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I was able to resolve my issue by migrating the ceilometer auth to keystone to v3. This is how the ceilometer service_credentials section looks now

auth_url = http://controller:5000/v3
username = ceilometer
tenant_name = service
password = xxxxxx
interface = internalURL
region_name = RegionOne
project_name = service
project_domain_id = xxxxxxxx
user_domain_id = xxxxxxxx
auth_type = password

With this configuration I was able to authenticate to keystone successfully.