Premier Robert Ghiz released details of the Prince Edward Island Energy Accord that will result in “significant electricity cost savings for Island consumers”.

“Our five-year energy strategy will reduce power rates and stabilize prices, bringing benefits to Island families, seniors, business and commercial users,” said Ghiz. “All these groups will share equally in the power rate reduction of 14%.”

The PEI Energy Accord contains a number of initiatives, including a new power purchase agreement, increased public investment in wind and the establishment of a Commission on the Future of Electricity in Prince Edward Island.

The major component of the accord is a new five-year power purchase agreement between Maritime Electric and NB Power that promises Islanders lower power rates and more price stability.

“We are pleased to have worked collaboratively with the province to achieve this deal for our customers,” said Fred O’Brien, Maritime Electric president and CEO. “The Accord is a good deal for our customers that will help them plan with greater certainty over the next five years.”

Under the PEI Energy Accord, the province will increase its investment in locally owned and produced wind energy.

“We have already seen the potential for wind power to stabilize energy costs when world oil prices rise,” said Ghiz. “We will expand our wind-power capacity to generate more than 30% of our energy requirements by 2013 and, in doing so, establish Prince Edward Island as a world leader with this technology.”

To ensure that all Islanders have an opportunity to participate in the development of the province’s energy future, a Commission on the Future of Electricity on Prince Edward Island will be established. The commission will be “expert, non-partisan, and will seek the views of Islanders”. It will examine key issues that affect the cost of electricity on Prince Edward Island.

Government, with its preferred borrowing rate, will assist in financing the debt associated with the shutdown of Point Lepreau. While the replacement energy costs will be deferred until Point Lepreau is refurbished, government will use its low-cost borrowing rates to finance the debt, over the short term, which will ultimately reduce the overall cost to Islanders, says the government.

The Prince Edward Island Energy Accord also identifies the need for additional cable capacity between Prince Edward Island and New Brunswick. The province has requested federal funds to assist with the construction of the proposed cable which is required for its future energy security.

Initiatives encouraging energy reduction and conservation are an integral part of the Energy Accord. Both the province and Maritime Electric promote energy efficiency and conservation. Beginning March 2011, the Office of Energy Efficiency will assume responsibility for energy conservation programs for both organizations and will expand its programming.

The accord also calls for legislative changes. The Electricity Rate Reduction Act will be introduced this session of the Legislative Assembly and will legislate the 14% rate reduction effective March 2011, and the freeze will continue until the spring of 2013.

“I am very pleased we are able to offer Islanders relief from high power rates over the next two years,” said Ghiz. “During this time, government will seek out and find other solutions to bring about longer-term price stability.”