Wellington, Oct 29 NZPA - The roll-out of smart electricity meters to nearly 1.3 million households by 2012 will only provide a full range of benefits if it is done properly, says the head of a Waikato electricity lines company.

"The country is about to spend up to a billion dollars... to get better billing data," said Julian Elder, chief executive of the Hamilton-based WEL Networks Ltd.

He told Parliament's commerce select committee today that it would be cheaper for electricity retailers to simply read their existing meters more often.

Dr Elder warned parliamentarians that the current focus by retail companies on using the meters to improve their billing systems ignored a lot of the technology's potential.

"If we do not take a coordinated approach to smart meters, then we may put security of supply at risk, and destroy value across the who electricity supply chain, rather than enhance it.

"At a minimum, we will have lost the opportunities that other countries are adopting."

The current smart meter roll-outs by retail companies were failing to include access to the system on a "real time" or near real time basis, he said.

Properly done, smart meters not only had the potential to curb the growth of demand for electricity, but significantly boost the quality of supply through the ability to monitor voltage and power outages at customer connection points and distribution transformers.

He backed the Parliamentary Commissioner for the Environment's warning that many of the so-called "smart meters" are actually "dumb" and recommendation regulatory action to help the industry to realise the full benefits.

Dr Elder said in-home displays of electricity consumption, in real time could provide a cheap way to change consumer behaviour and spread loadings on the networks.

But the automated meter-reading now being rolled out did not adequately take into account the other benefits on offer.

Some retailers were looking at using cellphone links to extract data from their "smart" meters, which ignored the potential for effective load control.

Customers would respond better if it was possible to automate control of appliances, in a similar way to the "ripple control" which had in the past allowed for switching of water heaters.

"Smart meters control load more precisely, but only with an in-home communications network," he said.

Dr Elder said smart meters could also enable other new technologies, such as connections to solar cells on roofs, and ways of charging electric cars off-peak.

"It is the uncoordinated approach of most of the current roll-outs that will lead to missed opportunity to cost-effectively deliver to the consumer, country and environment benefits from smart meters and smart grids," he said.