PG&E smart meter communication failure – lessons for the rest of us

See no evil, hear no evil

What we have got here is a failure to communicate

The famous line from legendary movie Cool Hand Luke is the first thing that comes to mind when one hears about the fiasco which PG&E’s smart meter rollout in Bakersfield Ca. has become.

From the report on the site:

a class-action lawsuit has been filed representing thousands that will demand damages from the utility and third-parties also involved in the $2.2 billion project.

Bakersfield residents believe their new smart meters are malfunctioning because their bills are much higher than before. PG&E claims higher bills are due to rate hikes, an unusually warm summer, and customers not shifting demand to off-peak times when rates are lower.

This has to be a huge embarrassment for PG&E and their partners who are spending $2.2 billion on this project.

So what has gone wrong?

A recent report in the New York Times raises speculation that the meters themselves are to blame:

Elizabeth Keogh, a retired social worker in Bakersfield, Calif., who describes herself as “a bit chintzy,” has created a spreadsheet with 26 years of electric bills for her modest house. She decided that her new meter was running too fast.

Ms. Keogh reported to the utility that the meter recorded 646 kilowatt-hours in July, for which she paid $66.50; last year it was 474 kilowatt-hours, or $43.37.

At a hearing in October organized by her state senator, Ms. Keogh took out two rolls of toilet paper — one new, one half used up — and rolled them down the aisle, showing how one turned faster than the other. “Something is wrong here,” she said.

Scores of electric customers with similar complaints have turned out at similar hearings. At one in Fresno, Calif., Leo Margosian, a retired investigator, testified that the new meter logged the consumption of his two-bedroom townhouse at 791 kilowatt-hours in July, up from 236 a year earlier. And he had recently insulated his attic and installed new windows, Mr. Margosian said.

I spoke to good friend and fellow Enterprise Irregular Jeff Nolan earlier today after I saw him Tweet:

yeah I’m actually pretty pissed, PG&E installed a so called “smart meter” and my utility bill increased $300.

It seems Jeff was having the same problem and his bill was also up significantly over the same month last year.

There are a number of problems here – all to do with transparency and communication.

If, as PG&E say, this is because of “customers not shifting demand to off-peak times when rates are lower”, then it follows that PG&E have either failed to communicate the value of shifting demand or the time when rates are lower.

One of the advantages of a smart grid is that the two way flow of information will allow utilities to alert customers to real-time electricity pricing via an in-home display. PG&E have not rolled out in-home displays with their smart meters, presumably for cost reasons. If they lose the class-action law suit, that may turn out to have been an unwise decision.

Even worse though, in a further post on Twitter, Jeff said:

I’m waited for PG&E to put up the daily usage numbers, I won’t get those until next month for some unexplained reason

This defies belief, frankly.

It seems that PG&E’s smart grid rollout is woefully under-resourced at the back-end. What PG&E should have is a system where customers can see their electrical consumption in real-time (on their phone, on their computer, on their in-home display, etc.) but also, in the same way that credit card companies contact me if purchasing goes out of my normal pattern, PG&E should have a system in place to contact customers whose bills are going seriously out of kilter. Preferably a system which alerts people in realtime if they are consuming too much electricity when the price is high, through their in-home display, via sms,Twitter DM, whatever.

Jeff himself likened this situation to the e-voting debacle where the lack of transparency around the e-voting machines meant the whole process collapsed. In the same way, a lack of open standards around smart meters means we can only trust the smart meter manufacturers and utilities when they tell us that they are operating honestly. That is unlikely to fly.

This debacle has massive implications, not just for PG&E’s $2.2 billion smart meter rollout, but for smart meter projects the world over.

Transparency and communications failures can lead to utilities being sued by their customers, as we have seen with the PG&E example. Not a desirable situation for any company. The PR fallout from the Bakersfield rollout means PG&E will have a much harder time convincing other customers to sign up for smart meters and may potentially set back smart grid projects in California for years.

You should follow me on twitter here.

