November 20, 2019
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Auditors advise dinging Emera $2M over customer billing system

Emera Maine | BDN
Emera Maine | BDN
Crews from Emera Maine can be seen in this January 2016 file photo.

PORTLAND, Maine — Emera Maine should be held responsible for at least $2 million of a $13.6 million cost overrun for a new customer information system causing a spike in billing errors, according to auditors.

The auditors’ report, issued late Monday by the Liberty Consulting Group, forms a basis for regulators and the utility to debate how much of those costs the company can pass along to customers. Emera Maine has requested to raise electricity distribution rates by 8 .3 percent, or about $2.40 per month for the average customer.

The audit shed light on other shortcomings of that billing system, which in May led to an error rate of nearly 30 percent across bills issued in the utility’s Bangor Hydro district. The total number of bills issued with errors as of June had topped the total for all of 2015.

The audit also found the system initially did not allow enrollment of customers into the state’s Low Income Assistance Program, which helps households that already qualify for state heating assistance to get help covering their electricity bills.

That problem and others were resolved after the system’s launch in June 2015. Remaining work was divided into smaller portions under a new project manager that the report said ” brought a clear strategy and approach.”

About 80 problems emerged after the customer information system went live and another 12 were set aside for a second phase of the project, the report said.

Allison Gray, a spokeswoman for Emera Maine, said Monday the company’s still reviewing the report. It plans to issue a detailed rebuttal due in early September.

In earlier testimony, the company placed part of the blame for the cost overruns on its vendor Cayenta Utilities, saying the project was underbid and that even perfect management could not have kept it on schedule.

The auditors found the project was underbid but also found management could have prevented cost overrruns, writing that “management’s inability to recognize and respond timely to project performance issues caused unnecessary delay” in the system’s launch.

The Maine Public Utilities Commission will weigh the management audit and Emera Maine’s response as it decides on the company’s request for raising distribution rates, of which the new customer system is one part. Regulators are expected to decide that case in the fall.

The $2 million recommendation comes alongside a much broader review of the company’s service quality and overall management of its transmission and distribution system. The review could figure into the rate case request.

“Our biggest concern lies in the comfort that management has in continuing to accept the level of reliability performance its metrics have shown,” the report stated.

The report said that harsh weather and other conditions make it difficult for Emera Maine to achieve top-notch service quality metrics compared to other utilities.

“On the other hand, neither should it be content with performance at essentially the bottom end of experience,” the report added.

Gray said the company has sought to balance service quality with costs and that it welcomes a chance to discuss the issues with the report’s authors during a conference hosted by regulators Aug. 15.

Despite “unchallenging reliability targets,” the report said the utility’s equipment and maintenance practices were in line with others its size.

 

Correction: An earlier version of this story did not accurately reflect the auditor’s agreement that the project was underbid.


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