I think that the signals that you are seeing are noise/mains hum that you are picking up on the wiring between the meter and the Arduino.
Try twisting your GND and signal wires together to reduce noise pickup.
That instruction sheet for the meter doesn't give a lot of information about the pulse output (other than it is 1000 pulses/kWh), however at the bottom of the introduction section, it does say that it is passive.
I think that means that there is no voltage coming out of the meter, but it is just being switched to the common.
If this is the case then you have to connect a pullup resistor to the +5V supply. The easiest way to do this is to use the internal pullup resistor on the input you are using.
You can activate this by adding:
pinMode(7,INPUT_PULLUP);
to your setup()