COM/MP1/avs Date of Issuance 2/9/2012

Decision 12-02-014 February 1, 2012

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Pacific Gas and Electric Company for Approval of Modifications to its SmartMeterTM Program and Increased Revenue Requirements to Recover the Costs of the Modifications. (U39M)

Application 11-03-014
(Filed March 24, 2011)

DECISION MODIFYING PACIFIC GAS AND ELECTRIC COMPANY'S SMARTMETER PROGRAM TO INCLUDE AN OPT-0UT OPTION

TABLE OF CONTENTS

Title Page

DECISION MODIFYING PACIFIC GAS AND ELECTRIC COMPANY'S 2 2

SMARTMETER PROGRAM TO INCLUDE AN OPT-OUT OPTION 2 2

1. Summary 2 2

2. Background 3 3

3. PG&E's Application 6 6

4. Opt-Out Plan 7 7

4.1. Parties' Positions 9 9

4.2. Discussion 11 11

5. Cost of Opt-Out Plan 21 21

5.1. Parties' Comments 23 23

5.2. Discussion 24 24

6. Cost Recovery for the Opt-Out Plan and Rate Structure 26 26

6.1. Parties' Comments 28 28

6.2. Discussion 29 29

7. Next Steps 33 33

8. Comments on Proposed Decision 35 35

Findings of Fact 36 36

Conclusions of Law 37 37

ORDER 39 39

DECISION MODIFYING PACIFIC GAS AND ELECTRIC COMPANY'S

SMARTMETER PROGRAM TO INCLUDE AN OPT-OUT OPTION

1. Summary

This decision modifies Pacific Gas and Electric Company's (PG&E) SmartMeter Program to include an option for residential customers who do not wish to have a wireless SmartMeter installed at their location. The opt-out option shall be an analog electric and/or gas meter.

This new opt-out option is a service that we are adopting with this decision. This opt-out option is a service because the standard for metering has been transitioned throughout the country and for the most part the world from the older technology, analog meters, to today's technology, SmartMeters. In this decision we are not reversing that transition, however, we do approve an option for those customers who, for whatever reason, would prefer an analog meter. This option to move away from the standard will require PG&E to incur costs such as purchasing a new meter, going back to the customer location to install and service the meter, and monthly cost of reading the meter. These are some of the examples of the additional costs required to opt-out of the standard wireless SmartMeters. As a result, this decision further finds that customers electing the opt-option shall be responsible for costs associated with providing the option. Issues concerning the actual costs associated with offering the analog opt-out option and whether some portion of these costs should also be allocated to all ratepayers or PG&E shareholders will be addressed in a separate phase of this proceeding.

To allow residential customers to begin selecting the opt-out option immediately, this decision adopts interim fees and charges, which will be subject to adjustment upon conclusion of the second phase of this proceeding. A Non-California Alternatives Rates for Energy (CARE) customer electing the opt-out option shall be assessed an initial fee of $75.00 and a monthly charge of $10.00. A CARE customer electing the opt-out option shall be assessed an initial fee of $10.00 and a monthly charge of $5.00.

This decision also authorizes PG&E to establish new two-way electric and gas Modified SmartMeter Memorandum Accounts to track revenues and costs associated with providing the opt-out option until a final decision on recoverable costs and cost allocation is adopted.

This decision further directs PG&E to file a Tier 1 Advice Letter implementing the opt-out option and to establish a SmartMeter Opt-Out Tariff within 15 days of the effective date of this decision. Finally, the September 21, 2011 Assigned Commissioner's Ruling directing PG&E to establish a delay list shall no longer be in effect and all customers currently on the delay list shall be transitioned to a wireless SmartMeter unless they elect to participate in the opt-out option. This proceeding remains open to address cost issues associated with the opt-out option.