PG&E Sucks It Up: Apology for Smart-Meter Foulup Shows Utilities Are Learning to Listen

Last Updated May 12, 2010 11:09 AM EDT

After almost three years of customer complaints, Pacific Gas & Electric has come to an unprecedented conclusion: the customer is always right.

That's not quite what the California utility said, of course. The actual statement was an apology for refusing to acknowledge problems with new smart meter installations, all the while delivering incorrect (and sometimes hugely inflated) bills to an unlucky percentage of their customers. "That kind of customer service is just simply unacceptable," senior VP Helen Burt said at a press conference.

But PG&E's recognition of customer needs and desires is more important than your average mea culpa -- in fact, it's something of a first for the entire electric-utility industry, which for years has had little communication with customers beyond sending out a monthly bill.

Traditionally, utilities never needed to be nice. For one thing, there was no danger of losing customers, since for the average person, where they buy electricity is entirely dependent on where they live.

That same average person also isn't worth much to the utility. A single household is barely noticeable in the overall scheme of delivering energy. The smart meters that customers were complaining about are even owned by the utility.

All those justifications worked just fine for almost a century, but times are changing for utilities. Smart meters are intended to not only deliver information on energy usage to the utility, but to customers, too -- and it's the utility who has to handle the technicalities. Customers who generate their own power, usually through solar panels, also have special demands.

Ironically, the same technology that enables the smart meters gave customers an unprecedented ability to complain about the bad service. Absent the Internet, PG&E would likely have succeeded in sweeping its problems under the rug.

The changing times means the utility of the future will have to be one that knows how to interact with customers. PG&E, at least, will have a constant reminder for several years as it fights numerous lawsuits brought over the new meters. Its industry peers would do well to take heed.

Whether that will actually happen is an open question. PG&E's difficulties remind me of a very similar problem facing the cable business. For years, companies like Cox and Comcast delivered cable, and rarely interacted with customers. Downtime and sloppy service weren't a huge problem, because most people can live without TV for a few days.

With the arrival of the Internet, though, both companies found themselves in a new business, delivering Web service. Instead of learning about their customers' new needs, though, the cable companies kept giving crummy customer service. (The worrying detail is that after years of trying to clean up, Comcast's service still gets low ratings.)

Incidentally, PG&E also delivered a 700 page tome to lawmakers with its apology, detailing its smart meter difficulties. It's available here, or you can head over to Earth2Tech for a good summary.