Smart Grid

Exploring the imperative of revitalizing
Americas electric infrastructure.
the
SMART GRID:
an introduction.
How a smarter grid works as an enabling engine

for our economy, our environment and our future.
prepared for the U.S. Department of Energy by Litos Strategic Communication under contract No. DE-AC26-04NT41817, Subtask 560.01.04
DISCLAIMER
This report was prepared as an account of work sponsored by an agency of the United States Government. Neither the United States Government
nor any agency thereof, nor Litos Strategic Communication, nor any of their employees, make any warranty, express or implied, or assumes any
legal liability or responsibility for the accuracy, completeness, or usefulness of any information apparatus, product, or process disclosed, or
represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade
name, trademark, manufacturer or otherwise does not necessarily constitute or imply its endorsement, recommendation or favoring by the
United States Government or any agency thereof, or Litos Strategic Communication. The views and opinions of authors expressed herein do not
necessarily state or reflect those of the United States Government or any agency thereof.
PRINTED IN THE UNITED STATES OF AMERICA.
PREFACE
IT IS A COLOSSAL TASK. BUT IT IS A TASK

THAT MUST BE DONE.
K_\;\gXikd\ekf]<e\i^p_XjY\\eZ_Xi^\[n`k_fiZ_\jkiXkè^k_\n_fc\jXc\
modernization of our nations electrical grid.
While it is running.
Full-tilt.
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of a wide range of stakeholders.
Equally critical to the success of this effort is the education of all interested members
f]k_\glYc`ZXjkfk_\eXkli\#Z_Xcc\e^\jXe[fggfikle`k`\jjliifle[è^k_\JdXik
Grid and its implementation.
It is to this mission that The Smart Grid: An Introduction is dedicated.
From the Department of Energy

The Smart Grid Introduction is intended primarily to
acquaint non-technical yet interested readers about:
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means for our country

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its implementation.
TOC
KNOWLEDGE BROUGHT
TO POWER
SECTION
FOUND ON
ONE Introduction: We Dont Have Much Time.
Toward an orderly transition to a smarter grid
TWO Edison vs. Graham Bell: The Case for Revitalization.
Presenting the argument in a timely fashion requires a trip back to the future
THREE The Grid as It Stands: Whats at Risk?
The many hazards associated with operating the 20th century grid in the 21st century.
The lights may be on, but consider what were missing
10
FOUR The Smart Grid: What It Is. What It Isnt.

Why its important to know the difference
FIVE Compare and Contrast: A Grid Where Everything is Possible.

For an invigorating vision of our energy future, look forward
16
TOPICS
SIX First Things First: Teasing Out the Complexities.
24
How various constituencies i.e., utilities and regulators are working toward
fundamental realignment to make a smarter grid get here faster
SEVEN How Things Work: Creating the Platform for the Smart Grid.
28
Making it possible for consumers to participate
EIGHT Progress Now!: A Look at Current Smart Grid Efforts and How Theyre Succeeding.
32
From West Virginia to California to Hawaii, a smarter grid is taking shape
NINE Edison Unbound: Whats Your Stake in All This?
36
Benefits for everyone
Resources and Glossary
40
Coming to terms with the Smart Grid...

1
SECTION ONE :
INTRODUCTION
WE DONT HAVE MUCH TIME.

Our nations electric power infrastructure that has served us so well for so long also known as the grid
is rapidly running up against its limitations. Our lights may be on, but systemically, the risks associated with
relying on an often overtaxed grid grow in size, scale and complexity every day. From national challenges like
power system security to those global in nature such as climate change, our near-term agenda is formidable.
Some might even say history-making.
Fortunately, we have a way forward.
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c\X[\ij#Xe[fk_\ib\pjkXb\_fc[\ij#Xifle[k_\`[\Xk_XkXJdXik>i`[`jefkfecp
needed but well within reach. Think of the Smart Grid as the internet brought to
our electric system.
A tale of two timelines

