Energy and Resources Minister Gerry Brownlee has approved electricity retailers pushing ahead with the widespread introduction of "dumb" smart meters which a parliamentary watchdog has warned will primarily benefit retailers rather than help householders cut their energy consumption.

Mr Brownlee said he is going with the Electricity Commission's decision not to recommend extensive regulation of smart meters, "because the benefits of regulation are not considered to outweigh the costs at this time".

The commission had recommended regulating some technical standards on information exchange protocols and data security, through electricity industry rules, he noted.

Parliament's Commissioner for the Environment, Jan Wright, last year urged MPs to probe the plans by electricity retailers and lines companies to install "dumb" smart meters -- without the capability to eventually link with individual "smart" appliances, and to immediately give householders a real-time display of their power consumption.

Dr Wright said most of the 1.3 million meters being deployed were potentially capable of monitoring a household's electricity consumption, controlling appliances, and feeding information not only to the retailer but to the householder.

But because companies were avoiding spending just a few dollars to put an appropriate computer chip in them, the meters could later cost householders hundreds of dollars each to retrofit, she said.

And in the meantime, consumers were missing out on a real-time display of their electricity consumption and cost which overseas experience had shown could trigger energy savings of 5 percent in household consumption, worth $125m, and up to 10 percent reduction in peak demand, saving another $100m.

But Mr Brownlee said he was persuaded by the commission's reasons for rejecting the need for extensive regulation of smart meters, including claims that reasons for regulating smart meters overseas do not apply to New Zealand, the current roll-out was happening in an acceptable timeframe, smart meter technology was not fully developed, and regulating the roll-out might create additional costs for consumers.

Though Dr Wright called for smart meters which had the ability to exchange information with "smart" appliances, Mr Brownlee said the technology was not yet fully developed and might not be available for another 10 years.

"Cconsumers would have to pay for a technology they would not benefit from for some years," said Mr Brownlee.

But Dr Wright told parliamentarians that it was possible to buy a smart plug -- an adapter into which whiteware such as fridges and washing machines could plugged -- that would provide an intermediate step.

Retailers have plans in place under which smart meters will be installed at approximately 80 per cent of New Zealand's almost 2 million meter installations by the end of 2013.

Molly Melhuish, co-convener of the Domestic Energy Users Network (DEUN), has said electricity retailers "tearing ahead" with installing inadequate smart meters should be told to stop.

"These meters are designed to maximise benefits to retailers while keeping domestic consumers captive to the oligopoly of generator-retailers, who have 97 percent of the retail market," she said.

But Richard Deluca, general manager of Mighty River Power's metering division, Metrix, which has deployed about 70,000 smart meters, said retailers' spending on smart meters would mean they needed to retain access to the customer at each site for as long as a decade.