Following the meetings of this sub-committee on March 16, 2009 and March 23, 2009,
it was concluded that the residents of Prince Edward Island have lost confidence in the
profit-based operation of Maritime Electric Co. Ltd (MECL) and view the regulatory
control exercised by IRAC over MECL to have been constrained and compromised.
Electricity is the single energy resource upon which every Islander – not just senior
citizens – and each Island business is totally dependent every day of the year. This
dependence dictates that the day-to-day supply, the security of future supply and the
overall customer affordability of supply all require strong government involvement and
control.
The PEI Senior Citizens’ Federation Inc. therefore recommends:
1) The PEI provincial government start inter-provincial actions to secure cost-based
electricity immediately, either from existing suppliers or new. We propose that a PEI
government commitment to participate in ownership of new electricity generation
projects with these suppliers should secure cost-based supply agreements.
2) The PEI provincial government use the outcomes of item 1) above to participate in
MECL’s negotiation on a new pricing agreement with New Brunswick Power when the
current Energy Price Agreement (EPA) ceases in September 2009.
3) The PEI provincial government assume majority ownership of MECL and disband the
regulatory control of electricity supply currently exercised by IRAC. Ownership and
control of the separate Summerside Utility would need consideration to ensure that the
best interests of Summerside residents are served.
4) The PEI provincial government take a more aggressive approach to the expansion
and ownership of PEI based wind turbines. The PEI provincial government, in
collaboration with Federal programs, needs to also expand green-energy spending
towards biomass energy generation.
5) Of immediate concern to the PEISCF – and presumably most residents and
businesses – is the planned consumer pricing of electricity supply for 2010. The
PEISCF has particular concern with the impacts of the Point Lepreau replacement
energy account, the tenuous decision by MECL and IRAC to revert to a twelve month
amortization period for ECAM and the replacement of the EPA for electricity supply due
in September 2009. We request that the PEI provincial government publish the
forecasted pricing by April 2009.
6) In determining revenue requirements, the bases used by MECL and IRAC are:
Canadian to US $.95, crude oil price between $104 and $110 and a subsequent ECAM
base rate (energy cost) of $.11 by 2011. The PEISCF request that the PEI provincial
government publish the mechanism by which the actual crude oil prices are accounted
in both the EPA and the Dalhousie cost participation agreement.
it was concluded that the residents of Prince Edward Island have lost confidence in the
profit-based operation of Maritime Electric Co. Ltd (MECL) and view the regulatory
control exercised by IRAC over MECL to have been constrained and compromised.
Electricity is the single energy resource upon which every Islander – not just senior
citizens – and each Island business is totally dependent every day of the year. This
dependence dictates that the day-to-day supply, the security of future supply and the
overall customer affordability of supply all require strong government involvement and
control.
The PEI Senior Citizens’ Federation Inc. therefore recommends:
1) The PEI provincial government start inter-provincial actions to secure cost-based
electricity immediately, either from existing suppliers or new. We propose that a PEI
government commitment to participate in ownership of new electricity generation
projects with these suppliers should secure cost-based supply agreements.
2) The PEI provincial government use the outcomes of item 1) above to participate in
MECL’s negotiation on a new pricing agreement with New Brunswick Power when the
current Energy Price Agreement (EPA) ceases in September 2009.
3) The PEI provincial government assume majority ownership of MECL and disband the
regulatory control of electricity supply currently exercised by IRAC. Ownership and
control of the separate Summerside Utility would need consideration to ensure that the
best interests of Summerside residents are served.
4) The PEI provincial government take a more aggressive approach to the expansion
and ownership of PEI based wind turbines. The PEI provincial government, in
collaboration with Federal programs, needs to also expand green-energy spending
towards biomass energy generation.
5) Of immediate concern to the PEISCF – and presumably most residents and
businesses – is the planned consumer pricing of electricity supply for 2010. The
PEISCF has particular concern with the impacts of the Point Lepreau replacement
energy account, the tenuous decision by MECL and IRAC to revert to a twelve month
amortization period for ECAM and the replacement of the EPA for electricity supply due
in September 2009. We request that the PEI provincial government publish the
forecasted pricing by April 2009.
