PG&E's announcement that it would replace around 1,600 smart meters statewide was an admission of problems, which the utility adamantly denied when complaints first surfaced in 2009.
The meters will be swapped out at no cost to customers and some of the defective meters already have been replaced, said PG&E spokesman Jeff Smith.
The utility said it is contacting customers who have the faulty meters.
Of the nearly 1,600 defective meters, 649 are in Fresno County, including 488 in Fresno and 120 in Clovis.
Not all of the faulty meters caused increased bills, Smith said, but customers whose bills were inflated will get rebates averaging $40. The utility also will credit customers $25 on their bill for the inconvenience and is offering a free in-home energy audit.
PG&E said it discovered the problem, calling the malfunction "a rare defect."
The defective meters, supplied by Landis+Gyr, an electric-meter manufacturer based Switzerland, would "occasionally run fast when experiencing a narrow band of high temperatures," the utility said, resulting in inaccurate electricity bills.
Since the smart meter program began, some PG&E customers have blamed the meters for large, inaccurate electricity bills. In 2009, the utility blamed higher bills on unusually hot weather and a rate increase that year.
But in January, then-PG&E chief Peter Darbee acknowledged problems with some of the meters and admitted the utility mishandled customer complaints. Darbee retired in April.
Landis+Gyr has supplied 2 million of the 8 million smart meters that PG&E has installed from Bakersfield to the Oregon border. The other supplier is General Electric.
The smart meter program will be completed in 2012 with the installation of 2 million more meters, Smith said.