How do P.E.I.'s 2 electric utilities work, and why are they at odds?
It's all about access to 4 giant underwater cables that bring power from the mainland
As residents of P.E.I. spent much of the last week grappling with electricity instability, the Island's second-largest city and the utility that powers most of the province have been engaged in a very public disagreement.
It all started early Monday morning, when an outage across the western part of the Island left more than 19,000 customers without electricity. Power was restored by midday, but the Island's power supply remained unstable while crews worked to fix a damaged substation — and that instability was felt most acutely in Summerside, which warned residents to be prepared for the possibility of rolling blackouts.
That's because Summerside has its own utility, Summerside Electric, which is owned by the city and generates most of its own power through wind and solar farms.
But it also buys additional electricity (about 40 per cent of its power needs in 2024, according to the city) from New Brunswick Power. The energy travels to the Island through an underwater cable system in the Northumberland Strait.
But to get to Summerside, that power has to travel through transmission lines owned by Maritime Electric, the privately owned utility that serves the rest of the province. It's an indirect wholly owned subsidiary of the energy utility holding company Fortis Inc.
Let's unpack this a little further.
How does it all work?
Four huge underwater cables bring power to P.E.I. from the mainland. The cables were paid for by the provincial government, which still owns them, but they are operated by Maritime Electric. Most of the energy that travels through those lines comes from NB Power and arrives first at the Borden-Carleton switching station.
From there, Maritime Electric delivers power through substations across the Island. But when Maritime Electric's Sherbrooke substation, north of Summerside, was damaged on Monday, the utility cut back Summerside's access to the power for which it pays.
Summerside Mayor Dan Kutcher was vocal in his criticism of that decision.
Summerside's utility is largely self-sustaining but it relies on Maritime Electric to keep the lights on. And when an event like the one that happened on Monday hits P.E.I., the city of 17,000 essentially becomes an island of its own.
That's because Summerside is what's called an "interruptible customer." That means it pays less for power — and that cheaper rate comes with the risk of its power supply being cut off during high-demand periods.
Maritime Electric president and CEO Jason Roberts said the utility has an obligation to serve its own customers first.
An application denied
The relationship between Summerside and Maritime Electric has been rocky in the past.
Summerside went to the Island Regulatory and Appeals Commission more than a decade ago, asking for permission to build its own lines to get power directly from the underwater cables.
Maritime Electric intervened in that application and the plan was ultimately shut down.
In its ruling, IRAC said Summerside didn't make a strong enough case that the plan would mean rate savings for its electricity customers and didn't lay out a strong enough business case.
The ruling says, in part, that the city:
- Underestimated the cost of constructing the proposed transmission line;
- Did not sufficiently detail cost estimates on operating and maintaining the line;
- Did not complete an environmental review of the proposed project, or consider additional costs that could result from an environmental review; and
- Did not sufficiently consider or address the issue of back-up transmission.
Perhaps crucially, the ruling found that the city would still have had to pay to use Maritime Electric's infrastructure because the plan hinged on its transmission line hooking into the utility.
"The City of Summerside is not by-passing the [Maritime Electric] system and therefore must continue to pay the required … fee for transmission services, which results in no savings to customers for the City of Summerside transmission costs," the ruling reads.
If you want to read the full ruling, you can find it here.
What now?
Kutcher maintains this latest dust-up goes to show it's time to revisit the entire arrangement — and make another serious push to access those underwater cables. He says the city "wouldn't be at the mercy of a fragile electrical system" if it had its own access to those underwater cables.
Maritime Electric, meanwhile, has a $427-million application before IRAC for a new combustion turbine and other equipment that would bulk up P.E.I.'s grid and increase local power generation, making the Island less reliant on getting power from neighbouring provinces.
The provincial government says it's committed to helping the two utilities work through the current instability, adding that "we must collaborate on the long-term work ahead, so Islanders can access reliable, affordable and sustainable electricity."
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With files from Cody MacKay and Maggie Brown