The all-digital meters eliminate meter readers and provide customers with real-time data that shows exactly how much electricity they use throughout the day, Oncor said.
Oncor packaged the cost of the meters with a rate hike request that was approved Thursday by the Texas Public Utility Commission.
However, the PUC didn't grant Oncor's full wish. Oncor had requested a $253.5 million yearly revenue increase, which would have added $4.67 a month for the average customer.
The PUC ended up approving a $115 million annual revenue increase, which will increase an individual's bill by about $3 a month.
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Nearly 900,000 "smart meters" were bought before the state issued operating standards -- and officials said the devices were not in compliance.
The first-generation "smart meters" will be reallocated and used for other projects, such as city streetlights, where meters do not require the same customer functionality, said Oncor spokesperson Catharine Cuellar.
Earlier this year, Oncor began charging customers $2.21 per month for meters that meet state requirements -- regardless of whether or not they have received a new meter.