6) In determining revenue requirements, the bases used by MECL and IRAC are:
Canadian to US $.95, crude oil price between $104 and $110 and a subsequent ECAM
base rate (energy cost) of $.11 by 2011. The PEISCF request that the PEI provincial
government publish the mechanism by which the actual crude oil prices are accounted
in both the EPA and the Dalhousie cost participation agreement.
| Presentation by PEI Senior Citizens’ Federation Inc. to the Standing Committee on Community Affairs and Economic Development Tuesday, June 16th 2009 |
With the single objective of securing future supply and overall customer affordability of electricity
on PEI, we have recommended changes to government regarding Maritime Electric Co. Ltd
(MELC). We are now promoting changes to the Island Regulatory and Appeals Commission
(IRAC).
on PEI, we have recommended changes to government regarding Maritime Electric Co. Ltd
(MELC). We are now promoting changes to the Island Regulatory and Appeals Commission
(IRAC).
Causes of Islanders’ Issues:
1) IRAC is not structured to control a monopoly supplier.
2) IRAC staffing level is unable to compete with MECL complexity.
3) IRAC does not protect consumers’ interests.
4) The appeals role of IRAC during hearings is not working.
5) Government oversight of MECL is weak.
6) MECL contributes directly to IRAC revenue.
1) IRAC is not structured to control a monopoly supplier.
2) IRAC staffing level is unable to compete with MECL complexity.
3) IRAC does not protect consumers’ interests.
4) The appeals role of IRAC during hearings is not working.
5) Government oversight of MECL is weak.
6) MECL contributes directly to IRAC revenue.
Assuming that radical changes to IRAC will be resisted, PEI Government changes are required.
We propose that these changes be modelled on the Nova Scotia Regulation System
1) A monopoly public utility supplier cannot be allowed to operate without the influence of both
Government and Consumers. In the current MECL/IRAC environment, PEI needs a “third leg-on-
the-stool”.
2) An Electrical Energy Appeal Board (EEAB) should be established to provide the path for
Government and customers input.
3) This board would report directly to the Executive Council, would consider issues outside the
legal interpretation of the Power Act, accept representations from both Government and customer
groups, adopt an arbitration role and be able to revoke or modify IRAC Orders pertaining to MECL.
4) Mandate of the Electrical Energy Appeal Board - EEAB:
IRAC has failed to provide Islanders with a fair Maritime electricity price and continues to ignore all
aspects of affordable future supply. An injection of business, technical and arbitration skills is
required to ensure that MECL returns to operate as a responsible Public Utility and does not
continue to exploit the monopoly position it holds.
We propose that these changes be modelled on the Nova Scotia Regulation System
1) A monopoly public utility supplier cannot be allowed to operate without the influence of both
Government and Consumers. In the current MECL/IRAC environment, PEI needs a “third leg-on-
the-stool”.
2) An Electrical Energy Appeal Board (EEAB) should be established to provide the path for
Government and customers input.
3) This board would report directly to the Executive Council, would consider issues outside the
legal interpretation of the Power Act, accept representations from both Government and customer
groups, adopt an arbitration role and be able to revoke or modify IRAC Orders pertaining to MECL.
4) Mandate of the Electrical Energy Appeal Board - EEAB:
- Has business, technical and arbitration skills.
- Is a standing Board accepting any IRAC/MECL Order appeal from one or groups of
approved appellants. - Can deny or modify IRAC Orders pertaining to MECL.
- Reports to the Executive Council.
IRAC has failed to provide Islanders with a fair Maritime electricity price and continues to ignore all
aspects of affordable future supply. An injection of business, technical and arbitration skills is
required to ensure that MECL returns to operate as a responsible Public Utility and does not
continue to exploit the monopoly position it holds.
| From the Maritime Electric/IRAC Subcommittee of PEI Senior Citizens' Federation Inc.: |
| Maritime Electric Company Ltd./IRAC Sub-Committee Proposal |
| ADVOCACY (continued) |
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