Abstract: In our India, there is lot of use of electricity in many different sectors and areas. This paper is based on prepaid system not postpaid as like existing system. First consumer pays for electricity and then use power for domestic and commercial purpose. Today’s Energy Meter system is a complex and something headache process due to calculating and distributing bills. In Existing System, Meter readers have to go every home to home and take reading and paying bills is a post-paid system. To minimize complexity in calculating and distributing bills and misuse of electricity are the main purpose of this project .It is indirectly affect to avoid illegal activities like power theft.In our proposed system, there is use of GSM technology.With the help of GSM technology, consumer get warning alarm and messages on mobile about minimum amount and for next recharge. LCD shows total balance, remaining balance and used power.