Written by MuMeTe FSR on . Posted in Uncategorized

Metering consists in the measure of electricity, gas or water usage through the deployment of specific technological devices called meters; the measurement in these cases is called electricity metering, gas metering and water metering, respectively.

Some aspects

Electricity Metering

The main aim of electricity metering is the acquisition of the measure of electric energy for commercial or billing purposes. Meters are typically calibrated in billing units, typically the kilowatt hour, i.e., the amount of energy used by a load of one kilowatt over a period of one hour. Electricity meters operate by measuring the instantaneous voltage and current and by getting the product of these two, corresponding to the instantaneous electrical energy, measured in watts. The measure of electricity is then integrated against time in order to provide a measure in kilowatt hours.

Traditional electricity meters measure cumulative energy use and are periodically read. Some meters have to be read manually: the reading in this case can be performed either by a representative of the company supplying electricity or by the customer himself, which will have to communicate the reading results to the concerned company.

Alternatively, Remote Meter Reading (RMR) and Automatic Meter Reading (AMR) allow for meters to be checked without the need to send a meter reader out. Apart from the direct costs savings deriving from the fact that there is no need for a meter reader, these reading systems offer further advantages in terms of minimisation of mistakes, more frequent and accurate measurements and remote provisioning.

Time of Use Metering

In order to encourage customers to shift their loads away from the peak demand times, some electricity companies offer Time of Use (ToU) rates. Tariff differentiation between different times of the day provides an incentive to shift the energy consumption towards those times of the day when electricity is cheaper and increase energy savings.

Time of Use meters are featured by a technology which allows to calculate the energy consumption of dwellings at different times of the day, in cases where a multiple-tariff scheme is applied by the electricity supplier. Domestic multiple-tariff systems usually allow two or more tariffs in one day, including “on-peak” (high price for electricity, generally during the day), and “off-peak” (lowest price for electricity, generally at night or at weekends).

Prepayment Meters

In most cases, consumers are billed according to the amount of energy they consumed in a previous period. An alternative mechanism is represented by prepayment meters, which require the customer to pay in advance for the electricity that will be used. When the electricity credit runs out, the electricity supply self-disconnects. Prepayment meters offer the company supplying electricity or gas the advantage to reduce the risk that the bill will not get paid by the customer. Prepayment meters present a number of different technologies. In some cases, for instance, customers are required to purchase an amount of credit on a card. The card is inserted into the meter so that the credit is transferred.

Smart Metering

Smart meters read electricity use with much greater granularity than traditional meters, which measure cumulative energy use, at most differentiating between day and night in case of time of use meters.

The international experience with prepayment meters might have favoured the transition from traditional metering to smart metering: prepayment metering showed that the deployment of a different metering technology could affect consumers’ behaviour. Thus, metering exhibited a potential in terms of consumers’ behaviour contribution to the achievement of energy policy objectives such as energy savings and efficiency.

Smart meters may exhibit a number of relevant technical capabilities, such as:

  • Real-time or near real-time registration of electricity use and of electricity generated locally, for instance, by photovoltaic cells;
  • Possibility to read the meter both locally and remotely;
  • Remote limitation of the throughput through the meter, which in the extreme case can result in electricity cutting;
  • Interconnection to premise-based networks and devices, such as for distributed generation;
  • Ability to read other, on-premise or nearby commodity meters measuring water or gas.

The basic functions of a smart meter are the measure of the electricity used or generated, the remote switching of the customer and finally, the remote control of the maximum electricity consumption.

The possibility to read the amount of generated energy is related to one of the main features of a smart grid: while traditional grids allow the transfer of energy only in one direction (toward the customer), smart grids allow energy to flow in the other direction too, with the customer being in the position to produce energy.

Smart Meters: Privacy Issues

So far public concern on smart meters has mainly focussed on the privacy issue, related to the greater communication capabilities of smart meters as opposed to traditional meters. Studies show that the amount of information which becomes available thanks to a smart meter may make it possible to identify the appliances in use through the load monitoring and consequently, to get relevant information concerning the lifestyle and private life of the customers.


Glachant, Jean-Michel,Creating Institutional Arrangements that Make Markets Work: The Case of Retail Markets in the Electricity Sector”, In R. W. Künneke, J. Groenewegen and J.-F. Auger (Eds.), The Governance of Network Industries: Institutions, Technology and Policy Reregulated Infrastructures, Cheltenham, Edward Elgar, 2009, pp. 46-60

Find other FSR publications on the topic


Anderson R. and Fuloria S. 2010. On the Security Economics of Electricity Metering

Brutscher P.-B. 2011. Payment Matters? An Exploratory Study into Pre-Payment Electricity Metering. Cambridge Working Paper in Economics 1124

Florence School of Regulation Workshop on “Smart Metering” (Florence, February 2009), See presentations

Olmos, L., Ruester S., LIONG, S. J, Glachant J.-M. 2010. Energy Efficiency Actions Related to the Rollout of Smart Meters for Smart Consumers, EUI RSCAS Working Papers Series, 2010/02