EUB denies NB Power request to deploy smart meters across province

The Energy and Utilitiies Board rejected NB Power's application to deploy smart meters to its entire customer base.

Move would 'not be in the public interest'

The Energy and Utilities Board ruled NB Power has not presented a solid enough case to justify the $100 million project. (Radio-Canada)

In a stinging rebuke Friday the Energy and Utilities Board rejected NB Power's application to deploy smart meters to its entire customer base, ruling the utility has not presented a solid enough case to justify the $100 million project.

"The Board is not satisfied of the prudence of the AMI (smart meter) capital project," read the EUB's 39-page decision, which follows hearings held last winter and spring.

"Consequently, it is not in the public interest. The fundamental reason behind this conclusion is the Board's finding that no positive business case was established in the evidence."

NB Power said later Friday that it will be "reviewing the decision and assessing its overall impact."

The utility is required to gain the board's permission for any capital expenditure in excess of $50 million. 

The request to adopt smart meters provincewide became a central focus of the utility's rate application this year.

Smart meters, along with other upgrades known collectively as AMI, for advanced metering infrastructure, make it possible to transmit individual customer consumption data back to NB Power in real time instead of being read in person once a month.    

The utility said that would allow for a number of innovations in pricing and service and help it nudge customers to shift their peak electrical demand enough to avoid the need to build new generators.

Costs outweigh benefits

NB Power president Gaetan Thomas urged approval of the smart meters. At first, the utility said the costs of smart meters would outweigh benefits by a little over $1 million, but the utility later boosted the benefits. (CBC)

But in first proposing to adopt the technology, NB Power presented a business case to the EUB that showed the costs of smart meters would outweigh benefits by a little over $1 million, a misstep in the application that placed it in immediate trouble.

During hearings in February, NB Power tried to amend its calculations to boost the benefits of adopting the technology while NB Power president Gaetan Thomas gave interviews urging its approval.

But in its decision, the board was unconvinced by the rescue attempt and said all the evidence supported the original application's fatal acknowledgement that the cost of adopting smart meters would be higher than the benefits it would generate.

"The demonstrated benefits to ratepayers must outweigh the expected costs that ratepayers will bear," it ruled.

The EUB said it could find no evidence smart meters pose a health risk to the public as some interveners suggested and it welcomed NB Power to reapply for permission to deploy the units if it can develop a stronger financial argument for them.

More bad news for utility

The EUB disallowed $8.7 million in costs NB Power had sought approval for in its application, including a proposal by NB Power to spend $1.3 million on expanding electric vehicle charging stations in the province. (Redmond Shannon/CBC)

But the smart meter rejection was just the beginning of the bad news for NB Power.

The board also disallowed $8.7 million in costs NB Power had sought approval for in its application and ordered the utility to reduce its application for a 1.5 percent rate increase accordingly.

"The Board concludes that it is appropriate in this matter to apply the cost disallowances to reduce the requested average rate increase," read the decision.    

That is likely to reduce the approved rate increase for customers this year to one percent, although it is up to NB Power to recalculate what the precise reduction will be and submit that back to the EUB next week for approval.  

Included in the rejected costs was a proposal by NB Power to spend $1.3 million on expanding electric vehicle, or EV, charging stations in the province which, like the smart meter plan, the board found the utility had not provided enough evidence to justify.

"EV charging stations are not within the core business of NB Power and are already provided by the private sector, without any ratepayer investment. Without a convincing business case, NB Power should not be expanding this program." it ruled.

It also reduced approval for planned expenditures on solar power programs to $1 million from $3 million.

The board said it would announce a date for new rates to take effect — likely Aug. 1 — once NB Power subtracts disallowed costs and recalculates the rate increase to the board's satisfaction.

About the Author

Robert Jones

Reporter

Robert Jones has been a reporter and producer with CBC New Brunswick since 1990. His investigative reports on petroleum pricing in New Brunswick won several regional and national awards and led to the adoption of price regulation in 2006.