PG&E refutes suit alleging price-gouging via smart meters

Pacific Gas & Electric’s smart metering headaches might have just gotten a lot worse. Already, the company has had to fend off accusations that its installation of smart meters hiked energy rates. Now Bakersfield, Calif. residents are suing the utility for price gouging via its smart metering program — but PG&E says the lawsuit has no merit.

The class-action lawsuit — which also names meter installer Wellington Energy, alleges that the utility falsely advertised its smart metering program and is benefiting from unfair competition (namely, that it has none, giving consumers no choice in the matter).

The class members have also received support from state senator Dean Florez, who says he inquired about the meter-related rate increases but was ignored by the utility, which he called “biased against consumers.”

A spokesman for PG&E released a statement that the “allegations in the lawsuit are untrue and have no merit.” The company is stressing to its customer base that reliable quality-assurance procedures have certified the meters for accuracy. It has also said it will bring in third-parties to confirm this fact (the California Public Utilities Commission is a likely candidate).

While PG&E has acknowledged an uptick in energy pricing accompanying its smart meter roll out, it attributes the change to warmer weather (meaning more air conditioning) and a natural increase in rates (in line with previous patterns and trends).

But it does make sense that smart meters might also boost energy costs, however slightly. Because they are much more accurate and precise than their clunky predecessors, the new meters are more likely to record higher energy use. This is a problem widely noted by utilities and the meter makers they contract with. The idea is to get consumers to pay more attention to their energy consumption and use the data the meters record to conserve. But that initial bill might be painful.

The higher rates — and the backlash they are sparking — could spell disaster for utilities and broader Smart Grid and smart metering initiatives if they aren’t careful and clever in their messaging. If lawsuits like this one are replicated across the country, where millions of smart meters are being installed by a patchwork of different utility companies, the bad PR could start to pile up. And if the first wave of Smart Grid deployment gets a bad rap, it will be that much harder to expand and improve upon it, says Erfan Ibrahim of the Electric Power Research Institute.

Utilities, determined to keep customers happy, especially as deregulation catches on in more markets, might ditch Smart Grid efforts if there’s no way to spin them more positively. PG&E has already tried to turn the tide around, opening up a customer care center in its downtown Bakersfield office, but the number of visitors has trailed off while the lawsuit remains a go.

greenbeat_logo7213255VentureBeat is hosting GreenBeat, the seminal executive conference on the Smart Grid, on Nov. 18-19, featuring keynotes from Nobel Prize winner Al Gore, Google CEO Eric Schmidt and Kleiner Perkins’ John Doerr. Register for your ticket today at