(As first told Sep 26, 2010 in the Sacramento Bee.)
The utilities use many of the same meters, vendors and software networks. But customers' reactions to smart meters installed by PG&E and the Sacramento Municipal Utility District are as dissimilar as the their corporate cultures.
Since Pacific Gas and Electric Co. rolled out its $2.2 billion smart meter program in 2006, the state Public Utilities Commission has received more than 1,800 formal complaints from customers blaming the high-tech meters for skyrocketing electric bills.
The complaints — some from customers who said their bills more than doubled — prompted hearings by state lawmakers and an investigation by the PUC. Officials in Marin County have called for banning the devices.
By contrast, SMUD's $120 million smart meter program has rolled out quietly. While 231 customers have complained since it kicked off in November, most of those complaints were minor and were handled within a day, the utility said.
"I think SMUD is doing it right. They are taking their time," said Bob Alvarez, chief of staff for state Sen. Dean Florez. "PG&E didn't do that."Florez, D-Shafter, chairs the Select Committee on the Smart Grid and has held hearings on PG&E's meter problems.
Unlike the old odometerlike metal meters, smart meters use wireless technology to transmit customers' billing information from their homes to the utility's offices. They eliminate the need for monthly visits by meter readers, saving the utilities millions of dollars a year in labor costs.
PG&E's meters allow customers to log onto its website to see how much energy they used the previous day. On its website, SMUD says it will start providing that feature in 2011.
PG&E's smart meters also include a system to alert consumers with a text message or a telephone call when they are about to move to a higher-priced electricity tier.
Eventually, the utilities plan to provide in-house displays and thermostat controls, boosting energy efficiency efforts even more.
SMUD and PG&E both use smart meters built by Swiss manufacturer Landis+ GYR and network software developed by Silver Springs Network of Redwood City. PG&E also uses meters built by General Electric Co.
Unlike PG&E, SMUD has opted for a go-slow approach. The local utility has installed 78,000 meters in a handful of neighborhoods, such as downtown Sacramento, Folsom, Rancho Murieta and some rural areas.
SMUD is holding off deployment of meters to its remaining 537,000 households until December, so it can test the meters' accuracy and improve its installation process, said Erik Krause, smart meter project manager. "We want to get everything right before we move on to the next thing," Krause said.
PG&E is taking a much more aggressive approach. The San Francisco-based utility giant says it has installed more than 6.8 million gas and electric meters throughout its service area and continues to deploy them at a rate of about 15,000 per day.
PG&E said it hopes to install about 10 million smart meters in Northern California by 2012.
The sheer size of PG&E's smart meter program, the largest in the electric industry, was a factor in the higher consumer complaints.
Recent rate hikes also played a role. About half of PG&E's customers saw their bills go up last year, but it wasn't because of the new meters, said company spokesman Paul Moreno.
PG&E officials have insisted that the smart meters are accurate, a point supported by a PUC investigation this month which found that the smart meters were correctly recording customers' electricity usage.
But the report, by Structure Consulting Group LLC of Houston, also faulted PG&E for its handling of billing disputes with customers.
Often, PG&E's customer service staff dismissed complaints as meritless and failed to follow up, Structure Consulting said. Staffers also mishandled complaints by incorrectly assuming that open cases had been resolved, the report states.
"PG&E rolled out its program so fast and at such a scale that problems caught up with them," said Marcel Hawiger, energy attorney for the San Francisco-based consumer watchdog group The Utility Reform Network, or TURN. "Fundamentally, I think people's anger reflects a continuing problem with PG&E's high rates and poor customer service." Gordon Weil, an energy consultant and former consumer advocate for the state of Maine, said investor-owned utilities such as PG&E have a profit motive for going fast when it comes to installing smart meters.
Regulators permit investor-owned utilities to earn a percentage rate of return on top of their overall capital costs. Increasing those costs — by installing smart meters, for instance — increases their actual profits, he said.
"They are able recover a heck of a lot more than their costs," Weil said.
PG&E's Moreno said the company's investment in smart meters is motivated by labor savings, not increasing the firm's capital investment base.
PG&E has learned from its mistakes, he said, stepping up its outreach to local community groups. It also has beefed up its call center staffing by 15 percent.
"We could have done a better job," he said. "We learned from that experience that customer complaints are important."