Lessons From Bakersfield: How to Avoid a Smart Meter Backlash

Pacific Gas & Electric (PG&E) announced at an industry event this week that it is installing 13,000 new smart meters a day, a pace that the utility will have to keep up if it wants reach its goal of 10 million installations by 2012. To many, this is great news — further proof that the smart grid is picking up steam and, as Pike Research forecasts, is well on its way to hitting 250 million smart meter installations by 2015. But not everyone is as jazzed about the smart-metering boom. In Bakersfield, Calif., some resident say the smart meters have brought nothing but misery.

To make a long story short, a hot summer, rate increases and the roll-out of new smart meters all combined to deliver a rude shock when Bakersfield residents opened recent electric bills. Some saw their bills double or triple from a year ago, before the smart meters were installed. Despite the number of potential factors, it’s the smart meters getting the lion’s share of the blame. One woman who has yet to receive her smart meter went so far as to put a pit bull on guard duty to scare away technicians that may come to install it.

Since then, there have been heated hearings and a pledge by PG&E to have smart meters independently tested. Meanwhile, PG&E has a public relations mess on its hands, casting an unwelcome shadow on the company’s smart meter infrastructure, supplied by GE, Landis+Gyr and Silver Spring Networks.

What can PG&E and other utilities learn from Bakersfield? Here are two lessons on balancing the promise of smart meters and customer expectations.

Accurate & Real-Time Energy Management

One of the benefits of PG&E’s SmartMeter program is an online energy monitoring portal that gives customers a snapshot of their power usage on an hourly or daily basis. Handy, except that customers can’t trust it. For one customer, the site showed that consumption actually rose during a blackout. PG&E says that it used estimates to determine consumption to make up for the fact that the smart meter couldn’t communicate during the outage.

Customers would be better served both by technology that provides more regular data and a site that accurately reports that information. It all boils down to granularity. Even hourly data is too limited to provide meaningful insight. Real-time monitoring provides instantaneous feedback and improves the chances of influencing consumer behavior. At the very least, PG&E could avoid suspicion by reporting zero consumption (with an alert message) in the absence of smart meter communications until the outage or disruption passes and the data can be retrieved.

Forward-Looking Customer Outreach

The Bakersfield smart meter roll-out took place amid a backdrop of two rate increases and hot spell — bad timing, by all accounts. But adding insult to injury is the fact the average customer who’s being sold on smart meters has heard volumes about the technology’s money- and energy-saving potential. Rate increases, on the other hand, are usually buried in the small print of an electric bill. That hasn’t helped shift the blame from smart meters to any of the other factors.

PG&E could have taken the edge off those higher bills and prevented a lot of ill will had it better prepared customers for both the rate hike and the smart meters. For example, PG&E could have promoted its energy-efficiency programs as part of consumer outreach initiatives for smart meter installation and educated homeowners on how improved the improved accuracy of smart meters can work for customers. Having not done so, the improved accuracy is only working in the utility’s favor, a situation that Celeste warned about many months ago.

Accurate smart meter data is a two-way street. While it helps utilities account for every fraction of kilowatt consumed by a household, utilities should also empower their customers to use that same information the second it’s generated to make informed decisions about their electrical usage via online tools or in-home displays.

The days when utilities just kept the electricity flowing and sent a bill at the end of the month are coming to an end. In the era of 250 million smart meters, utilities will have to be receptive to customers in a way that PG&E hasn’t been with the residents of Bakersfield.

Question of the week

How could PG&E have handled the Bakersfield smart meter debacle better?
Relevant analyst in smart meters
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  1. PG&E usage reporting may be hourly, but you can only see yesterdays data. I believe the data is being collected every 15m but PG&E’s vendor only pulls the data from the meter one or two times a day and there may be a further delay in updating the PG&E web site where it is plotted.

    At the moment, the site is also missing data for the last 2 days for my address. PG&E could start by getting data reporting more reliable and timely, before making it more readily accessible to the customer.

    On that note, the current focus for real-time feedback seems to be on in-home displays. This requires additional network connectivity between the meter ( typically outside the home and perhaps several floors away in high-rise buildings) and the in-home display. It would be much more interesting to start by throw the data APIs on the utility end open to 3rd party developers who could create all manners of web/mobile widgets where you could see your energy consumption from anywhere and on any device.

    p.s Plotting tools do need to extrapolate when data samples are missing. I am not sure if the PG&E site always had this disclaimer but at the moment it is pretty clear what they do when data samples are missing:

    “The data presented in this chart may slightly differ from the data reflected on your bill due to estimating, rounding and uncommon transactions.

    PLEASE NOTE: On occasion, some hourly reads may not be available. If this occurs, usage for that period will be displayed as an average of usage between the hourly intervals where reads were available. Daily reads are used to ensure accuracy in both billing and for cumulative online display of energy usage.”

    1. Ouch, see what I mean? Those delays are downright painful, particularly if you are trying to get a handle on your energy consumption.

      Good thoughts on APIs. Though I would love to pick my own energy monitoring app or device, so far utilities are keeping their systems pretty closed (it’s early still, mind you). Fortunately, companies like Google and Tendril seem willing to buck that trend (see: http://earth2tech.com/2009/02/11/how-googles-powermeter-will-affect-the-smart-meter-industry/).

      Thanks for the clarification, by the way.

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