Responding to months of consumer protests, the California Public Utilities Commission on Thursday ordered PG&E to come up with ways for worried customers to refuse SmartMeters.

The utility was ordered to submit proposals to the commission outlining procedures and costs within two weeks.

The PUC order is a stunning turnabout on a technology that many consider a key to managing energy use in the future. Utilities around the country have installed the electronic meters — which can be monitored and adjusted wirelessly — with little incident. But in Northern California, angry residents have expressed concerns that the meters can lead to overbilling and cause health problems, and PG&E has struggled to counter the bad publicity.

PUC President Michael Peevey said before Thursday’s meeting that he hoped the announcement “might calm some of the emotion surrounding this issue.”

Peevey said he could not predict what kind of proposal PG&E will submit, or how the commission will judge it. “But I think it’s clear the time has come for some kind of movement in the direction of customer opt-outs,” he said.

Joshua Hart, director of Stop Smart Meters, an activist group that has led opposition to the meters, said the PUC order was significant “but too little, too late.”

“We will not rest until we have a moratorium on installation and public hearings on the health concerns,” Hart said.

PG&E spokesman Paul Moreno said the utility has been examining possible opt-out options for the past few months in anticipation of such an order and that PG&E is prepared to meet the two-week deadline.

“We understand some of our customers have concerns relating to radio frequency from SmartMeters, “Moreno said, “even though the great weight of scientific evidence demonstrates that they are safe. But we take those concerns seriously.”

PR disaster

SmartMeters are digital devices that use radio signals to transmit information about customer electricity use to utilities, so they can obtain the data without sending meter readers to manually check traditional analog meters.

Supporters, including many energy-efficiency advocates, view SmartMeters as a key way to reduce electricity use and the greenhouse gas pollution that is emitted from burning natural gas and other fossil fuels to generate electricity. They say the technology will enable home and business owners to see their electricity use in real time the way drivers of hybrid cars like the Toyota Prius see their gasoline usage in real time by a meter on the dashboard. This could help them use electricity more efficiently, such as choosing to wash clothes at night when electricity demand is lower and prices could be reduced.

Although independent studies have found that SmartMeters emit far less electromagnetic radiation than cell phones and microwave ovens, critics have worried they could be harmed by the low-level radiation, and have demanded a choice. Others have claimed that the SmartMeters have led to overcharges in their utility bills.

Following growing opposition to the installation of the new meters, the PUC released a 400-page report by an independent consultant last year that found nothing wrong with the meters but concluded that PG&E turned the rollout into a consumer relations disaster.

Moving forward

In an interview with the Mercury News editorial board last month, PG&E President Chris Johns said his company “absolutely miscalculated” on its rollout of SmartMeters.

“We know the science has come out and said there is no harmful effect,” Johns said. “But there is a group of our customers that believe it does affect them, and that’s fair. The question is then how do you design something that makes sense that is an alternative that can still allow you to go forward with what is good for society?”

Johns said PG&E is installing about 15,000 SmartMeters a day, and had replaced more than 7 million traditional meters in its service area from Bakersfield to Oregon. He said the replacement of all 10 million meters in PG&E’s jurisdiction would be completed by the end of this year or early 2012.

“Some of those alternatives are pretty expensive, and who pays for that?” Johns said. “Does the whole community pay for that? Or do you try to make the person who wants the alternative pay for that?”

Peevey said Thursday that customers not wanting SmartMeters should pay “reasonable” costs for alternative meters instead of putting the burden on all ratepayers.

Contact Gary Richards at 408-920-5335.