Maritime Electric looks to IRAC for direction on block pricing

Maritime Electric says it is now looking for direction from the Island Regulatory and Appeals Commission before taking any action on eliminating block pricing for high-use Prince Edward Island residential customers, including farms.
The utility had planned to enforce a two-year-old standing order from IRAC on block pricing to take effect April 1. The order would have dramatically increased power bills for farms by between $8,000 to $20,000 extra per year, and has drawn intense criticism from farm groups and the Opposition.
"We are now looking for direction from the regulator," says a spokesman for the Island utility.
The province has asked IRAC to reconsider the order to eliminate block pricing. The order was granted in January 2008 but neither the farm community nor government was fully aware of the pending change until just over a week ago.
The Maritime Electric spokesman said the move to eliminate block pricing was actually initiated under the former Binns government so the Opposition should have been aware of the order and its background.
The utility met last Thursday (May 4) with officials from the PEI Federation of Agriculture to discuss the impact of the block pricing issue.
"They had legitimate concerns. We listened and are taking them very seriously," said the Maritime Electric spokesman.
The federation said it was caught by surprise by the block pricing issue.
Federation spokesman Mike Nabuurs said the provincial request to reconsider block price elimination is welcome news, but how an order was even struck without public input and lurked in the shadows for the past two years has startled the agricultural community.
"We're very pleased the government has stepped in to take some action," said Nabuurs.
"But this entire incident begs an answer as to how this could even happen. "If IRAC makes an order they should be required to let people know. This has major ramifications and it should be their responsibility to ensure the public is alerted and not just say, 'We posted it on the website'."
Roughly half the affected 3,400 Maritime Electric customers are farmers who will now lose the opportunity to pay less for electricity after using the first 2,000 kWh per month block.
Energy Minister Richard Brown has written IRAC asking for the reconsideration, saying the policy of the Renewable Energy Act, passed by the former government, may have negative impacts on those who operate as high-use residential customers.
Some farmers estimate electricity bills for an average farm could increase by $8,000 a year while larger operations could tack on another $20,000 in power costs.
The National Farmers Union also says it is concerned about the recent block pricing announcement which was part of a record week of negative announcements which will increase the pressure Island producers face in trying to survive, said an NFU spokesperson.
"The cost of electricity will increase dramatically for many large dairy and potato farmers in particular. The decision to scrap the two-tier system for electricity costs was made many months ago by IRAC, but no one was informed of this decision."
The NFU says the provincial government needs to take charge of the situation and do whatever has to be done to save the Island farming industry and ensure that consumers in this province will have a consistent supply of safe food.
Other announcements last week which have rattled the Island farming community were the cutbacks in the number of contract potato growers shipping to both McCains and Cavendish Farms and the closure of the fresh pork line at the Berwick, N.S., plant.