Pg&e Customer Revolt May Threaten Rollout Of Obamas Smart Grid
PG&E Corp., owner of Californias largest utility, halted meter installations in Bakersfield, north of Los Angeles, after hundreds of customers complained that readings werent accurate. The meters, part of a so-called smart-grid initiative billed as clearing the way for more renewable-energy use, are designed to help consumers conserve power during periods of peak demand.
Martha Johnson, pastor of a church in Bakersfield, said her utility bill almost doubled from a year earlier to $874 in July after her new meter was installed. “That caught my eye because Ive never had a bill that high,” said Johnson, 64.
San Francisco-based PG&E, which faces a lawsuit from a Bakersfield customer whos seeking class-action status, says its meters are accurate and hot weather and increased rates led to higher bills than consumers expected. The state Utilities Commission ordered an independent study of billing accuracy.
Whether PG&Es complaints stem from perception or defects, they may slow U.S. installations of the meters, a cornerstone of President Barack Obamas plan to spur grid upgrades with $8 billion in public-private funding. Consumer groups question whether benefits of the meters justify costs passed on when regulators allow utilities to increase rates to pay for them.
Regulator Reluctance
“If customers lose confidence in smart meters, I would expect regulators would be more reluctant to grant rate increases to install new meters across the system,” said Travis Miller, a utility analyst at Morningstar Inc. in Chicago. “Any kind of adverse impact from these projects could impact long- term growth of the meters.”
The devices allow utilities to check energy use remotely, eliminating the need for employing meter readers. They can be connected to equipment that shows customers when rates are highest, allowing households and other consumers to shift power use to less costly periods. Smart meters also give utilities more control of demand, helping them match usage with renewable electricity flows, such as from wind and solar power.
There are about 8 million smart electric meters in the U.S., and that count will jump sevenfold by 2019, according to the Institute for Electric Efficiency in Washington.
“Other states are looking very closely at what is happening in California,” said Mindy Spatt, a spokeswoman for the Utility Reform Network, a consumer group in San Francisco. “What we know for sure about the meters is they are job killers and they are very expensive. The rest is just pie in the sky.”
Cost Objections
Utility-consumer groups across the country have raised cost concerns about meter projects, said Charles Acquard, executive director of the National Association of State Utility Consumer Advocates.
Liberty Lake, Washington-based Itron has risen 7.3 percent this year on the Nasdaq Stock Market, trailing a 45 percent jump by the Nasdaq Composite Index. Schuman has “sector perform” ratings on Itron and other makers of meter-related products, including Comverge Inc., EnerNOC Inc. and Esco Technologies Inc. Comverge and EnerNoc have more than doubled in value this year. Esco has dropped 11 percent.
Duke Plan Rejected
Regulators in states such as Connecticut and Texas are pressing utilities to show how smart meters will benefit consumers. In November, Indiana regulators rejected a proposal by Duke Energy Corp. to install about 800,000 smart meters after concluding the company didnt show the plans long-term rewards.
Charlotte, North Carolina-based Duke, which got $200 million in federal funding to deploy smart meters and other equipment in three states, will reapply in January for approval in Indiana, company spokesman Dave Scanzoni said.
Fairfield, Connecticut-based General Electric Co. and Switzerlands Landis+Gyr are supplying the 10 million meters that PG&E plans to deploy at a cost of $2.2 billion.
Bakersfield resident Pete Flores filed suit in October, alleging that his bills almost tripled after a smart meter was put in. Lawyer Michael Kelly, who represents Flores, said he plans to file an updated suit with more plaintiffs in January.
California Case