Advanced metering infrastructure (AMI) includes new communications networks and database systems that will modernize our nation’s electric grid and provide important benefits to electric companies and consumers. AMI involves two-way communications with "smart" meters and other energy management devices. This allows companies to respond more quickly to potential problems and to communicate real-time electricity prices. These price signals provide consumers with financial incentives to reduce their electricity usage.
In addition, electric companies can send price signals to "smart" thermostats and "smart" appliances to alert them about an upcoming high-cost period. Based on consumer-determined responses, these smart devices can reduce consumer usage until the high-cost period has ended or shift that usage to lower-cost periods.
AMI, along with new rate designs, will provide consumers with the ability to use electricity more efficiently and provide utilities with the ability to detect problems on their systems and operate them more efficiently—ultimately improving reliability and saving money for consumers.
Resources
All documents listed below are PDFs, unless otherwise noted.
- Deciding on "Smart" Meters: The Technology Implications of Section 1252 of the Energy Policy Act of 2005
Plexus Research, September 2006. Provides practical guidance on how to build cases evaluating the cost-eff ectiveness of advanced metering infrastructure applications. Includes valuable lessons learned regarding the effective organization and management of AMI applications, and best practices for purchasing, installation, and integration.
-
Quantifying the Benefits of Dynamic Pricing in the Mass Market
Final Report |
Report with Appendices
The Brattle Group, January 2008. Reviews various smart metering programs in developing a spreadsheet-based estimate of utility specific, potential demand response benefits from smart meters, smart thermostats, and dynamic pricing. Also discusses how more accurate pricing signals can actually lower consumers' bills by eliminating utility hedging premiums, and compares smart metering and dynamic pricing with other demand response alternatives.
- Appendices A | B | C | | E | F | G | H
- The PRISM Suite
(This spreadsheet contains macros. You must have macros enabled in order to view this file properly.)
-
Demand Response Review 
The Demand Response Review is a survey of the Demand Response (DR) programs and initiatives in each of the six Commission-approved RTOs/ISOs: California ISO; Midwest ISO; ISO New England; New York ISO; PJM; and Southwest Power Pool. The entry for each RTO/ISO is divided into three sections. The first section provides a synopsis of the ISO's existing DR programs, if any. The second covers ongoing DR initiatives and future programs. Finally, the third section outlines issues in connection with DR in the region and typically includes a discussion of potential barriers to DR participation and recommendations to FERC and/or state regulators, among other issues.
-
Responding to EPAct 2005: Looking at Smart Meters for Electricity, Time-Based Rate Structures, and Net Metering
Kenneth Gordon, Ph.D, May 2006. PURPA, as amended by EPAct 2005, directs state regulators to take a new look at time-based rates, interruptible rates, standby or backup rates, and net metering. This report presents the economic principles and policy issues that a Commission needs to consider when evaluating rate options, and provides guidance to regulators on whether to adopt the proposed standards.
-
Retail Electricity Pricing and Rate Design in Evolving Markets
Prepared by Christensen Associates Energy Consulting, LLC, July 2007. Reviews the critical role that efficient rate design needs to play in today's electricity markets, and suggests practical strategies for overcoming historical barriers to implementing such rates. Elaborates the properties and forms of efficient electricity pricing, contrasting efficient rates with existing, traditional rates. Examines current market developments that appear to offer new opportunities for more efficient rates. Considers strategies for overcoming traditional barriers (e.g., treatments to address the under-recovery of fixed costs, adjustments to standard flat rates to cover revenues lost due to adverse selection, financial incentives for utilities to offer voluntary time-based rates, simple rate options with appropriate risk premiums for guaranteed prices, greater refinement of rate classes).
Join the Discussion
To join EEI's AMI/Smart Grid list server to discuss all aspects of these issues with more than 300 participants from utilities, consumer groups, regulators, consultants, vendor, government labs, etc., send an e-mail with your name, organization, and e-mail address to Michael Oldak and ask to be put on the AMI/Smart Grid list server.