Automatic Meter Reading (AMR) is based on the Advanced Metering Infrastructure (AMI), which provides smart meter data collection and analysis. One of the keys to managing dwindling energy resources is accurately measuring energy usage. Measurement is one of the first steps toward effective management and refining consumer behavior. AMI includes three major parts: smart meters, a control center, and a communication center. Current practice requires using power embedded computers as data concentrators to collect meter data from households and then send the data back to the control center for further analysis. The analysis can be used for demand management, implementing differential electricity rates, and for determining if new power plants are needed. Currently, electricity loss is higher than 40% in some developing countries; AMR can be expected to reduce this loss to less than 10%.

An AMR system requires some meters that can handle meter reading from home appliances and some power computers that can handle more complicated tasks, such as data acquisition, data computing, and data analysis. By integrating these meters, computers, and software programs, a smart solution can be created to establish an intelligent and distributed architecture for efficient meter reading and management.

This type of advanced meter can be used to collect information from a local meter, and power consumption behavior can be recorded and analyzed for monitoring and billing purposes. By building a smart meter platform, meter communication, meter calibration, and outage detection can be easily achieved.