Last summer, the province ordered SaskPower to remove more than 100,000 smart meters that had already been installed in homes after devices caught fire in June and July.
The U.S. manufacturer Sensus is refunding $24 million for all the smart meters the province purchased. That covers all devices that were installed and have to be removed, as well as those that haven't been put in yet.
The company is also giving SaskPower $18 million in credit for new meters and another $5 million for research on a device suited to the Saskatchewan climate.
NDP finance critic Trent Wotherspoon said the government should be reimbursed for the full $47-million cost of the meters and cut ties with Sensus.
"This whole nonsense of this government giving away a $5-million gift of ratepayers hard-earned money is absolutely unacceptable," he said.
Economy Minister Bill Boyd said the government will recover all the money if Sensus doesn't provide a satisfactory replacement for the faulty meters, which are planned to be removed from homes by March 15.
He added that any new meters will also undergo independent testing to ensure the technology is sound.
Boyd said the government decided to stay with Sensus because its communications technology is "judged to be one of the best in world in terms of a distributed power network like Saskatchewan's."
Saskatchewan's Crown Investment Corp. was directed to do a review after the fires. The investigation results released Monday found that rain water and contaminants getting into the meters appeared to contribute to them failing.
"In various parts of the province, eight meters failed catastrophically, melting or burning and in some cases damaging the sides of houses," the report said. The failures were not related to "hot sockets" or installation issues, it said.
The report also said SaskPower failed to look at the possibility that the meters could short out and catch fire.
On Monday, Boyd announced the resignation of Robert Watson, who headed the Crown utility during the project, and said Watson "took responsibility for the problems.''
But Wotherspoon called for Boyd's resignation during Monday's question period and said the minister should have been aware of the smart-meter issues. Wotherspoon said the minister has been part of the program's failures "every step of the way."
Boyd said the government was acting upon advice.
"In this case we weren't provided with any information that suggested there were problems with the meters," he said in an interview Monday. The government did act as soon as issues were identified, he added.
"If there was information presented and we didn't act upon it, clearly there'd be a problem with that, and I would resign," Boyd said.
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.