Blog Post

Lesson Learned from the PG&E Smart Meter Suit: It's a Communication Problem

We’ve yet to delve too deeply into all of the fisticuffs surrounding the suit filed by a Bakersfield, Calif. resident against utility PG&E (s PCG) for a smart meter that he says tripled his electricity bill. Other residents in the area have complained to the media and PG&E about billing discrepancies. In response, PG&E has slowed down its smart meter deployment in that area. And of course the lawyers are trying to spread the suit down the smart grid supply chain. But from my perspective, and from the position of some of the experts on the panel I moderated last night at the GreenBeat conference, it seems like the whole fiasco offers a lesson about the importance of open communication between utilities and their customers.

Smart grid technology and smart meters don’t represent new or risky or bleeding-edge technology. They use the same type of information technology — wireless networks, silicon, software — that controls our cell phones, computers and Internet, and that plays a massive role in the U.S. economy. It’s just being used in a new industry: electricity. Of course software can occasionally be glitchy, but so can a person manually driving by and reading home meters. As Grid Net CEO Ray Bell told audience members of the GreenBeat conference today “digital meters are rigorously tested, and highly accurate.”

The big issue is that utilities need to learn to communicate a lot better, and develop a much stronger relationship, with their customers, whether that’s through marketing, PR or customer outreach. As Seth Frader-Thompson, CEO of energy management startup EnergyHub said at the Dow Jones Energy Conference this week, utilities, with their regulatory markets, have a long history of looking at their customers as “rate payers,” or even “load” “repairs.” There needs to be a sea change in the relationship between utilities and power consumers.

“It comes down to trust,” explained Scott Hublou, co-founder of EcoFactor, which makes smart thermostat software and recently won the Cleantech Open grand prize, on the GreenBeat panel last night. The customer has to trust that the utility is installing devices that will make their service better, that the utility will keep their data private and safe, and that the smart meters will help them save money.

Devices like a smart thermostat can provide more transparency, and services like EcoFactor and EnergyHub can help bridge that relationship between the utility and power user. But utilities don’t necessary need these tools for a better customer relationship, they can start by offering much better online billing, enabling a customer to access their energy consumption history online, and giving them tips about how to help reduce energy consumption. Startup OPower is doing some of these more low tech online things now and even does paper mailed billing statements that can help the relationship. More transparency with data also means utilities can more easily follow the trail of data and fix or investigate a problem that could occur with a customer’s billing.

Some utilities are hard at work on marketing messages, PR and customer outreach. But I think the industry needs to do a whole lot more and take a page from some of the Internet firms like Google (s GOOG) that have had to deal with online data and digital privacy for years. Google’s business model hinges on maintaining customer trust, while using data to optimize search, online advertising and its other web services. When I was a reporter covering Google’s San Francisco citywide WiFi plan, Google regularly did things like hold town-hall-type meetings where the public could ask questions and get feedback (the WiFi plan didn’t work, but not necessarily because there was backlash from residents).

Google, through it’s division, is also using its expertise with privacy issues to develop a tool that will manage the relationship between the electricity user and the utility: PowerMeter. As VentureBeat editor and CEO Matt Marshall and Google’s Ed Lu, who presented at the GreenBeat show this morning, put it: the idea that Google will step in and take over that customer relationship can be terrifying to some utilities and as a result many utilities won’t partner with Google’s PowerMeter.

Well, utilities don’t need PowerMeter, but they have to do something. The PG&E Bakersfield hullabaloo is just the beginning of the backlash against smart meters and smart grid technology, which will only grow as smart meters continue to be installed throughout the country. The public concern reminds me of when digital voting booths were introduced, or when consumers first started to online bank. There’s some real concerns about keeping digital information private and secure in these systems, but ultimately it’s the responsibility of the organization that’s leading the switch to the digital two-way system to keep the line of communication open.

Image courtesy of Juverna Flickr Creative Commons.

