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Eye-Popping Electric Bills Spark Smart Meter Investigations in Texas, California

Educated Consumers Can Save Money, But Public Training Is Slow to Reach Out

Apr 2, 2010

You never get a second chance to make a first impression. It’s an old lesson that smart meter companies and utilities are learning the hard way as some of the country’s first smart grid pilots get underway.

Smart meters, unlike traditional meters, analyze home energy use for time-of-day pricing and send the data to customers and utilities to help them better manage their energy use and supply. While that knowledge can help customers save money, the technology is under fire in California and Texas, where lawsuits and scores of complaints are accusing utilities of using the new meters to inflate their customers’ bills.

The meters allow utilities to see if customers are using energy during peak-load times and charge them accordingly under specified plans. That means careful customers can save money by opting to use their high-energy appliances, such as dishwashers and clothes dryers, during off-peak times.

But with consumer education lagging behind smart grid rollouts, thousands of customers haven't taken advantage of the information and instead have been left thinking that their utility is just price gouging in the name of energy efficiency. Some think it’s a scam cooked up by the utilities; others assume the meters are inaccurate.

The utilities claim that bill increases can be explained by a number of factors, namely increased energy use, energy use during peak-load periods and a colder winter this year. After all, they say, smart meters have been deployed by the millions throughout the world, with few complaints from customers, so clearly the technology is not the problem.

Customers aren’t buying it.

California Complaints

In late 2009, Northern California utility Pacific Gas & Electric found itself in the middle of a lawsuit accusing it of false advertising.

The utility had told its customers that the smart meters it was installing in their homes would help them save money on their electric bills. When some bills went up instead, hundreds of PG&E customers filed formal complaints with the California Public Utilities Commission (CPUC). One Bakersfield resident, Pete Flores, sued the utility, claiming his electricity bill had jumped from about $200 a month to over $500 a month once a smart meter was installed in his house, with no change to his energy use.

The CPUC moved to investigate the claims, and PG&E stopped installing meters in Bakersfield. Now, several months (and more complaints) later, that investigation is officially underway: The CPUC announced this week that it had hired The Structure Group to conduct an independent evaluation.

In California, the CPUC had already authorized Southern California Edison to install approximately 5.3 million new smart meters, San Diego Gas & Electric to install about 1.4 million electric smart meters and 900,000 natural gas meters, and PG&E to install about 5 million electric meters and 4.2 million natural gas meters.

Since these smart meter rollouts began in 2009, the CPUC says it has received about 600 complaints, almost all from PG&E’s service area. In addition to evaluating the smart meters in the San Joaquin Valley, the origin of most of the complaints, the CPUC has asked its independent investigator to evaluate meters throughout PG&E’s territory.

Trouble in Texas

While PG&E submits to an investigation of its meters this week, Dallas-area utility Oncor is preparing to deal with its own smart meter investigation.

The utility has installed about 760,000 meters in its customers’ homes, and complaints to the Texas Public Utilities Commission have increased tenfold in the year since the installations began, all focused on large increases to bills.

The utility claims the increases are due to an unusually cool winter in the region, especially when compared with last year’s unseasonably warm winter. When Oncor ran a side-by-side test of its smart meters and the “dumb” meters it used to use on several homes in its service area, the results showed energy use readings to be the same on both meters, but customers wanted more proof. The commission will now conduct an independent test of Oncor’s meters to determine whether they are functioning properly.

“We’re enthusiastically supporting the testing program so that we can eliminate any seeds of doubt about the accuracy of these meters in consumers’ minds,” said Bob Shapard, Oncor’s chairman and CEO.

"Once we get these concerns behind us, all of us can get focused on the real cause of the high bills and help consumers address that."

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