What's Happening to Your Bill?
Many customers have asked us what has changed to increase electricity bills in recent times. The cost of electricity we purchase on behalf of our customers is subject to volatility.
Commodity-Based Prices
Since much of the electricity supply we purchase is fossil fuel-based generation, our electricity prices are heavily dependent on commodity-based resources pricing for such commodities as oil and natural gas 1.
Supply and Demand for Electricity
Electricity produced by oil and natural gas-based generators is sold in the wholesale marketplace to buyers offering the best price. The price of electricity is influenced by how much supply of electricity is made available for buyers of electricity and how much demand exists in the wholesale marketplace for the electricity that is available for sale. Maritime Electric is a buyer.
Canada-U.S. Exchange Rates
The Canada-U.S. exchange rate has a direct bearing on the price of electricity on PEI because Maritime Electric purchases a considerable portion of its electricity supply based on pricing in the New England wholesale marketplace and electricity is sold in U.S. dollars in this marketplace.
1 Bloomberg.com: Commodity Futures
