Smart metering utility network (SUN) is an emerging wireless technology to enable intelligent system control and information transfer in smart grid applications. However, the operation of SUNs on unlicensed bands is very sensitive to both internal and external interferences. This paper aims at internal interference analysis of SUNs in terms of packet error rate (PER) of a victim SUN receiver. We first establish an interference scenario to propose a packet collision model for PER calculation. The proposed packet collision model divides a SUN packet into time slots according to the number of colliding SUN packets in each slot. We then calculate the average colliding length in each time slot based on transmission probability of interfering transmitters to signify the severity of packet collisions, which leads to the derivation of average PER. Finally, the proposed analytical model is validated by simulations as an effort to evaluate the PER performance of a SUN receiver under the interferences.