DDS238 AC Power Meter: how to calculate current power consumption using pulses
Using method 1, you have a fundamental limitation that if you make your sample interval too short, you will get poor accuracy.

2000 pulses/kWh means a 1kW load will cause 0.55 pulses per second (or 1.8 seconds per pulse).  A 100W load will only give pulses every 18 seconds.  So if you are counting pulses in 5 second intervals, you will get apparent fluctuations >200W in your readings, just because of how those pulses fit into the time intervals.

Method 2 will give you the (mean) power between pulses.  But you have to design the system to handle arbitrarily long intervals.  You don't actually have any new data to display until you get the next pulse.