4. Parties' Comments

UCAN agrees with SDG&E that a digital meter with no radio installed is an appropriate option to offer residential customers. However, it believes that an analog meter opt-out option could be accommodated at this time. UCAN maintains that SDG&E's concerns about customers using analog meters to avoid mandatory tariffs are premature, as there are currently no mandatory real-time pricing tariffs in place. Additionally, it states that in the future, the opt-out fees could be adjusted to discourage customers from selecting the opt-out option to avoid these tariffs.¹⁵ UCAN further states that if an analog option is adopted for PG&E customers, that option should also be available for SDG&E customers. Finally, UCAN opposes the wired smart meter opt-out option, as it considers such an option to be overly expensive and a bad choice for customers.

UCAN believes that SDG&E has underestimated the number of customers who could potentially opt-out. As such, it maintains that the actual costs associated with offering an opt-out program could vary significantly from SDG&E's estimates. Furthermore, UCAN states that it is unable to determine the reasonableness of SDG&E's cost estimates. Consequently, UCAN argues that recovery of SDG&E's costs should be treated similarly to what had been proposed for PG&E - namely, revenues and costs associated with providing the opt-out option should be tracked in a memorandum account and recovery in SDG&E's annual Energy Resource Recovery Account application.

Similar to UCAN, DRA argues that ratemaking and cost recovery issues cannot be decided without further hearings. Further, DRA challenges SDG&E's proposed "two-step" approach to implement a radio off opt-out option on the grounds that there would be additional costs when SDG&E transitions from the near-term to the long-term approach for disabling the smart meters and that this cost is not included in the cost estimates.¹⁶ DRA also recommends that SDG&E be authorized to track costs associated with the opt-out option in a two-way memorandum account and seek recovery of these costs in a future application, subject to a reasonableness review.¹⁷ Finally, DRA recommends that the Commission consider the feasibility of allowing customers to conduct self meters-reads as a means of reducing costs.¹⁸

DRA also maintains that an analog meter opt-out option should be offered. It notes that based on SDG&E's cost estimates, this option is the least expensive solution and believes that the costs for this solution should be even less than the SDG&E estimates.¹⁹ DRA further asserts that allowing residential customers to retain an analog meter "may have no impact at all on California's energy policy goals."²⁰

CEP also opposes SDG&E's preferred solution and argues that an analog meter opt-out option should be offered. It maintains that a non-communicating meter with interval read capability would not address concerns raised by those customers who want an opt-out option that does not emit "electromagnetic radiation."²¹ CEP also asserts that since PG&E had stated that it was willing to provide analog meters to its residential customers, SDG&E should also be willing to do so.²²

CEP opposes charging customers for selecting the opt-out option. It believes that this would "discourage opting out and unnecessarily punish disabled, elderly, and concerned customers who select an opt-out plan."²³ Rather, CEP maintains that costs associated with offering an opt-out option should be borne by "investors and the company."²⁴ CEP also proposes that an opt-out program include "a smart meter free zone" and allow participation by commercial customers.²⁵

In response to comments, SDG&E asserts that an opt-out solution should provide interval data collection capabilities. It maintains that smart meters with interval data collection capabilities let customers participate in peak-time rebate plans, help them manage consumption with online power-use data and increase outage restoration.²⁶ Although SDG&E agrees that an analog meter opt-out option is a workable short-term alternative, it believes that adopting such an option "is only deferring tough decisions on interval metering, which as a result, could potentially impact future incremental energy usage and cost."²⁷ Nonetheless, SDG&E now requests that the Commission adopt a decision that would allow customers to select either an analog meter opt-out option or a radio-off opt-out option.

SDG&E continues to believe that a two-way interest-bearing balancing account is the most appropriate cost recovery mechanism, as the opt-out option is mandated by the Commission, and the actual costs are unknown and will vary based on participation. It argues that "[a] two-way balancing account will also eliminate the possibility that ratepayers pay for more than the actual costs and that shareholders wholly fund this program in the interim while the regulatory process takes effect."²⁸ Further, it notes that entries into the balancing account "would be subject to a CPUC reasonableness review at the time SDG&E requests to dispose of the balance."²⁹

SDG&E also addressed various cost information in response to UCAN and DRA's comments. These include:

· Revising existing processes to allow gas and electric meter changes be performed by a single SDG&E technician, thus reducing the number of SDG&E technicians needed to perform out-out related field visits.³⁰

· Revising the initial opt-out and exit fees to take into account whether the customer: (1) opts out of just the gas smart meter or does not have a gas smart meter on their premises; (2) opts out of just the electric smart meter; or (3) opts out of both a gas and an electric smart meter.³¹

· Clarifying that network enhancements costs per customer would not decrease significantly if the opt-out participation rate were higher than the estimated 3,000 customers. SDG&E notes that these costs were based on the assumption that 2% of the meters related to opt-out would create a "break in the mesh." SDG&E states that if the opt-out participation were higher than its estimate, there would be more "break in the mesh" and additional network enhancement costs.³²

As a result, SDG&E adjusted its proposed fees and charges as follows:

TABLE 2

Revised Fees and Charges

	Radio Out	Radio Off	Analog	Wired
Initial Fee*
Gas meter only	N/A	$151	N/A	N/A
Electric meter only	$182	$178	$158	$1,048
Dual commodity	$198	$193	$174	$1,082
Monthly Fee*	$15	$15	$15	$49
Exit Fee*
Gas meter only	N/A	$33	N/A	N/A
Electric meter only	$35	$35	$35	$61
Dual commodity	$53	$53	$53	$78

* SDG&E proposes a 20% discount of this cost for CARE customers.

SDG&E further clarifies that its two-step approach for the radio-off option does take into account near-term and long-term costs. It notes that any radios turned off via the near-term approach would not require any additional field visits as a result of the transition to the long-term approach.³³ Additionally, SDG&E refutes DRA and UCAN's assertions that the costs associated with customer self-reads would result in lower costs.³⁴ Finally, it provides further explanation to support its proposal to identify the meters of those customers electing the opt-out option.³⁵

¹⁵ Comments of UCAN on Proposal of SDG&E for Customers to Opt-Out of Wireless Smart Meters (UCAN Comments), filed January 17, 2012, at 3.

¹⁶ Comments of the Division of Ratepayer Advocates on San Diego Gas & Electric Company's Smart Meter Opt-Out Proposal (DRA Comments), filed January 17, 2012, at 4-6.

¹⁷ DRA Comments at 6.

¹⁸ Id. at 9.

¹⁹ Id. at 7.

²⁰ Id. at 8.

²¹ Center for Electrosmog Prevention Comments on D.11-11-007 Compliance Filing by San Diego Gas and Electric Company (CEP Comments), filed January 9, 2012, at 1.

²² CEP Comments at 4.

²³ Id.

²⁴ Id. at 5.

²⁵ Id. at 6.

²⁶ Response of San Diego Gas & Electric Company To the Comments Filed January 17, 2012 (SDG&E Response), filed January 27, 2012, at 1-2.

²⁷ SDG&E Response at 2.

²⁸ Id. at 3.

²⁹ SDG&E Response at 3.

³⁰ Id. at 4.

³¹ Id. at 5.

³² Id. at 8.

³³ Id. at 7.

³⁴ Id. at 6-7.

³⁵ Id. at 9-10.