There are in fact two grids to keep in mind as our future rapidly becomes the present.
The first well call it a smarter grid offers valuable technologies that can be deployed within the very near future
or are already deployed today.
The second the Smart Grid of our title represents the longer-term promise of a grid remarkable in its intelligence
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a similar killer app in this space wont substantially accelerate that timetable?
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on our environment.
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A smarter grid applies technologies, tools and techniques available now to bring knowledge to power
knowledge capable of making the grid work far more efficiently...
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technology in the 80s and 90s.
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will learn about some of them here.
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there will also come a time when you wont remember life before the Smart Grid.
Menlo Park Workshop
Pearl Street Station
First Street Lamps
Metering
Compact Fluorescent Light
advancements in electricity
There is a popular comparison that

underscores the pace of change or lack
thereof regarding our nations grid.
SECTION TWO:
EDISON VS.
GRAHAM BELL:
THE CASE FOR
REVITALIZATION.
The story goes like this:

If Alexander Graham Bell were somehow transported
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fe\f]k_\î`[jb\p\XicpXiZ_`k\Zkj#nflc[Y\kfkXccp
familiar with the grid.
advancements in telecommunications
First Telephone
Operator Switching Stations
Rotary Dialing
North American
Numbering System
Rotary Dial with Ringer

and Handset
While this thought experiment speaks volumes about
Given that the growth of the nations global economic leadership
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familiar with the grids basic infrastructure and perhaps even an
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dazzled as Graham Bell with the technology behind the scenes.
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to human involvement and endeavor that it has alternately (and
Everything must work almost perfectly at all times and does.
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megawatts of generating capacity connected to more than
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the industry ever know about it.
POWER SYSTEM FACT

Todays electricity system is 99.97
percent reliable, yet still allows for
power outages and interruptions that cost
Americans at least $150 billion each
year about $500 for every man,
woman and child.
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Engineered and operated by dedicated professionals over
Academy of Engineering set about identifying the single most
[\ZX[\j#k_\î`[i\dXèjflieXk`feXc\e^è\%@kZfekèl\jkf
important engineering achievement of the 20th century. The
offer us among the highest levels of reliability in the world for
Academy compiled an estimable list of twenty accomplishments
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which have affected virtually everyone in the developed world.
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cannot be overstated.
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But we all of us have taken this marvelous machine for

îXek\[]fi]Xikffcfe^%8jXi\jlck#flifm\iYli[\e\[î`[
achievement of the 20th Century.
has begun to fail us more frequently and presents us with

substantial risks.
Long Distance Calling
First Telecom Satellite
Touch-Tone Telephones
Cellular Communications
Phone Over the Internet
Since 1982, growth in peak demand for electricity

driven by population growth, bigger houses, bigger
TVs, more air conditioners and more computers
has exceeded transmission growth by almost
25% every year. Yet spending on research and
development the first step toward innovation
and renewal is among the lowest of all industries.
SECTION THREE:
THE GRID AS IT
STANDS: WHATS
AT RISK?
R&D as a % of Revenue
<m\eXj[\dXe[_XjjbpifZb\k\[#k_\i\_XjY\\e
chronic underinvestment in getting energy where it
Electric
Utilities
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Agriculture
]lik_\ic`d`kè^î`[\Z`\eZpXe[i\c`XY`c`kp%N_`c\
Printing
hundreds of thousands of high-voltage transmission

cè\jZflij\k_ifl^_flkk_\Le`k\[JkXk\j#fecp--/
additional miles of interstate transmission have been
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worsen at a time when outages and power quality
Less than 2%
Stone,
Clay & Glass
Retail
Aircraft &
Missiles
Durable Goods
Healthcare
issues are estimated to cost American business more
Office Mech
than $100 billion on average each year.
Energy &
Managment
Services
0%
In short, the grid is struggling to keep up.
4%
8%
PERCENTAGE of REVENUE
12%
Based on 20TH century design requirements and having matured
RELIABILITY:K_\i\_Xm\Y\\em\dXjj`m\YcXZbflkjfm\i
in an era when expanding the grid was the only option and
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[l\kfk_\jcfni\jgfej\k`d\jf]d\Z_Xe`ZXcjn`kZ_\j#X
modern concerns
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situational awareness on the part of grid operators. This issue
Energy efficiency? A marginal consideration at best when

energy was as the saying went too cheap to meter.
of blackouts has far broader implications than simply waiting

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Environmental impacts? Simply not a primary concern when
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the existing grid was designed.
transactions rendered inoperable. Such are the effects of even

a short regional blackout.
Customer choice? What was that?
did you know

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only way a utility knows theres an outage
is when a customer calls to report it.
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controlled infrastructure created largely before the age of
microprocessors that limits our flexibility and puts us at risk
on several critical fronts:
POWER SYSTEM FACT

