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PG&E's $2.2 billion program to install 10 million "SmartMeters" on homes and businesses throughout California to better monitor energy consumption is off to a rough start.

In the Central Valley, several PG&E customers who already have SmartMeters have complained of skyrocketing electricity bills over the summer, leading to widespread complaints that SmartMeters either malfunction or were used to intentionally overcharge.

In the Bay Area, the rollout of SmartMeters has just begun. Consumers in Hayward and pockets of the Peninsula have them, and installation in Cupertino, Los Altos, Mountain View, Saratoga and Sunnyvale is scheduled to start next month. The new meters are currently being installed in Concord and Walnut Creek; Oakland should get them in 2011.

But where the meters have been widely deployed, many consumers are not happy.

One Bakersfield resident who saw his $200-a-month bill rise to nearly $600 a month after he got a SmartMeter has filed a class-action lawsuit in Kern County Superior Court, claiming PG&E billed him for more electricity than he used.

The flood of consumer complaints led the California Public Utilities Commission to announce that it will require an independent third party to evaluate the SmartMeters for accuracy.

"We think there should be a moratorium on SmartMeters until we can ascertain that they're actually working," said Mindy Turn of the consumer advocacy group TURN, The Utility

PG&E insists the SmartMeters are working properly. It notes that rate hikes went into effect last fall and in March, and says customers in Bakersfield and elsewhere probably first noticed higher bills during the hot summer months, when they were likely using more air conditioning.

"The meters themselves are completely accurate, and we stand behind the SmartMeter program," PG&E spokesman Paul Moreno said. "The allegations in the lawsuit are untrue and have no merit."

SmartMeters are designed to track electricity and gas usage with greater precision and can be read remotely. They are a key consumer component of efforts to overhaul the nation's system for generating and distributing electricity. Last month, President Barack Obama announced $3.4 billion in stimulus funding for smart grid projects.

As more features are added, SmartMeters will tell consumers how much power their refrigerator or other household appliances use. The hope is that arming consumers with detailed data about their energy use will inspire them to conserve even more.

But others aren't convinced. State Sen. Dean Florez, D-Shafter, heard from constituents who had bills triple while they were on vacation, bills that exceeded their mortgage payments, and bills of $1,200 a month.

"They are fraud meters," Florez said. "It could be California's most ambitious smart-grid project, but I don't think PG&E should put any more SmartMeters on any home until these meters are tested."

Bakersfield resident Liz Keogh has closely tracked her energy usage since July 1983 and has kept all of her PG&E bills for the past five years. A retired Kern County welfare fraud investigator, she rarely goes over her "baseline" usage and is committed to energy conservation.

But her July, August and September bills showed the highest usage — and cost — in 26 years. In July of 2008, Keogh's PG&E bill says she used 473 kilowatt hours, for which she was charged $43.37. A year later, in July 2009, she used 646 kwh and was charged $66.50. She's convinced the SmartMeter over-read her usage.

"I've done everything possible to conserve energy," Keogh said. "July is always the hottest month in Bakersfield, but there's no way my usage went up that much."

PG&E is deploying more than 12,000 SmartMeters every day, with the goal of having 10 million installed by the end of 2012.

Some consumers have been stunned to learn that SmartMeters are mandatory: There's no way to opt-out of getting one. The meters, as well as the wires and pipes that lead up to them, are PG&E property, and the utility says it has the regulatory authority to install and maintain them.

Mark Williams was about to leave his Menlo Park home last spring when he noticed a PG&E contractor installing a SmartMeter. He immediately had privacy concerns: If the meter can be read remotely, he worried that PG&E — or, worse, a hacker — could determine by his energy use when he was, or wasn't, home. When he tried to block the installation of what he feels is an "intrusive" device, he says PG&E responded with escalating threats.

"I received threatening letters and calls," said Williams, a health policy analyst. "They would say 'You need to make an appointment to get this done, and you have five days to schedule it or your power will be turned off.' "

After a protracted battle, Williams said he thought he had no choice but to go along with the plan. After the SmartMeter was installed, Williams said he was back-billed for prior months for which he had already paid the bills in full. When he refused to pay for the back billing and wrote a letter of complaint, he says that PG&E retaliated by turning off his power.

PG&E declined to comment about the specifics of Williams' case, but said that the "shut-off for non-payment policy" is the same with or without SmartMeters.

"Your phone company knows who you called and when and for how long you spoke to them," PG&E's Paul Moreno said. "This is electric information. We don't sell it to third parties. But in order for the program to work, everyone needs a SmartMeter."

Reach Dana Hull at 408-920-2706.
ONLINE
To find out when PG&E plans to install SmartMeters in your city, go to: www.pge.com/myhome/customerservice/meter/smartmeter/deployment/index.shtml