The monitoring by Indiana Michigan Power will be the first using a "smart grid" technology that could eventually save customers money, utility spokesman David Mayne said.
The one-year test involves a display unit that shows how much electricity has been bought and used. The utility can then provide information back to the customer that can be used to modify consumption.
Service interruptions also can be detected more quickly.
"There are a lot of utilities that intend to introduce this technology in the years to come," Mayne said.
Indiana Michigan Power will begin the installation in South Bend in October and hopes to complete it by the end of the year. The company also will work with homebuilders to install advanced energy controls in 50 new homes.