Privately-owned PEI utility seeks rate hike after Fiona losses

CHARLOTTETOWN – The privately owned electricity utility in Prince Edward Island wants ratepayers to cover $37 million in costs incurred during post-tropical storm Fiona in 2022.

Maritime Electric, a subsidiary of Fortis, has applied to the Island’s regulatory commission for rate hikes of about 2.4% cent by Mar. 1, 2024, for rural residential customers. After the costs of the disaster are recovered in five years, the rate hike would be dropped, the application says.

The storm that hit on Sept. 24, 2022, lasted 12 hours, knocked out power to 84,000 customers and left a trail of 40,000 downed trees and branches that had to be cleared by repair crews. It took up to three weeks to restore power to all customers, with the average outage lasting about a week.

The company says in its application that its costs are not eligible to be reimbursed under the federal disaster relief program.

During debate at the legislature Tuesday, the Liberal and Green opposition parties said the utility could have better protected its power lines before the storm, adding that Fortis shareholders should absorb some of the costs.

Liberal member Robert Henderson tabled photos of power lines in his riding that fell during a storm Monday evening, when winds gusted at 70 km/h. The photos, he said, show that for years maintenance around power lines has been inadequate.

“(Maritime Electric) are behind their counterparts in Nova Scotia, New Brunswick and Newfoundland when it comes to this issue,” he told the legislature, referring to the trimming of branches around electrical lines. “No wonder 40,000 trees fell on the lines here. To solely blame homeowners for these downed trees is a cop out.”

Henderson asked Energy Minister Steven Myers if the Energy Department will intervene in Maritime Electric’s application, to shift some of the costs onto the utility. He also called on the Progressive Conservative government to push Maritime Electric to act more swiftly on the utility’s tree-trimming program.

In a 2022 application to the regulator, Maritime Electric said its tree-trimming budget is lower per kilometre of distribution line than in neighbouring provinces and had fallen behind industry standards. Three months before Fiona, the firm filed a rate application disclosing that 74% of its overhead power lines required “urgent vegetation management.”

However, the CEO has noted that in many instances, his company didn’t have right of way to trim trees.

Myers told the legislature the province’s energy regulator has the means to determine whether a company is properly costing its operations, but he said the government will keep an eye on the application proceedings.

“The regulatory process is long and onerous. (Maritime Electric) do have to prove they are owed all that money? At this point we’re going to let the (regulatory) process run out a bit more, but we’re never a big fan of rate increases,” Myers said.

Green Party member Peter Bevan-Baker noted that by Mar. 1, 2024 – if the latest approval is granted – electricity rates will have increased by 12% over a 12-month period.

“This company should be taking on the cost of doing business. They should be shouldering the burden, they make enough money as it is,” Bevan-Baker said.

The company says the $37 million of Fiona-related costs include $19.3 million for the replacement of equipment, and $15.3 million for the rise in operating costs while repairs are conducted.

 

This report by The Canadian Press was first published Nov. 28, 2023.

Feature image courtesy of iStock.com/FrankRamspott