ECAM Q & A
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What is ECAM? |
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The Energy Cost Adjustment Mechanism (ECAM) is a mechanism to manage energy related cost changes. The ECAM provides for an automatic increase (or decrease) to rates each month when energy costs are above (or below) a pre-established and Regulator-approved base level. The base cost per kWh is constant from month to month, currently 7.7 cents/kWh. Changes to base cost must have prior approval from IRAC. |
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Why was ECAM put into effect? |
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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 rate of 7.7 cents/kWh. The ECAM is applied to the rate set for energy consumption only and does not affect the basic service or demand charge. |
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How does ECAM fit within the current regulatory model in which Maritime Electric operates? |
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Maritime Electric operates under the cost of service regulation. This means that the cost of providing the services are recovered from the customer through their bills. A large portion of supplying this service is the energy supply cost which is largely out of our control. ECAM provides a way of effectively smoothing the variability without the need for frequent rate hearings and the costs associated with that. Maritime Electric is regulated by The Island Regulatory and Appeals Commission or IRAC as it is commonly known. |
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How does ECAM work? |
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Each month Maritime Electric prepares a report detailing energy related costs for the previous month. This shows the amount above/below 7.7 cents/kWh. In its simplest form, if costs go above 7.7 cents/kWh these costs are collected and if it goes below 7.7 cents/kWh these costs are deducted from the monthly bill. ECAM will fluctuate from month to month. |
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Will ECAM be used indefinitely? |
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ECAM is regulated by IRAC and will be applied by Maritime Electric as long as the Company is ordered to do so and it provides a useful function to customers. |
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What other jurisdictions use ECAM? |
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ECAM is not new to PEI. In fact it was in place in various forms since the mid 1970s. Various forms of ECAM have been around for over 50 years in jurisdictions throughout North America. |
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Where will ECAM appear on my bill? |
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The ECAM amount does not appear on the bill separately and is included in the energy charge section on a customer's bill. |
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What costs are included in the ECAM calculation? |
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Energy related costs include all costs associated with the production and purchasing of electricity. |
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How are ECAM and Maritime Electric rates approved? |
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Rates are subject to approval by IRAC. |
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What should I do if I suspect my bill is too high? |
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From time to time customers have concerns about their electricity bills. Customers with concerns about their bill are encouraged to contact their Maritime Electric Customer Service Representative at our toll free number 1-800-670-1012. |
