Should P.E.I.'s power be publicly owned? The energy minister is thinking about it

Prince Edward Island's energy minister is looking at whether and how the province could takeover Maritime Electric, given the utility's multiple requests for customer rate hikes over the past year.

On Friday, a2.5 per cent increase for residential customers kicked in the electric utility's third increase since the middle of last year.

All told, Islanders are paying nine per cent more on their bills than they did for the same amount of energy in May 2023.

Energy Minister Steven Myers called the constant rate hikes "a major concern" during question period in the P.E.I. legislature on Friday.

"This is obviously something that's been bothering me for a while," he said in response to questions from his fellow Progressive Conservative MLA Zack Bell and Liberal Robert Henderson about Maritime Electric's costs.

P.E.I. to take a hard look at creating a publicly owned electric utility

8 months ago

Duration 1:14

'We will not only look into it, we're going to research reports to see what it would look like if Islanders owned the electricity production and delivery on Prince Edward Island,' says Energy Minister Steven Myers, who is not happy with Maritime Electric these days.

"I think it's time that we took a heavy stance. We're going to research a report to see what it would look like if Islanders owned the energy production and delivery here on the Island."

Maritime Electric has been electrifying the Island since 1918, and has been owned by Fortis Inc. since 1990. Turning it into a public utility has been raised several times in the past, including by the governments of former premiers Jim Lee and Robert Ghiz.

The last study, in 2012, suggested a hybrid model involving private ownership of electricity distribution through wires while the government owns power generation facilities such aswind farms and solar arrays.

It gives me a scared-to-death feeling inside because it's such a big move, but the cost of doing nothing is showing every day out there. Energy Minister Steven Myers

But that model is a lot like what exists on P.E.I. now, and Islanders' power bills are still rising.

Meanwhile, Maritime Electric has revenues of about $250 million a year and assets worth around half a billion dollars.

Myers said he has no idea what taking over the utility from Fortis and making it a Crown corporation would cost the province, saying that's a question the research might answer.

"Could we seriously consider ourselves a better entity to take that on? Those are some very tough questions that are going to bring a very big decision at the end of it," he said.

"It gives me a scared-to-death feeling inside because it's such a big move, but the cost of doing nothing is showing every day out there, when I hear from Islanders [who] are being forced to turn off their lights or don't want to use their stove or are scared of opening up their Maritime Electric bill when it comes because they can't afford to pay it."

More rate hikes loom

The question came up in the legislature not just becauseof Friday's rate increase, but also due to concerns over the cost associated with Maritime Electric's smart meter program.

The utility's estimate for installing the meters recently went up by $16 million to $64 million. The more the program costs, the more rates might eventually have to go upin order to pay for it.

Myers said the province might end up picking up the cost of the smart meters, rather than Maritime Electric passing that expense onto Island residents and businessesin the shape of even more rate increases.

There's one more rate application for costs related to restoring P.E.I.'s energy grid after post-tropical storm Fiona that the Island Regulatory and Appeals Commission hasn't yet ruled on. If Maritime Electric's application is approved, the increase in electricity rates since May would hit 12 per cent.

Myers said earlier this week that the government could still pick up the tab for those Fiona-related costs as well.

This all might have Islanders asking: If the province is using taxpayer dollars to offset rate increases anyway, what point would there be toturning Maritime Electric into a public utility?

"You're taxed on your income, and your income may be higher than your neighbour's, so it's probably a fairer way to do it because you can afford to pay more rather than have it straight across the board and put more people into poverty because of it," Myers said.

"Why wouldn't we look at what an ownership model looks like [so] we would have a better opportunity to control the costs and pass on the savings to Islanders?"