PG&E to Bakersfield: Weather, Not Smart Meters, Cause of Higher Power Bills

| About: PG&E Corporation (PCG)

By Jeff St. John

Pacific Gas & Electric (NYSE:PCG) says its smart meters aren't the reason Bakersfield customers are seeing higher power bills this summer. Instead, it's hot summer weather, combined with electricity rate increases, that are the cause, the utility says.

California State Sen. Dean Florez has found a host of Bakersfield residents who are complaining about big power bills they've gotten after their smart meters were installed. Those complaints have focused attention on PG&E's $2.2 billion, 10 million smart meter deployment, with the California Public Utilities Commission demanding that PG&E find a third party to investigate (see San Francisco Chronicle).

But PG&E has already tested many customers' smart meters – made by General Electric (NYSE:GE) and Landis+Gyr and networked by Silver Spring Networks – and have not found any problems with how they're working, PG&E spokesman Denny Boyles said Wednesday.

Rather than malfunctioning meters, PG&E thinks the higher bills have come from its two rate hikes in the past 12 months, plus a hot summer that led to many Central Valley residents cranking their air conditioners to beat the heat, Boyles said.

Still, the complaints do point out a central issue for utilities deploying smart meters. While two-way communicating meters do offer the promise of linking home appliances, AC units and other systems to networks that could reduce power bills, those home area networks haven't gotten past the pilot stage yet (see Utilities Mull Price Points, Policies for Home Energy Management).

And that means most homeowners haven't seen direct proof that the meters are worth the rate increases they're paying to cover the cost of installing them — though in PG&E's case, those increases came years ago, Boyles noted.

Right now, PG&E smart meter customers can check their power usage at the meter, or log into a PG&E Web site to get updates, Boyles noted. In one customer's case, that website inaccurately reported power usage going up during a blackout – a glitch PG&E is correcting, he said.

But PG&E is looking at more complex and useful linkages between smart meters and homes, though the initial advances on that front may come to its small commercial customers first.

Those are the target customers for PG&E's proposed $85 million project to link 75,000 smart meter-enabled businesses with energy management systems. PG&E is seeking Department of Energy smart grid stimulus grant funding for the project, which includes Cisco and IBM (see PG&E Asks Cisco to Help Make 75K Businesses Energy Wise).

One of the project's goals is to give businesses advance notice of electricity prices that will change during the course of the day. Such time-of-use and peak pricing programs are a critical component of many utility smart meter networking plans, since they won't work to encourage customers to save power during peak demand times unless those customers can get pricing signals in a reliable and timely way.

In fact, peak pricing without some kind of forewarning to the customers could yield some even louder complaints about unfair power bills - not a pleasant prospect for utilities.

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