The P.E.I. Federation of Agriculture has asked to intervene in Maritime Electric's request to change the way it charges its residential customers.
The utility wants to stop discounting the cost of electricity for high residential users.
Residential customers who use more than 2,000 kilowatts per month pay less for any electricity above that amount. It's a system called a declining second block.
About 450 farms take advantage of the second block, but Maritime Electric is asking the Island Regulatory and Appeals Commission for approval to phase it out.
Second block phase-out proposal
The utility estimates Island farmer's bills would increase about 20 per cent if the second block was phased out immediately.
In order to avoid that rate shock, Maritime Electric has proposed phasing out the second block over four years, so that farmers and high-end users would face arouind five per cent increases each year.
The P.E.I. Federation of Agriculture is concerned about the proposed increases.
"Well, it's another additional cost ... along with what we've seen this year in fertilizer and diesel expenses," said the federation's executive director Donald Killorn.
"Another increased input cost that will ultimately have to be passed on to consumers to ensure that agriculture can continue to be the economic driver on Prince Edward Island."
Federation wants separate rate class
The federation would prefer Maritime Electric create a separate rate class for farms and other high-end residential users.
Killorn said that way, farmers could be sure they're not paying more for their electricity than they should be.
Instead, the utility said users can move to the small industrial class if that will save them money. But two different consultants' analyses showed that would only save money for very large farms with very high electricity use.
Maritime Electric president and CEO Jason Roberts said consultation was done with the federation and Dairy Farmers of P.E.I. before finalizing its proposal.
"A lot of great conversation occurred, and we did take all of their feedback, and we did put that together in our design application."
Roberts doesn't think creating a separate class for farms is the way to go at this stage.
"That's part of the reason why we recommended a four year phase-in, so that customers, including farms, have the opportunity to see what the changes are going to be, and adjust accordingly, and be prepared for the transition."
Roberts also said the utility is soon going to ask IRAC for a smart meter program.
He said once all Maritime Electric's customers get smart meters, it will be easier to get more accurate data on electricity use for a farm rate class.
Islanders have until Sept. 9 to submit questions which Maritime Electric will answer about the proposed rate design and until Sept. 30 to submit comments.