Intelligent Design

Smart meters are here. Across the country, electric utilities are replacing the traditional electric meter they have used to record household electricity use for the past 50 years or so. The familiar electric meter found on the side of most homes is being updated with a digital smart meter. A recent survey by the Institute for Electric Efficiency, Washington, D.C., found that, as of September 2011, more than 20 percent of homes in the country have a smart meter. Based on utility projections, more than half of all the homes in the nation will have a new smart meter within three years.

How Smart Meters Work

What is a smart electric meter? From a few feet away, the smart meter looks similar to the old analog meter it is replacing, but that is where the similarity ends.

The old meter is a mechanical device that uses spinning dials to record a home’s electricity use. At the end of the month, the utility sends someone out to manually read the dials to determine how much electricity the home consumed during the past month.

A smart meter is an electronic device that uses a digital screen to show how much electricity a home is using. The smart meter can record this usage on an hourly or even quarter-hour basis. The meter then sends this information automatically back to the utility.

Down the road, smart meters will open the door to dynamic electricity pricing, which reflects the actual demand for electricity in near real time. Today, homeowners pay the same price for electricity regardless of the demand for it, but electricity demand varies throughout the day and year. With a smart meter, a utility will be able to offer its customers a bill credit in return for reducing their demand during those peak hours. This in turn will help the utility defer the need to build more power plants and transmission lines.

Smarter Is Better

The smart meter returns benefits for the homeowner as soon as it is switched on. A major benefit is the smart meter can automatically notify the utility when a house loses power, whereas with the old electric meter homeowners had to call the utility to tell it they had lost power.

The smart meter gives utilities a head start in getting repair trucks on the road, targeting trouble spots and fixing them. It also is especially important when no one is home, as well as for vacation-home owners who can be away for long periods. In these instances, smart meters can help reduce or even prevent damage that can result from a power outage, such as pipes freezing in the winter or refrigerated/frozen food spoiling.

In the not-too-distant future, smart meters will offer more benefits for homeowners. In some parts of the country, homeowners can now go online to a utility website to see how much electricity their home has used in the previous day or even the previous hour.

In California, for example, two of the state’s largest utilities have launched a “green button” feature on their websites that enables homeowners to download details of their daily electricity usage. Texas has launched a statewide website—the Smart Meter Texas Portal—where consumers can sign into a password-protected account to get detailed views of their home’s electric usage history in 13-month, 30-day or 24-hour snapshots down to 15-minute intervals.

Some manufacturers also have begun offering in-home displays that communicate wirelessly with the smart meter, providing homeowners with almost instantaneous feedback about their home’s electricity use. These displays, which are about the size of a thermostat, can show the homeowner total household electricity use at a particular moment, as well as its cost, along with energy-use trends, such as how much electricity the home used during the previous day, week or month.

Studies have revealed this awareness about their home’s electricity use can motivate homeowners to take simple steps, such as turning off unnecessary lights or adjusting thermostats, to use electricity more efficiently. By doing so, they typically lower their monthly energy bill by around 5 percent.

Future Gets Even Smarter

With more smart meters being installed, appliance manufacturers are beginning to build smart appliances, such as dishwashers, dryers, thermostats and water heaters, that can communicate with the smart meter directly. Benton Harbor, Mich.-based Whirlpool Corp., for example, has announced plans to upgrade all its large-energy-consuming appliances by 2015 so they are capable of receiving and responding to signals from a smart meter. Fairfield, Conn.-based GE is another manufacturer planning to introduce smart appliances, as are a number of other companies.

With the smart meter and smart appliances, homeowners then will have the option of automatically operating these appliances during a utility’s lower-cost periods, such as the evening or overnight hours when the demand on a utility’s electric system is at a minimum. In return, homeowners will receive monthly credits on their electric bill.

Smart meters will even have a role to play with the new plug-in electric cars now taking to the road, such as the Chevy Volt and the Nissan LEAF. These electric cars help their owners to lower or even eliminate their monthly gasoline bill. They benefit society, as well, by reducing tailpipe emissions and cutting our nation’s foreign-oil imports.

The smart meter also will make it possible for electric utilities to offer plug-in electric car owners a lower-cost electric rate to encourage them to recharge their car during the off-peak, evening or overnight hours. Today, this rate is equivalent to about $1 per gallon of gas.

Benefits for the Electricity System

For the electric utility, smart meters are a powerful new tool for building a more efficient and reliable electricity system. With homes and the nation’s economy growing increasingly digital, this is becoming more important every year.

As part of the overall smart electric grid the nation’s electric utilities are building, smart meters also provide utilities with much more information about their electric system. The smart meter, along with the other digital technologies being installed, can help to ease congestion and bottlenecks on the grid and mitigate or, in some cases, even prevent blackouts. For a utility’s customers, this all adds up to more reliable electricity service.

By improving grid efficiency, smart meters also will help electric utilities to use their power plants more efficiently and help to defer the need for new plants. This will save everyone money. Smart meters also will facilitate the greater use of new power sources on the grid, such as wind and solar, which will play a role in improving air quality and reducing carbon emissions.

The smart meter is coming. Just as the advances in digital technology have created products and conveniences that would have been hard to imagine 20 years ago, smart meters, as part of the smart grid, promise another frontier for homeowner convenience and satisfaction.


Rick Tempchin is the executive director of retail energy services at the Edison Electric Institute, Washington, D.C.