June 11, 2013

CMP smart meter program faces possible PUC audit

By Tux Turkel tturkel@pressherald.com
Staff Writer

The staff of Maine's Public Utilities Commission contends that Central Maine Power Co. has mismanaged its smart-meter program, costing customers millions of dollars rather than saving them money, and failing to provide the expected energy savings and operational benefits.

CMP disagrees, saying the meters were installed on budget and already have begun saving money, with greater benefits coming in the years ahead.

The PUC will decide Thursday whether to audit the program — a step that would broaden the debate about smart meters beyond their alleged health effects into questions about whether the devices have lived up to their promised potential.

The commission's deliberations could provide an early glimpse into how Mainers are taking to a nascent, fast-changing technology. So far, few customers appear interested in the limited data offered by CMP's smart meters, or in using electricity when rates are cheaper.

That's not unusual, said Patty Durand, executive director of the Smart Grid Consumer Collaborative, a nonprofit advocacy group based in Atlanta.

"It's a slow process," she said. "Our research shows consumers want to know more, but it takes time for utilities to figure out what programs to create and how to market them."

Digital meters are one link in what energy experts call a smart grid, an evolving system in which computers and automation help maintain and upgrade the reliability of the nation's electrical network. The meters are fast replacing analog meters in the United States. More than 35 million had been installed by the first half of last year, and 65 million will be in place by 2016, according to the Edison Foundation.

CMP and state regulators began talking about smart meters six years ago, but the PUC didn't approve the program until 2009, when a $96 million federal stimulus grant that paid half the cost became available. Today, 600,000 meters are operating in an 11,000-square-mile wireless network. The network lets CMP calculate bills without sending workers to read meters, for instance, and it lets customers know how much electricity they're using at various times.

When the meters were first installed, CMP estimated that the net savings to ratepayers would total $25 million over the 20-year life of the equipment. The PUC staff says that won't happen. Rather than saving money, the program actually will cost customers about $80 million over the period, the staff says, and CMP shouldn't be able to recover that cost in rates. CMP strongly disagrees. In a rebuttal filed last week with the PUC, it notes that a total of 13 audits of the program will be done by year's end, internally and by the federal government, and no audit has revealed big issues with cost, management or the capabilities of the system.

"We absolutely delivered the project on cost and on schedule," said John Carroll, a CMP spokesman.

Carroll said the PUC staff is using a one-year revenue number to make a faulty analysis. He said CMP will update its 20-year cost-benefit projections soon, as part of a pending rate plan, and the program will show a net savings.

Some of the savings come from operating efficiencies that aren't easy to see, he said. One example is estimated bills, a practice that customers don't like. CMP had to send 95,441 estimated bills in 2010. Last year, it issued 5,833.

The disputed gap between costs and savings has the Maine Public Advocate's Office siding with the PUC staff in seeking a formal audit. The office long has expressed doubt about how smart meters would save money.

"Our concerns have been realized," wrote Eric Bryant and Agnes Gormley, two senior lawyers in the office. "Even though the costs of the audit will add to the weight of customer bills, the company's failure to deliver as promised demands this action."

(Continued on page 2)

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