A smart meter mounted on the outside of a home
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Smart Energy Transition

Smart Meters Explained: Your Energy Use and Helping the Planet

Daren Wang
December 14, 2023

In the earliest days of people having electricity in their homes, the power itself was free, but Thomas Edison charged them for each outlet. That practice didn’t last too long, and soon, the electricity meter was introduced to keep track of how many watts of energy a house used.

For much of the twentieth century, nearly every home in America had an electro-mechanical meter bolted to its side, characterized by ever-spinning dials. Monthly visits from meter readers were routine, capturing data on power consumption.

But sending out meter readers for those monthly visits was expensive and, given the occasional encounter with a guard dog, snake, or mound of fire ants, somewhat hazardous. That’s when new technology entered the scene.

Automated Meter Reader (AMR) and Advanced Metering Infrastructure (AMI)

When cellular communications and Wi-Fi became ubiquitous, utilities shifted to automated meter reader (AMR) technology, which sends usage data digitally to the utility. As of 2022, approximately 72% of U.S. electric meters were AMRs, with residential customers accounting for 88% of these installations.

In general, those AMRs made very little difference in rate-payers’ lives. Other than keeping the meter reader from occasionally passing through their yard, nothing changed.

In recent years, many utilities have started rolling out a whole new generation of devices known as “smart meters.” These sleek new gadgets, part of a rollout of Advanced Metering Infrastructure (AMI), present an opportunity for homeowners to play a much more active part in their energy usage, gain control of their home energy system, and potentially save money.

So what is a Smart Meter? According to the Department of Energy, a Smart Meter “establishes two-way communication between consumers and utility providers, enhancing the management of electrical services, including blackout awareness.” For a consumer, that means that you can track how much electricity you are using as you are using it with an app on your phone and save money by shifting energy usage to off-peak hours (for people on Time-of-Use rate plans).

Believe it or not, utilities want you to save that money. Energy usage during peak hours puts a lot of stress on the grid, and finding ways to encourage people to shift their energy usage to other times is a big part of most utilities’ long-term strategy to keep the grid healthy.

A recent study has highlighted that integrating AMI into customer systems can yield significant benefits for both customers and utilities. These advantages include:

Enhanced Customer Control

Increased use of new customer tools such as web portals and smart thermostats empowers customers to have greater control over electricity consumption, costs, and bills. Techniques like shifting demand to off-peak periods, coupled with customer technologies like in-home displays and programmable communicating thermostats, enable utilities to introduce innovative time-based rate programs and incentives, encouraging customers to reduce peak usage.

Capital Expenditure Savings

Lower utility capital expenditures and reduced customer bills are achievable through diminished peak demand, improved asset utilization, and more efficient maintenance practices.

Outage Management

Faster outage restoration and precise dispatching of repair crews to specific locations lead to lower outage costs and minimize inconveniences for customers.

Cost Reductions

Streamlined metering and billing processes result in fewer truck rolls, labor savings, enhanced accuracy and timeliness in billing, reduced customer disputes, and improved operational efficiencies.

Precise Billing

Smart meters excel in providing accurate billing information. Unlike traditional analog meters, which rely on manual readings prone to estimation errors, smart meters automatically transmit precise consumption data. This ensures fair and accurate billing for customers, eliminating inaccuracies.

This is also what allows services like OhmConnect to reward you for for saving! When you connect your utility with your account, we can then accurately calculate your average energy use because of the precise data from your smart meter. This allows us to reward you when you save energy during specified times (OhmHours or AutoOhms).

Enhanced Energy Efficiency

Empowering consumers to make informed decisions, smart meters increase awareness about energy conservation. This awareness prompts behavioral changes, such as turning off unused lights and investing in energy-efficient appliances, resulting in reduced energy consumption and lower utility bills.

Efficient Service

Smart meters enable utilities to detect and resolve issues remotely, leading to faster response times and less inconvenience for consumers. Technicians can often address problems without visiting the property, ensuring a quicker and easier service experience.

Integration with Smart Home Technology

Smart meters seamlessly integrate with various smart home technologies. This integration allows consumers to automate and optimize energy usage, such as programming smart thermostats based on real-time energy pricing information. This ensures a comfortable home temperature while minimizing energy costs.

Support for Renewable Energy

Facilitating the integration of renewable energy sources into the grid, smart meters provide real-time data on energy production and consumption. This information helps utility companies manage the fluctuating supply from renewable sources, contributing to a more stable and reliable energy distribution system.

Reduced Environmental Impact

Smart meters empower customers to monitor and reduce gas, water, and electric utility demand. By decreasing electrical demand, the need for new power plants and reliance on older, less cost-effective plants is reduced. Transitioning to updated smart energy plants ultimately decreases greenhouse gas and other air emissions, minimizing the environmental impact of energy production.

The Big Picture

America is transitioning to a new energy system. When our current grid was designed and built, big power plants were operated by utilities to send energy to nearby homes. The utilities determined how much power they generated by how much fossil fuel they burned.

Now, as demand rises, we get more and more of our energy from renewable sources such as wind and solar. That energy is clean and inexpensive, but it is not always available.

Utilities must manage a much more complex supply of electricity while people demand more electricity to power new devices, including charging their electric vehicles.

Finding new and more efficient ways to use the grid is key to meeting our ever-increasing demand for power, and smart meters are a big part of that strategy. Real-time data on how energy is being used allows utilities to use the limited capacity of our grid in the best way possible to keep the power up and costs down.

In most cases, utility companies install and own home utility meters. While upgrading to a smart meter may be at the discretion of the utility company, individuals can install sub-meters for detailed feedback and control. These sub-meters, positioned between the utility meter and the home, provide precision in recording utility usage and informed decision-making.

The growing adoption of smart meters signifies a significant advancement in utility management, offering benefits in efficiency, control, and potential cost savings.

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