By J.J. Smith. The Oncor electricity delivery company wants its residential customers to pay $93 million for obsolete “smart meters” the company ordered but customers will now never use because they’re not up to state regulations. 

The issue is part of a pending Oncor rate increase which, if approved by the Public Utilities Commission later this year, will increase the average customers’ bill by over five dollars.

In January the company already began charging customers an extra $2.21 per month to pay for new meters that do comply with state regulations - regardless of whether or not they have received a new meter.

The surcharge, which will be collected for 11 years, applies whether or not Oncor customers have received a new meter. The rollout won’t be completed for three years.

Any increase would mark the second time this year that Oncor customers had been told to pay for advanced meters.

The proposal to recover costs for the obsolete meters is a focal point for opponents of the rate hike–among them consumer groups, a coalition of cities and the PUC legal staff.

“These costs should be borne by Oncor, not by ratepayers,” PUC staff attorney Patrick Peters III asserted in a rate case filing. 

In an advisory ruling issued last week, two administrative law judges ruled that Oncor is only entitled to part of the amount because its meter purchases were “imprudent,” purchased prematurely and so customers shouldn’t have to foot the whole bill.

Nearly 900,000 smart meters were bought before the Texas Public Utilities Commission issued operating standards, and officials say the meters are not in compliance.

On the other hand, the company thinks their customers should pay for the meters since the equipment was designed to help reduce utility costs for consumers.

All of the smart meters are currently in use and will be replaced with new meters that are in compliance if the cost of those meters can be recovered, said Oncor spokesperson Catharine Cuellar.  

The first-generation smart meters will then be reallocated and used for other projects, such as city street lights, where meters do not require the same customer functionality.

Cuellar added that the original meters were bought at the request of the state and that in order to fund the second-generation meters, the company needs to recover the cost of the first-generation meters as well.  If that cost cannot be recovered, Cuellar said the original first-generation smart meters will continue to be used by customers at their residences.

“If we didn’t feel as though they were a prudent investment,” company spokesman Chris Schein said, “we would not have sought recovery.”