OEB Issues Decision on Smart Meter Costs

    TORONTO, Aug. 8 /CNW/ - Today the Ontario Energy Board (the Board) issued
a Decision with Reasons approving costs associated with smart metering
activities incurred by 13 utilities authorized by government regulation to
undertake smart metering activities. The 13 utilities are Chatham-Kent Hydro
Inc. (Chatham-Kent), Enersource Hydro Mississauga Inc., Horizon Utilities
Corporation, Hydro One Brampton Networks Inc., Hydro One Networks Inc. (Hydro
One), Hydro Ottawa Limited, Middlesex Power Distribution Corporation
(Middlesex), Milton Hydro Distribution Inc., PowerStream Inc., Tay Hydro
Electric Distribution Co. Inc., Toronto Hydro-Electric System Limited (Toronto
Hydro), Veridian Connections Inc. and Newmarket Hydro Limited.
    The issues considered in the case included cost recovery related to
minimum functionality, the prudence of costs incurred, the mechanism to reset
rates to recover costs found to be prudent, and the regulatory treatment of
stranded meter costs. The issues also included certain accounting procedures
such as the mechanism to clear variance accounts and the mechanism to reset
smart meter costs on a go-forward basis.
    In its Decision, the Board found the processes used by the 13 utilities
to purchase smart meters, related equipment, and services were carried out in
a professional and diligent manner. It also found the costs incurred by the
utilities met the definition of minimum functionality. The costs allowed by
the Board relate to installed meters as opposed to forecasted costs.
    Noting that cost per installation will vary between utilities depending
on the geographical nature of their service area and the extent to which
meters have been deployed, the Board concluded the costs claimed by the
13 utilities were prudently incurred. In the case of Hydro One, the Board
allowed half of the project management costs Hydro One applied for, but
invited Hydro One to apply for the remaining amount at the time of its
2008 rate application where it could provide further and better evidence
regarding the prudence of these costs.
    The Board directed Toronto Hydro, Chatham-Kent, and Middlesex, the only
utilities that applied for rate orders as a result of their cost claims, to
file draft rate orders reflecting the Board's decision within 15 days of this
Decision being issued.
    At the outset of the hearing various parties associated with the
proceeding brought forward motions to maintain and keep the prices of the
equipment purchased confidential. The general consensus of all parties was
that the public interest could be met by disclosing bundled costs on a cost
per smart meter installed basis. The Board noted that although it strives to
keep all of its processes public and transparent, this proceeding faced
unusual circumstances as it took place in the midst of the bidding and
tendering processes by these and other utilities. The Board is concerned that
disclosure of more detailed information at this time could undermine the
integrity of that process.
    The Ontario Energy Board regulates the province's electricity and natural
gas sectors in the public interest. It envisions a viable and efficient energy
sector with informed consumers served by responsive regulatory processes that
are effective, fair and transparent.
    For more information on the Board, please visit our Web site at
www.oeb.gov.on.ca or contact the Consumer Relations Centre at 416-314-2455 or
toll-free at 1-877-632-2727.

For further information:

For further information: Vanda Wall, Ontario Energy Board, (416)

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