Maritime Electric has filed an appeal with the P.E.I. Court of Appeal seeking to reverse a ruling that restricted the utility from recovering all expenses incurred during the restoration of power post-tropical storm Fiona. If successful, this appeal could lead to Islanders potentially facing an additional $6 million in costs compared to the current decision by the Island Regulatory and Appeals Commission (IRAC).
The IRAC decision, issued in June, allowed Maritime Electric to recoup around 90% of the approximately $41.2-million restoration costs related to Fiona through electricity rates. However, IRAC disallowed roughly $4.12 million, citing inadequate tree trimming efforts by the utility before the storm and prohibiting the utility from earning a profit on a portion of the expenses.
Maritime Electric is requesting the court to overturn these disallowances and assert its right to fully recover all Fiona-related costs. In case the court does not grant this request, the company is asking for the matter to be referred back to IRAC for a new ruling.
The P.E.I. government has announced its intention to intervene in the appeal, with Premier Rob Lantz emphasizing the government’s commitment to modernize the province’s electricity regulatory framework for improved accountability and protection of ratepayers’ interests.
The core of the dispute revolves around Maritime Electric’s preparedness for the storm. Prior to Fiona’s impact, the utility had highlighted deficiencies in vegetation management and the urgent need for tree trimming in its submission to IRAC. The storm resulted in widespread power outages as trees fell on utility lines.
Under P.E.I.’s Electric Power Act, utilities can only recover costs deemed to have been prudently incurred. IRAC’s ruling in June suggested that some costs could have been avoided had Maritime Electric been better equipped. However, Maritime Electric contests this assertion, arguing against the 10% disallowance without concrete evidence to support the decision.
The utility claims that most of the damage from Fiona was due to trees outside provincial rights of way, where permission is required before trimming can occur. Nonetheless, the lack of data to substantiate this claim was a factor in IRAC’s ruling against full cost recovery.
In detailing the costs incurred during the post-Fiona restoration, Maritime Electric outlined $19.3 million in capital spending for infrastructure repairs, $15.3 million in operating costs, and $6.6 million in interest due to borrowing for cleanup expenses. IRAC permitted a return on approved capital costs but excluded returns on operating and interest expenses.
Maritime Electric is seeking to overturn these exclusions, potentially recovering the disallowed $4.12 million and earning returns on previously excluded costs. This could result in an additional recovery of over $6 million from customers if successful.