BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 837
                                                                  Page  1

          Date of Hearing:   August 4, 2010

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                    SB 837 (Florez) - As Amended:  August 2, 2010 

          Policy Committee:                              Utilities and  
          Commerce     Vote:                            14-1

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable: No

           SUMMARY  

          This bill requires the Public Utilities Commission (PUC) to:

          1)Evaluate the impact of advanced metering infrastructure  
            ("smart meters") on the frequency of utility disconnections  
            and adopt policies to minimize any adverse impacts.

          2)Consider requiring electrical and gas investor-owned utilities  
            (IOUs) to evaluate their customer communication policies  
            relative to disconnection of service.

          3)Ensure that each smart grid deployment plan authorized by the  
            commission after January 1, 2012 includes testing and  
            technology standards, as specified.

           FISCAL EFFECT  

          Any costs to the PUC would be minor and absorbable.

           COMMENTS  

           1)Background  . A "smart meter" is a two-way communication device  
            that transmits data back to the utility and negates the need  
            for manual meter readings. Smart meters enable a utility to  
            provide customers with detailed information about their energy  
            usage at different times of the day, which in turn enables  
            customers to manage their energy use more proactively. Smart  
            meters allow the utility to disable and enable supply, and are  
            the foundation for demand-response programs, such as peak  
            pricing, which is designed to reduce electrical consumption  
            during times of peak demand. The PUC has authorized the  








                                                                  SB 837
                                                                  Page  2

            state's Southern California Edison (SCE) to install 5.3  
            million new smart meters, San Diego Gas and Electric (SDG&E)  
            1.4 million electric smart meters and 900,000 natural gas  
            meters, and Pacific Gas and Electric (PG&E) five million  
            electric meters and 4.2 million natural gas meters. 

            Although millions of smart meters have been installed by the  
            three IOUs without incident, last summer PG&E began to receive  
            a significantly high number of complaints from customers in  
            the San Joaquin Valley who experienced excessively high  
            billing statements. These complaints coincided with the  
            installation of smart meters in the region by PG&E and very  
            high summer temperatures.


           2)Purpose  . This bill requires the PUC to address several issues  
            related to the use of smart meters with respect to the  
            perceived potential for inordinate disconnections, the  
            security of customer data derived from smart meter usage, and  
            overall workability and compatibility with other utility data  
            systems. 


           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081