Paying its share

Summerside agrees to help repay cost of undersea electric cables

The City of Summerside has reached an agreement with the government of P.E.I. to pay its share of the cost for the province’s new sub-sea electric cables.

The deal also secures long-term access to the 180-megawatt cables for the city’s municipallyowned power utility, Summerside Electric.

It also gives the city a seat at the table in terms of discussions regarding the asset.

Council unanimously passed a motion during a special meeting Tuesday night to authorize Mayor Bill Martin to sign a debt recovery agreement that has been negotiated between the city, the province and Maritime Electric. The actual signing will take place at a later date.

“We’ve been mandated by the province as their agent to collect and remit on a prorated basis 10.1 to 10.4 per cent (depending of which number you use) of the provincial cost of the new cables,” said Martin, prior to the vote.

“In addition to that, we now have a guarantee of assurance of uninterrupted power.”

“The third leg of the stool … is that for the first time we are now in a formal partnership with Maritime Electric, P.E.I. Energy, City of Summerside, in terms of discussion around related energy topics.”

In 2016, the province and federal government announced a cost-sharing agreement for the cable project of $68.9 million from federal coffers and $73.6 million provincially for a total price tag of $142.5 million.

Earlier that same year the province secured an $80 million loan to pay for its half of the cost.

Ratepayers of both Maritime Electric and Summerside Electric will contribute to the repayment of the province’s loan over the next 40 years. Summerside Electric represents about 10 per cent of the total market in the province, so that will be its share of the overall repayment.

Electricity rates on P.E.I. rose by 2.3 this year and are scheduled to do so again in 2018 and 2019. Summerside has, traditionally, set its electric rates to match those offered by Maritime Electric and will do so again until the next review in 2019.