A method of measuring a customer's energy consumption based on when the energy is used. Real-time metering can measure energy use within time periods as brief as a few minutes. Standard metering of the type used for most residential electrical service measures energy use over days, weeks or months. Consumption at particular times of the day is then compared to the cost or market value of the electricity supplied at that time. This allows a utility to charge a customer based on what the energy costs the utility rather than on an average cost for energy over the entire billing period.

Time-of-use metering differs from real-time metering in that it measures average usage of electricity at certain times of the day over the length of the billing or meter-reading period. Real-time metering treats every time period of every day as a separate billing period.

Real-time metering requires the installation of a special real-time meter that reads energy consumption every few minutes and sends this information back to the utility or its billing service. A monthly reading of the meter isn't sufficient to make this scheme work, so a real-time meter must be able to periodically send data to a central database. This requires the addition of transmitters or dedicated communication lines to a customer's service entrance equipment. The meter, communications system and billing software required for real-time billing all cost money to the utility, and these costs take time to recover. Still, this system promises to provide substantial benefits to both utilities and consumers, and should promote more responsible use of electricity by all types of consumers.

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