Smart metering

Purpose

Smart metering offers potential benefits to customers. 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 purchases—smart meters with a home display (or smartphone app) provides 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. With regards to consumption reduction, this is critical for understanding the benefits of smart meters because the relatively small percentage benefits in terms of savings are multiplied by millions of users. Smart meters for water consumption can also provide detailed and timely information about customer water use and early notification of possible water leaks in their premises. Electricity consumption, and hence pricing, usually peaks at certain predictable times of the day and the season. In particular, if generation is constrained, prices can rise when power from other jurisdictions or more costly generation is brought online. Proponents assert that billing customers at a higher rate for peak times encourages 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.