San Francisco, September 3, 2010 — A government-backed review of PG&E Corp.'s smart meter program found that the meters work, but that poor customer service and other mistakes the company made led to frustration among more than 1,000 customers.

The California Public Utilities Commission hired Houston-based Structure Group to complete the review after several hundred customers complained that PG&E's smart meters were not accurately recording their electricity usage and that the company was overcharging them.

PG&E has insisted that the meters work and that customers' higher bills are due to higher usage.

PG&E said it welcomed the report and that it was already working to improve customer service and other deficiencies addressed in the review.

While Structure came across a few malfunctioning meters, the group concluded that nearly all the meters were working fine and that most utility bills had risen as a result of rate hikes implemented around the time the meters were installed, as well as increased power usage during a heat wave. The group noted that in some cases PG&E had applied incorrect rates to customers.

A central problem identified in the review was a lag of several months between the time PG&E installed a smart meter at a customer's home and when the utility started using data from the meter to bill the customer.

The lag resulted from installing the meter before installing the backbone communication system required to transmit the data and contributed to customer perceptions that the new meter wasn't working, Structure said.

Industry best practices dictate that communication hubs are installed first, then the meters, Structure said. Other diversions from best practices caused a frequent metering and billing errors that added to customer concerns that the meters were malfunctioning, the group said.