POLITICS
09/09/2014 04:48 EDT | Updated 11/09/2014 05:59 EST

Manufacturer to reimburse SaskPower for faulty smart meters

REGINA - Saskatchewan's Crown power utility has reached an agreement to recover the entire cost of its failed smart-meters program.

SaskPower CEO Robert Watson says U.S. manufacturer Sensus is refunding $24 million for all the smart meters the province purchased.

That covers all devices that were installed and had to be removed, as well as those that hadn't been put in yet.

Watson says Sensus is also giving SaskPower $18 million in credit for new meters, and another $5 million is going towards developing a device suited to the Saskatchewan climate.

Earlier this summer, the province ordered SaskPower to replace all of the 105,000 smart meters it had already installed after at least nine fires believed related to the units.

Watson says SaskPower will continue to replace the smart meters with digital ones until a new model is ready.

Watson says Sensus has a three-year window to come up with an improved meter.

"If they're not able to produce a meter that's acceptable to SaskPower or independent specifications, they will pay us $18 million cash," Watson said at a news conference Tuesday.

"We're talking about a meter that's brand new for the environment. Not only is it a good business decision, not only is it going to assure our customers of a safer meter, it will be the next generation."

A smart meter records consumption of energy in small intervals and can relay the information electronically to a utilities company. It eliminates the need to estimate bills when a meter reader can't do an on-site check.

SaskPower says there will be no impact on rates for customers as a result of the residential meter exchange.

Sensus, which is based in North Carolina, has said tests indicate some of the fires were caused by power surges or holes in the meter boxes that allowed water in.

Sensus stressed the "critical importance'' of careful meter installation, including examination of meter boxes and wiring. It also said installers need to be properly trained and that fast action is required when problems are first detected.

The NDP Opposition said it's not sure that entering into another contract with Sensus is a good idea.

Deputy leader Trent Wotherspoon said accepting $24 million for the faulty meters is little more than "pennies on the dollar."

"The contract that was put together by this government with this American provider wasn't worth the paper that it was written on," he said.

And the $18 million in credit, he added, simply keeps the province tethered to the manufacturer with no other options.

"Our taxpayer dollars ... are being held by Sensus and we're tied into entering into contract with them once again."

Wotherspoon also said the government receiving full compensation for the money it spent on the smart meters is proof that the province didn't complete due diligence.

(CKRM, The Canadian Press)