Joe obviously I can not see inside the house so I will just take a guess from personal experience.
The second meter was installed for off peak metering of an electric water heater.
Even if the occupants have stopped opting for off peak metering the meter socket and meter remain to feed the water heater.
From the 'added' meter it would run inside to a separate service disconnect a fused switch or 2 pole breaker enclosure.
From there off to the water heater.
The installation if done correctly is perfectly code compliant.
The idea is you pay a reduced kWh price for the water heater but a time clock shuts the power down at peak usage times.
Heres what I do not know.
I am not sure if a special meter incorporating a time clock is used or if the time clock is located inside.
The only time I have run into this the occupants or power company had discontinued the off peak option. so each month the meter reader reader reads both meters and you pay the total of both for your monthly bill all at the same rate.
Maybe you could ask your friend the meter guy about this.
As far as the 110.14 violation you certainly could be correct but it may not be covered by the NEC.
I believe many times these where done by POCO subcontractors without permits and with the blessing of the AHJ.
90.2(B) Not Covered. This Code does not cover the following:
Installations under the exclusive control of an electric utility where such installations
a.Consist of service drops or service laterals, and associated metering, or
[This message has been edited by iwire (edited 02-14-2005).]