Summerside begins power fight with Maritime Electric

Dave Stewart
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Lawyers Spencer Campbell, left, counsel for Maritime Electric, and David Hooley, representing Summerside Electric, bring their arguments to IRAC in regards to Summerside's application to build its own transmission line.

The City of Summerside wants more control over its own power.

Summerside has taken that fight to the Island Regulatory and Appeals Commission (IRAC).

A hearing began Tuesday in Charlottetown into the city’s application to have the right to construct a transmission line between its Sherbrooke Road substation and the Maritime Electric Company Ltd. Bedeque substation.

David Hooley, counsel for Summerside Electric (a utility under the City of Summerside), said it is the city’s position that the issue comes down to the rates Maritime Electric is charging the city every month.

Meanwhile, Spencer Campbell, representing Maritime Electric, said losing Summerside would mean the utility would end up charging the rest of its Island customers more.

Maritime Electric set a tariff and Summerside Electric objected to it because the city argues that, as wind producers, it can export wind off-Island for a lesser rate than Summerside can transmit electricity from the substation in Bedeque to the city.

The purpose of the Maritime Electric Open Access Transmission Tariff (OATT) is to provide non-discriminatory open-access transportation service over the Maritime Electric transmission system. Power is transmitted via two 200-megawatt underwater cables that lead from the power substation in Bedeque and travel to the shoreline through the Fernwood area and then go underground across the Northumberland Strait to Murray Corner, N.B.

Summerside Electric argues it would be cheaper to build its own transmission line from Bedeque to Summerside and not be on the Maritime Electric system at all.

Maritime Electric has between 600 and 700 customers in Summerside.

“If Summerside leaves the system, the cost goes up for everyone else,’’ Campbell said.

He also raised some alarm bells by suggesting if Summerside is allowed to build its own transmission line, it will be open season for everyone who wants the cheapest rates.

Hooley said Maritime Electric, in this case, isn’t looking out for Island ratepayers but themselves.

He insinuated it’s the “$290,000 in revenue they don’t want to lose’’.

When IRAC commissioner Moe Rodgerson asked if Maritime Electric has to be there to represent the customers, Hooley responded, “Maritime Electric is here to protect its turf.’’

Campbell said Maritime Electric has a responsibility under the Electric Power Act to pursue rates that are “just and reasonable’’.

Gordon MacKay, representing the province, said Maritime Electric has a statutory duty to provide energy at the lowest cost possible.

Greg Gaudet, director of municipal services for the City of Summerside, testified the city has a long history of supplying its own power and the current application fits

with those efforts.

Gaudet pointed out that until the mid-1970s, the city produced most of its own electricity from diesel generators and, in 2007, hatched plans to build its own $30-million wind project.

Gardiner MacNeil, a former employee of Maritime Electric who now works with Coles Associates, also testified on Tuesday.

Coles Associates did the feasibility study on the proposed transmission line for Summerside Electric.

MacNeil said among the options they considered for the city was its own submarine cable.

“After running the numbers . . . we thought this would be the most feasible option for our client,’’ MacNeil said.

dstewart@theguardian.pe.ca

Twitter.com/DveStewart

Organizations: Maritime Electric, Island Regulatory and Appeals Commission, Summerside Electric OATT Coles Associates

Geographic location: Summerside, Iceland, Bedeque Charlottetown Sherbrooke Road Fernwood

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Recent comments

  • just wait
    February 06, 2013 - 15:52

    Just wait till the HST Rolls in. Who will be rolling in the money then.

  • Rob
    February 06, 2013 - 15:24

    "He also raised some alarm bells by suggesting if Summerside is allowed to build its own transmission line, it will be open season for everyone who wants the cheapest rates." Am I reading that wrong or did he just say that 'it will be open season for everyone who wants the cheapest rates'... That is the problem with a privately held natural monopoly, they refuse to relinquish profits and seem to think that it' okay that they are charging islanders twice the national average. In December Fortis Inc. (owners of Maritime Electric) Announced an increase in the quarterly common share dividend by 3.3 percent. Marking 40 Consecutive Years of annual common share dividend payment increases. I live in Charlottetown, but kudos to Summerside for doing what should have been done in the first place - a publicly held power company. No one should be making millions of dollars in profits on an essential service when the monopoly occurs naturally and is subsidized taxpayers. It's time for the Government of PEI to start taking control of the electrical system on PEI and stop Islanders contribution to 40 straight years of dividend increase. It's mind boggling to me, an electrical company should be run as a crown corporation.

    • Anonymous
      February 07, 2013 - 10:29

      Hardly a natural monopoly when you have to go to IRAC and ask to build your own power line to leave the grid. This monopoly exists only because it is government sanctioned.

  • Bill Kays
    Bill Kays
    February 06, 2013 - 15:03

    Maritime Electric / Fortis definitely have a monopoly, definitely have been overcharging Islanders since day 1. Canada has laws similar to RICO in the US and they are administered by the RCMP and the Office Of The Superintendent of Financial Institutions. WHY NO CHARGES AGAINST FORTIS and our illustrious leaders?

  • Townie
    February 06, 2013 - 13:41

    ME just doesn't want to loose its monopoly, they wouldn't survive otherwise. I'd say go for it Summerside, competition will help Islanders.

  • WHY START NOW
    February 06, 2013 - 13:29

    Why would Maritime electric start doing something thst is right now. They have been milking the life out of their customers for years. You continually read articles of how the taxpayers of this province are paying for the electricity twice as they get the money from the Government to pay for the elecricity then charge their customers for it. The parent company of Maritime Electricity FORTIS is making hundreds of millions of dollars annually yet will not put anything into Maritime Electric. But who would when you have a control and can blackmail the entire province as they are doing in this case by stating that if 600 customers move to Summerside Electric they will put up the price for electricity to the rest of the Island. We already have the highest rates in Canada. Maritime Electric and FORTIS must use an old WC Fields saying as their slogan QUOTE ' NEVER GiVE A SUCKER AN EVEN BREAK' UNQUOTE

  • John W.A.Curtis
    February 06, 2013 - 11:55

    Summerside wanting its' own transmission line is the end of Maritime Electric's Monopoly. Summerside however won't be able to force Maritime Electric to sell its' power lines or give up its' 600 customers. It is the customers who will decide to go with Maritime Electric or the City of Summerside

  • hugh
    February 06, 2013 - 11:31

    we should seek a deal to allow Quebec to purchase Maritime Electric with the understanding they charge PEI customers the same rate they charge their customers. Quebec has the lowest electricity prices in Canada, thanks to their abundant, clean, efficient hydro electricity.

  • all the heavyweight legal bills are blooming
    February 06, 2013 - 10:54

    This story is a great example of how the legal profession milking Toronto charge out rates of back water utilities which are all politically connected elitists. Parasites on the posterior of progress. All the power users will pay for this court room bonanza. Stewart McKelvey charged the province almost four times what CBC was charged in a recent suit. All are not suits, many are duds. funny eh?