincial Government has given Maritime Electric a blank check.

  • I Wonder
    November 21, 2012 - 10:58

    Just pulled this from the Fortis Inc website: ....... "Fortis Inc. (“Fortis” or the “Corporation”) (TSX:FTS) achieved third quarter net earnings attributable to common equity shareholders of $45 million" ............. that's not bad for 3 months of business ............ would it be a conflict of interest if those involved in approving this provincial funding turned out to be shareholders in Fortis Inc? Would it not be a good idea for them to disclose whether they or someone in their immediate family has shares?

  • SG
    November 21, 2012 - 10:15

    It won't be PEI that will be paying for replacement electricity it will be each and every PEI Taxpayer! Also aren't we paying twice? We're paying for our Electricity and we'll also be paying one way or another for the interest on the $5.5 Milliion plus! (Sheridan stated: Don’t expect to see a drop in energy prices in December when the plant is providing its cheaper power to P.E.I.) Mr. Sheridan I won't be expecting to see a INCREASE In Decemeber EITHER! (Sheridan said government is still trying to decide what to do with the previously planned 2.5 per cent increase that would take effect in the coming year.) I have an Idea for that. Erase it from the Books as each and every Islander has Paid Enough now and will be paying more when the HST is implemented! Many Islanders are on the verge of Bankruptcy! Many others are moving West. When Islanders have to depend on Welfare and our population continues to decrease as more Islanders move West where will our Government's tax dollars come from then? To say I'm Concerned about our Island's Future is a huge understatement!

  • Wake up
    November 21, 2012 - 10:10

    Better do your research Squirrel its not our wind energy . Remember Ghiz and the boys sold us out to Suez Energy. They are from Houston Texas and they sell the electricity produced back to the states .

  • don
    November 21, 2012 - 08:55

    ALFREDD. the government may get the money back but the tax payers will not see any of it. it will go to off islanders as dizzy loves to DONATE money. look at OCI,HOMBURG,PNP.

  • Squirrel
    November 21, 2012 - 08:16

    Where do we stand with our wind power. Are we still sending it to the US ??? I think we have to know a lot more about our wind power its use & how much it produces in relation to our needs.

  • Checker
    November 21, 2012 - 07:08

    It has been said before and is worth repeating...the Electrical Distribution Act should be repealed and amended as to provide for competition on the Island. Right now Maritime Electric has a monopoly and can charge what they like. There seems to be enough politicians benefiting from this to allow it to continue. Ms Crane, Messers Bevan-Baker and Redmond please pick up the ball on this one. It is a change to the Island landscape that is long overdue and would provide all Islanders with a badly needed financial break .. Remember, we have the highest electrical rate in Canada. It is nothing more than robbery.

  • Makes no sense
    November 21, 2012 - 06:56

    Am I missing something here? Is Maritime Electric owned by our provincial government? Why are my tax dollars going to them? Since they are a private company, shouldn't it be up to them to maintain service? Are they going to pay back the money to the taxpayers? We are essentially giving them money, so they can sell the product back to us (at a profit) and we don't get the initial investment back? How is this in any way sane or in the best interest of the local tax payer???

    • We're being planb'd again.
      November 21, 2012 - 10:42

      Dear MAKES NO SENSE . . . Of course you're asking the right questions. But, like they say on the streets now, "We're being planb'd again!"

  • alfredd
    November 21, 2012 - 06:06

    So PEI is getting reimbursed for this cost, - I love the way Sheridan can mislead the people. Takes you to read the qwhol,e story to find this out that he is fully expecting to get the money back. Slime, slime,slime just love the knack he has.

  • Nor'easter
    November 21, 2012 - 05:39

    You have to be kidding, with the big proffits they make we still give them big handouts. The state of Maine is giving their customers a 7% reduction in their bills starting in March. With all the cheap wind power we are sending to the new england area, I'm hoping for at least that without giving a nickle to Maritime Electric.

  • don
    November 20, 2012 - 21:39

    1st we have to pay our light bill now we are giving them 5.5 mill to help with there profits. what kind of brains do we have running this government. we need to replace them with preschooler.