Energy Cost Adjustment Mechanism
What is ECAM?
Energy Cost Adjustment Mechanism (ECAM) is a mechanism to manage energy related cost changes that are beyond the control of the Company. The ECAM provides for an automatic increase (or decrease) to rates each month when fuel and purchased energy costs are above (or below) a base level. The base cost per kWh is constant from month to month, currently 0.0673 per kWh. Changes to base cost must have prior approval from IRAC.
Why was ECAM put Into Effect?
Beginning April 1, 2005, Maritime Electric reintroduced the application of an Energy Cost Adjustment Mechanism (ECAM) when calculating customers’ monthly bills. The mechanism provides for a monthly adjustment to rates to reflect changes in energy related costs above or below the base level of $0.0673 per KWh. The ECAM is applied to energy consumption only and does not affect the basic service or demand charge.
ECAM documents available for download:
Have More Questions on ECAM?
Here are answers to commonly asked questions on ECAM.
1) What is ECAM?
ECAM (Energy Cost Adjustment Mechanism)
ECAM is a mechanism to manage energy related cost changes that are beyond the
control of the Company. The mechanism provides a way of enabling the Company to
refund energy related costs without significant changes to basic rates.
The ECAM provides for an automatic increase (or decrease) to rates each month
when fuel and purchased energy costs are above (or below) a base level. The
basic rate per kWh is constant from month to month. Changes to basic rates must have
prior approval from IRAC.
2) How does ECAM fit within the current regulatory model in which MECL operates?
Maritime Electric is regulated by The Island Regulatory and Appeals Commission or “IRAC” as it is commonly known.
In Maritime’s Electric application to the Island Regulatory and Appeals Commission dated April 30th 2004, the Company proposed the reintroduction of an Energy Cost Adjustment Mechanism to assist in managing changes in energy- related costs that are beyond its control. The mechanism provides for a monthly adjustment to rates to reflect changes in energy related costs above or below the base level of $0.0673 per kWh. The ECAM is applied to energy consumption only and does not affect the basic service or demand charge.
3) How does ECAM work?
Each month Maritime Electric files a report detailing energy related costs for the previous month. This shows the amount above/below $0.0673 cents per kWh. In its simplest form, if costs go above $0.0673 cents per kWh these costs are collected if it goes below $0.0673 cents per kWh these costs are rebated. ECAM will fluctuate from month to month.
4) Will the ECAM mechanism be used indefinitely?
The ECAM Mechanism is regulated by the Island Regulatory & Appeals Commission and will be applied by Maritime Electric as long as the Company is ordered to do so.
5) What other jurisdictions use ECAM?
ECAM is not new to PEI. In fact it was in place up until 2003. Various forms of ECAM have been around for over 50 years in jurisdictions throughout North America in areas where there is price volatility.
6) Where will ECAM appear on my bill?
ECAM number will not appear on the bill. It will be included in the energy charge section on customer’s bill as a separate charge. There will be a new line added to the bill at the bottom near the total which reads The energy charge is subject to the Energy Cost Adjustment Mechanism.
7) What energy related costs does Maritime Electric have?
Energy related costs include all costs associated with the production and purchasing of energy.
8) How are MECL rates set?
Rates are set by The Island Regulatory & Appeals Commission.
9) What should I do if I suspect my bill is too high?
From time to time customers have concerns about their bills. Customers with concerns about their bill are encouraged to contact their Maritime Electric Customer Service Rep at our toll free number 1-800-670-1012.
