Electric utilities will deploy 588 million smart meters by 2015, and by 2020, the global deployment will reach 1 billion, according to Pike Research. At that point, the saturation point will only be 56%.

Industry estimates have shown that customers can use at least 5% less energy by gaining a better understanding of which appliances are using the most energy. Beyond energy conservation, smart meter technology enables utilities to offer time-of-use rates to encourage customers to consume energy during off-peak periods.

Customers also benefit from quicker outage management and power restoration as well as from the utility's ability to disconnect and reconnect service in an automated manner. In addition, companies are able to adjust billing cycles to meet their customers' needs as a result of the smart meter technology. For example, Portland General Electric (PGE) is now able to offer “customer-selected due dates,” because the company can read the smart meters on a daily basis.

Benefits for Electric Utilities

Utilities worldwide are aware of the benefits of smart meters for their customers, but what they may not yet realize is they can gain a lot of benefits by installing smart meter networks and investing in other smart grid technologies. Here are three key benefits for electric utilities.

  1. Smart meters can help utilities zone in on meter tampering

    When PGE deployed its smart meters, the utility expected to be able to detect system leaks and identify the location of thefts, said Bruce Carpenter, vice president, transmission and distribution services for PGE. The company's actual results have been much higher than anticipated, leading to recovered revenues and increased conservation efforts.

    Community Outreach

    Specifically, PGE's advanced meter infrastructure and meter data management systems have given its energy recovery unit teams a high-resolution and previously unavailable diagnostic tool to help reduce energy loss.

    PGE has always placed a high priority on energy recovery and used to rely on meter readers to identify tamper situations. However, out-of-sight self cut-ins ahead of the meter were rarely identified. Now monitoring the feeder and tap lines and comparing the usage to the sum of the meters adds a sophisticated feature to energy loss management practices. So far in 2011, PGE has received nearly 12,000 leads and confirmed more than 1,250 loss situations, leading to rebilled revenue in the $1.5 million range.

  2. Companies can improve their efficiency

    At the Phoenix, Arizona, U.S.-based Salt River Project Agricultural Improvement and Power District (SRP), installing more than 700,000 smart meters has allowed the company to complete more than 1.2 million field orders through its smart meter network instead of sending a crew and rolling a truck to handle those requests. Because of that, SRP has been able to eliminate more than 400,000 labor hours and has chopped more than 2 million miles (3.2 million km) off its fleet's odometers.

  3. Smart meters reduce the reliance on power plants

    Perhaps one of the most overlooked advantages is one of the simplest — the fact that when customers reduce their electricity demand, they are reducing the need for utilities to build new power plants or rely on older, less efficient plants. The cost of power plant construction and maintenance is usually passed on to customers in retail rates. And building power plants only to meet occasional peak demand is very expensive. It is much more economical to enable customers to reduce their demand through smart meters, time-of-use rates and other incentive programs.

Despite the increased use of smart meters and their obvious benefits, continued education is required to inform both consumers and utilities about the merits of smart meters.

It might seem hard to believe, but there are still many utilities — mostly smaller regional municipal providers — that not only question the cost of the systems, but also don't understand their value and how they benefit from the technology.

Electric utilities that have already deployed their smart meter technology advise other companies to start the educational campaign early in the process. For example, the city of Naperville, Illinois, U.S., is preparing for a full rollout in November to its 57,000 customers, which includes 50,000 homeowners.

As part of its community outreach program, the utility is deploying a Smart Grid Customer Bill of Rights. The company is also including thorough RF emission testing to ensure the safety of the smart meters.

One of the most highly successful parts of its program, however, is recruiting residential and business customers to act as smart meter ambassadors. So far, more than 30 customers have signed up and are busy spreading the word on the benefits of smart meters. Hopefully similar campaigns will develop around North America.

Bob Sitkauskas is chairman of the board of Utilimetrics, a trade association of utilities, consultants, vendors and other professionals engaged in or considering utility automation.