41% more outages affected 50,000
or more consumers in the second half of
EFFICIENCY:@]k_\î`[n\i\aljk,dfi\\Z`\ek#k_\\e\i^p
the 1990s than in the first half of the decade.
savings would equate to permanently eliminating the fuel and
The average outage affected 15 percent
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more consumers from 1996 to 2000
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than from 1991 to 1995 (409,854
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versus 355,204).
country would conserve enough energy to light 3 million homes

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SECTION THREE : CONTINUED

THE GRID AS IT STANDS: WHATS AT RISK?
NATIONAL ECONOMY: The numbers are staggering and speak

for themselves:
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resource recovery
million in losses.
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economy rather than paying the
Board of Trade resulted in $20 trillion in trades delayed.
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are dollars that society can put
the company $1 million every minute.
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billion economic loss to the region.
Compounding the problem is an economy relentlessly grown digital. In

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yet these hundreds of billions of dollars are buried in the economy and largely
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term coal contracts are certain to raise their visibility.
Decrease in Transmission Investment (Dollar Amount In Billions)
$6
- 117 million
$5
$4
$3
$2
$1
75
8
80
85
90
Y E ARS
95
00
SECURITY:N_\ek_\YcXZbflkf])''*fZZlii\[k_\cXi^\jkèLJ_`jkfip
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turned their thoughts toward terrorism. And not without cause. The grids
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of various grid components can bring about a domino effect a cascading series
f]]X`cli\jk_XkZflc[Yiè^flieXk`fejYXebè^#Zfddle`ZXk`fej#kiXZ#Xe[
U.S. Share of World Population

Compared to its Production of
Greenhouse Gases
security systems among others to a complete standstill.

ENVIRONMENT/CLIMATE CHANGE:=ifd]ff[jX]\kpkfg\ijfeXc_\Xck_#X
Zfdgifd`j\[\emìfed\ekk_i\Xk\ejljXcc%K_\Le`k\[JkXk\jXZZflekj]fifecp
+f]k_\nfic[jgfglcXk`feXe[gif[lZ\j),f]`kjî\\e_flj\^Xj\j%?Xc]f]
4%
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YlkXdXafiZfeki`Ylkfikf^cfYXcnXidè^%@]n\Xi\kfi\[lZ\fliZXiYfe]ffkgièk
Xe[jkXb\XZcX`dkf^cfYXc\emìfed\ekXcc\X[\ij_`g#Zc\Xe#i\e\nXYc\jfliZ\jf]
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The U.S. accounts for 4% of the

worlds population while contributing
25% of its greenhouse gases.
?fn\m\i#n`k_flkXggifgi`Xk\\eXYcè^k\Z_efcf^`\jcèbè^k_\dkfk_\î`[#
their potential will not be fully realized.
GLOBAL COMPETITIVENESS: Germany is leading the world in the development
and implementation of photo-voltaic solar power. Japan has similarly moved to
the forefront of distribution automation through its use of advanced battery-
25%
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>i`[jX^\e[X#XdXafiZfdgfe\ekf]n_`Z__XjYl`c[è^j]leZk`feè^Xjgfn\i
gcXekj%>\e\iXccp#_fn\m\i#k_\j\Zfleki`\j[fek_Xm\Xc\^XZpjpjk\dfek_\
order of the grid to consider or grapple with.
How will a smarter grid address these risks and others? Read on.
DENMARKs PROGRESS OVER THE PAST TWO DECADES

Small CHP (Combined Heat & Power)
Large CHP (Combined Heat & Power)
Wind
Centralized System of the mid 1980s
More Decentralized System of Today
Prepare for an electric system that is

cleaner and more efficient, reliable,
resilient and responsive
a smarter grid.
SECTION FOUR :
THE SMART GRID:

WHAT IT IS.
WHAT IT ISNT.
part 1: what it is.

