A smart meter is usually an electrical meter that records consumption in intervals of an hour or less and communicates that information at least daily back to the utility for monitoring and billing purposes. Smart meters enable two-way communication between the meter and the central system. Unlike home energy monitors, smart meters can gather data for remote reporting.
Since the inception of electricity deregulation and market-driven pricing throughout the world, utilities have been looking for a means to match consumption with generation. Traditional electrical meters only measure total consumption and as such, provide no information of when the energy was consumed. Smart meters provide an economical way of measuring this information, allowing price setting agencies to introduce different prices for consumption based on the time of day and the season.
Electricity pricing usually peaks at certain predictable times of the day and the season. In particular, if generation is constrained, prices can rise from other jurisdictions or more costly generation is brought online. It is believed that billing customers by time of day will encourage consumers to adjust their consumption habits to be more responsive to market prices.
Regulatory and market design agencies hope these "price signals" will 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.
Since the inception of electricity deregulation and market-driven pricing throughout the world, utilities have been looking for a means to match consumption with generation. Traditional electrical meters only measure total consumption and as such, provide no information of when the energy was consumed. Smart meters provide an economical way of measuring this information, allowing price setting agencies to introduce different prices for consumption based on the time of day and the season.
Electricity pricing usually peaks at certain predictable times of the day and the season. In particular, if generation is constrained, prices can rise from other jurisdictions or more costly generation is brought online. It is believed that billing customers by time of day will encourage consumers to adjust their consumption habits to be more responsive to market prices.
Regulatory and market design agencies hope these "price signals" will 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.
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