The estimated cost for Maritime Electric to convert all of its customers over to smart meters has increased by more than $16 million — a move that could lead to larger electricity rate increases for Prince Edward Island customers if the plan is approved.
Last November, the company submitted its original smart meter proposal with a pricetag of $47.6 million to the Island Regulatory and Appeals Commission.
But just a month later, the company submitted a revised estimate pegging the cost at $64 million, an increase of 34 per cent.
Interest costs are expected to add another $2.8 million on top of that.
In the December submission, the company said that once it began sourcing components for the plan with selected vendors, costs went up — a process the company said resulted in "improved budget accuracy."
Ottawa committed $19M
The federal government announced last year that it would provide $19 million in funding for the project.
That funding commitment hasn't changed, which means a larger share of the costs will now be borne by P.E.I. customers.
Their share of the costs has gone from $28.6 million to $49 million, an increase of 71 per cent.
With its initial budget estimate, Maritime Electric calculated its plan would increase electricity rates by about .3 cents per kWh by 2028, with an annual cost to residential customers of about $24.
A worker conducts maintenance high atop one of Summerside's four wind turbines. For more than a decade now, Summerside's city-owned utility has been using smart meters to get customers to do more chores needing electricity when the city is generating more wind power. (Shane Hennessey/CBC)
For large industrial customers using 10,000 kWh per month — about 15 times as much as what Maritime Electric considers a benchmark residential customer — the cost increase would be $377 per year.
No breakdown was given of how rates will be affected with the bigger, revised budget Maritime Electric submitted in December.
Maritime Electric boosted rates twice last year. A further rate increase has already been approved for 2024, and IRAC is still considering yet another increase.
Last November, the company applied to increase rates to recoup $37 million in restoration costs from post-tropical storm Fiona over a five-year period.
If that's approved, Maritime Electric's per-kWh residential rate will be 12 per cent higher on March 1, 2024, than it was a year earlier.
$30M in cost benefits
In its submission to IRAC, Maritime Electric has also laid out $30 million in cost benefits from switching to smart meters, including a reduction in the cost of reading meters manually.
The company has said the upgrade would also allow it to respond more quickly to power outages.
Most significantly, the new meters would let the company implement time-of-day electricity rates, meant to shift usage of power-guzzling appliances away from peak hours by offering discounted rates during off-peak hours.
Smart meters aren't a new concept, and there have been calls to implement them across P.E.I. for years.
Summerside, which operates its own city-owned utility, began installing smart meters for some of its customers in 2010 to take advantage of electricity generated by the city's wind farm.
Last month, the city flipped the switch on a new solar farm.