Maritime Electric's rate hike application still under review

Maritime Electric will likely have to wait until early summer before it finds out if its request for a residential rate increase is approved, says the Island Regulatory and Appeals Commission.

Maritime Electric had applied for a 4.1 per cent rate increase spread over three years, with the first 1.3 per cent to have taken effect March 1.

In a news release issued Thursday, IRAC said it is reviewing the application, but requires more information from Maritime Electric before it can make a decision.

Once all the information has been provided and reviewed by the commission and its experts, public hearings will be scheduled to allow Maritime Electric to present its case, IRAC said.

IRAC said it anticipates those hearings to be held in early summer.

About $4 a month extra, utility says

Maritime Electric had asked for residential rate increases of 1.3 per cent on March 1 and 1.4 per cent on March 1, 2020, and March 1, 2021.

The utility has said that would translate to about $4 extra each month over the course of the three years, for a "typical" residential customer using 650 kilowatt hours per month.

I think it was important that people realized that the proposed changes were not going to be in effect on March 1.— Kim Griffin, Maritime Electric spokesperson 

Maritime Electric applied for the rate increase because its costs of doing business have gone up, said spokesperson Kim Griffin. Those costs are outlined in the application document, which is about 170 pages, she said, so questions from IRAC were to be expected.

"We anticipated that this could happen," she said. "We're still in the midst of answering some of those questions."

Griffin said it's at IRAC's discretion when the hearings will be held and when any rate increase would take effect.

"I think it was important that people realized that the proposed changes were not going to be in effect on March 1."

Maritime Electric also asked for billing changes that would make it more expensive for homeowners who use more energy — for example, those who use electric heat, or farms, which are also considered residential customers.

Under the current rate structure, homeowners who use more than 2,000 kilowatt hours in a month receive a discount of about 20 per cent on everything above that threshold by paying a lower rate for what's called second block usage.

But the utility has applied for a change in its residential rate structure to more than double that threshold, meaning that by 2021, the discount wouldn't kick in for homeowners or farmers until they used 5,000 kilowatt hours of electricity in a month.

'Process in ongoing'

Because the second block billing rate is lower, it would push up costs for customers who use more than 2,000 kilowatt hours per month, if that change is approved.

Maritime Electric has also applied to drop the extra $2.35 per month in service charges paid by rural customers, which would benefit about 42,000 households.

In an email to CBC, a spokesperson for IRAC said "there has been no deferral" in Maritime Electric's application.

"The process is ongoing and the commission is obtaining further information from Maritime Electric," the email said.

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