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April 28, 2010
Brattle Principal Ahmad Faruqui Authors Article for on PG&E’s Proposal to Reform Smart Meter Rate Designs

Dr. Ahmad Faruqui, a principal in Brattle’s San Francisco office, authored an article posted on on April 27, 2010. In the article, “The California Smart Meters Story Continues to Evolve,” Dr. Faruqui provides an update on California’s state-wide smart meter initiative that was launched following the 2000-2001 energy crisis, discussing the recent criticism the initiative has faced and a proposed rate shift from a five-tier schedule to a three-tier schedule. The criticism that the smart meter program has faced is based on a dramatic increase in the electricity bills of some residents served by Pacific Gas & Electricity (PG&E), which has been inaccurately attributed to the installation of smart meters. As a result, PG&E is seeking to replace its five-tiered inverted rate schedule with a three-tiered inverted tier rate schedule, which some critics believe will penalize conservative electricity consumers. However, according to Dr. Faruqui, “contrary to the view being espoused that the new rates will be anti-conservation, they will provide plenty of incentive for energy efficiency since the second tier rate is under 13 cents per kWh and the new third tier will represent a doubling of price.” He goes on to say that in the current five-tier schedule consumers in the higher tiers actually subsidize those in the lower tiers, and that a three-tier system would present a fairer option for consumers. For more information, please visit the SmartMeters website.