Smart Meter - Purpose

Purpose

Since the inception of electricity deregulation and market-driven pricing throughout the world, utilities have been looking for a means to match consumption with generation. Traditional electrical and gas meters only measure total consumption, and so provide no information of when the energy was consumed at each metered site (market use rates are readily available to utilities however). Smart meters provide a way of measuring this site-specific information, allowing price setting agencies to introduce different prices for consumption based on the time of day and the season. Smart meters may include measurements of surge voltages and harmonic distortion, allowing diagnosis of power quality problems.

Utility companies propose that from a consumer perspective, smart metering offers a number of potential benefits to householders. These include, a) an end to estimated bills, which are a major source of complaints for many customers b) a tool to help consumers better manage their energy use - stating that smart meters with a display outside their homes could provide up-to-date information on gas and electricity consumption and in doing so help people to manage their energy use and reduce their energy bills and carbon emissions. Electricity pricing usually peaks at certain predictable times of the day and the season. In particular, if generation is constrained, prices can rise if power from other jurisdictions or more costly generation is brought online. Proponents assert that billing customers by time-of-day will encourage consumers to adjust their consumption habits to be more responsive to market prices and assert further, that regulatory and market design agencies hope these "price signals" could delay the construction of additional generation or at least the purchase of energy from higher priced sources, thereby controlling the steady and rapid increase of electricity prices. There are some concerns, however, that low income and vulnerable consumers may not benefit from intraday time-of-use tariffs.

A utility representative in Florida denied such intentions when he stated, “There are no plans to implement any price tiering” and he added that, since they are regulated by the state government, any such change would be subject to regulatory approval after required public hearings.

Smart metering offers potential benefits to utility companies in that they will be able to eliminate many jobs, but there are concerns that many of the "benefits" proponents cite for consumers, not only will fail to be realized, but to the contrary, could increase costs to the consumers.