PG&E’s Smart Meter Rollout - A Customer Project

PG&E approached its large-scale smart meter rollout by focusing on the value for its customers.
Published: Fri 20 Mar 2015

The PG&E SmartMeter initiative involved the upgrade of approximately 10 million customer meters. The project, one of the largest smart meter initiatives in the US at a cost of approximately US$2.3 billion, has made meter reads more efficient, power is restored quicker during outages and peak demand is reduced more effectively. Launched in 2007, the project reached closure in 2013.

Customer engagement-raising the game

Despite the complex issues surrounding the mechanics of deployment and communication challenges, the deployment was carried out at a relatively high pace and everyone worked hard to avoid inconveniencing PG&E customers, says Bill Deveraux from Oracle Utilities who spoke to Engerati at Smart Energy UK & Europe. PG&E appointed Oracle Utilities Customer Care and Billing to maintain and manage both the meter inventory and customer information - converting the raw data into billable usage and generating bills based on each customer's selected rate option/programme.

Deveraux told Engerati that due to customer billing issues in the past, PG&E had to “raise the game” in terms of customer engagement prior to and during the rollout. Advertising and community marketing was carried out beforehand. There was also a need to gain a better understanding of the customers’ experience of the installation and even improve the training of meter installers.

While benefits fell largely on the operations (commercial and physical distribution) side of the utility such as the elimination of manual meter reading, there were definitely benefits to be attained from the “softer side” of the business case for smart meters, explained Deveraux. This included demand side management, and the effects of smart meter data on consumers’ consumption behaviour. By driving energy efficiency goals and putting into place effective demand response programmes, PG&E could avoid the cost of having to build new generation and distribution infrastructure in the near future.

PG&E overcoming its energy challenges

John Webster of Opower, which partnered with PG&E during the massive rollout, gave Engerati further insight into PG&E’s key business challenges prior to the smart meter rollout:

  • High efficiency goals

  • High peak usage

  • Smart meter backlash

To meet these challenges, Opower, appointed by PG&E for its Advanced Customer Engagement platform, recommended that the utility introduce new, scalable energy efficiency and demand response programmes, and at the same time, deliver compelling experiences to end users by demonstrating value to consumers. In order to attain customers’ acceptance of smart meters, PG&E had to promote the advantages of smart meters.

The utility knew it had had to drive demonstrable customer value and this was done by:

  • Posting paper home energy reports using Automated Metering Infrastructure (AMI) data to one million homes.

  • 5 million homes have access to AMI data on the web (personalized tips and data on individual consumption, suggested time usage and rates, as well as comparisons with the neighbourhood)

  • 5 million homes have access to smart rate analysis tools

  • 250,000 homes and businesses receive the smart rate education report

  • 500 homes have joined the Home Energy Management System (HEMS) pilot where household devices are linked to prompt people during peak events where capacity constraints are at play

  • 5 million homes use web widgets

Webster says that the results of these tools have been positive with each report recipient group seeing a consistent savings of between 1% to 3%.

Smart meters-showing real customer value

Webster told Engerati that many US utilities’ smart meter business case is often weighted towards grid optimization than consumer benefits. “Most of the time, the regulator would make them re-do their business cases so that the consumer appears at the heart of the business case. Regulators want to see the real impact of real customer value.”

Deveraux recommends that utilities should not oversell the benefits of a smart meter. They should instead set realistic expectations. He adds that it is also important for utilities to focus on post deployment so that the organization is able to take full advantage of everything that the smart meter has to offer.

PG&E’s success lies in their approach to customers, says Webster, which can be summed up by Christopher Johns, the utility’s president, who said: “We thought we were undertaking an infrastructure project but it turned out to be a customer project.”

The relevance of this viewpoint is echoed in our recent Opower webinar, Don’t Leave Your Customers Behind – Learn how to Unlock Smart Meter Value for Consumers.