State regulators plan to explore whether to allow sophisticated electric meters capable of charging businesses less for power when demand is slack while raising the cost on days when air conditioners are running flat-out.

The Public Service Commission study may lead to requiring North Dakota's three stockholder-owned utilities to offer "smart metering" technology to homeowners, commissioners say.

Smart meters could alert customers to their electric use during the day, and to hour-by-hour fluctuations in the price of electricity. Homeowners could respond by delaying the operation of their washing machines, dishwashers and other appliances until the nighttime, when there is typically less demand for power.

At present, North Dakota utilities generally charge their customers average monthly prices for electricity.

Smart metering already is widely used in Europe as part of an effort to reduce energy use in the European Union. In Canada, Ontario's provincial government intends to install smart meters in 800,000 homes and small businesses by year's end, and equip most of the province's 5 million electric customers by 2010.

Smart meter use is much less common in the United States. The Federal Energy Regulatory Commission, in a study published last August, estimated only 6 percent of the nation's electric meters were smart meters.

State utility regulators, prodded by a federal energy law, have been giving the issue a closer look in recent months, analysts say. North Dakota's PSC voted last week to draft rules to regulate the use of smart meters by large commercial and industrial electric customers.

The commission's order also requires North Dakota's stockholder-owned utilities to submit annual reports about "the feasibility of making smart metering available for all customers."

"It is easier for the utility companies to provide these services to a limited number of customers to begin with, rather than to all of their customers," said Susan Wefald, the PSC president.

The PSC's directive affects Montana-Dakota Utilities Co., of Bismarck, and two Minnesota-based utilities that serve North Dakota cities, Xcel Energy Inc., of Minneapolis, and Otter Tail Power Co., of Fergus Falls, Minn. The commission does not regulate rural electric cooperatives.

North Dakota utilities commonly measure a customer's electric use by sending out a worker to look at the meter each month, although some use meters that can be read remotely.

Xcel Energy and Montana-Dakota Utilities Co. have installed remote meters for almost all their customers, spokesmen for the two utilities say.

Smart meters are more sophisticated and more expensive than meters the utilities now use.

They allow the customer and utility to communicate with each other, while the remote meters now in use only transmit information from the customer to the utility. Smart meters can display data about a customer's power use and the cost of electricity at that moment.

Smart meters would allow utilities to charge more for power use during the day, when higher demand can make electricity more expensive, and less during the nighttime, when consumption often drops dramatically. Customers would be alerted to price jumps so they could take steps to avoid them.

"It's helpful to the customer, because they can shift more of their (electric use) to off-peak times," said Dan Sharp, an MDU spokesman. "It's also helpful to the industry because it could lead to more conservation and delay the need for building additional power plants."

The Public Service Commission's decision to draft smart metering rules was prompted by a federal energy law, approved two years ago. It asked state utility regulators to study smart metering's usefulness, along with other issues affecting how electric power is produced and sold.

Sharp; Mark Nisbet, Xcel Energy's top North Dakota manager; and Cris Kling, an Otter Tail spokeswoman, said their utilities already offer pricing plans that allow businesses to cut their power costs during periods of high demand.

Questions that will be raised during the Public Service Commission's study involve who should pay for smart meters, and whether they will save enough money to be worth the expense, Nisbet said.

Sharp said smart meters now cost $250 to $450 each. The new remote meters that MDU is installing throughout its North Dakota service territory cost about $50 each, he said.

Smart meter technology is already getting a tryout in other states.

Baltimore Gas & Electric Co. is beginning an experimental program next spring to install smart meters in the homes of 5,000 customers.

Some of California's largest utilities are pushing smart-metering projects. Southern California Edison wants to provide 5.3 million meters to residential and business customers, which it estimates will cost $1.3 billion and decrease electric demand by 1,000 megawatts. The project is awaiting regulatory approval.

Regulators have endorsed a separate initiative by the Pacific Gas and Electric Co., which serves San Francisco and the Bay Area. The utility expects to finish installing 5.1 million smart electric meters by 2011.

Bob Lieberman, an Illinois commerce commissioner, told the Federal Energy Regulatory Commission in May that consumers are largely unaware of how they may benefit by having more access to electricity price information.

"For 80 years, we have lived and prospered with a dumb network, dumb meters and average prices.," Lieberman said. "Other than the few geeks among us, who would even know enough to want to change?"

Some observers say there are cheaper and less complex ways to reduce electricity demand.

Programs that allow utilities to turn off customers' air conditioners for short periods during times of high demand "attack peak usage directly while saving energy and money at the same time," said Bob Finkelstein, director of The Utility Reform Network, a consumer advocacy group based in San Francisco.

Xcel Energy already has a "cycling" program in North Dakota, which turns off customers' air conditioners for 15 minutes each hour during times of high demand for electricity, Nisbet said.

More than 9,000 of Xcel Energy's 87,000 North Dakota electric customers take part in the initiative, which offers 15 percent reductions on a customer's electric bill from May through August.