Smart Metering Improves Efficiency In Smart Cities

By Rick Rys


Highly networked, “smart cities” can use a variety of smart metering approaches for their various utilities to improve efficiency and service levels, reduce costs, and enhance customer satisfaction. Smart metering improves efficiency in a smart city, which is an urban development vision to integrate information and communication technology (ICT) and Internet of Things (IoT) technology in a secure fashion to manage a city's assets. In addition to cities, the concept smart meteringapplies to small towns, business entities, buildings, or anywhere an entity or group might improve the efficiency of services by better communications and coordination.  In all cases, smart metering plays a critical role.

The recent hurricanes Harvey in Texas and Irma in Florida caused extensive damage to the infrastructure of both states. The high winds damaged electric power and cell towers and excessive rain and storm surge closed many roads and contaminated drinking water.  Hurricane Maria in Puerto Rico was even more destructive.

In 2013, Florida Power and Light installed a highly advanced smart energy grid at a cost of almost $3 billion. This new grid was credited with fast power recovery following hurricanes Matthew and Hermine in 2016 and helped the state recover from the more extensive Irma damages. A map on the FPL web site provided live updates that showed progress on the restoration of electrical service.  FPL can reach out to each smart meter to more accurately identify where work needs to be performed and assess the overall state of power across its service area.

The communication infrastructure is becoming ever more dependent on cell towers, a trend that is only likely to increase as we move to 5G cellular technology.  This represents a new point of vulnerability. Irma knocked out more than 80 percent of the cell towers in some hard-hit counties and repairs can take a long time.

The Case for Smart Metering

Five key utilities make our cities function in the modern world:

  • Electricity
  • Water and sewerage
  • Natural gas
  • Communications (phone, internet, radio, TV)
  • Transport (roads, rail, and airports), including for supply chain and waste management

smart meteringIndividuals, households, and businesses need these important utilities to function. Following a natural disaster, all efforts are made to get this infrastructure back in service as soon as possible. The amount of money spent is enormous.  Smart metering systems can help reduce both the cost and effort required to do so.

The metering systems that measure consumption and help determine how much consumers pay for these utilities have become increasingly elaborate and intertwined into databases and software applications. Currently, in most cases, each utility uses different metering mechanisms.

  • Electricity is metered with revenue-grade meters that input voltage, amperage, and power factor.  The meters can support time-of-day pricing adjustments and some can measure either consumed or produced electric power to handle distributed energy resources like photovoltaic (PV) solar or wind.
  • Water is metered with positive displacement-type meters that record the volumetric use of water.
  • Natural gas meters are also volumetric and typically adjusted for measuring cubic feet of gas at 60 DegF (or 15 DegC) with possible adjustments based on the energy content of the fuel.
  • Communications meters are a bit more complex. In many cases, there is no obvious meter on data bandwidth, although many cellular data plans do keep track of and/or limit the bandwidth used over a month or other time period. There is typically a base charge for the connection and possible additional charges based on usage or data rate. Although they no longer charge for long distance phone calls within the country, most US communication companies still charge for international calls.
  • Transport systems like roads, ride services, trucking, subways, buses, and air travel can include tolls, fuel charges, driver/pilot, service or shipping charges, and equipment use or rental. Transport metering takes on many forms.

Smart Metering Can Benefit All

With virtually all people and businesses increasingly dependent on reliable, high-quality electric, water/sewerage, phone, and broadband services, there are many new opportunities for utilities to improve service, billing, usage, and utility efficiency.  However, one of the lessons learned for smart metering is that the meters should benefit the consumer smart meteringas well as the utility or other service provider. Smart meters will make it easy for utilities to see the consumption pattern at the consumer connection, but consumers can also benefit from this data. Simply looking at the trend of power usage over a summer or winter day and observing changes in power consumption over a year can provide great insights to help the consumer improve efficiency and reduce cost.

The days of human meter readers traveling around with clipboards are virtually gone.  Even human toll collectors are fast disappearing as fully electronic systems using in-vehicle transponders and networked toll sensors proliferate.  The trend is toward connected meters because such devices are faster, more accurate, and provide more useful information to more people than conventional methods.  However, challenges remain.

While there are valid reasons why utilities and municipalities may need certain consumer information, there are also valid concerns about data confidentiality. Also, even though much of the metering and communications capability exists, it takes technical, business, and government leadership to make it happen.  Additional hurdles include determining who pays for the more expensive smart meters, what capabilities the smart meters should have, and the right time for a municipality to move to the technology. 

Potential Smart Meter-related Improvements

Let’s visit each of the five utilities mentioned to see how a smart city could employ smart meters to implement improvements.

Electrical Utilities

While some countries, states, or cities have mandated smart meters, much of the US still uses simple “dumb” meters, smart meteringand some still require a human meter reader to physically go to each house once a month.  Utilities spend big money on both generating capacity and transmission lines to handle the peak loads.  Some utilities bill their customers a flat rate for power, yet the cost of generating that power could be significantly reduced if consumers could shift load to reduce the peak transmission load.

