Environmental Engineering Reference
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regulators, and customers. Utilities are not used to rapidly changing technology - until
recently the industry expectation was that the same basic electricity system technology
would be used for decades. But with smart meters, there are possibilities for frequent
technological improvements - both hardware and software. This creates a major challenge
for investment. If a utility invests in one meter design in one year, it will have a difficult
time explaining to its customers why they should switch to a different meter in the near
future. Another challenge related to the fast pace of technological change is compatibility:
it is possible that first-generation meters may not be compatible with second-generation
meters if new functionalities are incorporated and industry standards are not agreed upon.
This raises issues of standards - how will interoperability of system components be
managed? Should a specific type and model of smart meter be mandated, and, if so, by
whom?
5.5.1 Smart Meter Deployment in California
Within the United States, the state of California has perhaps the longest and most
complicated history of smart meter rollouts. California is an environmental leader, known
for advancing innovations for environmental improvement more aggressively than other
United States jurisdictions. Within this context, California energy regulators were among
the first to approve an electric utility's smart meter initiative, in 2006, with Northern
California's Pacific Gas and Electric (PG&E) meter retrofit program. The initial phase
of this program proposed retrofitting conventional gas and electric meters with
communication devices that would enable monitoring of hourly consumption and variable
pricing mechanisms. Responding to rapidly changing smart meter technology, PG&E was
successful in amending its proposed meter retrofit program in 2009 to involve installing
However, the initial rollout was plagued by problems. As this program was
implemented, some customers began to experience price spikes in their bills, and they
accused PG&E of gouging customers. PG&E's customers were angry; opposition rapidly
grew from these negative experiences and forced PG&E to adapt and institute meter
opt-out alternatives. During this time additional complaints emerged about PG&E failing
to honor customers' smart meter opt-out requests, which exacerbated customer mistrust and
frustration with PG&E. So many customers were upset that the California Public Utilities
Commission conducted an investigation into the accuracy of the smart meter readings.
Installation errors and concerns about faulty signals, overcharging, and health impacts have
resulted in dozens of California cities, towns, and counties adopting ordinances to halt
smart meter installations (Stopsmartmeters.org
2014
). The consumer backlash associated
with PG&E's initial rollout of smart meters served as a strong warning to other utilities
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