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PG&E Starts Largest Meter Change Ever; Shift to 'Smart' System

Starting at the extreme southern end of its service territory in the agricultural and energy hub of Bakersfield, CA, Pacific Gas and Electric Co. Thursday kicked off the start of its five-year, $1.7 billion change-out of 10.3 million electric and natural gas meters to an interactive, smart metering system -- the largest U.S. utility meter replacement ever.

PG&E's lead will be followed closely by the state's other major energy utilities, and all private utility customers in California should be on advanced systems after 2012.

PG&E's rollout follows a series of pilots over the past six months -- 2,500 each of advanced gas and electric meters installed in Vacaville, CA, east of the San Francisco Bay Area. The utility is deploying SmartMeter, a patented system that will permit remote meter reading and what PG&E called "a number of benefits" for customers, the state and itself.

With the advanced metering system, "PG&E will be able to restore power outages more quickly, offer customers more ways to save on their energy bills, reduce operating and energy costs, ease strains on the state's power gird, and lessen impacts on the environment," said Peter Darbee, CEO of the utility holding company, PG&E Corp. Michael Peevey, president of the California Public Utilities Commission, and local Bakersfield officials joined Darbee in marking the first installation of the new meters.

PG&E said the SmartMeter devices allow customers to voluntarily enroll in time-of-use pricing options that allow the shifting of loads from high-priced peak-demand hours to lower-priced off-peak times. "From an energy use perspective, the greatest benefit of this program will be realized in hotter climates, such as the San Joaquin Valley [in spring and summer]," a PG&E utility spokesperson said. "These areas will be among the first to receive the new meters.

The so-called smart meters will allow PG&E to virtually phase out its meter-reading function and cut its operating costs. The change-out involves 5.1 million electric meters and 4.2 million natural gas meters in place currently, along with an estimated additional 1 million gas and electric meters collectively that will be added through new customers over the next five years, a PG&E utility spokesperson said. The advanced metering system is part of the utility's broader "transformation plan" for updating all of its operations.

Darbee said the smart meters put the utility "one step closer to providing real economic, environmental and energy efficiency benefits to customers."

The automatic, real-time metering system would allow for better detection of power outages and could lead to faster outage restoration, PG&E said. "Customers would no longer need to unlock gates, tie up dogs or make special arrangements to allow meter readers access to tough-to-reach meters. Customers could also go online [via the Internet] to review their own energy use."

PG&E said the new meters are "virtually identical" in size and appearance to existing meters, and the gas modules are only a small part (the size of a cigarette pack) added to an existing meter. Dozens of utilities around the nation already have employed advanced meters like these.

California's advanced metering push dates back to 2002 when the CPUC ordered the major utilities to consider programs and tools that offer customers improved options to reduce their electric usage during high-demand situations. The utilities were directed to explore advanced metering technologies and conduct two-year statewide pilot programs to gauge customer interest in dynamic pricing options.

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