Pacific Gas and Electric Co. has Embarked on the Largest Implementation of Advanced Metering Infrastructure (AMI) Technology in the United States to date. Over five years, PG&E (San Francisco, California, U.S.) will roll out its SmartMeter program at a cost of US$1.7 billion. By the end of 2011, it will deploy approximately 10.3 million new meters at nearly 6 million homes and businesses across PG&E's 70,000-sq mile (181,300-sq km) service area. It also will deploy a communications network and back-end IT systems capable of collecting and processing hourly electric and daily gas usage data.

The SmartMeter program will enable PG&E to provide its customers with demand-response rate options to reduce peak energy use by encouraging customers to shift demand to off-peak periods. Because electricity purchased in peak periods is more expensive, this load shift will reduce power procurement costs. It also will provide a variety of improvements in customer service, such as more accurate billing, and will eliminate the need for customers to unlock their gates and tie up their dogs on days meter readers are scheduled to visit.


The SmartMeter program will provide a wide range of benefits to customers, the state and the utility. Customers will benefit from greater convenience, enhanced service reliability (shorter power outages), more effective customer service, new services (for example, online access to energy-usage data) and new rate options.

Customers also will benefit from reduced peak demand, which promises to lower the average cost of power and reduce the likelihood of rotating power outages, such as those that occurred during the 2000-2001 California energy crisis, when power supplies were inadequate to meet demand. The state of California will benefit from additional levers to influence energy demand and from reduced environmental impacts.

While PG&E's large energy consumers have been able to sign up for demand-response rates for some time, individual consumers and small businesses have not had this option as a standard offering. A system of automated meter reading will provide PG&E the detailed energy-usage data needed to implement rates that vary by the time of day across its entire customer base. These rates will provide the California Public Utilities Commission (CPUC) a powerful tool for shaping California energy policy: the ability to influence not only energy supply, but also energy demand.

By providing customers incentives to use less energy and to shift energy usage to non-peak periods, the SmartMeter program actively supports PG&E's leadership on environmental issues. Lower peak demand reduces the need either to use older, less-efficient (and dirtier) power plants or to build additional generation facilities. This will help reduce the environmental impact of providing California consumers electric service — a clear benefit to the state.

The utility will benefit from reduced operational costs and greater efficiencies. In fact, these savings will cover roughly 90% of the cost to deploy and operate the system over its 20-year life. More than half of these savings result from the elimination of manual meter-reading activities. Other primary areas for operational savings include billing, remote connect disconnect, metering operations and outage restoration. The SmartMeter program will pay for itself over the projected life of the system; benefits will exceed costs.

Beyond these operational improvements, the SmartMeter program will benefit the utility by putting in place an infrastructure that will significantly transform PG&E's business while improving customer service and satisfaction. Detailed energy-usage data for all PG&E customers will create opportunities to enhance operations, improve customer service and expand customer-service offerings. Some of these can be anticipated today; others have yet to be discovered.

PG&E is exploring new emerging intelligent grid technologies that could enhance the SmartMeter program to provide benefits such as automation of distribution equipment and access to energy from idle plug-in hybrid electric vehicles using emerging vehicle-to-grid technology. The SmartMeter program not only puts PG&E at the forefront of industry developments today, it also positions PG&E for a leadership role in the future.


The SmartMeter program currently includes two separate communication systems: a radio frequency (RF) system for gas (Hexagram's STAR system) and a power-line carrier (PLC) system for electric (DCSI's TWACS system).

PG&E conducted a successful test of these technologies in the spring of 2006 after installing 2500 SmartMeter electric meters and 2500 SmartMeter gas meter modules at homes and businesses in Vacaville, California. The community of Vacaville was chosen as a test site because it has light industry, a thriving downtown and major retailers. Vacaville also has hot summers that are characteristic of California's inland areas. These warmer, inland areas are where California's population is growing most rapidly and where demand-response programs are expected to generate significant peak-load reduction.

PG&E set up a demonstration center in Vacaville to prove out both SmartMeter program functionality, including near real-time remote reads, and SmartMeter field deployment processes. The test enabled PG&E to experience everything it would encounter during a system-wide deployment, including brief power interruptions for most electric customers as meters are changed out. Fortunately, both remote reads and field deployment processes worked as anticipated.


