This paper presents a smart energy meter for automatic metering and billing system. The integration of a mircocontroller and GSM short message service (SMS) provides the meter reading system with automatic functions that are predefined. The GSM module requires a SIM (Subscriber Identity Module) card just like mobile phones to activate communication with the network. Direct current (DC) components are used to control alternating current (AC) loads. To isolate these components from each other, relays with a network of resistors and diodes are used. Users can recharge and control loads remotely. Utility companies also have remote access to the system such as fault diagnosis and communicating with clients. The proposed energy meter system (EMS) transmits data like consumed energy in kWh and generates a bill over a GSM mobile network. Other advantages include that the system provides domestic power consumption accurately, safely and with a relatively fast update rate.