A legislative standing committee is calling for an end to unscheduled price adjustments for fuel but Premier Robert Ghiz says that may result in sticker shock for Island consumers.
The recommendations are contained in report that reviewed the Island Regulatory and Appeals Commission.
The commission, commonly referred to as IRAC, regulates petroleum prices, land protection, public utilities, including Maritime Electric, and auto insurance.
It’s been referred to as the commission everybody loves to hate.
Robert Henderson, chairman of the legislative standing committee, says IRAC plays a key role in protecting consumers and small retailers. He said his committee recommends that IRAC continue to regulate fuel prices.
But Henderson said the committee also feels the public has a right to know when fuel prices will change.
Therefore, he said, they are recommending an end to unscheduled price adjustments.
“We heard loud and clear that a lot of Islanders were not in favour of these unscheduled price adjustments mostly because they couldn’t prepare for them,” Henderson told The Guardian.
“The argument was, what’s the point of IRAC if you can adjust the price at any given time?”
IRAC sets fuel prices in P.E.I.
In the beginning, prices were only adjusted at the beginning of the month. Now they are adjusted at the beginning and the 15th of each month.
But during volatile market conditions, the commission can issue an unscheduled price adjustment at any time.
The commission has also stopped telling Islanders in advance of upcoming changes in prices, saying advanced warning can hurt gas retailers.
Ghiz said he’s prepared to look at the committee’s recommendations but, he added, the province has to respond to world events that may force the price of fuel up between regularly scheduled price adjustments. He said he’d rather see the price increase gradually, rather than spike at the beginning or middle of the month.
“What would happen if they made an adjustment on the first of the month and then between the first and the 15th you saw the price of oil go up $20 a barrel?” Ghiz told The Guardian.
“You’d see a huge increase on the 15th. Sometime it’s better to come in with gradual increases so that Islanders don’t get hit with one big, balloon payment at one time.”
IRAC has long contended that price regulation means P.E.I. has among the lowest gas prices in the region, but Island consumers have often disputed that claim. 
Henderson said the committee has now made its recommendations but it will be up to government to decide if they want to implement those recommendations.
Still, Henderson said his committee believes that market volatility should not be used as an excuse not to scrap the unscheduled price adjustments.
“Yes, there is volatility in the energy markets, there’s no argument there. But there needs to be some sense of cushioning the blow.”

Highlights:

A legislative standing committee has reviewed the Island Regulatory and Appeals Commission. Here are the key highlights:
– Scrap unscheduled fuel price adjustments;
– Educate Islanders on how fuel prices are determined;
– Review the mechanism for increasing rents to ensure fairness for both tenants and landlords;
– Overhaul the rental act and review recommendations made in 2006 to see if they can be implemented in 2010;
– Review the legislation that governs Maritime Electric, called the Electric Power Act;
– Require time of day billing so Islanders know the cheapest times to use electricity;
– Province should hire a public intervenor so that citizens who are making challenges to IRAC will have independent representation;
– Environment Department needs to carefully consider the development of wind farms and their impact on local homeowners as it explores energy issues in the future.