PCs should've known Ottawa would not cover Maritime Electric's $36M Fiona bill, Opposition says

P.E.I.'s Official Opposition says the province should have known Ottawa would not cover repair and restoration costs for the province's electrical grid after post-tropical storm Fiona. 

Liberal MLA and infrastructure critic Robert Henderson said Premier Dennis King should have known that Maritime Electric does not qualify for the federal Disaster Financial Assistance Arrangements (DFAA) program.

Last November, King said the federal government would be covering Maritime Electric's $36-million bill in cleanup and restoration costs after Fiona through the disaster relief program.

But on Monday, King backpedaled, telling CBC News that Ottawa would in fact not be footing the bill.

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"I'm quite surprised that the government wasn't aware of what the eligibility would have been for that particular program, and why it left the opinion that the federal government was going to be contributing to this to many Islanders," Henderson said in an interview with CBC News.

"It needs to be a little more on the ball on understanding the intricacies of these particular programs that it's referencing."

Maritime Electric does not meet the disaster relief program's definition for a small business. So, its Fiona-related costs are ineligible, the federal Emergency Preparedness office said in an email to CBC News this week.

Maritime Electric has said if Ottawa doesn't pick up the cost, electricity rates Islanders pay could rise by 2 to 3 per cent. 

But the company said it's too early to say, because it hasn't received official confirmation on whether or not some level of government will be assisting the company with its Fiona-related spending.

"Until we have resolution of that, I think it's too early to say what the impact of Fiona is going to be," CEO Jason Roberts told CBC News.

Who's going to pay?

If the provincial government were to pick up the cost, Henderson said that would be much the same as leaving the company to pay, because the same group of people would be covering the cost — either through taxes or higher electricity rates.

But Henderson said he still feels the better option is for Maritime Electric to cover its own bill, as that way the company would have to go through the Island Regulatory Appeals Commission to justify a rate increase.

"That might be a way that at least the ratepayer would get a better shake on this," Henderson said. 

More oversight needed, Liberals say 

Henderson said he believes the cost to restore power after Fiona was higher because Maritime Electric wasn't investing enough in preventive maintenance.

"Maritime Electric has not invested even to a maritime standard when it comes to vegetation management underneath its lines," the Liberal MLA said.

In 2020, Maritime Electric spent half as much per kilometre of distribution line on tree trimming compared to NB Power and a quarter as much as Nova Scotia Power.

In 2019, after post-tropical storm Dorian struck the Island, Maritime Electric surveyed its grid and concluded almost three-quarters of its overhead power lines "require[d] urgent vegetation management to avoid a significant deterioration of reliability."

The cost to conduct that work was pegged at $54 million. By the time Fiona struck three years later, the company had only spent $9 million on tree trimming.

Henderson said ultimately it's up to the provincial government to ensure Maritime Electric is making the necessary investments in maintenance, suggesting that oversight didn't take place in the lead-up to Fiona and hasn't happened in the almost year that's passed since.

"They're supposed to make sure that they're protecting Islanders and being forward-thinking to the demands and needs," said Henderson.

"You don't wait for a year after a bad event has occurred to even start to interact with what should be the solutions moving forward. So I would say there's a negligence on government here in not protecting Islanders [from what] could happen from another hurricane season."