“Smart Meters, Bad Manners”

It did not take long for the reaction to the CPUC report by The Structure Group on Smart Meters to pour in—and it was not good.  The front page headline in the San Jose Mercury News story blared “Smart Meters, Bad Manners”. The news story prominently blasted the PG&E customer service saying that customers of the utility “were consistently treated by PG&E as wrong, until the customer proved to PG&E that they were right.”

The public release of the report at the California Public Utilities Commission was designed to be a public flogging experience for PG&E and so it was.  But if opponents of smart meters expected to find the technology discredited they were disappointed.  The sample of both smart meters and old dumb meters analyzed by The Structure Group found a consistently high level of compliance with expected standards—that was almost an afterthought in the reaction of the audience.  But that was not the worst of it. If The Structure Group had stopped there in its report this event would have been a non-news story.  But the report was designed to deflect criticism from the smart grid policy and focus attention on PG&E’s customer service performance—-“bring me someone to hang!”.

Those the report was designed to please most were having none of it.

“I was especially surprised at the limited number of customer complaints that were reviewed,” said State Senator Dean Florez (D-Shafter) who got blindsided in the Bakersfield smart meter meeting telling reporters he was not satisfied with the $1.4 million report.

PG&Es senior vice president for customer service Helen Burt tried the mea culpa route telling the reporters “we heard loud and clear that what was lacking was customer communication and customer service.”

So what?

The real PG&E sin being punished was not its decision to put in the smart meters it was causing the Bakersfield Effect—leaving customers out of the process, ignoring their complaints, denying start up meter installation problems and embarrassing the politicians and regulators.  For that sin there would be a public flogging.

The real lesson is that disruptive technology well—disrupts the traditional utility culture, introduces new business communications and customer education needs along with new equipment and changes the ages old relationship between utility and ratepayer—and not enough attention is being paid to getting that part right the first time.  The public flogging of PG&E customer service will be instructive both inside the utility and outside.  The question is whether utilities will learn from the experience or just take the whipping and move on as long as regulators keep authorizing rate recovery of the costs.

This is just the tip of the smart grid transformation process.  We have bigger battles looming on the horizon over meter data and what it means, over the gateway to the customer and who controls it, over the competitive threat from energy management solutions that get in between the utility and the customer and over the cumulative cost of all of this change.

And after all of those problems are solved, smart grid still has only a 50/50 probability of success because neither the Federal Government nor the States are likely to risk the two things essential to smart grid success—build enough new high voltage interstate electric transmission to scale smart grid and bring remotely located renewable energy resources to market, or force customers to transition from average cost pricing to dynamic pricing so end users feel the energy price volatility enough to take sufficient action in demand response, energy management or energy efficiency to make a scalable market for those services.

As customers we  hate this uncertainty—and Senator Flores and other politicians will hear us loud and clear again if it happens as ratepayers turned customers turned voters yell—–“bring me someone to hang for this mess!”