SoCalGas gets OK for $1-billion smart-meter project

A divided Public Utilities Commission on Thursday approved a request from Southern California Gas Co. to charge customers $1.05 billion to install radio-controlled smart meters on 6 million homes from Fresno to the Mexican border -- overriding criticism that the technology simply isn’t needed.

On a 3-2 vote, the regulatory panel backed a proposal by Commissioner Dian Grueneich to provide 20.5 million SoCalGas users with more real-time information about how much natural gas they are using to run furnaces, water heaters and stoves.

For a $200 smart meter, ratepayers would be charged 70 cents a month for 25 years, the expected lifetime of the equipment. Their savings, however, appears to be minimal: about 1% less gas over the same time.

Approval of the smart gas meters, Grueneich said, is in line with previous PUC orders to shift to smart electric and gas meters.

She said her proposal, to be phased in starting mid-2012, “provides reasonable assurance that the project will be cost-effective for ratepayers.”

Opposing commissioners called the estimated savings speculative, agreeing with an agency administrative law judge’s decision that concluded that SoCalGas’ meter plan was a money loser.

“The proposal simply does not pencil out,” said Commissioner John Bohn, who suggested that there’s no urgency to move forward immediately with the new meters for a utility that sells only natural gas.

Because natural gas can be purchased by utilities ahead of the heating season and stored for months, its price is not as volatile as rates for electricity, said critics, including the PUC’s own independent ratepayers’ advocate division.

Consequently, gas consumers are unlikely to monitor their hour-by-hour usage to avoid using energy when it’s more expensive. What’s more, residential users don’t need a smart meter to know that a long hot shower will raise their bills more than a short one.

Other opponents of the gas meter plan, including labor unions and consumer advocates, contended that the money that would be spent to upgrade gas meters would be better used to create jobs for people weatherizing homes instead of going to a project that would result in layoffs of full- and part-time meter readers.

“Instead of eliminating 1,000 jobs in hard-hit Southern California, the CPUC can create jobs and benefit customers,” said Sam Weinstein, an official of the Utility Workers Union of America.

But, SoCalGas, a unit of Sempra Energy in San Diego, countered that the effect on jobs should be minimal because the bulk of meter readers are part-timers who move on to other jobs after a year or two.

The company also said it has agreed to spend $1 million to retrain meter readers for new jobs.

Weinstein’s group and the consumer advocate group the Utility Reform Network, or TURN, accused the PUC and SoCalGas of rushing to approve the natural gas smart meters. They argued that the commissioners, who normally meet in San Francisco, should have waited at least until an already scheduled meeting April 22 in Los Angeles.

“With an issue this controversial and a vote this close, we don’t understand why the commission did not want to hear from Southern California consumers before voting on this,” said Mindy Spatt, a spokeswoman for TURN. “It seems they want to duck the hard questions that consumers are asking about these meters.”

Indeed, smart meters for both electricity and gas have become controversial over the last year as Pacific Gas & Electric Co. began a widespread rollout of smart metering for electricity throughout Northern California, the Central Coast and the San Joaquin Valley.

Customers have complained to lawmakers and regulators about sudden spikes in monthly electric bills. Both the PUC and the state Senate are investigating the complaints.