The electric industry is poised to make the transformation
]ifdXZ\ekiXc`q\[#gif[lZ\i$Zfekifcc\[e\knfibkffe\k_Xk
is less centralized and more consumer-interactive. The move
to a smarter grid promises to change the industrys entire
Yljè\jjdf[\cXe[`kji\cXk`fej_`gn`k_XccjkXb\_fc[\ij#
èmfcmè^Xe[X\Zkè^lk`c`k`\j#i\^lcXkfij#\e\i^pj\im`Z\
gifm`[\ij#k\Z_efcf^pXe[XlkfdXk`fem\e[fijXe[Xcc
consumers of electric power.
10
A smarter grid makes this transformation possible by bringing
9\ZXlj\k_`jèk\iXZk`fefZZlijcXi^\cpèk_\YXZbîfle[#n`k_
k_\g_`cfjfg_`\j#ZfeZ\gkjXe[k\Z_efcf^`\jk_Xk\eXYc\[k_\
dè`dXc_ldXeèk\im\ek`fe#k_\i\jX[iXdXk`ZjXmè^jfe\e\i^p
èk\ie\kkfk_\lk`c`kpXe[k_\\c\Zki`Zî`[%Dfi\`dgfikXekcp#
that would otherwise be consumed.
it enables the industrys best ideas for grid modernization to

K_`jkpg\f]gifîXd_XjY\\eki`\[èk_\gXjk#Ylkn`k_flkJdXik
achieve their full potential.
>i`[kffcjjlZ_Xj\eXYcè^k\Z_efcf^`\j#èk\ifg\iXY`c`kpYXj\[
Concepts in action.
fejkXe[Xi[j#Xe[cfn$ZfjkZfddle`ZXk`feXe[\c\Zkife`Zj#`k
It may surprise you to know that many of these ideas are already
possessed none of the potential that it does today.
èfg\iXk`fe%P\k`k`jfecpn_\ek_\pXi\\dgfn\i\[Ypd\Xejf]
the two-way digital communication and plug-and-play capabilities
that exemplify a smarter grid that genuine breakthroughs begin
to multiply.
Visualization technology. Consider grid visualization and the

tools associated with it. Already used for real-time load monitoring
Xe[cfX[$îfnk_gcXeeè^Xkk_\lk`c`kpc\m\c#jlZ_kffcj^\e\iXccp
lack the ability to integrate information from a variety of sources
or display different views to different users. The result: Limited
POWER SYSTEM FACT

AVERAGE COST FOR 1 HOUR OF
POWER INTERRUPTION
INDUSTRY
Cellular communications
Telephone ticket sales
Airline reservation system
Semiconductor manufacturer
Credit card operation
Brokerage operation
AMOUNT
$41,000
$72,000
$90,000
$2,000,000
$2,580,000
$6,480,000
Advanced Metering Infrastructure (AMI) is an approach to
situational awareness. This condition will grow even more acute
integrating consumers based upon the development of open
XjZljkfd\i$]fZlj\[\Z`\eZpXe[[\dXe[$i\jgfej\gifîXdj
standards. It provides consumers with the ability to use electricity
èZi\Xj\#i\hlìè^j`ê`ZXekcpdfi\[XkXXjn\ccXjk_\XY`c`kp
dfi\\Z`\ekcpXe[gifm`[\jlk`c`k`\jn`k_k_\XY`c`kpkf[\k\Zk
to understand and act on that data.
gifYc\djfek_\ìjpjk\djXe[fg\iXk\k_\ddfi\\Z`\ekcp%
E\ok$^\e\iXk`fem`jlXc`qXk`fe`jfe`kjnXp%F]gXik`ZlcXiefk\`j
8D@\eXYc\jZfejld\i$]i`\e[cp\Z`\eZpZfeZ\gkjc`b\Gi`Z\jkf
M<I;<#Xgifa\Zkè[\m\cfgd\ek]fi;F<Xkk_\FXbI`[^\EXk`feXc
;\m`Z\jkfnfibc`b\k_`j18jjldè^k_Xk\e\i^p`jgi`Z\[fen_Xk
CXYfiXkfip%M<I;<M`jlXc`qè^<e\i^pI\jfliZ\j;peXd`ZXccpfe
it costs in near real-time a Smart Grid imperative price signals
<Xik_ n`ccgifm`[\n`[\$Xi\Xî`[XnXi\e\jj#èk\îXkèî\Xc$
are relayed to smart home controllers or end-consumer devices
k`d\j\ejfi[XkX#n\Xk_\iè]fidXk`feXe[î`[df[\cè^n`k_
c`b\k_\idfjkXkj#nXj_\i&[ip\ijXe[i\]i`^\iXkfijk_\_fd\j
^\fîXg_`ZXcè]fidXk`fe%Gfk\ek`Xccp#`kn`ccY\XYc\kf\ogcfi\k_\
dXafi\e\i^p$lj\ij%K_\[\m`Z\j#èklie#gifZ\jjk_\è]fidXk`fe
state of the grid at the national level and switch within seconds
based on consumers learned wishes and power accordingly. The
kf\ogcfi\jg\Z`Z[\kX`cjXkk_\jki\\kc\m\c%@kn`ccgifm`[\iXg`[
_flj\fifZ\i\jgfe[jkfk_\fZZlgXekj#iXk_\ik_Xem`Z\$m\ijX%
information about blackouts and power quality as well as insights