31 Responses to “Lesson Learned from the PG&E Smart Meter Suit: It's a Communication Problem”

  1. Allie in Vacaville CA

    Not only has our rate gone all over the place but last months bill, which has previosuly been rather low as the temps drops, just came in at over $500. Tehre is no rhyme or reason for this we have never in my entire time living in California had an electric bill for that amount. Something is definetly off somewhere. Even if I jhave left my air on all day when I am at work (i have doen this) we hardly ran the AC at all in Sept. we work all day for crying out loud there is no way that is accurate

  2. Now that PG&E doesn’t have to pay a lot of employees to drive around, pay for fuel, trucks, upkeep of such trucks….when will we see as a customer our savings….? Why isn’t it passed down to us…OH LET ME GUESS, piss on us right?

  3. Michael Bender

    I am looking forward to smart meters and the smart grid, especially once we’ll be able to get a power monitoring interface that can sit on my home’s LAN (please don’t make a USB/Windows-only thing!). However the big beef that I have with PG&E is their usury baseline electric rate plan. I work full-time from home and thus I’m not in the car every day using up space, fuel, contributing to air pollution and congestion and all of the other myriad things that a daily commuter (that commutes by car in the SF Bay Area) consumes. However I am paying through the nose for PG&E electricity since my job is a software developer for enterprise-class multi-user systems and I am running various computer systems and networking gear throughout the day, so I get bumped up into the higher levels of PG&E Baseline Tiered Hell. I contacted PG&E and told them my situation and asked if they had any type of plan that I could be one to reduce my rates since I am acting in a way what I feel is a net positive impact on the environment, but they said no, they didn’t cater to such folks as myself. I am concerned that when my smart meter gets installed, I’ll be put onto some sort of ToU (Time of Use) rate schedule and be getting screwed even harder every month.

    TIme for PV I guess…

  4. I put a high efficiency furnace in my home last year on 4/28/09. Nothing else changed in my habits or my home in the ensuing time except the installation of a Smart Meter on 2/23/10. My bill went up 55% over the same time last year for the last billing cycle! That is 25% higher than the rate increase! A customer trying to conserve and save just can not get a break!

  5. It is unfortunate that folks have blamed smart meters for higher bills.. All published tests I know of indicate that smart meters are more accurate than old meters. Old meters themselves were not always accurate, and, undoubtedly, some dead or slow meters were replaced in the process.

    A few facts that shed light on the complaints:

    1. The number of complaints is extremely low, in the low hundreds, relative to the number of smart meter installed by PG&E so far. Based on my last check, over 3 million gas and over 2 million electric smart meters are in place. The complaints are loud, thank to some good PR and media attention, but they are minute relative to the number of folks with smart meters.

    2. About half the smart meters in Bakersfield were installed by July-August of 2008, and the second half was installed after July of 2009. At some point it will be relatively easy to compare bills of customer with and without smart meters, facing the same weather conditions and rates.

    3. After the 2000 crisis, the California legislature has limited increases for lower usage customer (130% of the baseline amount or energy budget) and for customer on the low income assistance tariff. All of the rate increases since 2000 have been piled on usage at higher level for customers who are not on low income tariffs. As are result, the relationship between usage and bills is not linear, but exponential. Regular usage is at roughly 11c per unit of energy (kWh), while high end usage is at 44c per unit. A 50%increase in usage, which is very common over the summer, can more than double regular bill. Do the math on the PG&E rates (Google PG&E tariff book) and you can check this.

    4. Over 35% of Bakersfield customers are on the low income assistance rates. Eligibility changes over time as folks get jobs or promotions. A high usage customer that switches from highly subsidized low income tariffs (oddly, enough the subsidy is bigger for energy hogs) can face a bill quadruple the size without changing energy usage. Again, much of this design rests on the CA legislature, consumer advocates, and, partly, on PG&E.

