Many electric power suppliers are suffering from huge losses due to higher cost related to generation of resources, especially fossil fuel. Many ideas have been proposed to renovate the price distortion in the electricity market. Among these ideas, smart metering system has been considered as an effective method for improving the pattern in power consumption of energy consumers thus reducing the financial burden of electricity companies. In this paper, we reviewed smart metering system of other countries and explained our development of smart metering system specialized for Korean residential environments. With this developed system, we have conducted a pilot demonstration for 2 months in the winter season Dec. 2008 to Feb. 2009. 77 various sized households in two different cities volunteered to participate in this demonstration. During this demonstration, our study focused on verifying the effectiveness of IHD (In-Home Display) which is an essential component of Korean smart metering system. The result of this demonstration is also included in this paper.