Bringing sanity to power rates

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Summerside city council is on the right track in considering foregoing a planned 2.2 per cent power rate increase set for March 1.

This, coupled with the advent of the Harmonized Sales Tax on April 1, would put an additional strain on both public and private wallets.

The proposed 2.2 per cent increase is in line with a similar hike planned by Maritime Electric. The reason the city is considering following suit is because Maritime Electric and not the Summerside Electric Utility services 600 to 700 city residences and it would be unfair to have separate power rates within the city.

The city has tried, unsuccessfully, to bring those residences under its power umbrella but Maritime Electric has refused to let them go.

Mayor Basil Stewart suggested that the city forego the 2.2 per cent increase and keep its rates below those of Maritime Electric. And the mayor is correct in his thinking that lower power rates, besides being popular with the public, could be a major draw for economic development.

The one stumbling block in this scenario is the fact the Summerside Electric Utility has a $2.5 million operating deficit that needs to be addressed. The 2.2 per cent increase would bring in an additional $360,000 annually that could be put towards eliminating that deficit.

That money would have to be found elsewhere.

Councillor Cory Thomas cautioned that while keeping the power rates below those of Maritime Electric is appealing, council would have to review the city’s general fund to find replacement dollars.

Stewart said it is possible that new business and new development that would come to the city would generate the money to cover the utility’s operating deficit.

That’s a risk – but it’s one worth taking.

The city has a unique and invaluable asset in its electric utility and its needs to stop following the lead of Maritime Electric. The city should set its own rates and run its own utility to best serve the public and the business community of Summerside.

Council has also opted to turn up the heat in the negotiations to secure those homes not serviced by the Summerside Electric Utility. They intend to offer Maritime Electric a deal. The city’s auditors are looking at a proposal to present to Maritime Electric for those customers. What this proposal is and what it will entail is being worked on.

As for the 2.2 per cent rate hike, council will determine its fate during budget deliberations. For the time being, the city will implement the hike but indicated that it may cut it after the budget is approved. Every ratepayer in the city, including the 600 to 700 Maritime Electric customers would receive a rebate. 

 

 

 

 

 

Organizations: Maritime Electric, Summerside city council

Geographic location: Summerside

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  • dave
    February 08, 2013 - 07:35

    what about the wind mills thomas was that a waste of money