5. Positions of Parties

5.1. Positions of the Applicant

The Applicant characterizes the deployment of PG&E's Smart Meters as a "$500,000,000 mistake."¹² The Applicant alleges that "the problem with Smart Meters" results "from PG&E's lack of proper testing and research before implementing Smart Meters."¹³ A key part of the Applicant's case is as follows:

This lack of sufficient testing and research not only caused system-wide problems with billing and service, but also necessitated PG&E's upgrade to the entire Smart Meters system because the original technology lacked needed functionality. The president of the [Commission], Michael Peevey, stated in a presentation to the California Legislature that allowing PG&E to go forward with the Smart Meter program was a half billion dollar mistake and that ratepayers are the individuals paying for this mistake.¹⁴

The Applicant argues that as a result, "[a] significant rise in customers' bills have come from the increase in rates PG&E has passed on to customers in order to pay for the Smart Meter program, which has proved to now be a colossal mistake."¹⁵

More specifically, the Applicant cites both the decision by PG&E to replace the meters that it initially installed (approved in D.09-03-027) and the numerous customer complaints as resulting from PG&E's failure to "properly test or research this technology."¹⁶ The Applicant claims that the three technological developments that PG&E incorporated into its Smart Meter upgrade - a connect/disconnect switch, a Home Area Network gateway, and a solid state meter - were necessary because "PG&E either failed to consider these technological advances or willfully misled the [Commission] in the cost/benefit analysis..."¹⁷

In its Reply, the Applicant retreats from its initial argument over the inaccuracy of the meters, and states that "[t]he accuracy of PG&E's Smart Meters have [sic] nothing to do with the Application."¹⁸

Instead, the Applicant shifts emphasis to its arguments that PG&E should have known about and considered these technological developments at the time of its original application. The Applicant's Reply argues:

The ZigBee [Home Area Network] technology used in the second round of Smart Meter deployment, however, was already in development in the early 2000's and as early as April 2004 ZigBee was being discussed in the tech media as a "cost-effective and easy-to-use home network" ...¹⁹

Additionally, the Applicant argues that "the remote connect/disconnect technology which was used to justify the upgrade was available and being used as early as October 1, 2005 in Wisconsin by Shawano Municipal Utilities."²⁰

The Applicant summarizes its main argument as follows:

In short, the [Commission] was sold a bill of goods regarding PG&E's initial Smart Meters plan, a plan which was a half-billion dollar mistake. [The Applicant], on behalf of herself and all other PG&E customers, now asks the [Commission] to help in alleviating PG&E rate payers from the ill effects that this mistake is having and will have for years to come on ratepayers' bills.²¹

5.2. Positions of PG&E

In response, PG&E argues that "[t]he Application mischaracterizes the reasons for PG&E's technology upgrade and fails to provide any declarations of new facts that would warrant a modification of PG&E's Smart Meter decisions"²² and asks that the Commission dismiss the Application.

More specifically, PG&E argues that:

As part of the Commission approval of the AMI project in D.06-07-027, the Commission determined that there was "sufficient credible evidence to adopt as reasonable a project budget of $1.7394 billion." ([Conclusion of Law] 3, at 65.) The Commission further concluded that it was "reasonable to adopt a 10% shareholder and 90% ratepayer risk sharing of cost overruns not to exceed $100 million beyond the total project costs...." (At 66.) The Commission concluded that PG&E would not be subject to an ex post reasonableness review of costs within the authorized budget, including the $100 million sharing band. (Id.)²³

PG&E also cites D.09-06-03-026 as authorizing "an incremental budget of $466.760 million as part of its approval of PG&E's Smart Meter program upgrade."²⁴

PG&E argues that "[T]he Applicant's request to modify the Commission's Decisions over a year after the Decisions were issued is a misguided attempt to revisit issues that have been conclusively decided by the Commission."²⁵ Citing D.09-03-026, PG&E argues further that "[t]he record clearly demonstrates that PG&E sought authority to upgrade its previously approved advance metering technology because customers would benefit from the substantial innovation and reduction in costs that had rapidly developed in the industry since the time that PG&E first sought approval for its AMI project."²⁶ PG&E further argues that "the Application criticizes and second-guesses the Commission's cost-benefit analysis..."²⁷

PG&E also cites The Structure Consulting Group's finding concerning the accuracy of the Smart Meters as refuting the charge that PG&E did not properly test or research the Smart Meter technology.

Finally, PG&E argues that "[n]o new material facts exist here"²⁸ and therefore the Commission should deny the application.

¹² Application at 1.

¹³ Id.

¹⁴ Id. at 3-4, footnotes omitted.

¹⁵ Id. at 4.

¹⁶ Id. at 7.

¹⁷ Id.

¹⁸ Applicant's Reply at 6.

¹⁹ Id. at 4.

²⁰ Id. at 5.

²¹ Application at 10.

²² PG&E Protest at 1-2.