August 18, 2019
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Regulators OK audit of Emera Maine billing upgrades

PORTLAND, Maine — State utilities regulators voted Tuesday to open an audit into cost overruns during the deployment of Emera Maine’s new customer billing system, which the company told regulators it can explain.

All three members of the Maine Public Utilities Commission voted Tuesday to open the audit, recommended by the commission’s staff and the Office of the Public Advocate, which represents ratepayers.

In a response to the recommended audit Monday, Emera Maine said it can justify the cost overruns in launching the $30.9 million customer information system, or CIS.

“Emera will demonstrate that the project was underestimated and underbid by the CIS vendor, and the CIS consultant engaged to advise the company on this complex implementation,” the company wrote, adding that even if there were “absolutely flawless” management then coming in on budget and on time “extremely unlikely.”

Emera argued that while the project did cost more than expected, it was still less than the estimated cost of the next best alternative system.

The vendor, Cayenta Utilities, declined to comment.

Emera Maine is seeking to recover the cost of distribution improvements through a request to raise the distribution portion of bills 8.3 percent, or $2.40 per month for the average user among its 159,000 customers. That’s based on average household use of 500 kilowatt-hours per month.

While Emera Maine said it could justify the costs for its customer information system, it had urged regulators to either narrow or avoid a broader investigation of how Emera has managed its transmission and distribution system, the subject of a separate case opened in June.

The PUC voted Tuesday to include a review of Emera Maine’s management of its transmission and distribution system in the audit.

Harry Lanphear, spokesman for the commission, said Tuesday the transmission and distribution review in the audit will rely in part on that previous investigation.

The Office of the Public Advocate had argued in favor of an audit, saying cost overruns for the new customer information system, billing issues and proposed transmission and distribution upgrades warrant it.

“Were these a short list of short-term problems, it would be possible to conclude that the company management was effectively managing the situation,” attorneys in the public advocate’s office wrote.

Emera can later request to recover the costs of the audit in its bills. Weighed against the potential utility rate increases, the public advocate’s office wrote it the cost is worth it.

The customer information system had an initial projected cost of $17.3 million when it began requesting to recover those costs in its rates. By the end of that case, it projected the cost at $23.3 million.

With some expenses for implementation still pending in its Maine Public Service district, which serves Aroostook and northern Penobscot counties, the project cost has reached $30.9 million, according to a company vice president, Karen Holyoke, who testified to the PUC in March.

The commission’s vote calls for the audit to be completed before new rates are scheduled to take effect Dec. 21.



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