New Brunswick

NB Power's smart meter plan labelled a 'money loser' during EUB grilling

NB Power executives faced tough questions on the $122.7-million project during the first day of the annual rate hearing.

The utility estimated the total savings would fall short of the $122.7M price tag

NB Power executives faced tough questions on its smart meters project Wednesday in Saint John. (Robert Jones/CBC NEWS)

A trio of NB Power executives were under pressure Wednesday to justify why the utility wants to invest more than $100 million to install smart meters with customers when its own accounting shows savings from the change will be less than the cost to implement it.

"Those projected costs are $122.7 million and the projected benefits are $121.4 million. Is that correct?" asked Christopher Stewart, a lawyer for J.D. Irving Ltd. during the opening day of NB Power's annual rate hearing.

"Yes. That's the life cycle costs of the project and the life cycle benefits of the project," responded NB Power senior vice president of operations Lori Clark.

"That's negative $1.3 million," observed Stewart. "It's a money loser."

Clark, along with two other NB Power senior vice presidents, Keith Cronkhite and Darren Murphy, fielded initial questions about the utility's smart meter plans in front of the Energy and Utilities Board as part of a 12-day review of a number of issues.

Lori Clark, NB Power's vice president of operations, fielded questions about the cost and benefits of the smart meters plan. (Robert Jones/CBC NEWS)

The board has the power to approve or reject NB Power projects that cost more than $50 million, including the smart meter project.

Greater benefits expected

The three vice presidents argued that smart meters are needed as a foundation for NB Power to implement a number of other modernization plans and suggested total financial benefits will likely be greater than the analysis it prepared for the hearing seemed to show.

The meters will connect directly to the utility's computers and track consumption in real time. That will open up opportunities to establish high and low rates during the day to try and steer electricity consumption to off-peak hours.  

The meters also allow for homeowners to install their own generation, like solar panels, or invest in large battery storage units to load up on low-cost nighttime power and sell what they don't need back to the utility.

Smart meters became the focus on the first day of the annual rate hearing. (Ryan Pilon/CBC)

NB Power said the meters, and an aggressive new package of consumer energy conservation initiatives, will help it soften expensive wintertime consumption peaks on its system and is the key to lowering costs and avoiding the construction of new power plants — advantages it did not fully detail in its proposal.

"We did not take into account all of the potential upside benefits. We were very conservative in the calculation of our benefits," said Clark. "There are a number of projects that are enabled by our Advanced Metering Infrastructure that haven't been identified in the business case."

Stewart responded: "You say you've taken a conservative approach but its the approach you've chosen to bring forward."

Christopher Stewart, a lawyer for J.D. Irving Ltd., described the smart meter plan as a "money loser." (Robert Jones/CBC NEWS)

Recent complaints

Clark said the multiple recent complaints the utility has received from people surprised by the size of their January power bills show the value of smart meter.

But she assured Gerald Bourque, leader of New Brunswick's fledgling KISS N.B. Political Party and a hearing participant, that no one who objects to the device will be made to take one.

"When we are dealing with high bill complaints like we have been this last month, customers would actually be able to see their usage throughout the month and not be subject to receiving a final bill at the end of the month and being surprised by their consumption," she said.

"We will have an opt out policy."

Whether the meters pay for themselves or not, it is important the board not judge the proposal to buy them on that issue alone, Murphy said.

"It's more than just economics," he said. "It's about preparing for that future and modernizing the infrastructure."