Taxpayers won't save by taking over Maritime Electric, CEO says

Teresa Wright
Published on February 22, 2012
A Maritime Electric worker repairs a line in this Guardian file photo
Guardian photo

Making Maritime Electric a public utility would not help Islanders save on their power bills, says the utility’s president and CEO Fred O’Brien.

Opposing views on whether the province should take over Maritime Electric were presented Wednesday as the P.E.I. Energy Commission began its public meetings on the cost and management of energy in P.E.I.

As part of his submission, O’Brien told the commission government-owned utilities in other jurisdictions have tended to become problematic, as ‘priorities can get skewed.’

“There are very strong motives within government to do economic development, regional development very viable and very appropriate for a government to deal with, but where we would have concern is if they would engage and pull the utility into those types of goals,” O’Brien said.

“It would deflect from where we should be, which is reliable service at the lowest possible cost.”

But Leo Broderick from the Council of Canadians called on the commission to recommend the provincial government take over full ownership and operation of Maritime Electric and all energy utilities and wind farms in the province.

With multinational companies in control of most of these assets, Islanders continue to pay high energy prices and in doing so, support mainly non-renewable energy initiatives, Broderick said.

“We pay 10 per cent of what we have in the province to Fortis, which is Maritime Electric, that would be a 10 per cent savings. And as energy costs continue to rise and we continue to rely on fossil fuels the costs are only going to increase,” he said, referencing the 9.75 per cent rate of return currently guaranteed to Fortis-owned Maritime Electric.

“We think there would be further energy savings in the province if all the energy in the province is controlled by the province and then we could even sell it on the market. At the moment all those profits go to Fortis and we need control over that,” Broderick said.

He pointed to the city of Summerside, which operates its own electric utility. He said this community-based model could easily be replicated in other areas of the province.

“It is not a corporate board. The monies go back into the community, if there are any monies to be made, or at least an attempt to reduce the electrical rates,” he said.

“There’s no reason why this could not happen here in Charlottetown, there’s no reason it could not happen in Souris.”

Leo Cheverie also spoke to the energy commission Wednesday in support of government ownership of Maritime Electric.

He said he believes P.E.I.’s electrical grid should be decentralized to allow for more community based utility management.

“It will actually create more jobs, create more money for the local economy and have a whole lot more positive impacts so I think public ownership, community ownership models are something we need to be looking at.”

O’Brien argued Maritime Electric as a public utility would not save Islanders money on their electricity rates because 70 per cent of the Island’s supply comes from outside sources subject to market prices and fluctuations.

“We don’t have the resources here to economically produce power with the exception of wind, so no matter what structure the utility is built upon, it will have to buy power from essentially the same source as we do,” O’Brien said.

“If there was a cheaper way to build generation here on the Island, we would be doing it now or the P.E.I. Energy Corporation would be doing it, someone would be doing it. That’s why I conclude that with two-thirds of your bill being driven by energy supply, that’s hard to overcome.”

Other presenters to the commission Wednesday included a Larry Flemming from Cavendish Farms and Michael Meacher who both spoke about the need for a natural gas pipeline for P.E.I.

The commission will submit a report to government in the fall with recommendations that come from whatever materializes through public input. The public meetings continue Thursday.