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June 13, 2013

Utilities commission votes to audit CMP smart meter program

By Tux Turkel
tturkel@pressherald.com
Staff Writer

HALLOWELL — The Maine Public Utilities Commission voted Thursday to undertake an audit of Central Maine Power Co.’s smart meter program, to determine if the program is saving money and providing the benefits that were expected when the agency approved it in 2010.

Commissioners David Littell and Mark Vannoy voted for the audit. The commission’s chairman, Tom Welch, did not participate in the deliberations. Welch had done prior smart-meter work for the utility when he was in private practice.

The vote paves the way for the PUC to hire an outside consultant to audit the program. The process could take several months.

Thursday’s vote stems from charges by the PUC’s staff that Central Maine Power  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 have already begun saving money, with greater benefits coming in the years ahead.

The PUC’s decision broadens the debate over smart meters beyond their alleged health effects into questions about whether the devices have lived up to their promised potential. So far, very few customers appear interested in the limited data offered by CMP’s smart meters, or in using electricity when rates are cheaper.

The audit will help get at the question of whether sparse participation is due to a current lack of interest, or whether CMP could have done a better job in making products and services available. If the commission determines that CMP could have done better, it could keep the utility from recovering some of the program’s expenses in rates.

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. But the PUC staff says that won’t happen. Rather than saving money, the program will actually 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.

But after today’s vote, both Littell and Vannoy said that, for customer confidence, it’s important for  the program to have an independent, transparent audit.

 





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