The president of Maritime Electric was reluctant to put a timeframe on when the utility might phase out the charges for the second block of power when he appeared before the Standing Committee on Natural Resources and Environmental Sustainability.
O'Leary-Inverness MLA Robert Henderson, who is also the Liberal party agriculture and land critic, questioned John Gaudet on the issue. Farmers are charged at the residential electricity rate rather than the industrial or general service rate. Consumption of 2,000 kilowatts, known as second block, is charged at a lower rate and many farms consume electricity in the second block.
"My understanding there was an arrangement to phase that out over a period of time, so I’d like to get on the record what that arrangement is and if IRAC have made any change to that so our farm community can at least be better prepared to know how to adapt to that, should that happen sooner than they expected," Henderson explained.
In a letter to the Island Regulatory and Appeals Commission (IRAC), PEI Federation of Agriculture president David Mol expressed concern about calls from some quarters for a faster phase-out of the second block. He said discussions the organization has held with the utility led them to believe there would be a phase-out period of at least three years.
Mol noted Maritime Electric has placed energy meters on 90 different farming operations throughout the province. These meters are located on farms of different sizes, different commodities and different business models.
"This study started last year with a percentage of these farms before all 90 became operational in 2019 and these meters will be closely monitored by the Company for the next three years," the federation noted in its letter. "This has been done to collect a set of reliable data on which to make decisions regarding farming operations and their rate structure.It will answer questions around whether or not it makes sense to leave them classed with the residential rate, or perhaps suggest they need their own class."
Gaudet told the former agriculture and fisheries minister it is still unclear when the farm community may see any changes, saying future discussions are needed with IRAC on the issue. He added "you may or may not know that we’ve got special meters installed in a representative sample of farming customers to better understand their usage patterns and what they contribute to the cost of supply, both in energy and demand. "
The utility president added "It will be up to us to come up with new appropriate rates for farm customers, and it’s very difficult for me to say what that is today because we are conducting that study and we are hopeful to have that study completed early next year. "