California Senate Appearance

April 26, 2010

In comments to a California State Senate panel on April 26, 2010, PG&E Senior Vice President and Chief Customer Officer Helen Burt outlined findings of the company's review of its SmartMeter™ technology and assured customers the technology is performing up to industry standards. The complete text of her prepared remarks appears below.

Good morning. I’m Helen Burt, PG&E’s senior vice president and chief customer officer.

Several years ago, PG&E became the nation’s first major utility to adopt smart meters. Since then, dozens of other utilities have joined us. And in fact, today there are approximately 76 million smart meter devices in use worldwide. This is critical because SmartMeter™ technology is essential to creating a cleaner, more efficient, low-carbon energy future.

Looking back, I want to acknowledge that PG&E missed important opportunities to do some things better as we introduced this groundbreaking technology.

As with the deployment of any new technology, similar to the iPhone or Windows, there will be great successes and need for changes. We have had a similar experience with our SmartMeter™ program. Even though the meters have been a huge improvement over our legacy meters, increasing accuracy and reducing the need for billing estimates, they have not been perfect. We have learned a lot from our rollout about the need for better communication with our customers.

Customers should know that we’ve taken these important lessons to heart.

First, this experience has reminded us how important it is to communicate with our customers about new technologies.

Second, it’s reminded us that it is vital to anticipate—and to help others anticipate—the reality that some growing pains are inevitable when introducing a new technology on such a large scale.

And third, it’s reminded us that we need to do more to help customers understand their rates. In fact, it turns out that rate-related issues account for a very large number of customers’ inquiries about their meters.

Today, we’re putting these lessons to work to do a better job.

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Regrettably, some have mischaracterized PG&E as claiming smart meters are “infallible.”

It’s critical to set the record straight.

No technology is infallible. No technology is completely immune to human error. And, to my knowledge, no one at PG&E has made such a claim. Last fall, when we said “the meters work,” we meant it. They do. But that doesn’t mean that every single one of them works 100 percent of the time.

Even technologies as critical as some medical devices—which patients literally depend upon for survival—are not infallible. For instance, of the millions of pacemakers in use, studies show that about 0.14 percent will malfunction.

Yet, the overwhelming majority perform exactly as they should, and they provide enormous value.

While no one would equate the benefits of SmartMeter™ technology with those of a life-saving medical treatment, they are substantial nonetheless. We should think about technologies like SmartMeter™ devices in a similar way.

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Now let me quickly and candidly summarize the facts we have found about our SmartMeter™ program and put them into perspective.

Most significantly, we have found that more than 99 percent of SmartMeter™ devices are performing exactly as they should—a success rate that is well within accepted standards.

That compares with about 97 percent for traditional meters.

The total number of instances where we’ve found a customer’s SmartMeter™ device is not measuring usage in line with accepted standards is just eight meters, out of 5.5 million. Context here is important—just eight meters out of 5.5 million.

As a result, we can say with confidence the technology at the heart of the SmartMeter™ program is not only sound – it is a substantial improvement over previous meters.

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Let me now address three other items—all of which are separate and distinct from the meter’s ability to accurately measure usage: the meter’s wireless communications, data storage on the device and human error.

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We’ll start with the wireless connection.

We have seen some examples of meters that have trouble connecting with the network. This is essentially the same as a cell phone having a bad signal. We’ve seen this in about one-tenth of 1 percent of the 5.5 million meters installed.

Even more important, it has no impact on meter accuracy

When this happens, we fix it. In the meantime, we issue a bill using an estimate based on the customer’s routine energy usage, until we can manually retrieve the actual usage data from the meter. Then we reconcile the two amounts to ensure customers only pay for the energy they’ve actually used.

Even with traditional meters, utilities have to estimate bills when they can’t access a meter. In fact, SmartMeter™ technology is significantly lowering the number of estimated bills.

In March, the percentage of SmartMeter™ customers who received an estimated bill was eight times lower than the percentage of customers with traditional meters who received an estimated bill.

And finally, we want customers to know that the CPUC enforces stringent regulations for all utilities on estimated bills.

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Let me now discuss the second item—data storage.

In two-tenths of 1 percent of the meters, we found the need to upgrade the software, or replace the meter, when the meter measured usage data correctly, but didn’t retain it.

When this occurs, we fix the problem. This meant the customer was actually billed for less energy than they used, and we do not go back and charge retroactively.

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The third item relates to installation complications.

Among the 5.5 million meters, in less than one-half of 1 percent of cases, perfectly functioning meters haven’t been connected properly and calibrated as they should.

To be clear, this is not a technology issue. When it occurs, it is our mistake, and we apologize to the customer, and we correct it. That includes working to improve training for installers.

All of these items that I mentioned represent less than 1 percent of our meters installed to date. Again, all of these issues have been, and are being, corrected as we find them and make up less than 1 percent of our meters installed to date.

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More than 99 percent of SmartMeter™ devices are working properly, and perform better than traditional meters we are replacing. They have fewer problems, and are helping to us to reduce the number estimated bills each month. And, they are helping our customers to save energy and money.

SmartMeter™ technology is the indispensable cornerstone of the smart grid—which will empower customers and utilities to manage energy use more intelligently. It will allow customers to increase their control over their energy costs, and it will allow for even greater integration of electric vehicles.

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Let me close by reiterating my opening point.

We have learned a lot from this experience.

It’s helping us do a better job for customers today.

And they have our clear and firm commitment that we will continue taking steps so they can share our confidence in SmartMeter™ technology, and can take full advantage of its many benefits.

Thank you.

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