PE: Farmers relieved as Maritime Electric delays rate hike

[CHARLOTTETOWN, PE] — A plan to scrap a second, cheaper block of electricity for higher-usage residential customers is being delayed.
 The Island Regulatory and Appeal Commission has issued an order delaying the elimination of the 2,000-kilowatt threshold.

Maritime Electric will now have to go before the commission to argue for the change as part of its 2010 rate amendments. 
The decision will cost Maritime Electric more than $800,000. 
Farm leaders describe it as a good first step. The rate change would have impacted the struggling agricultural sector the hardest.

Mike Nabuurs, executive director of the P.E.I. Federation of Agriculture, says his group will now make a presentation to the commission in an effort to have the second-block reinstated permanently.

But Nabuurs said it’s unfortunate it had to get to this point.

“A decision of this magnitude that impacts farmers and rural P.E.I. the way it does, someone needed to be informed,” said Nabuurs. 
“It seemed like everyone I spoke to within government, from the minister of environment — and that was George Webster at the time — right down to the current minister of environment and the premier, seemed to know this was coming down the pipe.”

The rate change would have had no impact on the majority of Islanders. About 70 per cent of residential customers use 650 kilowatts of power or less. 
It also would not have had any impact on commercial customers like Cavendish Farms or McCains. 
But for farmers who use more than 2,000 kilowatts of electricity, it would have had a major impact. They make up more than half of the 3,400 customers who would have been impacted by the rate change. 
The rates, as they currently stand, allowed those high-end users to pay less for the electricity they use over and above 2,000 kilowatts. 
The changes could cost large farmers thousands of dollars.

Fred O’Brien, president of Maritime Electric, said the utility suggested putting the changes on hold and including those changes in the current rate application. He said that will allow Islanders to have their say.

In its application, Maritime Electric said the suspension is also warranted 
because of the potential rate restructuring associated with a possible deal between the provinces of P.E.I. and Quebec.
 P.E.I. is hoping to strike a deal with Quebec to buy cheaper hydro power from that province.
 The Island now pays the highest electricity rates in the country.

O’Brien said while he supports the suspension of the rate changes, he said they’ll be seeking to have the 2,000-kilowatt threshold removed next year. 
He said the rate changes were already approved in 2007. 
They were supposed to go into effect April 1.

“We went through the public process. All of our applications are open to the public,” said O’Brien. 
“But clearly a segment of our customers did not pick up on the impact that would have on them.”

No date has been set for the 2010 rate hearings.

O’Brien said the loss of the expected $800,000 income will have an impact on the company’s bottom line but will not impact other rates… at least not now.

“At this point in time we have no approved rates other than the ones that are in existence now. It will have to be absorbed by us — that’s certainly not an easy thing.”

Maritime Electric said most jurisdictions have eliminated block pricing.
 In a time of energy conservation, block pricing actually rewards customers for using more 
electricity.

Nabuurs said farmers have taken steps to become more energy-efficient but they still need to use electricity to keep their farms operating.

“Farmers don’t have a choice.”