Association for Public Policy Analysis & Management

Advanced metering infrastructure (AMI), often known as smart meter, provides the first building block in a smart grid by empowering customers and utilities with real time information regarding energy use. It is a key element in the U.S. government’s push for electric grid modernization, receiving 25% of the $4.5 billion federal investment through the American Recovery and Reinvestment Act. The U.S. advanced metering penetration rate increased from 1.7% in 2007 to 28.2% in 2012, with a total number of 43 million smart meters installed nationwide. However, smart meter deployment varies greatly across regions. In 2012, smart meter penetration rates were below 10% in twenty U.S. states, while twelve states and the District of Columbia have installed smart meters for over 40% of their electric customers. In this study, we use panel data of the fifty U.S. states and the District of Columbia between the year 2007 and 2012 to understand progress towards smart meters, and the conditions in which smart meter deployment is more (or less) likely.

Many scholars have investigated the determinants for technology diffusion, and public policy is often considered as an important factor. In the energy and climate change arena, regulations at multiple scales often coexist in order to solve the common pool resources related problems. Previous studies have failed to capture the complexity of these policy schemes that often involve divided authority across multiple types of actors. To address these issues, this study follows the social shaping view of technology and considers the implementation of smart meters as a socio-technical regime transformation process that is patterned by a range of social, economic and political factors. We draw upon governance and policy implementation theory as well as technology diffusion theory to evaluate the impacts of a multi-tiered governance system and socio-economic contexts on states’ performance in advanced metering deployment.

Results show that public policies intervening in smart meter innovation and adoption tend to be a stronger factor that drives the regime transformation than social interest groups or regime selection pressures. In particular, more federal funding and reduced regulatory uncertainty of state public service commission decision-making can promote smart metering deployment. These effects are highly dependent on states’ smart metering policy actions. Neither technological pressures from higher levels of distributed renewable consumption and energy efficiency nor social interest groups (high income, environmental groups, and high-tech companies) affect smart meter penetration rates. This paper provides an empirical analysis of how multiple-level governance works in a clean technology diffusion process, and demonstrates the importance of understanding the complex interdependencies between divided authorities in electricity system governance, and how their individual actions interact to create policy outcomes. The findings also highlight the importance of coordinating and aligning governance at different levels to induce the transitions to a sustainable energy infrastructure system.