Photo credit svale


  1. david h stannard says

    First I’m not a PG & E customer. I would think that they probably published the tariff schedule just like Portland General Electric and other utilities in order that we consumers can make informed choices. I have not seen any mention of what information PG&E provided customers but am interested. Certainly I’m sure that customers were told that their meters would change because it would disrupt their electricity in their home and because PG&E may have required access to their property. Or maybe Portland General electric is the model to follow.

    Most people I know throw out the inserts included with their monthly bills and just pay it unless it looks wrong (sudden increase). Similar behavior with installation instructions and assembly instructions. So, did PG&E provide examples to their customers? Were they incomplete? All things being equal in terms of consumption behaviors, I would think that a customer would be able to calculate the impact given their monthly bill because the format breaks things down fairly clearly.

    So before I decide that PG&E botched this, I want the rest of the data. And yes I realize that even if they did provide information, there is always room for improvement.

    That said, I don’t think that a smart meter provides sufficient information to allow customers to modify their consumption behavior. Insufficient data resolution. I’m thinking that the analogy is how to modify your spending behavior by simply looking at your daily checking account balance – it is just an aggregate, point-in-time measurement.

    For consumers to benefit from lower rates AND for the utility companies to benefit (not by making more dollars but by avoiding expensive capital investments), a consumer needs to understand which appliances use the most electricity and when. You can buy expensive software and meters, but will it pay back when simply using paper / spreadsheet and common sense can probably give one a good starting point.

    I hear that Heating, AC and water tanks are the most expensive factors in electric bills. The US Government claims that most energy usage in commercial buildings is from lighting. How much energy do I lose because the hot water piping is uninsulated and it is 40+ feet from the tank to the kitchen sink where I have to waste water (pay for in and going out). How much energy usage can I shift to cheaper hours? Is it a better investment to change my windows to triple pane or re-insulate. Impact = ? I need to know before I invest which implies simulation, models and then validation. My house is heated to 64 F in winter and the AC starts at 84 in summer. I only have Energy Star appliance (better ones now available). I have – in theory – an energy efficient home built to 2006 norms; but as I feel the air leeks around electrical, doors, double pane windows, etc, I realize that our greater savings probably don’t come from smart meters but from the good old basics.

    I don’t think that a smart meter is helping me change my behavior. It does help the utilities in many ways and it provides (maybe) infrastructure for smarter energy usage in the future. But for now I’m doing the calculations and modeling using pen and paper in the sunlight. I want to globally optimize my energy costs, my impact on the environment.

    Sorry for the long comment. While I’m not anti nanny state, I just find that we jump on organizations way too easily and with biased / incomplete facts. Sometimes companies just can’t win for losing. But I think that it is time to address real issues and move away from the hype of new stuff.

    Just my perspective and meant to be a constructive interaction

  2. says

    There exists a google-like backend for sensor collection networks in the smartgrid domain — its called openPDC (disclaimer: I’m an engineer on the project)

    The openPDC is an open sourced project hosted at:

    and is described as:

    “The openPDC is a complete set of applications for processing streaming time-series data in real-time. Measured data is gathered with GPS-time from multiple input sources, time-sorted and provided to user defined actions, then dispersed to custom output destinations for archival.”

    In terms of google-like backend, the project uses Hadoop as a storage and processing framework on the backend. This is relevant as Hadoop is an open source implementation of google’s internal GFS / MapReduce.

    Currently the openPDC is used for synchrophasor data collection (high res grid data), but it is trivial to collect any type of time series (sensor) data as the openPDC is open source and easily extensible. openPDC would be a perfect fit for a project such as this and over time I believe you will see it pop up in more related grid domains.

    A little background:

  3. Stephen G says

    The problem isn’t with the smartmeter, the problem is with the rate hike (during daytime / peak usage period).

    But since providing electricity is the most expensive during the daytime / peak usage period, then it makes sense to bill accordingly. Until smartmeters, this wasn’t possible. In the long run, this could mean lower bills … for those willing to adjust their usage patterns.

