Lessons from PG&E: How to Avoid a Smart Meter Backlash

Last Updated Nov 16, 2010 3:06 PM EST

Pacific Gas & Electric's (PGC) massive smart grid rollout, which hooked up millions of customers in the northern California to new meters that can communicate with the utility, is a cautionary tale of epic proportions. Even now, after its smart meters passed a state investigation and its a history-making and much delayed apology, PG&E keeps pissing its customers off.

If PG&E were the only utility switching out old analog meters with "smart" ones as part of a larger effort to upgrade the power grid, its frequent bumbling may not be worth more than a passing glance. But with more than 40 million smart meters scheduled for U.S. deployment in the next five years, the PG&E case offers up plenty of lessons for other utilities or any other company about to rollout new technology.

1. Upgrade your corporate culture along with your technology For nearly a century, customers have had little communication with their electric utilities aside from receiving their monthly bill. Utilities focused providing power to its customers and skipped the warm and fuzzy stuff. As a result, utilities suck at communication.

And that wouldn't be a big deal, except that the whole point of upgrading the grid and embedding it with intelligent technology is to allow for two-way flow of communication -- and even power -- between the utility and the customer.

Any major technological upgrade, especially one that will change a component of your business, should be matched with renovations to the culture within the company as well.

2. The customer is always right. Seems basic enough. Even when the customer is wrong, it's typically beneficial to suck it up and apologize anyway. For example, after PG&E began installing new smart meters, it was inundated with complaints from customers who suddenly saw large spikes in their electric bills.

It turns out, that while PG&E did have problems with its installations, an investigation determined the technology within the smart meter was sound and actually performed better than the old analog meters they replaced. The large utility bills were most likely caused by the summer's heat wave and rate hikes.

Any time new technology is rolled out there will be problems along the way. PG&E employees should have been prepped for that and the utility should have apologized early and often. Instead, they dragged their feet until trust was so obliterated the apology did little to quell customer angst.

3. Detail the role of public relations
Sometimes PR folk, in a bid to protect their company, go overboard and forget their purpose: Building up positive relations with the public. Take PG&E's latest foible. William Devereaux, PG&E's senior director of its $2.2 billion smart meter rollout, used a fake name in an attempt to join an online discussion group that opposes the utility's program. He was caught immediately, of course, and resigned last week.

Clandestine capers are not the role of public relations. You're gonna get caught and it will make you look worse.

4. Consider outsourcing
More than one smart grid insider has mentioned this solution to me. As the world's utilities begin to deploy smart meters, it may be best for someone else to handle customer relations. Their take? Utilities, companies that have a long history of poor communication, should perhaps focus on what they do best and leave the job of working with customers to the professionals.

The idea isn't to create a bunch of call centers overseas either. That's already being done. Instead, have another local company handle all communications for the utility. Considering the other option of actually dealing with the utility, customers may prefer the alternative.

Photo from PG&E
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