Maritime Electric Goes Public

Maritime Electric held a public session this evening at the Delta Prince Edward. Hosted by President & Chief Executive Officer Jim Lea, the session was an opportunity for the company to make its case to the public over the rather dramatic increase in electric rates that is scheduled for April 1.

For a matter of such importance to the day to day lives of Islanders, the session was poorly attended: there were perhaps a dozen people present. Nonetheless, the presentation by Mr. Lea was comprehensive and compelling. He began with a thorough overview of the electricity marketplace in the Maritimes: where the power comes from, how much it costs, and so on. He then explained Maritime Electric’s position in the marketplace, its regulatory environment, and the challenges it faces going forward.

I’m not a electricity expert, and I don’t have any way of testing the veracity of Mr. Lea’s remarks. But I have to laud him, and the company, for making the effort to meet with the public: it’s certainly more than our other monopoly utilities have done.

I recorded the entire session; the recording is 1 hour and 47 minutes long. Jim Lea’s presentation from the podium is very clear; there was no floor mic for the audience, so the questions are difficult to make out.

The question I wanted an answer to I asked at 1:38:46:

Is there a situation in which it is beneficial to Maritime Electric to have consumption drop?

Mr. Lea responded:

It would depend on, which customers reduced. Some customers we probably supply at a loss. So yah there are some customers — right across the board, generally speaking, from Maritime Electric’s perspective, no it would not be beneficial. All you have is fixed costs that you have to spread over fewer kilowatt hours.

And there’s the rub, if you’re someone like me who thinks we should all work to reduce energy consumption: it’s in Maritime Electric’s best interests to sell more electricity. I don’t fault them for this and, indeed, to pursue any other course would be irresponsible to their shareholders.

On first blush this means that those working to reduce energy consumption are at odds with Maritime Electric (and, in a more general way, with all profit-making investor-owned utilities). At the same time, it’s the utilities who know most about the energy market and how it works, and we depend on the utilities’ viability to toast our toast and power our computers.

I’m not sure how to resolve this paradox.


Rob Paterson's picture
Rob Paterson on March 27, 2003 - 13:00 Permalink

Peter — you have raised a central issue. All I know about the topic is that issue #1 is to reduce consumption. #2 is to find a renewable source.

Both these options are open for PEI but you have nailed the block — for the utility this would be a disaster. They have fixed costs which they have to support — so the system is set up to do the wrong thing.

So they look for a way to spend 280 million on a pipeline and Robert Ghiz calls for drilling for gas. New Brunswick looks to put in a link to the US for more power as their nuclear reactor comes off line.

If this is the issue maybe it can be solved by government — a true role — The general good is less consumption and more renewable. If that is the direction then we can broker a deal with ME. If their role becomes network operator it would be easier — they might then build, maintain and rent the network and become indifferent to the traffic. PEI might have to own the distribution system itself. The deal would look like a hotel. Local man owns the building Holiday Inn operates it.

If we don’t go down this type of road we will remain stuck with a utility having to defend its interest in traffic.

Cameraguy's picture
Cameraguy on March 27, 2003 - 13:21 Permalink

If there is one thing I took from the meeting last night, it is that Maritime Electric may not have a monopoly for long. Richard Brown seemed gung-ho to start up his own energy-supply utility, build a 4”-pipeline to Borden, and use natural gas exclusively for the production of electricy.

Alan's picture
Alan on March 27, 2003 - 14:43 Permalink

I shared with “double L” yesterday the information I could easily find that places wind power at 1 million US per megawatt. For the 280 million Canadian for the gas generation machnies and pipes, that would be 182 megawatts of clean energy without ongoing fuel costs. If you add the local fossil generation already in place, it more than covers PEI needs and largely removes the Island from the fluxuations of fossil fuel prices. Denmark now apparetly provides itself with more than 50% of its power by wind. Where’s the wizardry in this math? Even if you don’t want to see these things for some reason on PEI, build them at Tormentine, NB and spend another 20 million on a new cable to bring it over. Why is tying the economy to another fossil fuel (gas) and its naturally rising price the better option? Set it up as a co-op and you may find out the roadblock is a for-profit utility and feeding shareholders.

Alan's picture
Alan on March 27, 2003 - 14:47 Permalink

Jim Lea quoted in by CBC PEI on their website: “…we have no natural resources of our own.” ‘nuff said.

John Morris's picture
John Morris on March 27, 2003 - 18:12 Permalink

As cameraguy said on PEIinfo, islanders arent brave enough to stand up for themselves when it comes to stuff like this.

Rob Paterson's picture
Rob Paterson on March 27, 2003 - 21:02 Permalink

How can we challenge this “we have no natural resouces” statement? Alan great comparison with wind — clear choice

Alan's picture
Alan on March 27, 2003 - 21:33 Permalink

Not only as nice choice but a better economic choice as well. If the assets for wind generation were purchased and paid (along with maintenance)by citizens amortized against future MECL billings, they would be paid off in a sensible order. How to challenge? Put Lee and the Minister of “Buying Things for MECL” in a room and ask them to explain themselves.