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CA Regulators Okay $49 Million for PG&E Smart Meter Pre-Start-Up Funds

Sending a message it wants both aggressiveness and cost-effectiveness in a billion-dollar utility meter-change-out proposal, the California Public Utilities Commission Thursday granted Pacific Gas and Electric Co. $49 million in pre-start-up funds -- despite a staff recommendation to slash the amount to $7 million -- for its proposed five-year effort to transform all of its natural gas and electricity utility customers to advanced ("smart") metering systems.

PG&E's overall $1 billion proposed utility program, which is the first of the state's major utility automated meter reading (AMR) proposals being encouraged by state regulators, is being reviewed in a separate, ongoing proceeding by the CPUC. Thursday's action was taken to help PG&E's utility secure some early planning and testing funding ahead of any new meters being deployed with customers.

Overriding an administrative law judge's proposal to limit the funds, CPUC President Michael Peevey said the regulators have been prodding all of the utilities to adopt advance metering systems therefore granting the $49 million request supports the state's Energy Action Plan, but it still "remains for PG&E to prove its case on the merits of the type of technology that should be installed and what the overall level of expenditures might be. In the meantime, my alternate decision sends a clear signal to them and other utilities that they should continue moving forward to facilitate integration of AMR into their systems, including billing and customer service."

Commissioner Geoffrey Brown supported the funding, but noted that he was not sure "a strong enough case" was made by the utility for the level of funding being granted. "The $49 million is a 'trust'," said Brown. "It shouldn't go into some other projects, and if it is unspent, it shouldn't be used for executive compensation or other special things they want to do. The $49 million is required by automated meter reading."

Ultimately, Brown said the "limited risks" in granting the utility $49 million upfront to jump start the program are outweighed by likely benefits from moving to a smart meter system overall.

The decision specifies that PG&E's utility and the others in the state pursue "open architecture" metering systems that are nonproprietary in nature.

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