How Smart Meters Affect Your Bill


Smart meters are growing in use. Here's how they could potentially change your electricity consumption habits, and lower your electric bill.

What Is A Smart Meter?

Simply put, a smart meter is an electricity meter that is able to determine not just how much electricity you used, but when you consumed it. A traditional automatic meter reading (AMR) tracks your electricity usage, against which your utility company applies an average price for the previous month in order to determine your bill. However, electricity prices vary throughout the day, spiking in periods of high demand, and falling dramatically during periods of low demand--like during the night. 

As electricity markets have become deregulated, companies have searched for better ways of pricing the electricity they provide, in order to charge consumers for the electricity that they use, when they use it. Additionally, because smart meters can be read remotely, electricity and gas companies see them as a way to save money in operating and labor costs. While smart meters do not in themselves constitute a "smart grid," they form an integral part of one.

How Can A Smart Meter Affect Your Electricity Bill?

So what can a smart meter do for you? Potentially save you money. A smart meter is often combined with a smart monitor, a device that notifies you of your real time electricity consumption. By adapting your habits to use electricity during the least expensive parts of the day (like charging an electric car at night), and by giving you information that Can help you moderate your electricity use, a smart meter could potentially save you money on your monthly electric bill. One study found that on average, smart meters help reduce electricity consumption by 3-5%. 

Of course, a smart meter could also result in higher electricity prices if much of your consumption occurs during peak periods, where the market price of energy is above what the average, end-of-month price would be. 

A Controversy In The Making?

However, opponents of smart meters have raised several objections. Some community organizations have charged that smart meters, which communicate on a wireless system, emit high levels of electromagnetic frequencies that could cause negative health consequences. The Texas Public Utility Commission maintains that EM frequencies are far below the FCC's standard, and that smart meters are safe. Additionally, opponents have raised privacy concerns regarding the data that is collected by utilities about consumers and their electricity usage habits. 

Users who wish to opt-out of, or replace a smart meter with a traditional one have the right to do so, but could face one-time or recurring charges for either keeping an analog meter in place, or having a smart meter removed and replaced with an analog meter:

  • American Electric Power (Central Texas) - $200 to keep an analog meter, or $300 + $18/month to replace a smart meter with an analog one.
  • American Electric Power (North Texas) - $200 to keep an analog meter, or $356 + $35/month to replace a smart meter with an analog one.
  • Oncor - $400 to keep an analog meter, or $842 + $25/month to replace a smart meter with an analog one.

Smart Meters In Texas

  • Austin Energy has been one of the Texas utilities to roll out smart meters on a large scale. Having begun in 2008, Austin Energy has so far deployed nearly 400,000 residential and commercial smart meters.
  • In Houston, Centerpoint Energy is currently upgrading its network to provide smart meters to its 2 million customers, and even got a $200 million grant from the U.S. Department of Energy to do so. 
  • Dallas based Oncor Electric completed delivery of smart meters to its 3 million electricity customers in 2013. Its smart meters can determine electricity prices at 15 minute intervals.
  • CPS Energy in San Antonio is planning to equip all of its customers (both electricity and gas) with smart meters by the end of 2016, and has made real-time data available to customers on its website.