Policy Studies Electricity Policy

Leveraging Competitive Markets to Unlock the True Value of AMI

Key Points

Since 2011, utilities have invested an estimated $15 billion in a metering and communications systems known as AMI. To date, these systems have primarily been used to lower utility operating costs. However, they also provide real-time consumption data that could be used to reduce electricity consumption, save consumers money and allow the electric grid to support more renewable energy.
Most residential electricity consumers are billed under an average daily consumption pattern regardless of their actual usage. However, AMI would permit each customer to be billed based on their actual hourly usage and allow competitive energy suppliers to offer products that reward consumers for responding to changes in energy prices. This could save consumers currently on competitive supply an estimated $250 million per year.
Competitive energy providers are working to provide consumers innovative, lower-cost electricity services that allow in-home devices to automatically respond to wholesale market prices. To advance these efforts, regulators should allow competitive suppliers to offer a consolidated bill for both energy and utility distribution charges.
Press release: Smart regulation and new innovations through AMI could save consumers nearly $250 million a year in electricity costs

Image credit:  fuyu liu

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