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Last Updated: Monday, 6 June, 2005, 12:23 GMT 13:23 UK
'Smart' meters to cut power bills
Gas meter
Current meters display the amount of energy used and not the cost
Energy customers will be better able to monitor how much they are spending on gas and electricity under plans being debated by the European Parliament.

A draft directive will require power firms to install 'smart' meters in customers' homes.

These meters would display the amount and, crucially, the cost of the energy being consumed, enabling customers to better manage their usage.

Consumer body Energywatch said the directive could lead to lower bills.

Peak-time savings

This type of metering is good for the environment and can lead to lower bills
Graham Kerr, Energywatch

If given the go ahead, the draft energy end-use efficiency and energy services directive could lead to the replacement of the UK's 30 million energy meters.

It has been estimated that the replacement programme could cost power firms up to 2 billion euros (1.35bn).

However, Energywatch claimed that energy firms would save money as the new meters can be read remotely, dispensing with the need for meter readers and eliminating under billing.

Italian power firms have been installing 'smart' meters in new buildings since 1997.

Energywatch said that as a result of customers being able to monitor how much their energy use was costing them, peak-time demand for power had fallen by 5% in Italy.

"This type of metering is good for the environment and can lead to lower bills," Energywatch spokesman Graham Kerr told BBC News. "As for energy firms, they get to make savings on their administration costs."

See how a smart meter works

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