November 12, 2009

EXCLUSIVE INTERVIEW

Lawsuit to target all smart

grid firms tied to project

A PG&E smart meter charged Bakersfield, Calif resident Pete Flores an average of $500-600/month, though immediately before the new meter went in his bills averaged less than $200, alleged a class action lawsuit against PG&E that was filed last month.  Also economically damaged by the meters was “a much larger class of people,” said the complaint, filed Oct 16 in California's Superior Court.

          We gave some details of the case Tuesday (SGT, Nov-09) but had not yet obtained a copy of the complaint.  The plaintiff's attorney Michael Kelly told us the case is the first of its kind that he is aware of.  He is with the law firm of Kirtland & Packard in El Segundo, Calif.

          “Other state courts won't be bound by the ruling, though they may be influenced by it,” he added.  A judgment that a particular piece of equipment is defective could form the basis for other courts to summarily reach a similar decision, said Kelly.

          In addition to PG&E, the suit named Wellington Energy of Pittsburgh that it said helped PG&E install smart meters starting in 2006 plus 100 defendants who remained unidentified in the complaint but that the suit predicted would include some 20 firms that designed or manufactured the smart meters installed by PG&E, another 20 that made the wireless communications systems within the meters, 20 that wrote the software and another 40 that are “in some manner legally responsible for the damages suffered by the plaintiffs,” the complaint said.

          “One guy got a bill for $11,000 that was supposed to be $100,” said Kelly.  “Some bills are two, three, four times higher now than before the smart meters.  There are anecdotal explanations for every bill that's out of whack and obviously some increase could be due to higher rates and higher demand,” he added.  “But there has to be an explanation that no one has identified.  At this point, we don't think there's one particular cause.”

          Each defendant is charged with 11 violations of civil law: breach of California's Legal Remedies Act, unjust enrichment, violation of the public utilities code sections allowing only “just and reasonable” charges and requiring any rate changes to be “justified” plus negligence, breach of contract, fraud and deceit, false advertising, unfair competition through misrepresentation and concealment, breach of the duties of good faith and fair dealing and negligent misrepresentation.

          The complaint asked for a jury trial and an injunction without making a specific request for damages -- although “special damages” above actual monetary losses are asked for.  A trial date has not been set, though an April 14 case-management conference was set.

          The complaint alleged that PG&E began installing smart meters -- without giving customers a choice in the matter -- in November 2006.  Bakersfield and the Sacramento region are test areas for the meters with over 10 million of them planned by 2012 in a $2.2 billion roll-out, the complaint said.

          More than 100 complaints about the meters have been made to the activist group the Utility Reform Network (TURN) -- evidence that “a much larger class of people” than the named plaintiff have been damaged by the meters, said the complaint (Editor's Note: the main page of TURN's website had at press time a headline reading “Stop outrageous smart meter bills” with a blurb warning of smart meter accounts having “skyrocketing bills” and a link to more information on the group's website).

          A special meeting called by State Assemblyman Dean Florez on Oct 5 in Bakersfield (SGT, Oct-19) added evidence of the problem's gravity, the complaint said.

          PG&E spokesman Jeff Smith Monday declined to comment on the case except to say that California's PUC is working to identify an independent party to test the meters as was promised by PG&E in a statement last Thursday.  In that statement, PG&E said it supports “plans to bring in an independent party to review meter accuracy,” adding that “SmartMeter meters are accurate” and that “the allegations of the lawsuit are untrue and have no merit.”

          The details of that independent audit “are being worked out,” PUC spokeswoman Susan Carothers told us this week.  A start date was not yet set and a third-party had not been picked, but “I know our folks are working on that,” she added.

          The case is titled “Flores v Pacific Gas and Electric Co,” in California Superior Court, Kern County.  A case number was not yet assigned at our “press” time.

          BOTTOM LINE: We were not able at press time to confirm the validity of an online news report published by Greentech Media with Monday's date that said the utility has “paused” its rollout of smart meters in Bakersfield.