Reporters and regulators often ask me, “How will consumers benefit from smart meters?” Fortunately, the US consumer value proposition for smart meters has been clearly developed by utilities and regulators over the past decade.

Smart meters offer four main types of savings. Three of these primarily benefit consumers…

1. Saving money by shifting demand. Participating in demand response programs (such as dynamic pricing and, down the road, automated controls) will help consumers cut peak demand by 10-20%. This reduces the number of new power plants required over time and would save US consumers an estimated $5-10 billion per year on their utility bills.
2. Saving money by saving energy. Consumers will use the energy information and feedback provided by smart meters to cut energy use. We expect total usage to shrink from 5-10%, which would save US consumers am additional $17-35 billion per year.
3. More green energy. Smart meters are a key part of the smart grid, which will allow utilities to better accommodate intermittent power generation sources such as wind and solar, as well as electric vehicle charging. This will make it easier for environmentally conscious consumers to “live their values,” while also improving public health by curbing air pollution, and reducing our dependence on fossil fuels (an energy source that keeps getting costlier and riskier).
4. Reduced operating costs for utilities. Smart meters will help utilities cut costs on everything from meter reading to remote disconnects to more efficient customer service. In most cases, these savings will cover more than half of the cost to install smart meters — and those savings will get passed back to consumers (offset by smart meter costs).

Overall, smart meters will save US consumers $20-50 billion per year by empowering consumers with smart prices, controls, and information. These tools will allow consumers to reduce peak demand, improve energy efficiency, support renewable energy, and help utilities operate more efficiently.

There is an extensive literature supporting all of these numbers from smart meter projects and plans in California, Texas, Maryland, Washington DC, Ontario (Canada), Victoria (Australia), and the UK.

The analytical work has been done. Now it’s time to educate policymakers, consumers, and our the utility industry about the specific benefits of smart meters.