into system operation for utilities. With a platform built on Google
<Xik_#`kZXeXcjfkXb\X[mXekX^\f]Zfek\ek^\e\iXk\[Yp>ff^c\
Earths user community.
11
SECTION FOUR : CONTINUED

THE SMART GRID: WHAT IT IS. WHAT IT ISNT.
Just whos running the grid?

=fid\[Xkk_\i\Zfdd\e[Xk`fef]k_\=\[\iXc
Phasor Measurement Units.
<e\i^pI\^lcXkfip:fdd`jj`fe=<I: #Xe
GfglcXicpi\]\ii\[kfXjk_\gfn\ijpjk\dj_\Xck_d\k\i#G_Xjfi
@e[\g\e[\ekJpjk\dFg\iXkfi@JF fiI\^`feXc
D\Xjli\d\ekLe`kjGDL jXdgc\mfckX^\Xe[Zlii\ekdXepk`d\j
KiXejd`jj`feFi^Xe`qXk`feIKF `jXgifk$
Xj\Zfe[XkX^`m\ecfZXk`fe#gifm`[è^XeDI@f]k_\gfn\ijpjk\d
ZfdgXi\[kfk_\O$IXphlXc`kpXmX`cXYc\]ifd\Xic`\iJlg\im`jfip:fekifc
Xe[;XkX8Zhl`j`k`feJ:8;8 k\Z_efcf^p%F\iè^n`[\$Xi\Xj`klXk`feXc
XnXi\e\jj#g_Xjfijnfibkf\Xj\Zfe^\jk`feXe[Yfkkc\e\ZbjXe[d`k`^Xk\
neutral organization in charge of reconciling

jlggcpXe[[\dXe[Xj`kZffi[èXk\j#Zfekifcj
and monitors the operation of the power
jpjk\d%K_\@JFjZfekifcXi\XZXe\eZfdgXjj
or even prevent blackouts.
one state or several.
Kpg`ZXccp#d\Xjli\d\ekjXi\kXb\efeZ\\m\ip)fi+j\Zfe[jf\iè^X
steady state view into the power system behavior. Equipped with Smart
K_\ifc\f]k_\j\fi^Xe`qXk`fej`jj`ê`ZXek
>i`[Zfddle`ZXk`fejk\Z_efcf^`\j#d\Xjli\d\ekjkXb\eXi\gi\Z`j\cp
èdXbè^k_\JdXik>i`[i\Xc%@JFjXe[IKFj
k`d\$jpeZ_ife`q\[Xe[kXb\edXepk`d\jXj\Zfe[`%\%#*'jXdgc\j&j\Zfe[
will use the smart distribution system as
offering dynamic visibility into the power system.
another resource for managing a secure and
Adoption of the Smart Grid will enhance every facet of the electric delivery
most economic transmission system. Lessons
jpjk\d#èZcl[è^^\e\iXk`fe#kiXejd`jj`fe#[`jki`Ylk`feXe[Zfejldgk`fe%
learned from their experiences in building
It will energize those utility initiatives that encourage consumers to modify
gifZ\jj\jXe[k\Z_efcf^`\j#\kZ%#n`ccY\[ì\Zkcp
gXkk\iejf]\c\Zki`Z`kpljX^\#èZcl[è^k_\k`dè^Xe[c\m\cf]\c\Zki`Z`kp
[\dXe[%@kn`ccèZi\Xj\k_\gfjj`Y`c`k`\jf][`jki`Ylk\[^\e\iXk`fe#Yiè^è^
Xggc`ZXYc\kf\fikjèî`[kiXej]fidXk`fe#
both short-term and long-term.
generation closer to those it serves (think: solar panels on your roof rather
k_Xejfd\[`jkXekgfn\ijkXk`fe %K_\j_fik\ik_\[`jkXeZ\]ifd^\e\iXk`fe
kfZfejldgk`fe#k_\dfi\\Z`\ek#\Zfefd`ZXcXe[î\\e`kdXpY\%@kn`cc
empower consumers to become active participants in their energy choices
to a degree never before possible. And it will offer a two-way visibility and
control of energy usage.
smart definition: distributed generation

