Race to the Smart Grid

Tomorrow's electric power system will rely on the "smart grid"— infrastructure that is monitored and managed by means of continual, two-way communication between users and utilities.

Automated meter reading is probably the best-known application of the smart grid, but that's only the beginning. With the right infrastructure in place, electric utilities can communicate not only with meters but also with end-user appliances, such as hot-water heaters and their own generating and distribution equipment. In many rural areas, telcos will play an important role in making the smart grid a reality. Utilities and regulators are counting on the smart grid to enable energy conservation, shift demand from peak to nonpeak periods, integrate distributed energy sources (small-scale solar, wind and hydro generators) and energy storage facilities, accommodate the proliferation of electric cars, reduce waste and theft of power, and raise system uptime and reliability, among other goals. State regulators are still wrestling with the question of how to pay for smart-grid investments. For example, in June 2010, the Maryland Public Service Commission shocked the industry by denying Baltimore Gas & Electric's proposal to shift the cost of smart meters to customers. But in general, regulators support the initiative.