Reliance on the standard cumulative kilowatt-hour meter substantially compromisesenergy efficiency and demand response programs. Without advanced metering, utilities cannotsupport time-differentiated rates or collect the detailed customer usage information necessary to(1) educate the customer to the economic value of efficiency and demand response options, or(2) distribute load management incentives proportional to customer contribution. Thesedeficiencies prevent the customer feedback mechanisms that would otherwise encourageeconomically sound demand-side investments and behaviors. Thus, the inability to collect orproperly price electricity usage handicaps the success of almost all efficiency and demandresponse options.Historically, implementation of the advanced metering infrastructure (AMI) necessary forthe successful efficiency and demand response programs has been prevented by inadequate costbenefitanalyses. A recent California effort has produced an expanded cost-effectivenessmethodology for AMI that introduces previously excluded benefits. In addition to utility-centriccosts and benefits, the new model includes qualitative and quantitative costs and benefits thataccrue to both customers and society.
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