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Maine PUC Staff Recommends Audit of CMP 'Smart Meter' Program
05/31/2013   Reported By: Keith Shortall

The staff of the Maine Public Utilities Commission is recommending an audit of Central Maine Power Company's so-called "Smart Meter" program, citing concerns about significantly higher costs that could be passed along to ratepayers. Keith Shortall has more.

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Maine PUC Staff Recommends Audit of CMP 'Smart Met Listen

Back in 2010, when CMP was seeking state approval for its controversial Advanced Metering Infrastructure - or Smart Meter - project, the company told the Public Utilities Commission that it expected savings of $25 million over 20 years.

But earlier this month, the company revised that estimate - significantly. "It would appear, at this point, that that amount has been reduced by CMP to $99 million in net costs," says Maine PUC Administrative Director Harry Lanphear.

Lanphear says that means that the estimated savings to ratepayers have disappeared, and turned into a cost of tens of millions of dollars. He says that's why his office is recommending that the full commission order an audit of CMP's management of the program, to find out what happened - and, says Lanphear, to determine how to respond to CMP's pending request for a rate hike of more than 8 percent.

"So again, what the staff is recommending is that the commission hire a third party to look into this issue and see what happened, and see why there is that difference," Lanphear says.

That "difference," says Maine Public Advocate Dick Davies, is significant enough to warrant an audit. Davies says the significant swing in the cost estimates, if accurate, should be borne by CMP shareholders, and not by consumers.

"And we will be arguing that the customers should ought not to be paying for the mismanagement - if that proves to be the case - or other problems that led to this huge swing from what appeared to be benefits to what now appears to be costs to the ratepayers, ought to be picked up by somebody who is responsible for the problem, and that would not be the ratepayers," Davies says.

CMP says the proposal for an audit of the project is reasonable. "We're not suprised at all at the recommendation that an audit should be done," says spokesman John Carroll.

Carroll says several audits of the project have already been done, but acknowledges that it could be time for another.

"We really expected to revisit a lot of the questions, given the size and complexity of the project," he says. "We did complete it on time and on budget, and the system is working as designed, but the preliminary cost-benefit analysis, which this really refers to, is based on a lot of assumptions, and 20-year forecasts that we had to make before installing the first meter. Now that the system is installed and working, it's sensible to revisit those assumptions."

Ed Friedman would like the PUC to go even further, and order the removal of more than 600,000 Smart Meters installed in Maine homes. Friedman, an activist with the Maine Coalition to Stop Smart Meters, says state regulators failed to challenge CMPs financial estimates, which he believes were intentionally overestimated in order to win approval.

"They were not being truthful to start with, right from probably cost to potential problems with the Smart Meters vis-a-vis safety issues from radio-frequency emissions, right on down to a number constitutional issues that haven't been litigated yet," Friedman says.

The Maine Supreme Judicial Court ruled last year that the PUC had failed to address public safety concerns about Smart Meters, and ordered the commission to revisit the issue.

The proposed management audit recommended today by PUC staff would be focused on CMP's cost estimates of the program, and would be used to help decide the 8.2 percent rate hike request, which CMP has indicated it would like to take effect by July 1 of next year.


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