    • DruBlu

      Wow Josh,
      If it were that simple it would be solved already.
      Do you think these customers do not know what their average bills are over the course of a year? Please!
      A seasoned customer is aware their bill goes up in the summer. Subsidized customers know the bill will go up when they do not qualify any longer for low rate programs. These folks are experiencing unexplainable bill increases based on their known history with rate changes taken into consideration.
      Communication is not the root problem, it’s arrogance.
      These users are not phobic of ‘new’ wireless technology as Alexis seems to think. They are afraid of an empty bank account.

  6. it may not be the meter – but rather the communication/collection of data to the databank. friends – you can deny if you like – but there is a problem w/smart meters. All the complaints from residents in Texas and California – come from busy people who don’t have time to sit around and write their Utility Commission or State Reps or the Media – just for the fun of it… no one cares if they have a smart meter or a regular meter – neither do they want to spend there days analyzing their power usage every minute. They just don’t want their power bill to have a 100+% increase.

  7. Mary Anne Clark

    I live in Walnut Creek.
    My 11/9/09 bill: $168.03,
    my 12/9/09 bill: $366.20,
    my 1/11/10 bill: $1010.09,
    my 2/10/10 bill: $1053.23.
    My smart meter was installed sometime in Dec. 09.
    $366. is the highest bill I’ve ever received from PG&E.
    PG&E says its my fault. I am seeing others have had the same problem. Just wanted to weigh in on this issue.
    Mary Anne Clark

  8. It may not be the Smart Meters. PG&E is not aware of the utility fraud taking place with their equipment, utility poles or illegal re-wiring. Because records are being altered to cover up the evidence. With PG&E’s office personnel looking at altered records, the group behind the fraud continue laughing at them for being so “oblivious.” Check this out: CLICK: Central Valley Utility Fraud

  9. It’s easy for PG&E to communicate and educate, of course they did NOT do that at the begining of Summer 09 in Bakersfield. They had the budget and the means to do a media blast, but Kern county only got one warning in the form of one insert in the bill that no one reads. Of course, no one was prepared for the sticker shock of bills that tripled, from the rate hike and the compounded increase to that rate hike from the Generation #2 Smart Meter. It’s not about education, we ALL have been educated for years to conserve electicity. New smart energy miser appliances, energy conservation building materials used in all new land development projects. IT worked, but it worked too well. The INVESTORS must be kept fat and happy. The rate payers must feed them. Here’s the bottome line, this nation is in the middle of a full on depression, and Kern County is poor in anycase, so kick us while we’re down. PG&E and The CPUC needs to understand that the people just can’t afford it, PERIOD!!! Don’t forget Cap N Trade on the way for further taxes on energy and everything else. Again, we CAN’T afford it. Is that sinking in yet??

  10. Bob in Bakersfield

    Our smart meters went in about a year ago. PG&E didn’t read the old meter and must have guessed at the kwh for that first month. The bill was for two times the kwh that would have resulted from our entire connected load operating 30-24-7. They adjusted the bill upon my telecon.
    My question: What’s this “turning on the meter” re Alexis above? Our gas and elec smarties are functioning I suppose as remote reads by PG&E but should I expect something more?

  11. Katie, I agree that utilities need to do a lot more work to communicate benefits to consumers. But I think they also need to think through what those benefits are. Several utility representatives have indicated to me that smart meters are not – and have not ever been – about the consumer. A bit of market research into what benefits consumers need in order to embrace smart meters might be in order. It is telling that Google PowerMeter is moving forward without smart meters – their consumer benefit feels like a bit of a waning promise.

  12. Alexis Madrigal

    “Smart grid technology and smart meters don’t represent new or risky or bleeding-edge technology. They use the same type of information technology — wireless networks, silicon, software — that controls our cell phones, computers and Internet, and that plays a massive role in the U.S. economy. It’s just being used in a new industry: electricity.”

    This is a very good point. I wish people got that more often. People don’t really understand how the electric grid works, but I think they assume it is “smarter” than it is.