PG&E began field deployment of both the gas and electric systems in Bakersfield, California, in November 2006. In the spring of 2007, PG&E expanded deployment to Sacramento, California, where it is deploying gas modules. PG&E exceeded its goal of completing 242,000 meter upgrades by the end of 2007. As deployments spread to other parts of the utility's service area of northern and central California, meter installs will ramp up to a rate of 12,000 meters a day.

In December 2007, PG&E began billing a first set of customers on usage data collected remotely through the SmartMeter system. As billing on SmartMeter data becomes operational for additional customers, manual meter reading for these customers will be discontinued.


PG&E's SmartMeter system is one of the first to build a meter data-management system (MDMS) and an enterprise-level energy-usage data warehouse as integral parts of its AMI system architecture. The MDMS is engineered for multiple collector networks as PG&E fully anticipates multiple field technologies will be used given the size, breadth and diversity of its service area.

The first two field technologies are PLC for electric and RF for gas, but MDMS was designed from the beginning to accommodate others. To allow for future applications and services as they are developed, PG&E implemented service-oriented architecture principles in the design of system interfaces where beneficial. These components are essential for maximizing the system's flexibility and data-mining benefits. Initial deployment of these systems began in November 2007.


PG&E anticipated a considerable evolution in AMI technologies, and this market has evolved rapidly over the last several years. PG&E continues to monitor and evaluate its technology options, even as it proceeds with deployment. In July 2007, PG&E initiated a request-for-proposals process to explore the potential of new technologies that have emerged on the market since it began its SmartMeter program. In the fall of 2007, PG&E selected several of these technologies and is currently conducting pilot tests. If these technologies prove successful in pilot, PG&E may refine the technology mix of its SmartMeter program going forward in order to provide its customers the greatest possible value for their investment.

Specifically, PG&E is looking to upgrade the current SmartMeter technology with solid-state meters that include both built-in remote connect/disconnect switches and devices for remotely communicating into the premises. These devices would allow PG&E to provide a greater range of capabilities than the electromechanical meters currently in use.

In recent years, solid-state meters with such devices have also come down in price. Among other benefits, these new meters would enable broad-based load control (including load limiting). They would also facilitate communications with the programmable communicating thermostat technology being promoted and codified by the California Energy Commission through California's Title 24 building code. And they would provide for future communication with household appliances, enabling possible options such as setting appliances to turn on when energy prices drop to a certain level.

Going forward, PG&E expects its SmartMeter infrastructure to be a key enabler for the changing energy landscape. In addition to supporting the introduction of a range of new rate options based on interval energy-usage data (that is, demand-response rates), it should facilitate the management of distributed generation (such as solar) and distributed storage (such as plug-in hybrid electric vehicles). The SmartMeter program holds great promise to enable customers to use energy more wisely, which will mean less waste and greater value for every kilowatt of expended energy.


PG&E's SmartMeter program and other utility deployments have triggered a wave of activity and growth in the North American market for AMI technologies. These programs have prompted technology vendors to go back to the table and redesign their products and introduce new functionality. The fact that PG&E is now in a position to evaluate new AMI technologies is the direct result of the leadership PG&E originally demonstrated in implementing an early AMI solution. As an early mover in the AMI market, PG&E is now ahead of the game. PG&E has made significant strides in integrating SmartMeter capability with a wide range of its systems and will be capable of handling the use of interval data across its entire business. PG&E has also moved ahead with field implementation and gained valuable experience in deploying AMI technologies in the field.


We are just at the beginning of what promises to be an exciting revolution. Ten years from now, the energy industry will look very different. Emerging technologies will provide customers with more options to save on energy costs and more features to automate their homes and businesses. For utilities, it will bring increased efficiencies, improved electric reliability and greater customer satisfaction.

Tim Vahlstrom has more than 32 years of gas and electric utility experience at Pacific Gas and Electric Co. (PG&E). His work at PG&E has focused on management and leadership of gas and electric engineering, operations, metering and customer-service functions. Vahlstrom heads PG&E's SmartMeter Operations department, which will operate PG&E's SmartMeter system and provide ongoing support and management once installed. Prior to this assignment, Vahlstrom managed PG&E's Gas and Electric Metering department and was involved in PG&E's exploration and evaluation of AMI technologies. Vahlstrom earned his BSME and BSEE degrees from California State University, Fresno.