Transportation, Infrastructure and Energy Minister Steve Myers has signaled the government's intention to intervene at upcoming hearing before the Island Regulatory and Appeals Commission (IRAC) on an application by Maritime Electric to raise rates.
In a statement to the legislature, Myers said the government was especially concerned about what impact the proposed increase would have on farmers, pointing out producers are charged at the residential electricity rate rather than the industrial or general service rate.
"Electricity and consumption of 2,000 kilowatts, known as second block, is charged at a lower rate," Myers told the legislature."Many farms consume electricity in the second block. "
A consultant hired by the commission has recommended that a phase-out of the second block rate start immediately to discourage excess use of energy. The long-time Georgetown-St Peters MLA said abolishing the second block immediately will have an unfair impact on farmers.
"The provincial government does not have direct control over electricity prices, but our government knows the importance of ensuring Islanders can afford to pay their bills," he said. "There will be public hearings on the rate increases this summer. The PEI Energy Corporation will intervene in these hearings when necessary. "
Myers said the government will be advocating that as a first step, any changes to the second block rates be phased in over a longer period of time. He added the province is also working with farmers to help them save money and reduce greenhouse gases through efficiency programs that will help farmers reduce energy use.
It would be up to IRAC to decide when any proposed increase would come into effect. However, Myers noted the commission does have the power to make rate increases retroactive. Myers added "While we do recognize that electricity costs money and we are willing to pay fair rates, we are also going to fight for Islanders on this important issue. "
Summerside-South Drive MLA Steve Howard said the current electricity rate structure puts an unfair burden on the province's most vulnerable citizens. The Green energy critic noted "People who have less, use less. So right now, you pay more for that first block of power. So I mean, you could shift that to a complete flat rate block and have no blocks of power whatsoever where everybody pays the same and that would tilt the scale in the right direction."
Howard said the province should be encouraging Islanders to use less electricity "and it’s the high users of that power that drive the expensive upgrades that Maritime Electric needs to put in place. So it’s really, the onus is on those folks who use high power to pay for those infrastructure upgrades. They tend to also be the people who are more deep pocketed and have the ability to pay more." He suggested the rate structure should be changed so that those who use less, pay less, adding there should be incentives for all Islanders to cut electricity use.
"As far as farmers go, there are a great deal of small farmers out there as well," he concluded. "I’ve spoken with hundreds of them over the years. Some are very large and have vast energy expenses. Some are very small and don’t have much more than a large household expense would have. "
Cornwall-Meadowbank MLA Heath MacDonald said it is "extremely important to review these types of things from time to time to ensure that all parts of society are valuable and all parts of society are being looked upon as users and how much they use and what have you."
However, the Liberal energy critic said the government of the day has to be willing to support those industries that may need monies to initiate some of the changes. He argued the province must "put programs in place that will actually adapt to ensuring that that innovation is created in those farms without breaking the bank of those farms."