;`jki`Ylk\[^\e\iXk`fe`jk_\lj\f]jdXcc$jZXc\gfn\i^\e\iXk`fek\Z_efcf^`\j
cfZXk\[Zcfj\kfk_\cfX[Y\è^j\im\[#ZXgXYc\f]cfn\iè^Zfjkj#`dgifmè^
i\c`XY`c`kp#i\[lZè^\d`jj`fejXe[\ogXe[è^\e\i^pfgk`fej%
12
8eXlkfdXk\[#n`[\cp[`jki`Ylk\[\e\i^p[\c`m\ipe\knfib#k_\
Smart Grid will be characterized by a two-way flow of electricity
and information and will be capable of monitoring everything from
power plants to customer preferences to individual appliances.
@kèZfigfiXk\jèkfk_\î`[k_\Y\e\kjf][`jki`Ylk\[Zfdglkè^
Demand Profile
and communications to deliver real-time information and enable

the near-instantaneous balance of supply and demand at the
320
device level.
The problem with peak.
240
While supply and demand is a bedrock concept in virtually all
d`^_k`cpY\ZXlj\#Xjefk\[#\c\Zki`Z`kpdljkY\Zfejld\[k_\
moment its generated.
KILOWATTS
fk_\iè[ljki`\j#`k`jfe\n`k_n_`Z_k_\Zlii\ekî`[jkil^^c\j
160
N`k_flkY\è^XYc\kfXjZ\ikXè[\dXe[gi\Z`j\cp#XkX^`m\ek`d\#
having the right supply available to deal with every contingency
80
is problematic at best. This is particularly true during episodes of

g\Xb[\dXe[#k_fj\k`d\jf]î\Xk\jke\\[]fi\c\Zki`Z`kp[liè^
a particular period.
0
0
12
18
24
HOURS of the DAY
13
SECTION FOUR : CONTINUED

THE GRID TODAY: WHAT IT IS. WHAT IT ISNT.
Imagine that it is a blisteringly hot summer afternoon. With countless commercial

Xe[i\j`[\ek`XcXìZfe[`k`fe\ijZpZcè^lgkfdXo`dld#[\dXe[]fi\c\Zki`Z`kp`jY\è^
[i`m\ejlYjkXek`Xccp_`^_\i#kf`kjg\Xb%N`k_flkXî\Xk\iXY`c`kpkfXek`Z`gXk\#n`k_flk
knowing preciselyn_\e[\dXe[n`ccg\Xbfi_fn_`^_`kn`cc^f#î`[fg\iXkfijXe[
utilities must bring generation assets called peaker plants online to ensure reliability and
d\\kg\Xb[\dXe[%Jfd\k`d\jfc[\iXe[XcnXpj[`Zlckkfj`k\#g\Xb\ijXi\\og\ej`m\
kffg\iXk\i\hlìè^]l\cYfl^_kfek_\dfi\mfcXk`c\jgfkdXib\k%9lkfc[fiefk#
X[[`k`feXcg\Xb\ij^\e\iXk\X[[`k`feXcî\\e_flj\^Xj\j#[\îX[è^k_\i\^`fejXì
hlXc`kp%:fdgfle[è^k_\è\Z`\eZpf]k_`jjZ\eXi`f`jk_\]XZkk_Xkg\Xb\igcXekjXi\
generation assets that typically sit idle for most of the year without generating revenue
but must be paid for nevertheless.
@edXbèî\Xc$k`d\î`[i\jgfej\Xi\Xc`kp#XjdXik\iî`[dXb\j`kgfjj`Yc\kfi\[lZ\k_\
high cost of meeting peak demand. It gives grid operators far greater visibility into the
jpjk\dXkXe\iîXelcXi`kp#\eXYcè^k_\dkfZfekifccfX[jèXnXpk_Xkdè`d`q\j
k_\e\\[]fikiX[`k`feXcg\XbZXgXZ`kp%@eX[[`k`fekf[i`mè^[fneZfjkj#`kdXp\m\e
eliminate the need to use existing peaker plants or build new ones to save everyone
money and give our planet a breather.
part 2: what the

