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Letter from Greg Reimer, Executive Vice President, Transmission, Distribution & Customer Service, BC Hydro

I am writing in response to a letter from Mr. Adrian Dix dated January 14, 2016 and an article in today's Globe and Mail regarding BC Hydro's smart meter program.

The letter and article contain numerous misleading and untrue statements by NDP critic Adrian Dix. His allegations are so completely off-base and unsupportable that I feel compelled to respond to them in an open letter so that all of our customers and the public are aware of the facts.

BC Hydro's smart meter program was approved with a budget of $930 million and is forecast to come in more than $100 million under budget. The program was developed to modernize BC Hydro's 1950s-era grid. It has provided a number of important benefits including reduced electricity theft as well as equipping customers with better information and tools to make smart energy choices and ensuring that their power can be restored more efficiently.

The legislated deadline for implementing the program was December 31, 2015 and BC Hydro deployed all required elements, including smart grid upgrades, telecommunications and analytics, on time. BC Hydro has filed 22 quarterly reports with the BC Utilities Commission on the program's costs and activities, which are all readily available and could have easily been obtained had they been sought.

Once a year, BC Hydro's updates to the Commission include an analysis of the realized benefits of the program for the preceding year. BC Hydro's most recent update in August 2015 shows that the program has reduced energy theft by 1,139 gigawatt hours of electricity from 2012 to 2015. Far from under delivering, this amount actually exceeds the theft reduction targets in the original business case.

Indeed, the business case projected that energy theft reduction would peak at 75% in 2016 and now, BC Hydro is forecasting a reduction of 80% or more. The expected cost savings of the program have been embedded into BC Hydro'’s rate applications since 2012, which means that BC Hydro customers have already received lower rates as a result of the success of this program. This program will provide a net benefit to BC Hydro customers.

Mr. Dix's assertion that BC Hydro invented energy theft estimates to inflate its business case for smart meters is simply untrue. Energy theft increased dramatically from 2006 to 2011 following the enactment of the Safety Standards Act which allowed for local governments to obtain lists of high consumption residential accounts from BC Hydro to combat marijuana grow-ops. An analysis by BC Hydro in 2006, using three independent methodologies, indicated that grow-ops were stealing 500 gigawatt hours of electricity per year.

A subsequent analysis indicated that theft had increased to 850 gigawatt hours. This was validated further by a study from the University of the Fraser Valley which confirmed the scale of electricity theft and the economic impact on BC Hydro's customers. At the time, BC Hydro's cost of energy based on the most recent power call was $124 per megawatt hour, which equates to an annual cost of $105 million.

The men and women at BC Hydro work hard every day to deliver clean, reliable, low cost electricity to our customers. While I understand that the job of an opposition critic is to oppose, when this involves an attack on the integrity of those employees, I think it is important to set the record straight.

Thanks,

Greg Reimer