DRA and TURN Urge CPUC to Put Pipeline Safety Before Smart Meters

November 16, 2011, San Francisco—Consumers throughout southern California will face drastically higher gas bills if their utility company is permitted to install “smart” gas meters.  The Utility Reform Network (TURN) and the Division of Ratepayer Advocates (DRA), an independent consumer advocacy division of the California Public Utilities Commission (CPUC) today filed a joint petition to modify the CPUC’s order allowing Southern California Gas Company (SoCalGas) to install the meters. 

Consumer representatives originally objected to the $1 billion price tag for the meters, an investment predicted to net customers benefits amounting to just pennies on the dollar.  Since the CPUC gave SoCalGas the go-ahead, the utility has proposed an additional $2.5 billion in pipeline safety improvements as well as a $1.6 billion rate hike.  With the U.S. Department of Energy warning of higher natural gas prices this winter, bills could skyrocket. 

The CPUC narrowly approved the scheme with 2 of the 5 Commissioners dissenting and questioning the value and cost-effectiveness of smart meters for gas service.  Forecasted conservation benefits, which are not based on empirical data, are dubious at best given that the expensive meters support time-based pricing strategies for electric service, and are not applicable to residential gas service.  Changed circumstances have highlighted the need to put non-urgent expenditures on hold.

“The Commission can halt this program now with no harm to vendors, consumers, or the gas company,” said Mark Toney, executive director of TURN.  “On the other hand, if the Commission refuses to act, countless customers will be harmed by higher gas bills, and some will be forced to make difficult choices between heating and eating.   Why rush into more smart meters now?”

The explosion of a natural gas pipeline in San Bruno in September 2010, and the CPUC’s subsequent investigations into gas pipeline safety throughout the state, has shifted California’s priorities.  The expenditure of an additional $1 billion for unneeded smart meters is simply too large a burden for customers already struggling with unemployment, foreclosure, and other economic woes.

“Safety, not smart meters, is the priority for consumers,” said Joe Como, acting director of DRA.  “Circumstances have changed since the CPUC approved these unnecessary meters, and in the environment of escalating energy bills, customers should not have to foot the billion dollar bill for technology that provides them little, if any, benefit.”

 

Media Contact: Matthew Marcus, Governmental Affairs Manager, (916) 327-3455, matthew.marcus@cpuc.ca.gov