For consumers to participate, they need an incentive like time-of-day metering, plus some infrastructure to allow them to act on price signals.  Specifically, the consumer needs an easy way to connect the price signal from a smart meter to a large power consuming-device that can shift the load with minimal consequence.

If a consumer has solar power, it should be easy to match power-consuming devices with the peak solar production to smooth out the load. Utilities may often be slow to implement rate policy and install smart meters; and few manufacturers of water heaters, or heating and air conditioning equipment provide control systems that could integrate in this way.  You can also blame government for not making this a requirement and for the missing technology standards needed for interoperability. The incentive is there; it just takes time for the infrastructure (and government) to catch up.

Water Utilities

Water meters are seldom smart and, most likely, they simply display the accumulated volumetric usage volumes.  Some can be read remotely, possibly by a scanner held by a meter reader driving by the meter location. The nature of water systems does not usually provide benefits for time-of-day load shifting, although there is benefit for consumers to see when they are using water and how much they have used.

Water system managers could use smart meters to better manage the resource.  A network of water meters in a piping system can be used to obtain an accurate water balance. This could help find leaks and manage water resources especially in areas where demand for water exceeds supply and various consumers are competing for the available supply.  Furthermore, smart water meters could go a long way to reducing occurrences of “non-revenue water,” or, to put it more bluntly, water theft.

Gas Utilities

As with water metering, there is an advantage for consumers to see their consumption profile and smart gas meters would enable this.

In some situations, natural gas pipelines do not have the capacity to provide adequate gas in high-load situations like frigid weather conditions in northern climates. (In New England, some power plants are restricted from using natural gas during certain cold spells to help ensure availability of adequate supply for consumers). Accurate metering of a gas distribution network could help manage those networks in these capacity-constrained situations.  As with water utilities, smart meters could help gas utilities identify potentially dangerous gas leaks and always-costly theft.

Cellular and WiFi Networks

While the bandwidth of communication systems is increasing, many cellular companies still charge for data usage. This area tends to be more advanced than others as most of the devices on the network are already smart and all are connected by communications networks.

Today’s consumers can connect to the internet via a cellular or satellite phone hotspot. Typically, the hotspot can provide Wi-Fi connectivity to several devices.  In fact, many cars now have a roving cellular connection.  Many of these devices (and even broadband devices) meter the volume of data downloaded.  Such metering is especially useful for consumers and, in many cases, cellular hotspots are configured to jump down to a low bandwidth (without any penalties) once a download threshold is exceeded.

Transportation Systems

Metering for transportation has become much easier and more advanced. Instead of toll booths and toll collectors, tolls are collected via in-vehicle transponders and networked toll sensors.  Rider services like Uber and Lyft and/or urban bike sharing services employ easy-to-use smartphone apps to manage the ride hailing and/or commercial transactions. Even plane boarding and security control has become much easier with smartphone-enabled boarding passes.


While smart cities offer tremendous opportunities, the complexity can be overwhelming. The metering part of a smart city is a fundamental requirement to move forward as it provides the critical status of the infrastructure needed for a city to function smoothly and efficiently.

smart meteringIn practice, smart cities are a “journey,” limited by the creativity, values, and innovation of the people living there, along with plenty of technical, economic, and political constraints. There is no perfect smart city, but careful planning can make cities more livable.  Part of that planning is the well-thought-out embedding of digital technologies into the daily lives of all the city shareholders.

Although measuring is critical, it is not sufficient.

The key issue is how all stakeholders use these measurements to make better decisions. Consumers and city administrators alike need appropriate access to data from the smart meters and for the appropriate communication paths and software applications. They also need interactive equipment that can connect to and act on the utilities they need.  Examples include water heaters or battery systems that respond automatically to grid pricing.

Smart meters need to have appropriate features and software applications for all stakeholders.  Utilities and town planners must act to implement and use new technologies and phase out obsolete systems in a planned way that is viable economically as well as technically.

Based on ARC research and analysis, we recommend the following actions for various stakeholders:

  • Develop both short- and long-term plans. Cities will not become “smart” without a long-term plan or series of smaller plans that consider the needs, resources, and mindsets of all stakeholders.  The many smart cities that have made impressive progress to date can provide a model for this planning.
  • Develop appropriate policies and learn from others’ mistakes. As electricity suppliers span multiple cities and are regulated by state and federal entities, these are the places where new policies can help.  Smart meters should not benefit only the suppliers, they should give consumers useful information that allows them to improve their own efficiency.  Some countries have made a strong move to smart electric meters, however not all experiences are positive. The US can move to the next generation of smart meter technology and can learn from previous mistakes.
  • Consider all sources of Big Data. In addition to smart meters, the IoT provides access to a wide variety of Big Data and analysis capabilities for smart cities.  In this report, we focus on a small but critical subset of that data, and recommend that – in their respective journeys to smart cities – municipalities should initially focus on the metering of critical city utilities.


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Keywords: Smart Cities, Smart Meters, IoT, Energy Management, Asset Management, Cybersecurity, ARC Advisory Group.

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