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 Google.org 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.