The Island Regulatory and Appeals Commission will be hearing from Islanders Thursday evening on Maritime Electric's request for a residential rate increase, and the P.E.I. Green Party is making a pitch.

The utility has applied for a 4.1 per cent rate increase spread over three years, and has also asked for changes that could result in higher bills for those who use more electricity.

As of now, people who use more than 2,000 kilowatt hours (kWh) per month pay a lower rate, often referred to as second block pricing.

Maritime Electric has applied to raise that threshold to more than double what it currently is.

With the proposed increase for 2021, it would mean the lower rate wouldn't be applied until a customer used 5,000 kWh of electricity in a month.

Three-tier plan

Green Party MLA and Opposition energy critic Steve Howard says he has a better plan that would benefit Islanders with lower incomes. He intends to submit the plan to IRAC Thursday.

Green Party energy critic Steve Howard is suggesting a three-tier system as opposed to Maritime Electric's existing two-tier system, separating first and second block usage. (Al McCormick/CBC)

"The bottom line is, the way it's set up right now, the high-energy users end up downloading costs on the Island's most vulnerable and we need to fix that," Howard said.

The Greens' plan suggests a three-tier system as opposed to Maritime Electric's existing two-tier system.

Inspiration for the alternative plan came from studying B.C. Hydro and Ontario's rates, which both use an ascending rate structure, he said.

"They have a 650 kilowatt per hour ceiling for the first block," Howard said. "The typical household would be in that first block of inexpensive power."

If the plan were implemented, Howard believes Islanders using less electricity would see their bills go down.

"Those who use a lot more will be in that second block of power and they're going to be encouraged to use energy efficient, alternative energy systems," Howard said.

"Those tend to be the people that have the capacity to actually put those things into place, make purchases that reduce their energy consumption … the first block folk tend to be rentals that would use less power."

No numbers right now

For now, Howard's plan doesn't include estimates on how much customers who use less energy would actually save. He said Maritime Electric hasn't released the information to draw a comparison from.

Maritime Electric has asked for changes that could result in higher bills for those who use more electricity. (Tyson Koschik/CBC)

The third tier, which would include the Island's highest users, would include large farms on the Island, he said.

"The reason that those farms are even in a residential class is just an oversight [from] many, many years ago. They really don't belong in a residential rate class because their consumption is so high," Howard said.

There is room for discussion on the potential to move these farms to an agricultural rate class or switching them over to the small industrial rate class, he said.

The proposal would look to switch Islanders over to the three-tier rate system by 2021.

Islanders will have the chance to offer IRAC their insights on Maritime Electric's proposed rate increases at 6:30 p.m., at 134 Kent Street in Charlottetown.

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