Consumer Federation of California

More Pacific Gas and Electric Co. customers who fall behind on their bills will have their power shut off once the utility installs SmartMeters throughout its territory, the company predicted in a recent government filing.

The advanced, digital meters allow San Francisco’s PG&E to turn service off or on without sending a crew to a customer’s home. As a result, PG&E expects to shut off 85 percent of the customers eligible for disconnection in 2011, according to the company. In 2008, just 37 percent of customers eligible for disconnection actually lost service.

The number of disconnections could approach 380,000 in 2011, according to a document PG&E filed last month with the California Public Utilities Commission as part of the company’s latest rate-increase request. Last year, the commission reported that PG&E shut off service to 298,020 delinquent customers in the 12-month period that ended in August.

The prediction comes at a sensitive time.

The number of Californians losing electricity and gas service has jumped as the recession ravages household budgets. At the same time, PG&E’s SmartMeters have come under fire from some customers who say their utility bills soared after the new meters were installed.

Mark Toney, with The Utility Reform Network, said PG&E customers should be allowed to refuse having SmartMeters installed at their homes. The utility, California’s largest, has installed 4.6 million SmartMeters so far.

“Really, it’s our worst fears being realized, that PG&E sees these SmartMeters as a collections weapon to put more pressure on people by being able to shut them off so easily,” said Toney, TURN’s executive director.

With older gas and electric meters, utilities had to send a technician to each customer’s house in order to switch service on or off. The time and expense involved gave utilities a strong incentive to negotiate payment plans with delinquent customers, rather than disconnecting service, Toney said.

“With SmartMeters, that incentive is gone,” he said. “There’s no expense to flipping a switch.”

Toney wants California energy regulators to require that utilities send someone to a customer’s home before cutting off electricity and gas. His organization discovered PG&E’s prediction on customer disconnections while scrutinizing the utility’s rate-increase request.

A PG&E spokesman noted that the utility gives all delinquent customers the same number of warnings that their power could be cut off. That’s true for customers with old analog meters as well as new SmartMeters.

“The important thing is, it doesn’t change the process that leads up to us having to shut a customer’s power off,” said company spokesman David Eisenhauer.

California’s big, publicly traded utilities cut off service to 818,042 customers from September 2008 through August 2009, according to the utilities commission. That’s an 8.8 percent increase from the prior 12-month period.

At the same time, PG&E’s number of disconnected customers rose 40 percent, to 298,020. Commission staff members speculated that PG&E’s SmartMeters were contributing to the sharp rise in shut-offs, but didn’t have proof.

Public outcry over the rising number of disconnections spurred PG&E and California’s other utilities to change some of their procedures.

PG&E customers with overdue bills now get two more phone calls warning that they could lose service. The company has suspended until next year the practice of demanding a deposit before reconnecting customers.

In addition, delinquent customers who work out a payment plan with PG&E but miss an additional payment won’t automatically lose service. Instead, PG&E will give them a second chance to stick with their payment plans.

“These are things we started implementing when we saw that things were getting tough for customers,” Eisenhauer said.

Tags: CPUC, PG&E, The Utility Reform Network