    Though since we ALREADY pay well above the national average rates ( ), I would rather have seen any rate increase for peak usage matched by a rate decrease for off-peak usage.

  4. says

    This should be an easy enough problem for the consumers to solve. Whatt you do with the power on your side of the meter is your business. A few consumers ought to buy old analog meters and install them just inside of the “Smart Meter”. (Now that the digital ones are rolling out, the old ones can be had on the cheap.) Log discrepancies. Pursue recourse.

  5. Baris Zor says

    I still did not get a “Smart Meter”. I am still trying to understand the various views for this new technology. As far as I know, while these meters alloe you to monitor your energy consumption and then you can decide to decrease your consumption level. If so, I don’t understand how people can increase their bills.

    In an article I read that there will be visual monitoring systems as the next feature of the Smart Meters. May be it can help people to lower their bills.


  6. says

    I maintain a small website aggregating New Zealand sourced smart meter related news. News from other sources is published now and then. The site also describes and links to to New Zealand Electricity Commission (NZEC) documents and discussion papers. NZEC is NZ’s electricity market regulator.

  7. says

    Folks – there is a formal motion up before PG&E as a Petition to Amend Rulemaking Practice to “Accept and enforce the ruling in California v Khaled” against the SmartGrid

    Khaled was the ruling which shutdown red-light cameras because the evidencde models do not meet basic court admissibility standards. This petition (P1007015) is what the Grid needs to become transparent.

    The reasoning is simple – all billiung disputes are handled by the ALJ’s (The PUC’s own Administrative Law Judges) meaning they are in fact a real California Court. If the minimum standards for court admissible evidence was set by Khaled then all Court’s reviewing digital evidence need to enforce that same standard here in the State of California.

    At the very least this is true for all of the Division 4 Appellate district’s cities and any entity operating within that district or who sells power in or through that district.

    Additionally the evidence quality mandate will mean properly tracking the firmwar and runtime configuration for the people who evidently installed tens of thousands of meters with bad or wrong firmware in them.

    We would like your support on this matter and we point you to my CTO’s blog at for more information

    Todd Glassey CISM CIFI
    CTO Certichron Inc

  8. Michael Stubbs says

    My electric company recently installed a smart meter on my home which is equipped with solar power. My bill increased dramatically to my surprise. I also have a monitoring tool that provides me with electrical usage statistics and have found that the monitoring system and the electric company’s usage numbers are never in sink with each other. I’m very disappointed with the smart meter and would advise that you fight having one installed until the power company can provide more information on how it works. They should also provide the customer with real time readout of what is being monitored and power usage. Would have been nice if they would have done testing before they deployed the solution.

    • admin says

      smart meters vs smart monitors – there will likely be a discrepancy. going forward monitors will be hardened as certified as meters, but for there is difference between consumer-driven attempts at monitor-driven behaviour change and the Smart Grid meters.


    In regard to these newfangled electronic utility electric meters (ALL TYPES, MAKES AND MODELS), the utility companies could have a serious problem on their hands in 6-8 years when these things begin dropping dead, left and right, all around the country. For technical reasons I won’t go into, there is NO WAY these electronic meters will have the longevity of the old mechanical models. Case in point: the mechanical meter at my house is now 36 years old, and still works fine (others out in the field are considerably older than this). I predict that the average useful life of these electronic meters will ultimately be under 10 years – – – especially for ones that are subjected to harsh environments, such as in Phoenix, Arizona, where the temperature can (and does) exceed 100 degrees during the warmer months.

    Anyone care to comment?

    —– Gerald Tcimpidis, electronics technician
    (Columbus, Ohio)


  1. […] What is worrying though is that while 71% of utilities say securing customer buy-in is key to successful smart grid roll-outs, only 43% say they are educating their customers on the value proposition of smart grids. This is hugely problematic because, as we have seen, customer push-back can go a long way to de-railing smart grid projects. […]