Maritime Electric is seeking a reversal of a ruling that bars the utility from fully recouping expenses related to restoring power after post-tropical storm Fiona. If successful, this could lead to Islanders potentially facing an additional $6 million in charges compared to the current judgment.
The appeal contests a decision made by the Island Regulatory and Appeals Commission (IRAC) in June, permitting Maritime Electric to recover approximately 90% of its roughly $41.2 million in Fiona restoration costs through electricity rates. IRAC disallowed around $4.12 million, citing inadequate tree trimming efforts by the utility before the storm and restricting the utility from earning profits on certain expenditures.
Maritime Electric is urging the court to overturn these disallowances and affirm its right to recover the full costs incurred due to Fiona. If unsuccessful, the company requests a review by IRAC for a fresh ruling. The P.E.I. government intends to intervene in the appeal to ensure the interests of Island ratepayers are safeguarded.
The disagreement revolves partly around Maritime Electric’s preparedness for Fiona. Prior to the storm, the utility had highlighted deficiencies in vegetation management and the urgent need for tree trimming in a submission to IRAC. The storm’s impact resulted in a widespread blackout as trees toppled onto power lines.
Under P.E.I.’s Electric Power Act, utilities like Maritime Electric can recover costs from customers only if deemed “prudently incurred.” IRAC’s June decision questioned the prudence of some costs, suggesting better preparedness could have mitigated them.
Maritime Electric disputes IRAC’s decision, arguing that withholding 10% of restoration costs lacks justification. The utility also contends that nearly all damage from Fiona was caused by trees outside provincial rights of way, necessitating property owners’ consent for tree trimming. However, the utility has not provided data to substantiate this claim, a factor considered by IRAC in its ruling.
The restoration costs post-Fiona included $19.3 million in capital expenses for infrastructure repair, $15.3 million in operating costs, and $6.6 million in interest due to borrowing for cleanup. IRAC allowed a return on approved capital costs but not on operating or interest expenses, a decision Maritime Electric aims to reverse. If successful, the utility could recover the disallowed $4.12 million and potentially earn returns on excluded costs, totaling over $6 million in additional recovery from customers.