[BETA] Fortnightly

The envisioned smart grid includes the digital automation of the power supply system to improve the security, quality, reliability, efficiency, and safety of electric power, as well as to make the system more environmentally friendly. Advanced ( i.e., smart) meters and the associated smart metering systems are an integral part of the smart grid. According to the Edison Foundation, 38 states are pursuing deployment of smart meters and almost 60 million smart meters are expected to be installed in the next 10 years—approximately 47 percent of U.S. households. The worldwide installed base of smart meters is expected to reach 302.5 million by 2015. ¹

The shift to smart meters and smart metering systems in Texas has been widely supported by both electric utilities and the legislative and regulatory bodies in the state of Texas. Much of that support derives from the significant perceived benefits to the utilities and their customers that are expected from the deployment of smart meters and metering systems, and the overall development of the smart grid.

The three largest transmission and distribution service providers (TDSPs) in Texas, under the regulatory authority of the Public Utility Commission of Texas (PUCT), began installing smart meters in late 2008. Oncor Electric Delivery was the first utility in Texas to begin mass deployment of smart meters to its approximately 3.4 million residential and non-residential retail electric customers. Oncor was followed by CenterPoint Energy, which began deploying advanced meters to its 2.4 million customers in early 2009. AEP Central Texas and AEP North Texas—collectively AEP Texas—began initial deployment of advanced meters to 1.1 million customers in November 2009. As of September 2010, these TDSPs have installed more than 2.1 million smart meters and expect to have 6.5 million smart meters installed within the next three years.

Dramatic change in the utility industry is occurring with the advent of smart meters and the development of the smart grid. Utilities around the globe see far-reaching potential through the deployment of smart meters and smart metering systems by enabling active participation by consumers, the creation of new products, services and markets, and the realization of new operational efficiencies and more. ² However, harnessing this potential and realizing the promise and perceived benefits of smart meters and the broader smart grid must first overcome certain challenges and key risks. To date, many members of the public haven’t embraced smart metering deployments and some have sought to halt the deployment of smart meters, including recent efforts to place a moratorium on smart meter deployments in California and Texas (see