A new energy supply contract with NB Power is going to mean big electricity rate increases for Prince Edward Islanders, says Maritime Electric.

The utility says higher world energy costs led to higher rates that it will be paying to NB Power.

Maritime Electric CEO Fred O'Brien says the price increase is a straight pass through of costs.
(CBC)

"A typical residential customer using 650 kilowatt hours will see about a seven per cent increase over their costs in 2007, year over year, over 2006," Maritime Electric CEO Fred O'Brien said Wednesday.

The increase will be introduced across the province gradually beginning in April.

"Business customers on average, because their consumption varies quite dramatically from business to business, will see about a 10 per cent increase. These increases are attributable to our increases in energy supply, so this is a straight pass through of, basically, market increases in energy," O'Brien said.

The contract between Maritime Electric and NB Power has been forwarded to the Island Regulatory and Appeals Commission, but O'Brien said Maritime Electric does not need approval from IRAC for this increase.

O'Brien said the utility will continue to work on the development of wind power to reduce costs. It's also urging customers to reduce consumption as a way to mitigate the increase.