Smart meter program costs to skyrocket

Ontario smart meter costs include infrastructure for time-of-use pricing and a pay-per-use system, with Hydro One and Ontario Energy Board oversight, aiming to shift electricity rates from peak periods and modernize the provincial grid.

Ontario’s New Democrats are demanding the auditor general investigate the true costs of Ontario’s smart meter program — a system the government estimates at $1 billion.

Already, $852 million has been spent to install the meters, according to NDP MPP Peter Tabuns Toronto-Danforth, the party’s energy critic.

But as the entire province switches to the smart meter phase-in system, costs to the public purse will skyrocket, warned Tabuns.

“This is costing us a fortune,” he said.

The $1 billion is an estimate for the entire smart meter infrastructure, which includes a computer support network, said Energy Minister Brad Duguid, who has argued that old meters contribute to higher rates today. The smart meters are needed to allow for time-of-use pricing, though TOU bills have been criticized for missing key information, so customers can shift their usage from peak periods when costs are higher.

The cost for one meter is $700.54 in 2010. This includes a communications network to support the meter, according to Hydro One’s Laura Cooke. The actual price and installation of the meter alone is only $145, says Cooke, and the $700.54 cost for the full system is spread over the customer base.

The cost to install the meters is in line with the initial estimates from the Ontario Energy Board, which regulates the province’s electricity, said Duguid, even as rate hikes over five years have been predicted by some observers.

“What the NDP should be doing is supporting our efforts to bring forth a clean and reliable system,” he said. “In this day and age there is a need to modernize. We are trying to give consumers an opportunity to be part of that clean, reliable system.”

So far, 4.1 million smart meters have been installed and another 400,000 are on their way.

But Tabuns says Auditor General Jim McCarter needs to provide a comprehensive, cost-benefit analysis on the program.

“We know of no studies detailing how much money the system will save to justify the investment of billions of dollars,” Tabuns said. “This is a perfect Liberal program, you get to spend a fortune and nothing really happens in the end. Sort of like e-health.”

However, Charlie Macaluso, CEO and president of the Electricity Distributors Association said “based on some crude data and averaging, the $1 billion sounds about right”.

The OEB has had exhaustive hearings on all these costs, he said, including how energy savings programs affect utility revenues. “All these costs are part of a regulatory review process,” he said. The EDA represents approximately 80 local distribution companies across the province.

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