Pull the plug on smart meters, public intervener tells EUB

NB Power has done such a poor job building an economic case for buying and deploying smart meters in New Brunswick the Energy and Utilities Board should pull the plug on the project, public intervener Heather Black has concluded.

"The evidence has shown the (financial) analysis that NB Power is offering is unreliable,"  Black said during closing arguments on the smart meter issue Wednesday.

"This level of uncertainty deprives the board of the ability to conclude as a result of this proceeding the investment rationale is positive or even break even.

"It's indisputable that as a starting point...with ratepayer money at risk the benefits to ratepayers must outweigh the costs," Black said. 

Final arguments presented

NB Power is in the middle of its annual rate hearing, which is being held in two parts.  

The first half concluded Wednesday with various parties delivering final arguments on two specific issues, including whether NB Power should be allowed to  spend $122.7 million to buy and install smart meters provincewide.

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The meters are capable of transmitting individual customer consumption data back to NB Power in real time which the utility says will help lower energy consumption by allowing for a number of innovations in pricing and service.   

But because the project will cost more than $50 million, the expenditure requires explicit Energy and Utilities Board approval.

NB Power analysis unreliable

Black joined JD Irving Ltd. lawyer Christopher Stewart in calling for that approval to be denied, largely because of weaknesses in the business case NB Power put forward.

"The inescapable problem in this application is that it turns on a question of whether the board can rely on the analysis in NB Power's rationale,' said Black.

Her conclusion — it could not.

In its original evidence, NB Power produced figures showing the  acquisition of smart meters would be an investment with a negative return over 15 years, costing it $122.7 million offset by benefits of just $121.4 million.

It attempted to adjust the benefit amount upward by $33 million as hearings progressed but both Black and Stewart said those efforts were not trustworthy.

"We went from a slightly money losing project to one that had a benefit midstream in this application," said Stewart in his own closing remarks.

"We are somewhat skeptical of such a dramatic shift midway through this analysis."

Stewart was especially critical of NB Power not hiring outside experts to endorse its smart meter plan at hearings, a decision even those friendly to NB Power's project agreed was a mistake.

Endorse smart meter plan: Stoll

The lawyer for New Brunswick's three municipal utilities, Scott Stoll, urged the EUB to endorse the smart meter plan, even though he acknowledged the proposal was poorly prepared and weakly presented.

"Our primary concern is what was not in the proposal and that's where (smart meters) are going to take us and are going to take customers.  We could not understand why time of use rates were not included in the business plan," said Stoll.

"Unfortunately NB Power provided no expert witnesses," he added, echoing Stewart's complaint.

Nevertheless Stoll asked the EUB to look past those shortcomings and endorse the smart meter plan anyway.

"(We) believe smart meters are going to be part of the future. It's a question of when, not if."

The EUB will likely take weeks to decide whether to accept or reject NB Power's request to proceed with the smart meter project.  In the meantime, hearings will reconvene March 19 for a consideration of NB Power's request for a two per cent rate increase it was hoping to have in place for April 1.