Before the Utility and Review Board (UARB) approves Nova Scotia Power’s (NSP) plan to install “smart” meters across the province, both the Consumer Advocate and the Small Business Advocate feel the utility needs to smarten up its proposal. They say NSP hasn’t presented enough solid evidence to prove that installing digital meters to measure electricity usage won’t cost ratepayers more than it should.
NSP claims that once it spends $133 million to buy and install new meters connecting to homes through a wireless network, it will save $18 million over the next two decades. But experts hired by the public advocates contend in their closing submissions that the costs appear to be understated, while benefits may be overstated.
Expert witness Paul Chernick challenged the 20-year “shelf life” claim for the meters by providing data from six utilities which showed similar smart meters needed replacing over a period of seven to 20 years. As for NSP’s projection that smart meters will save the power company $11.5 million per year in overtime costs because they can pinpoint storm-related outages, Small Business Advocates Melissa Macadam and Nelson Blackburn remain skeptical.
NSP also plans to save money by introducing a discount for customers who volunteer to use less power during “critical” peak periods such as cold winter days when demand for electricity is high. However, the study used to support its cost saving estimate may be flawed. It’s based on the experience of a California utility which offers a special price when demand peaks because of air conditioning in summer. Consumer Advocate Bill Mahody urged the UARB to order a pilot project to check and verify NSPs cost-to-benefit assumptions before approving $133-million to buy the meters.
No intervenor challenged NSP’s choice of hardware for the smart meter, despite comments made by energy consultant Peter Ritchie in The Examiner. Ritchie criticized NSP for choosing a meter which — by the company’s own admission — does not come equipped with the latest radio technology. Were that technology included in the meters, it would enable consumers to monitor energy consumption by individual appliances and find out what’s gobbling too much power, so they could adjust.
Ritchie’s comments may have come too late, though, arriving after the various intervenors had presented their initial evidence last fall. Only the last paragraph in the final submission by consumer advocate Bill Mahody touched on the question of whether the utility’s choice of product offers the best long-term value.
Much of the pre-filed evidence focused on whether NSPI’s application [The UARB refers to Nova Scotia Power as NSPI] passed the cost/benefit analysis. In the event the application is approved, the Consumer Advocate notes the ongoing responsibility on NSPI to prudently select safe and sufficiently advanced equipment as part of the AMI (Advanced Metering Infrastructure) deployment.
Although it has provided The Examiner no supporting evidence, NSP continues to assert that the meter it picked can be modified in the future to monitor consumption by home appliances or even electric cars. The utility has told the regulator that if the smart meter purchase is not approved at this time, ratepayers will miss out on significant savings from a bulk purchase negotiated with other Emera-owned utilities and neighbouring New Brunswick Power. Meanwhile, the utility defends its economic analysis as “robust”:
Even under the scenario where all sensitivities examined are assumed to have negative outcomes, the investment in AMI is calculated to represent a net cost of $5 million. This means that even under this highly unlikely scenario, the customer and utility functionality provided by AMI and industry transformation enabled by AMI are acquired for a net cost of $5 million over the 20-year life of the investment.
There’s no question that “smart “meters are a step forward. The current meters are decades old. The meters NSP wants to buy are equipped with technology to permit remote two-way communication between your home’s meter and the power company. They will save money by eliminating the need for 72 workers to visit and read the existing meters across the province.
But while consumers will be able to track their daily power consumption online, a big improvement, they may be denied a further opportunity to break down consumption by household appliances in real time. That’s a feature which radio-equipped meters already deployed in B.C. and Quebec can provide.
In those provinces, as well as in Ontario, consumers can also save money on their power bill by doing household chores during times of the day and night when electricity demand is low. In Nova Scotia, that discount (known as “time-of-day pricing”) is currently available only to customers with electric heat, about 40 per cent. The Small Business Advocate recommended to the UARB that NSP extend its discount to all residential customers — if and when it gets the green light to buy new meters.
The UARB also received a submission from Brian Gifford, representing the Affordable Energy Coalition. Gifford noted that once smart meters are introduced, low-income people are more likely to see their power cut off for non-payment. In British Columbia, disconnections climbed from 6,376 in 2012 to 30,183 in 2016, following the implementation of smart meters. Ontario reported a similar experience. Gifford says not enough research has been done by NSP to address a similar concern here.
Gifford put forward the following recommendation to the UARB:
• A condition of approval should be that changes be made to NSPI Tariffs and Regulations to increase protections for low income households when disconnection is contemplated. Meeting Ontario’s standards, this would mean: If a social service agency informs NSPI that it is checking to see if the household qualifies for assistance under low-income energy consumer programs, NSPI will delay disconnecting the service for up to 21 days. If the household has medical equipment that relies on electricity, and has documentation from their doctor, NSPI must give the household at least 60 days’ notice before disconnecting the electricity.
• We further recommend that: The regulations must be monitored with formal reports regarding the number of disconnects starting at least one year before implementation of AMI and continuing thereafter, and if a face-to-face contact occurred in each case.
There is support for NSP’s plan from the Ecology Action Centre and Efficiency One.
Efficiency One is the utility the Province established to operate and analyze conservation programs, in order to prevent Nova Scotia Power from being in a conflict-of-interest by profiting from selling energy while preaching the gospel of energy conservation.
But in its final submission, Efficiency One launched a significant argument: it believes the legislation which established it also makes the agency the most appropriate choice to receive data from the smart meters, so it can design initiatives to help consumers benefit from the new information. It would also track and verify changes in consumption patterns.
This is more than a turf war — it’s serious business. Efficiency One is requesting:
(a) an ORDER from the UARB that Nova Scotia Power cannot implement any conservation programs enabled by data from the smart meters, and that;
(b) the regulator issue a subsequent order tasking Efficiency One with designing and operating all energy conservation programs that use data from the AMI smart meters.
Whatever the UARB ultimately decides — whether to allow Nova Scotia Power to move ahead now with the bulk purchase of the smart meters or delay approval until a pilot project can test the mettle of the technology and the cost-benefit estimates — the decision could have an impact on consumers and energy conservation policy for the next decade or two.