IRAC affirms electricity rate increase by deadline

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Maritime Electric

The Island Regulatory and Appeals Commission can work with great alacrity when the need arises. The commission was facing a tight deadline to approve a new electricity rate agreement for Prince Edward Island residents. A joint proposal from Maritime Electric and the provincial government on increased power costs for the next three years was filed in late January and a month hadn’t passed when an answer was delivered.

It was, of course, a resounding yes.

Hearings were held, explanations given and a written decision was rendered — all before the month of February. There was, of course, some urgency involved. A multi-year energy accord signed in 2011 was expiring and the utility had already received approval for a 2.5 per cent increase on its solo application to take effect March 1. The province and Maritime Electric then got together and presented a joint proposal unveiled Jan. 29, which was to provide stability in rates for the next three years.

IRAC can procrastinate by times. It was recently criticized for delays with an appeal on a building development at the Belvedere golf course. It was over a year before the commission finally overturned Charlottetown city council’s decision to reject a rezoning proposal. The developer finally has the green light and the golf course has a much-needed infusion of cash.

As for the electricity proposal, the deal seems reasonable, all things considered. The deal saves Maritime Electric the time and cost of preparing annual filing for rate increases. It was good for government and ratepayers who know there won’t be any surprise increases for three years.

There is bad news. Rates will increase 2.3 per cent each of the next three years — or 6.9 per cent in total. For each of the past three years, the cost of electricity went up 2.2 per cent. Electricity costs will have increased 13.5 per cent over six years when this current deal expires. With approval rendered, the increase was effective just in time for March meter readings beginning Tuesday. Maritime Electric said the rate hike was needed to offset increasing costs, such as escalating energy supply contracts and the new submarine power cable.

To be fair, IRAC didn’t just rubber stamp the joint rate proposal. Maritime Electric’s top management personnel and corporate lawyers appeared before IRAC to offer a detailed explanation to justify the new rate structure.

The company, which earlier agreed to a slightly lower corporate return for shareholders, must also report annually any over-earnings to IRAC. If the extra revenue is considerable, it must be set aside and applied to customer costs during the next round of negotiations.

Ottawa and the provinces gather this week in Vancouver to discuss climate change. That topic will play a role as P.E.I. develops its own, much-anticipated, provincial energy strategy. The province seems intent on fast-tracking this project with a completed strategy expected by this spring. It seems ambitious.

Student union makes grade

Recent changes to the student financial aid package seem like sound measures that will benefit Island students as they pursue their post secondary education.

The intent is to provide students with more flexibility, improve accessibility to higher education and allow them to focus their attention on their studies. The UPEI student union says it’s extremely pleased with these changes because they will greatly improve what is extremely important — accessibility to post secondary education.

These changes will result in an increase in the weekly maximum loan a student can receive and indexation of this weekly maximum to the Consumer Price Index — priorities which the UPEI Student Union had advocated to the provincial government the past two years.

The UPEISU says the province has chosen to make students a priority and invest in the future of post-secondary education. Almost half the UPEI students assessed say they need more than what the student loan program can provide.

The adjustments made to the weekly maximums and the index to inflation will help address accessibility and affordability on a long-term basis. These positive changes are the result of discussions between the province, post secondary institutions and student unions.

Sometimes, when students lobby and make sound arguments, institutions and government actually listen.

Organizations: Island Regulatory and Appeals Commission, Maritime Electric, Charlottetown city council UPEI Student Union

Geographic location: Prince Edward Island, Ottawa, Vancouver

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Recent comments

  • Kyle
    March 03, 2016 - 17:57

    provincial energy strategy .. is it to keep increasing it 2.3 every year for ever .that doesn`t seem to be a great strategy ,for anyone but M. E and the goverment

  • Quiet Observer
    March 03, 2016 - 14:42

    It really doesn't metter - IRAC was going to improve rate increases regardless of any issue anyone raised. have you ever seen them deny Maritime Electric?

  • Joe Doe
    March 03, 2016 - 13:27


    March 03, 2016 - 11:28

    There should have been a red flag at the beginning when Maritime Electric cited the new cable as additional costs, as every article I have seen and read on the new cable all say that the cable is funded solely by the Federal and Provincial Governments. WHY is this multi million dollar company saying they need extra money for the cable. Doesn't anyone else see this critical error in the approval by IRAC?

    • don
      March 03, 2016 - 15:20

      you have to remember the Island Regulatory and Appeals Commission is owned by the government and the higher the rates the more profit goes to the share holders. i say we have a lot of government mla's and the leader has shares in the company. but they are getting the cable from the tax payers of Canada now they want more. i still say that irac is just a front for the government and remember the Lieutenant Governor in Council appoints the members of the Commission and designates the chairman and a vice-chairman. and the LG is a liberal so what does that tell you??