The way the power meters measure the amount of electricity entering your home is through the use of eddy currents, these are magnetic fields produced within non magnetic materials through the flow of electrons, which opose the magnetic field which induced them.
An interesting experiment to demonstrate these is to take a long piece of aluminium pipe and drop a small magnet down the middle of it, the magnet will fall very slowly, not because it is attracted to the aluminium, but due to it creating an oposing magnetic field as current flows around the ring of the tube.
In your power meter is a very thin disc or ring of aluminium (non magnetic), which experiences a magnetic field due to the electricty entering the house (the strength of the field is determined by the amount of current flowing). This magnetic field causes the electrons within the aluminium to move, in turn generating their own magnetic field.
The two magnetic fields opose one another (if they supported each other we would have a free source of energy) and so the aluminium ring is rotated as electricity flows into the house. The power company then simply measures the number of rotations of this wheel to calculate your bill.
To cheat the power company - 100% illegal - you simply need to stop this ring from moving, two ways this would be possible are through opening up the(usually perspex) box and physically holding the ring still. Although any tampering with the box will land you a hefty fine. The second way is to use external alternating magnetic fields to directly effect the speed at which the aluminium ring spins - quite difficult to do in practice and again liable to land you with a hefty fine when caught out.
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