Islanders will be paying more for their power with two electricity rate increases over the next month.
On March 1, rates were raised by 2.2 per cent. This increase is part of the five-year P.E.I. Energy Accord, negotiated between the province and Maritime Electric in 2010 as a way to stabilize rates.
While nobody likes paying higher prices, the accord has helped to eliminate major power rate fluctuations experienced by Islanders prior to 2010, said Maritime Electric spokeswoman Kim Griffin.
“I think any increase is a concern for customers, so I think we want to make sure they know about it,” she said. “In this situation we were able to lock in our energy contracts and we were able to confirm these increases so that people would know what they were paying on a year-to-year basis.”
The P.E.I. Energy Accord led to a drop of 14 per cent in electricity rates in 2010 in part because the province assumed $35 million in Maritime Electric’s debt at a lower rate than the company could borrow.
Rates were frozen for the first two years and were set to increase with the rate of inflation. Then last fall in the legislature, government capped these increases at 2.2 per cent every year for the next three years.
"...we were able to lock in our energy contracts and we were able to confirm these increases so that people would know what they were paying on a year-to-year basis.” - Kim Griffin, Maritime Electric
This year is the first year since the accord was signed Islanders have seen an increase in their power bills.
Griffin said the majority of residential customers use about 650 kilowatt hours of electricity a month, which amounts to a $105.25 bill. With the 2.2 per cent increase in rates, those customers will now pay approximately $107.59.
She said notices will be sent out with Islanders’ bills this week to make sure people are aware of the increase.
This is not the only rate hike happening this year.
When the HST comes into effect next month, a further nine per cent tax will be added to Islanders’ electricity bills. That’s because currently, electricity is PST exempt and only the GST is applied.
After the 14 per cent HST is implemented on April 1, Islanders will be paying a total of 11.2 per cent more for electricity than they were before March 1.