New subsea cables alone won't solve P.E.I.'s power problems, Maritime Electric says
Plans for two new undersea power cables between P.E.I. and New Brunswick are an important step for the Island’s electricity future, but they won’t solve the province’s reliability and capacity challenges on their own, says Maritime Electric’s president and CEO.
'There is still a critical need for capacity here on the Island'
Last week, the federal government announced $5.9 million for planning work on a project that will eventually add two new subsea power cables between the two provinces.
Jason Roberts called the funding “an excellent first step.”
“You just don’t go out to the store and buy submarine cables,” he told Island Morning host Wayne Thibodeau.
“It takes a lot of planning, a lot of analysis to figure out the size, the cost, where they go, how they’re going to be operated, where they interconnect.”
Roberts said the federal funding will support the studies, regulatory work and environmental assessments that are needed before any new cables can be installed.
P.E.I. relies heavily on electricity imported from New Brunswick through four existing subsea cables.
But even with two additional cables, Roberts said, the Island will still need more local electricity generation to keep the system reliable.
“The cables alone are not the solution,” he said. “The cables help us access energy supply off-Island. There is still a critical need for capacity here on the Island.”
Roberts said local generation is needed for two main reasons.
First, it provides greater security if there are problems with the mainland grid or the interconnections, considering how electricity demand on P.E.I. continues to grow, especially during the winter.
Second, local generation helps maintain voltage support and power quality, particularly in eastern P.E.I.
“The further away your generation resources are, the riskier it becomes in terms of having that security of supply,” he said.
Roberts linked the need for more local generation to Maritime Electric’s application before the Island Regulatory and Appeals Commission to add two diesel-powered generators to the province's power grid. He said a hearing is scheduled to begin Aug. 25.
“The addition of two generating units and 150 megawatts of capacity ultimately is still critical and still needs to happen. As do the cables. They both need to happen,” Roberts said.
New cables could cost more than last project
Construction on the two new cables is expected to begin by 2028. Roberts said that timeline is realistic if work gets underway quickly.
Two of the current subsea cables that run between Murray Corner, N.B., and Richmond Cove, P.E.I., were installed in the late 1970s and are nearing the end of their lifespan.
The other two, between Cape Tormentine, N.B., and Borden-Carleton, P.E.I., were replaced in 2017 at a cost of more than $142 million.
Roberts said people should expect a higher price this time, pointing to inflation and rising costs for materials and equipment.
He noted the 2017 replacement project received funding from both the federal and provincial governments and said he hopes that model will continue.
“Last time around it was a 50‑50 federal-provincial funding arrangement,” he said. “We collect that 50 per cent provincial component through our current rate structure, so over the life of those cables.”
He added that the original cables are owned by the province, while the 2017 cables are owned by the P.E.I. Energy Corporation. With the new $5.9 million in federal funding going to the energy corporation, he expects any future cables would also be owned there, not by Maritime Electric.
Could regional co-operation lower electricity costs?
The funding announcement came the same week that the governments of New Brunswick, Nova Scotia and P.E.I. signed a memorandum of understanding on regional electricity cooperation.
The three provinces plan to develop a regional road map for electricity transmission by next spring, and are considering creating an independent electricity system operator (IESO) for the Maritimes.
“What we’re talking about with this most recent announcement is the concept of opportunities for a regional IESO that would look at opportunities for generation planning, transmission planning … and, maybe ultimately down the road, an organization that could co-ordinate the operation of the system,” Roberts said.
He noted that P.E.I. already operates in a highly integrated way with New Brunswick, buying about three‑quarters of its electricity from off‑Island.
At the same time, he said, any move toward a single regional utility or shared operator would require significant political agreement and must still ensure Islanders’ needs are met.
P.E.I. Premier Rob Lantz told CBC News on Monday that an independent electricity system operator could potentially help deliver “the best, most competitive energy prices for ratepayers in the region.”
Roberts, however, said several factors continue to put upward pressure on electricity prices, including population growth, increasing electrification, rising demand and phasing out coal-fired generating stations in the region.
“The price of electricity is not going down,” he said. “We’re working our best each and every day to keep the costs as low as possible, and that’s our goal.”
