EUB punts rate hearing as NB Power studies $122M smart meter plan

An effort to redesign the way NB Power charges customers for electricity — generally viewed as bad news for those who heat with electricity — has been suspended by the New Brunswick Energy and Utilities Board for one year.  

The EUB has agreed to consider an upcoming NB Power application to spend $122 million on new "smart meters" for homes and businesses first.

"The Board finds that the AMI (Advanced Metering Infrastructure) application should precede the rate design hearing and therefore it is in the public interest to grant an adjournment," ruled EUB chairman Raymond Gorman in a brief hearing last week.

NB Power has been under pressure from the EUB to better match prices it charges for electricity to the cost of producing and distributing power. That could see consumers paying substantially different prices for power between summer and winter — even between day and night.  

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But the utility has argued there is little room to make substantial changes like that until its entire inventory of power meters is upgraded.

"It is NB Power's submission that the rate design proceeding is … premature because it does contemplate discussion of rate design options that might not be available depending on … (smart meter) deployment," NB Power's senior legal counsel John Furey said during arguments for the suspension.

Tracking more frequent

Unlike current units that have to be physically visited to be read, smart meters will connect directly to NB Power computers, allowing individual customers to have electricity consumption tracked several times an hour instead of once a month. 

The utility says this will allow it to charge a variety of rates for electricity — more when consumption is higher, such as in the mornings, on weekends and during winter — and less when consumption is lower.

"We are going from reading a customer's meter once a month, so 12 times a year, up to 12 times an hour," former NB Power executive Neil Larlee said during testimony in front of the EUB last February.

Smart meters for $122M

But the new meters are expensive, an estimated $92 million to acquire one for each customer and another $30 million to have them installed and made operational. 

It's an expense that largely requires EUB approval, something the regulator is expected to hear evidence on this winter and rule on by next spring.  NB Power said without that decision being made first, redesigning rates made little sense. 

"I don't see how we can have a meaningful process … because we don't know what rate design options are available or might be precluded in the event the (smart meter) decision is not to deploy or to deploy," said Furey.

Because those who heat with electricity consume large amounts of power during high-demand cold snaps, the rate design process is generally expected to result in higher costs for that group.  

However, NB Power has argued smart meters will allow for enough discount periods that electric heat customers who move activities such as laundry, dishwashing and showers into the evening will be able to offset some or all of the increases they experience.

NB Power is expected to formally apply to buy and install smart meters provincewide within the next two weeks as part of its next general rate increase application. 

The rate design hearing will resume next fall.