Business

Thursday, Sep 02 2010 06:36 PM

Study faults PG&E's customer service, not SmartMeters

BY JOHN COX, Californian staff writer jcox@bakersfield.com

The uproar over Pacific Gas and Electric Co.'s SmartMeter program had more to do with customer service failings than with actual technological problems, according to an outside report released Thursday.

Authors of the five-month study generally backed PG&E's assertions that its residential customers' electric bills spiked between 2008 and 2009 mainly because of hot weather coinciding with steep rate increases and, in some instances, people falling out of discounted bill programs.

The report appears to quash a key criticism of SmartMeters -- that they measure electric usage inaccurately. But it also takes PG&E to task for shortcomings ranging from its handling of customer complaints to a hasty rollout schedule that created a need to estimate bills that had to be squared up later.

At a press conference following the report's release at a meeting of the state Public Utilities Commission, PG&E pledged to step up customer outreach efforts and rebuild trust in a technology the industry deems crucial to making the nation's power grid more efficient.

"We heard loud and clear that what was found lacking was customer communication and customer service," PG&E's chief customer officer, Helen Burt, said at the conference.

The more than 400 page report was prepared by The Structure Group, a Houston-based consulting firm that until last year did work for PG&E on projects unrelated to SmartMeters. It has no existing contracts with the utility.

Perhaps nowhere more than in Bakersfield have the remote devices stirred controversy. Complaints here about skyrocketing bills last summer, as many SmartMeters were being installed or upgraded in Kern, led to a backlash that spread across the state and created worry in the entire electric utility industry.

A leading PG&E critic, state Senate Majority Leader Dean Florez, D-Shafter, questioned the report's adequacy and said he will convene a hearing Sept. 16 in Sacramento to determine whether the study "meets the standard of inquiry expected by ratepayers."

Upon listening to a summary of the report, Commission President Michael Peevey said he was "not really that surprised by the results," given the high number of SmartMeter customer complaints registered with the commission against PG&E. He and other commissioners said they expect the company to adhere to best practices within the industry.

On Tuesday PG&E issued a news release stating that it had formed an advisory panel of experts, regulators, customers and others to make sure the continuing SmartMeter rollout follows the industry's best practices.

No moratorium

For months PG&E consumer advocates have called for halting the rollout, which began in Bakersfield in 2006 and is expected to be complete in 2012. The commission steadfastly declined to stop the process, saying it would await The Structure Group's study.

At Thursday's meeting commissioners made no mention of a moratorium. But afterward, Julie Fitch, the commission's Energy Division director, said a moratorium is one possible outcome of a new petition before the commission calling for a suspension of SmartMeters rollouts on the grounds that the remote devices emit potentially harmful electromagnetic fields. This concern seems to be more widespread in Northern California than in Kern.

Local meter upgrades

Although PG&E has pushed forward with SmartMeter installations during the study that began in April, it did bow to customer skepticism by suspending one aspect of the program during the course of the inquiry: switching out first-generation SmartMeters -- which exist only in Kern County -- for second-generation meters common elsewhere across PG&E's territory.

Now that the study is complete, the company said it expects to resume the meter upgrades in late November. There remain about 120,000 of the first-generation meters in the Bakersfield area, as compared with about 330,000 second-generation meters here.

Testing for accuracy

As part of its study, Structure said it tested more than 750 SmartMeters. Of those, 156 were tested in a laboratory, where each met industry-established accuracy standards. Another 611 meters were field-tested, and Structure reported that each of these came in under the 2 percent margin of error allowed by the commission.

Additionally, the consulting firm conducted "end-to-end" system tests on a small number of meters to determine whether PG&E's billing system was working properly. Structure said it found no deviations to suggest a "systemic problem" in the billing system's accuracy.

Structure also said it reviewed the accounts of 1,378 customers who had filed complaints about their bills, and that it conducted phone interviews with 20 of these customers.

Poor customer service

The company found that PG&E's customer service system failed in several respects:

* PG&E's processes did not address customer concerns about new equipment and changes in their power usage;

* Customer skepticism about SmartMeters "was not addressed early or effectively" by PG&E;

* Both PG&E and the commission classified customer complaints as being resolved even though the customers did not feel they concerns had been fully addressed;

* The utility's customer service team missed opportunities to provide specific usage data that may have helped customers understand the technology better.

The company said it has taken several steps to ensure better service going forward. These include:

* Establishing more PG&E "Answer Centers" and adding 165 customer service representatives to provide prompt answers to customers' questions;

* Creating a call center dedicated to answering questions about SmartMeters in particular;

* Drawing up a new set of communications timed to introduce customers to the devices and their benefits;

* Calling customers who receive an estimated bill for two consecutive billing cycles, so they know the reason for the estimates and can arrange to make payments.

Minor technological problems

The study's authors did note some relatively minor technological shortcomings with SmartMeters. Discussing the report's findings Thursday, Structure principal Stacey Wood referenced statements made by PG&E in May that it continues to work on problems related to communication, data storage and incorrect meter installations. PG&E said such problems affected only about 1 percent of company SmartMeters, or about 55,000 devices.

A hasty rollout

Wood said PG&E initially focused on building a "backbone" system to handle incoming data before the meters were installed, an approach that she said was in line with best industry practices. But as time grew short, she said, the utility began putting in SmartMeters before building the larger network to process meter data.

Wood emphasized that although this situation contributed to bill estimations, there was no evidence of actual billing errors related to the system's inability to transmit or receive data.

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