This paper presents the design of a smart meter (SM) with demand response (DR) capabilities. The SM design is tested in a simulation that implements an advanced measurement infrastructure (AMI), which allows a bidirectional communication between the household smart meters and the distribution management system (DMS). The DMS deploys an energy management system (EMS) that runs a simple demand response program (DRP) based on time of use (TOU), consisting in peak and off-peak rates. Results from the simulation and the data collected from the SM show significant improvements in energy consumption during peak hours thanks to the load curtailment strategies.Paradise Island