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COMMENTARY: P.E.I.’s Electric Power Act is holding back Island's clean energy future

The spring legislative session is our chance to fix a regulatory framework that rewards the wrong things.

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Prince Edward Island has committed to reaching net zero emissions by 2040 — among the most ambitious climate targets in the country. Yet our primary electricity law, the Electric Power Act, last consolidated in 2017, contains a structural flaw that works against that goal. As MLAs assemble for the spring legislative session, they have an opportunity to begin fixing it.

The problem is what energy economists call “capex bias” where utilities are financially incentivized to choose capital-intensive projects over more efficient operating solutions. Under sections 21 and 24 of the act, Maritime Electric earns its profit by building physical infrastructure — poles, substations, generators — which gets added to its rate base. The more capital assets the utility accumulates, the higher its earnings.

Operating expenditures, by contrast, are simply passed through at cost with no profit margin. This creates........

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