I'm just speaking generally here and most of this is hearsay from conferences I've been to. I don't have any direct experience installing a smart system other than replacing old dial meters with AMRs that would send their signals through the power lines which could then be read in the main office. I don't have a lot of experience with demand side management yet either.
This is what I know from where I live, Canada may be different. From what I have gathered, yes, some smart systems can tell what appliances you are using like Darling_Jimmy pointed out. The reason they want to do this is so that they can turn off some load (like the air conditioner) for 15 minutes during peak hours. It would hardly be noticeable in the temperature of the house and by alternating which services this happens to down the chain, this 15 minute down time can reduce grid strain by a lot (I'd have to check to see the %'s). Most people generally wake up around the same time in the morning and come home around the same time. During this time, they might turn on the lights, turn on Mr. Coffee, open up the fridge for a couple minutes before they decide what they want for breakfast, let the shower warm up, turn on the morning news, check e-mail, and maybe finish drying some laundry. Every one doing this at the same time for one hour adds up to quite a bit of load during that hour.
Basically the power company is faced with either trying a smart system to provide incentives that will hopefully reduce inefficiencies or else rebuilding the whole grid with much bigger wires because it is under too much strain already. Bigger wire means bigger structures. You're going to pay for it one way or another if you're on the grid, whether you decide to use during peak hours or just get the cost of upgrading the grid passed onto you in utility bills or taxes. The electricity quality from a system with a lot of strain is low compared to an entity that can produce its' own power.
Around where I live, grid strain is the worst in the summer with air conditioning load and irrigation load. The system is maxed out in the summer. Voltage regulators are stepping up the voltage as high as they can and substation transformers are humming loudly and are as hot as they can get without blowing up. During cooler months, people don't use electric heat and the system might only be running at 25-50% of what it's ideal load should be (maxed out is not ideal load either.) Power factor was mentioned earlier and something that can also lead to a poor power factor besides inefficient consumer side electronics or appliances are lightly loaded transformers on the utility's side of the system. So transformers that have to be big enough to handle quick bursts of peak load are then contributing to bad power quality when that load quickly disappears. The utility here just puts up more capacitors on the power lines if the power factor gets bad. I don't know how well that works in the big picture.
Another thing to consider is that anyone who wants to install an alternative energy system should want a smart meter. Batteries are expensive and the most cost effective way to store power is by hooking up to the grid and selling it. That is, if your utility allows it. Consider this. If prices follow demand and rise during peak hours, many small producers that have solar panels on their roof could sell during peak hours and help increase supply, thus hopefully reducing price during peak hours. If it's done right, people could choose who to buy power from, increasing the choice on the market. Think of it as a p2p system. Of course, no one seems to like lobbyists, and guess who has the most lobbyists in my state's legislature? Yep, electric power utilities. We've finally at least been able to recently get net metering in my state with excess power over the net metering limit still being sold as an avoided cost back to the utility.
I can understand the concern here. I don't want utilities to control what I do either, but the main thing they are trying to do is provide incentives to increase efficiency. My ideal situation would be off-grid with a battery bank. The best way to do this though is to reach for the low-hanging fruit first. You really don't need that much electricity. Designing houses to take advantage of the environment will reduce load requirements by A LOT. Planting wind breaks helps quite a bit too (I suppose people in urban areas probably can't do this.) Refrigeration, freezers, and lighting are the main things you need. Most other things are conveniences. Installing solar panels, inverters, and batteries without conserving energy any other way is reaching straight for the high-hanging fruit.
Edit: One bad thing in my experience about electronic meters is that they don't hold up to lightning strikes very well. Power lines get struck by lightning a lot more than one might think. They're not cheap meters either, but some companies that make meters offer a buyback program for bad meters.
Post edited February 26, 2012 by KyleKatarn