ELECTRICITY:

Thousands of smart meters have malfunctioned -- PG&E

Pacific Gas & Electric Corp. admitted that tens of thousands of its newly installed smart meters have malfunctioned in California's Central Valley, contrary to the Northern California utility's earlier claims of customer error.

Officials with PG&E told state lawmakers Monday that the utility has had to replace about 40,000 smart meters, out of 5.5 million that have been installed since 2007. PG&E has come under fire from residents of Bakersfield, who filed a class-action lawsuit last year claiming billing errors of up to 300 percent, and the California Public Utilities Commission (CPUC) is conducting an independent investigation, as well (Greenwire, Nov. 24, 2009).

Until this week, PG&E has maintained that the meters were reflecting hotter-than-usual temperatures and a new pricing plan. But under questioning from state Sen. Dean Florez (D), chairman of the newly formed state Senate Select Committee on the Smart Grid, company officials admitted to installer errors, wireless network glitches and data storage problems.

"Smart meters are not infallible, and to my knowledge, we've never said they are," said Chief Customer Officer Helen Burt. "We have found eight meters out of the 5.5 million we've installed where there is an issue with the actual meter accuracy, and there are three other issues that don't affect meter accuracy."

According to PG&E, four-tenths of 1 percent of the meters were installed incorrectly, two-tenths of 1 percent did not register data correctly, and one-tenth of 1 percent were not able to transmit their data. That equals 38,500 meters out of 5.5 million installed.

The smart meters are being installed as part of a statewide mandate; CPUC is requiring all three investor-owned utilities to finish installations by 2012. But the problems are overwhelmingly concentrated in PG&E's territory, CPUC staff told lawmakers.

"Despite the very large numbers of meters rolled out by utilities, the lion's share of those complaints are in PG&E's territory, particularly in the Central Valley," said CPUC Executive Director Paul Clanon. CPUC has received roughly 1,000 complaints about smart meters, he said. "A dozen, maybe two dozen, are not PG&E-related. It's very striking."

Michelle Mueller, San Diego Gas & Electric Co.'s vice president of external affairs, said her company had received 122 complaints of high bills out of 770,000 smart meters installed. "We started a customer engagement program before installing any meters, asking them about how they wanted information and follow-up visits," she said. SDG&E also goes door-to-door offering assistance and information, she said.

Burt conceded that PG&E had erred in its communications with customers. "We thought of this as a rollout of infrastructure, and it just simply is not," she said.

"One of the areas that if I were doing this program today I would do differently, I would keep the traditional meter that was at the customer's home, and that's something we're planning to start doing this summer," Burt said. "I wish I could go back and say to those 5.5 million customers, 'I have your meter if you want to test it,' but we just didn't think about that at the time."

Michael Kelly, an attorney with Kirtland & Packard who is handling the class-action suit in Bakersfield, said the hearing confirmed his clients' allegations. The suit has been stayed pending the completion of CPUC's investigation.

"PG&E's position since day one has been that the meters work just fine and people just don't pay attention to their bills, so they don't know how much energy they're using," Kelly said. "Their mantra has been there's nothing wrong with the smart meter system, and this is clearly evidence to the contrary."

PG&E, meanwhile, is still installing meters across its territory at a rate of about 12,000 per day in an effort to reach all of its customers by the end of 2011. The meters, which record and display more detailed energy consumption data than traditional meters, are a cornerstone of California's move toward charging different prices based on time of day and demand, which it plans to begin next year.

Staff from CPUC's ratepayer advocacy arm warned that the state's long-term energy pricing policy could be in jeopardy.

"We're concerned customers are still reeling with the uncertainty of these meters and will have to start making decisions very soon about whether they want to change their rates to save them money," said Dave Ashuckian, deputy director of the Division of Ratepayer Advocates. "They have to buy into the whole concept that these will save them money, and if that's not the case, you may see significant failure of a program that had good intentions to create ratepayer savings and may not do so because of the manner in which it's been implemented."

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