PG&E smart meter opt-out could be analog

In what looks like a major victory for consumer advocates, the California Public Utilities Commission has revised its own revision of Pacific Gas & Electric’s smart meter opt-out plan to allow those who don’t want to have the digital meters to keep or go back to their old analog devices.

The commission has also put on hold a decision about how to allocate the costs of the opt-out between customers and utility shareholders until more information on the actual costs of the program can be collected.

The PUC issued the revised ruling late last week, after pushing back a vote on the issue from its Jan. 12 meeting to Feb. 1.

For those into primary sources, click here to go to the latest revised decision. Don’t be intimated by the 43-page length; it’s actually pretty readable and will give you a good overview of the arguments that have shaped this latest version of the plan.

Pending approval on Feb. 1, the key provisions of the new PG&E opt-out plan are:

– Analog meters: The revised decision from Commission President Michael Peevey goes to considerable lengths to say the commission is not ruling on the science of whether or not radio frequencies from digital meters are potentially harmful to human health. The decision quotes at length a decision from Federal Communications Commission citing existing science that the meters emit less radio frequencies than some household appliances and do not violate any federal guidelines.

Further, those customers who stick with analog meters for any reason will not be able to benefit from any energy-efficiency programs associated with smart meters.  Such programs — including variable pricing plans and customer access to real-time information on their energy use, neither of which have been widely rolled out yet  – are called for as part of California’s drive to reduce its greenhouse gas emissions and achieve 33 percent renewables by 2020.

But, all that said, the commission has decided to go with an analog opt-out, rather than simply turning off the wireless radio in the digital meters.   PG&E customers will not be able to choose whether they want an analog meter or a digital meter with the wireless turned off; analog will be the only opt-out choice.

Sign-up for the opt-out will begin 20 days after the commission approves the plan.

– Costs. The commission also revised the interim pricing PG&E opt-out customers will have to pay to keep or get back their analog meters. Regular customers taking the opt-out will pay an upfront fee of $90 and a monthly extra charge of $10 for meter reading.  Low-income customers on the California Alternate Rates for Energy (CARE) or Family Electric Rate Assistance (FERA) plans will pay $10 upfront and $5 extra per month.

Another big change in the decision is that these rates will be in effect on an interim basis. The commission has decided to initiate a second phase of the PG&E opt-out which will include tracking the utility’s revenues and expenses related to the program and then evaluating how much can be charged to customers or whether shareholders will have to pick up part of the bill.

Specifically, PG&E has to establish separate accounts to track the opt-out plan’s finances and and then submit an application for cost recovery.  In a significant footnote, the commission writes:

“Authorization of a memorandum account does not necessarily mean that the Commission has decided that the types of costs to be recorded in the account should be recoverable . . . Instead, the utility shall bear the burden when it requests recovery of the recorded costs, to show that separate recovery of the types of costs recorded in the account is appropriate, that the utility has acted prudently when it incurred these costs and that the level of costs in reasonable.”

 If the plan is approved come Feb. 1, it will become the de facto standard for Southern California Edison and San Diego Gas & Electric, both of which will likely have to come up with their own opt-out plans in the foreseeable future.  Following an order from the PUC, both utilities now have delay-installation lists for customers who have put off or don’t want a smart meter installation at their homes.

It is interesting to speculate on exactly what happened that turned the PUC around so dramatically. Peevey in particular is a strong smart meter advocate, but his influence may have been somewhat countered by Mike Florio, who before being appointed to the PUC last year by Gov. Brown was senior staff attorney at The Utility Reform Network, a consumer advocate group.

Another part of the bigger picture has been the utilities’ failure to get customer buy-in on the smart meters, an issue of intense discussion among utilities across the nation. 

In a bit of serendipitous timing, Intelligent Utility, an industry publication, recently published an  article on its website  called “How to talk to a customer, if you have to.”  The piece provides an update on industry efforts to develop better tools and targeted messages for different types of customers and counsels a transparent, cooperative approach.

Editor-in-chief Phil Carson writes:

“In my view, there’s a several-step process in play for utilities as their forward-facing business plan dictates their technology roadmap: gain or regain stakeholder trust, outline and implement a generational outreach effort and, within that framework, determine the tactical programs that answer short-term needs. There’s plenty of research on how to match messages to value propositions that appeal to a diverse customer base.

“For utilities that don’t understand that they are proposing generational changes in customer engagement and behavior and that affecting that change will require a new way of doing business, let the bill stuffer be your epitaph.”