Advanced Metering Infrastructure (AMI) Utility Meters and Time of Use (TOU) Rates: Utility Acronyms Galore
A handful of Colorado utilities including investor-owned Xcel Energy and Black Hills Energy as well as three other municipal utilities (Fort Collins Utilities, Longmont Power & Communications, and City of Loveland Utilities) have started and/or completed Advanced Metering Infrastructure (AMI), or “smart”, meter rollouts across their service territories. These digital meters are connected to utility networks through radio and/or cellular connections/signals. They collect usage data on intervals typically ranging from 15 minutes to hourly. Meanwhile, data transmittal typically occurs on 15 minute to daily intervals, although some real-time meters can transmit data nearly up-to-the moment, depending on the use case (source: Eaton, 2025). With this information, electric utilities can charge customers different prices at different times, aligning with regional market prices and/or varying costs of production for vertically integrated utilities (like Xcel Energy, Black Hills Energy, and several municipal utilities). In Xcel Energy’s territory, customers who have had AMI meters installed and have not opted-out of Time of Use (TOU) rates, their bills will have a breakdown of per kWh (unit of electric energy) charges during two separate time-periods:
Off-peak: All holidays and weekends. During non-holiday weekdays, 9PM - 5PM (the next afternoon).
On-peak: Excluding holidays and weekends, 5PM – 9PM.
The chosen periods are meant to reflect variations in the cost of electricity throughout the day. The adoption of TOU pricing may also help dampen or help prevent the effects of what is called the “duck-curve”, as notably observed on California’s wholesale electricity grid, CAISO, on a routine basis. Electric grids with high solar energy penetration may exhibit excess solar power generation, creating a mismatch between electricity demand and supply (source: U.S. DOE, 2017).
AMI is a powerful piece of technology but with every major rollout there are bound to be challenges. Overseas, Great Britain’s Department for Energy Security and Net Zero (DESNZ) released data estimating that as of June 2023, 4.27 million (over 13%) AMI or “smart meters” were not functioning correctly after beginning a nationwide rollout of the technology in 2016. This prompted regulatory action by the Department against the Office of Gas and Electricity Markets (Ofgem), Great Britain’s energy regulator. While less substantial, New York’s Niagara Mohawk Power Corporation (d/b/a “National Grid”) reported that 0.5% of new AMI meters were deemed to be faulty. In Colorado, Loveland Water and Power returned 3,118 AMI meters set for installation to the manufacturer, Eaton Corporation. Thankfully, they caught the defects prior to the changeout. However, one can imagine the issues they may have caused had their QA/QC process not caught the defect(s). Nevertheless, it’s clear that whether it be poor manufacturing, installation error, commissioning mistakes, or improper data connections — some AMI meter installations do not go as planned and can lead to increased costs for ratepayers. The bottom-line is that while the new smart technology is welcomed for potentially more accurate billing and its ability to assist in decarbonization efforts, utility customers everywhere need to be aware of potential downsides to the technology rollout, particularly if their bills seem to have significantly increased since its installation.
If you feel that your business, commercial property, or multi-family residence may have experienced incorrect billing due to the installation of an AMI meter, feel free to contact Peak Utility Advisors (PUA) at the information below. Aside from requesting that your utility company come test their meter (which you can always do on your own in the state of CO for a nominal fee), we work closely with sub-metering providers and can help resolve costly utility billing errors. In addition, if you’re considering opting out of Time of Use rates, PUA can model costs side by side to help you make an informed decision.
Contact Information
Matt Jochym
Advisor/Founder
(M): 970-235-1098
(E): matt.jochym@peakutilityadvisors.com
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