Electricity prices in Invercargill and Southland could vary over the course of a day if PowerNet decides to roll out "smart meters" across its network.
Chief executive Jason Franklin said a decision on smart meters was one of the company's goals for 2013.
They would replace conventional meters in homes on PowerNet-managed Electricity Invercargill and The Power Company networks from 2014-15 onwards.
Smart meters work by measuring power use over half-hour periods, sending this data electronically to electricity suppliers.
This allows companies to vary prices according to demand, potentially reducing the amount of power consumption spikes as customers move away from peak pricing times.
Genesis Energy has carried out three trials of variable pricing using smart meters, including a year-long pilot in Waitemata where 200 customers have been offered peak, off-peak and shoulder-rate tariffs for power.
In one of the trials, in which consumers were also given energy-saving equipment such as energy-efficient fridges, the average saving on power bills was 19 per cent.
Parliamentary Commissioner for the Environment Jan Wright has expressed enthusiasm for the plan.
"If people are able to reduce power consumption at peak times, that reduces the need to build new power plants," she said.
Mr Franklin said staff were investigating how smart meters could be brought into PowerNet.
The company is part of SmartCo, a group of provincial networks which want to introduce smart metering.
"We would like there to be a decision this year," he said.
Meters would send data to a central point over a radio network.
Mr Franklin said the grid's existing communications network could be changed to incorporate new meters.
Meter readings would be processed by a data-management company, which could be based overseas.
"It doesn't have to be in New Zealand . . . this is very sophisticated technology."
Smart meters had already been introduced in the North Island, and PowerNet was watching that closely, Mr Franklin said.
Genesis Energy has installed 300,000 smart meters in customers' homes and the WEL network in Waikato has introduced smart metering on its network and plans to complete the project by 2015.
It was important to keep customers informed about the changes, Mr Franklin said.
"Your logistics have to be extremely good. From what we've seen [in the North Island] it can be done well."
Other goals for 2013 included the upgrade of the main power line from Athol to Winton to a 66-kilovolt supply, which would position the network for growth in demand for irrigation and dairying in the future, Mr Franklin said.
Several substations were also due for upgrades to cope with demand.
A new substation could be built at Awarua to service the area earmarked for industrial development by the Invercargill City Council.
The existing substation supplies South Pacific Meats and the Open Country Dairy Factory.
"If there's new industry down there . . . power supply won't be a restriction [to development]," Mr Franklin said.
- The Southland Times
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