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DC's utility company, Pepco, has begun installing new "smart meters" in its customers' homes. The question is, will new smart meters help DC-area homeowners track electricity usage better? They are digital upgrades from the analog meters, and Pepco anticipates that, at some point, they will be able to track usage in real time and send the information between DC consumers' homes and Pepco.

Some DC residents have seen significant increases in their energy bills since they have had the new meters installed and have questioned whether the new meters had something to do with the increase. It is difficult to accurately pinpoint an exact cause of the increase; higher energy costs and unusually colder winter weather in DC are certainly significant factors.

An explanation of how Pepco costs are broken down may also help DC-area homeowners understand their bills. Approximately 72 percent of the cost of a DC Pepco bill goes toward covering the cost of electricity. This cost is unregulated and subject to market conditions. The transmission of electricity as well as maintenance of the delivery infrastructure account for about 23 percent of DC customers' monthly bill. This cost is regulated by the DC Public Service Commission. The other five percent of DC homeowners' monthly bills consist of taxes and surcharges.

Once DC homeowners know how their monthly costs are allocated, they can learn how smart meters can benefit them. Besides being able to track how much energy they use, DC-area homeowners will be able to see when their home energy is being used and, eventually, be able to view their usage over time online. Smart meter technology would also eliminate the need for estimated bills.

DC-area homeowners can regulate the 72 percent cost portion of their energy bills by using the new meters. This is because the new technology would use a rate schedule that either charges based on what time of day electricity is being used or charges based on overall demand on the grid. The time of day charges would be based on predetermined rates depending on the time of day energy is being used. Charges based on demand on the grid would go up as more electricity is being used by everyone. DC homeowners could then determine the most expensive times to use electricity and avoid or limit use during those times in order to lower their energy bills.

Rachel Valentino is your professional real estate agent in the Washington, DC area. If you are buying or selling a home in the DC area contact Rachel Valentino and her team of DC area real estate experts.