The Ontario Energy Board has issued a Decision with Reasons approving costs associated with smart metering activities incurred by 13 utilities authorized by government regulation to undertake smart metering activities. The 13 utilities are Chatham-Kent Hydro Inc. (Chatham-Kent), Enersource Hydro Mississauga Inc., Horizon Utilities Corporation, Hydro One Brampton Networks Inc., Hydro One Networks Inc. (Hydro One), Hydro Ottawa Limited, Middlesex Power Distribution Corporation (Middlesex), Milton Hydro Distribution Inc., PowerStream Inc., Tay Hydro Electric Distribution Co. Inc., Toronto Hydro-Electric System Limited (Toronto Hydro), Veridian Connections Inc. and Newmarket Hydro Limited.

The issues considered in the case included cost recovery related to minimum functionality, the prudence of costs incurred, the mechanism to reset rates to recover costs found to be prudent, and the regulatory treatment of stranded meter costs. The issues also included certain accounting procedures such as the mechanism to clear variance accounts and the mechanism to reset smart meter costs on a go-forward basis.

In its decision, the Board found the processes used by the 13 utilities to purchase smart meters, related equipment, and services were carried out in a professional and diligent manner. It also found the costs incurred by the utilities met the definition of minimum functionality. The costs allowed by the Board relate to installed meters as opposed to forecasted costs.

Noting that cost per installation will vary between utilities depending on the geographical nature of their service area and the extent to which meters have been deployed, the Board concluded the costs claimed by the 13 utilities were prudently incurred. In the case of Hydro One, the Board allowed half of the project management costs Hydro One applied for, but invited Hydro One to apply for the remaining amount at the time of its 2008 rate application where it could provide further and better evidence regarding the prudence of these costs.

The Board directed Toronto Hydro, Chatham-Kent, and Middlesex, the only utilities that applied for rate orders as a result of their cost claims, to file draft rate orders reflecting the Board's decision within 15 days of this Decision being issued.

At the outset of the hearing various parties associated with the proceeding brought forward motions to maintain and keep the prices of the equipment purchased confidential. The general consensus of all parties was that the public interest could be met by disclosing bundled costs on a cost per smart meter installed basis. The Board noted that although it strives to keep all of its processes public and transparent, this proceeding faced unusual circumstances as it took place in the midst of the bidding and tendering processes by these and other utilities. The Board is concerned that disclosure of more detailed information at this time could undermine the integrity of that process.