Rhode Island Energy’s “advanced metering” proposal will cost the Ocean State nearly $200 million and require the manual replacement of approximately 525,000 electric …
Rhode Island Energy’s “advanced metering” proposal will cost the Ocean State nearly $200 million and require the manual replacement of approximately 525,000 electric meters.
“If approved … and this is still an ongoing docket … the costs would be borne by ratepayers,” said Thomas F. Kogut, Associate Administrator Cable TV and Legislative Liaison for the Rhode Island Division of Public Utilities and Carriers (PUC).
Following historic electric rate hikes immediately after PPL’s acquisition of the Narragansett Electric Company (forming Rhode Island Energy), the state’s new power-providing entity will be back before the PUC next week, requesting a total overhaul of the state’s electric metering system — a process known as “Advanced Metering.”
RI Energy testimony estimated the statewide meter replacement program at “$188 million on a net present value (NPV) basis over the 20-year project life.”
However, Rhode Island Energy seeks $199.6 million in additional revenues “to fund the incremental cost associated with the AMF through a separate factor outside the base distribution rates (AMF Factor) over eleven years, 2023 through 2033,” according to the PUC’s legal advertisement publicizing next week’s public hearing.
The overall price tag “includes the meters and associated IT technology and installation,” Kogut explained.
The public has the chance to comment on RI Energy’s proposal at a 6 p.m. public hearing on Tuesday, April 4, in Hearing Room A at the PUC Office, 89 Jefferson Boulevard, Warwick.
“In this docket, Rhode Island Energy filed for approval of the Company’s Advanced Metering Functionality (AMF) Business Case program proposal,” according to legal advertising for the public hearing. “The proposal includes a full-scale deployment of AMF across its electric service territory in Rhode Island intended to replace existing electric automated meter reading (AMR) meters. The proposal includes capital spending and recovery through rates for expenses associated with meters, software, communications and other operating expenses.”
Kogut explained that the cost, per ratepayer, would be less than a dime per month.
“Cost factor in the company’s transmittal, as proposed has, for illustrative purposes, a projected 7 cent/month residential bill impact with a cumulative impact of $246 in the fifth year of the cost recovery,” Kogut said.
While PUC approval is not guaranteed, the state board ultimately approved the sale of the state’s electric provider to the east coast utility powerhouse formerly known as Pennsylvania Power & Light (now PPL), and the subsequent rate hike.
Kogut warns, however, that no matter the PUC’s decision, the state’s aging meters are nearing obsolescence.
“One point to note, the AMR meters are nearing the end of their operational lives, and will need replacing,” Kogut said.
According to the PUC, “The AMF factor would recover the actual incremental capital investments placed in service and the actual incremental operation and maintenance (O&M) costs incurred on a historical basis.”
Kogut broke down the overall proposal. Approximately $73 million will be spent on hardware. Meter install costs should run around $19 million.
“These costs include both utility and vendor labor to physically install the meters and related equipment and facility costs to enable meter deployment,” Kogut explained.
RI Energy spokesman Ted Kresse released a statement from the utility company.
“The Advanced Metering Functionality (AMF) Business Case … we submitted to the (RI PUC) is an important step in modernizing the state’s energy infrastructure for the benefit of all Rhode Islanders. Approximately 60% of our existing meters are nearing the end of their design life and need to be replaced.”
The power provider insists the new technologies included in the AMF proposal will provide their “customers with greater control, choice, and convenience in managing their energy consumption.”
“What’s more, AMF technology will also help us meet evolving customer expectations by enhancing outage management capabilities and enabling more convenient remote service connections,” RI Energy argues. “If approved, this proposal will also help deliver the clean energy network our customers and communities deserve and reflect a collaborative effort between Rhode Island Energy and key stakeholders to create a more efficient, resilient, responsive grid. And, while replacing Rhode Island’s existing electric meters with advanced meters will require investment, we have put together a thoughtful, enduring proposal that we anticipate will result in minimal bill impacts to our customers.”
Several months ago, RI Energy also filed its “Grid Modernization Plan,” which “provides an outline of how the electric distribution system can evolve to handle the growth of distributed energy resources, including renewables and energy storage, and allow greater flexibility to enable a two-way exchange of energy and information — something today’s grid was not designed to accomplish.”
“Together, the Grid Modernization Plan and AMF Business Case will enable significant customer benefits, including reduced energy use and improved reliability,” according to RI Energy. “Importantly, they provide a more holistic long-term cost containment strategy for modernizing our infrastructure. As energy supply costs are at an all-time high, it’s critically important that we look to implement smarter, more efficient technologies that can help decrease costs for our customers over time.”
Kresse said the impact on most residential electric bills should be minimal.
“If approved, (the $188 million) will be collected from RI customers with an average bill impact over the first 5 years of $1.27 a month for a residential customer using 500 kWh of electricity,” Kresse explained Tuesday. “Costs for the installment of the meters has been factored in to the $188 million. We don’t have an estimate of actual hours needed, but if approved, we anticipate full deployment of the meters to take approximately 18 months.”
Tuesday’s hearing will not be “an evidentiary hearing,” said Kogut, “but a hearing for public comment.”
The original public comment session was scheduled for Feb. 28, but canceled due to a winter storm. The hearing can be watched online, and the public can weigh in via Zoom link or in person. Details can be found at the PUC’s website (ripuc.ri.gov).
Public hearings on the RI Energy proposal are expected to continue through the summer.
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