Four Key Benefits of Smart Meters to Electric Utilities

If knowledge is power, knowledge about power is extremely valuable for electric utilities.

And that’s exactly what smart meters give you — a deep understanding of how, where and when power is used across your network.

Smart meters can help you reduce your utility’s costs, improve your system’s efficiency and increase your customers’ satisfaction.

But they’re not the only option available to you. To understand how smart meters benefit utilities, you first need to understand how they’re different from other types of electric meters.

What Makes a Smart Meter Smart?

The two-way communication between a meter and a utility’s home office is what sets the smart meter apart. A smart meter can send information about energy usage, voltage regulation, load currents and other metrics. It can also respond to commands, such as disconnecting service remotely.

This information-sharing capability is attractive to many electric utilities. The number of smart meters in the United States has more than doubled since 2011, according to a 2020 report from the Federal Energy Regulatory Commission. Nearly 57% of the 154.1 million operational electric meters in the U.S. are smart meters.

A smart meter’s role in advanced metering infrastructure (AMI) is crucial to its definition. While some people refer to automated meter reading (AMR) meters as smart meters, a meter is not truly “smart” unless it’s part of an AMI system.

The U.S. Energy Information Administration defines AMR as, “Meters that collect data for billing purposes only and transmit this data one way, usually from the customer to the distribution utility.”

AMI smart meters, on the other hand, open many more possibilities for data transmission and usage.

Four Benefits of Smart Meters to Utilities

Since AMI is a significant investment, understanding the benefits of smart meters to utilities can help you make the case for AMI with key decision-makers.

The following list highlights the advantages of smart meters compared to AMR or power line carriers. If you’re currently using standard electric meters that require manual reading, the benefits of implementing smart meters are even greater.

1. Restore power outages faster and more efficiently

Smart meters allow you to know exactly when and where power goes out. Since you don’t have to wait for customers to report issues, you can dramatically decrease the duration of outages and your number of truck rolls.

The speed at which you can identify outages with smart meters can have several lasting, positive impacts.

First, your customers will appreciate the speed at which power can be restored. Unfortunately, most people don’t think about electricity until it’s gone, so outages are a crucial time to impress customers with your service.

It also eases the burden on your staff. Over time, customers will (hopefully) learn that they don’t need to call to report outages, so your team can spend less time on the phone.

Perhaps most importantly, smart meters can reduce the amount of truck rolls needed for outages.

Typically, if a customer’s power goes out at 9 a.m. and no one’s home, they won’t report it until they arrive back from work at 5:30 p.m. You’ll need to send a truck out after hours and pay overtime.

But if you have an AMI system, you’ll know about the outage right away. Now, you can choose the most time-efficient plan to restore the power. Maybe you already have a crew scheduled to work in that neighborhood that day, so you can fix both issues at once.

The precise data you can retrieve during outages is also a powerful tool. With smart meters, you can know exactly how many customers lost power and exactly how long it was out.

No more overestimating how many customers lost power just to be safe. You can give regulatory commissions an accurate reflection of outages, all while improving your System Average Interruption Duration Index (SAIDI) and other performance metrics.

2. Disconnect service remotely

Shutting off customers’ electricity when they don’t pay isn’t fun for anyone involved, but it’s essential for ensuring profitability.

Even so, the traditional costs of sending a truck to disconnect a meter — only to have the customer start paying again the next day — can add up.

Remote disconnect removes a lot of the frustration and inefficiency involved with shut-offs. Here are a few of the benefits of remote disconnect-enabled smart meters:

You can significantly reduce truck rolls related to shut-offs.
Meter technicians don’t need to deal with upset customers in person.
You can schedule disconnects and reconnects when customers move.

T&D World reported that one large electric cooperative reduced their average monthly truck rolls from 2,900 to just four truck rolls per month with AMI remote disconnect.

That number represents enormous cost and labor savings, especially at a time when good workers are increasingly hard to find.

For rural co-ops and geographically dispersed utilities, adding smart meters with remote disconnect capabilities could eliminate thousands of miles of travel time.

Disconnect-enabled meters also often have current limiting capabilities. Current limiting is useful when a cold weather rule prevents you from disconnecting customers who haven’t paid.

You could restrict the customer’s current to 10 amps, for example — enough to power a furnace but not much else. This prevents the customer from racking up an even larger bill and helps your utility stay profitable.

3. Easily implement new pricing and load management programs

Since smart meters allow you to measure energy usage more accurately, you can more easily implement time-of-use (TOU) rate programs to incentivize off-peak usage.

Where allowed, real-time data also creates opportunities for real-time pricing that varies based on energy production and demand.

Prepay programs can be appealing when you want to decrease overdue payments or simply give customers more payment options. Customers who often pay late can be transferred to a prepay program where their electricity is disconnected once they reach their limit.

Smart meters also equip you with better data for bidirectional metering or net energy metering. Customers who generate their own electricity from solar, wind or other power sources can see exactly how much electricity was delivered and received.

Beyond pricing, smart meters allow utilities to provide better energy feedback to customers, disaggregate data based on individual appliances and devices, optimize voltage regulation and create grid-interactive efficient buildings.

While some of these analytics use cases benefit customers more than utilities, regulators are increasingly requiring utilities to show evidence of benefits to customers to justify AMI implementation. It’s helpful to know how smart meters would impact all your utility’s stakeholders.

4. Troubleshoot blinks, sags and swells

Identifying the cause of a temporary disruption of power, sag or swell can feel like searching for a needle in a haystack.

The search can be costly, too, because you need to send a truck to the customer’s location to figure out if the issue happened on your side or the customer’s.

But with smart meters, you have that information at your fingertips. You’re equipped with an arsenal of data about when and where issues occur. Ultimately, this helps you determine why they occur — without a truck roll.

Are multiple customers in the same neighborhood experiencing blinks at the same time every day? The right AMI system can tell you that information and reveal patterns, so you can investigate what’s causing it.

Smart meters can also monitor for issues like overheated sockets. You can get an alert when a meter socket is about to burn out and fix it before an outage occurs.

Over time, these minor optimizations add up, strengthening your distribution system and making it more resilient to widespread outages.

Are Smart Meters in Your Future?

Despite the initial cost of implementation, smart meters present significant cost savings and customer service benefits to utilities.

Smart meters can help you recognize outages quickly and accurately, shut off power from an off-site location, establish time-of-use rates and troubleshoot a variety of issues.

By understanding the advantages of smart meters compared to AMR or standard electric meters, you’re one step closer to discovering how adopting new technology can benefit your utility.

Distribution Automation Improvements with AMI