smart grid isnt.
G\fgc\Xi\f]k\eZfe]lj\[Ypk_\k\idjJdXik>i`[Xe[jdXikd\k\ij%8i\k_\pefkk_\
jXd\k_è^6Efk\oXZkcp%D\k\iè^`jaljkfe\f]_le[i\[jf]gfjj`Yc\Xggc`ZXk`fejk_Xk
constitute the Smart Grid; a smart meter is a good example of an enabling technology
that makes it possible to extract value from two-way communication in support of
distributed technologies and consumer participation.
As much as smart
technologies can enhance this
familiar device, its not the same
thing as the Smart Grid.
14
8jfe\è[ljkip\og\ik\ogcXèj`k#k_\i\`jefj`cm\iYlcc\kn_\e`kZfd\jkf
\eXYcè^k\Z_efcf^`\j]fiXjdXik\iî`[2k_\i\`jèjk\X[j`cm\iYlZbj_fk#
an array of technological approaches that will make it work.
=lik_\iZcXi`ZXk`fe1;\m`Z\jjlZ_Xjnè[kliYè\j#gcl^$è_pYi`[\c\Zki`Z
m\_`Zc\jXe[jfcXiXiiXpjXi\efkgXikf]k_\JdXik>i`[%IXk_\i#k_\JdXik
>i`[\eZfdgXjj\jk_\k\Z_efcf^pk_Xk\eXYc\jljkfèk\îXk\#èk\i]XZ\
with and intelligently control these innovations and others.
The ultimate success of the Smart Grid depends on the effectiveness of
these devices in attracting and motivating large numbers of consumers.
illustrating the opportunities: the smart grid as enabling engine.
Enabling nationwide use of

plug-in hybrid electric vehicles
Making large-scale energy

storage a reality
Making use of solar energy

24 hours a day
Allowing the seamless integration of

renewable energy sources like wind
SMART
GRID
Ushering in a new era of

consumer choice
Exploiting the use of green building

standards to help lighten the load...
15
The Smart Grid transforms the current grid

to one that functions more cooperatively,
responsively and organically.
SECTION FIVE:
COMPARE AND
CONTRAST:
A GRID WHERE
EVERYTHING
IS POSSIBLE.
SMART GRID FACT
Made possible by a smarter grid, DOEs
Solar Energy Grid Integration Systems
(SEGIS) is a suite of tools, techniques and
technologies designed to achieve a
high penetration of photovoltaic
(PV) systems into homes
and businesses.
16
Intelligent capable of sensing system overloads and
IN TERMS OF
OVERALL VISION,
THE SMART GRID IS:
rerouting power to prevent or minimize a potential outage;

of working autonomously when conditions require resolution
faster than humans can respondand cooperatively in aligning
k_\^fXcjf]lk`c`k`\j#Zfejld\ijXe[i\^lcXkfij
Efficient capable of meeting increased consumer demand without

adding infrastructure
Accommodating accepting energy from virtually any fuel source including

solar and wind as easily and transparently as coal and natural gas; capable of
èk\îXkè^XepXe[XccY\kk\i`[\XjXe[k\Z_efcf^`\j\e\i^pjkfiX^\k\Z_efcf^`\j#
for example as they are market-proven and ready to come online
Motivating enabling real-time communication between the consumer and utility so

Zfejld\ijZXekX`cfik_\ì\e\i^pZfejldgk`feYXj\[feè[`m`[lXcgi\]\i\eZ\j#c`b\gi`Z\
Xe[&fi\emìfed\ekXcZfeZ\iej
Opportunistic creating new opportunities and markets by means of its ability to capitalize on
plug-and-play innovation wherever and whenever appropriate
Quality-focusedZXgXYc\f][\c`m\iè^k_\gfn\ihlXc`kpe\Z\jjXip]i\\f]jX^j#jg`b\j#[`jkliYXeZ\j
Xe[èk\iilgk`fejkfgfn\iflièZi\Xjè^cp[`^`kXc\ZfefdpXe[k_\[XkXZ\ek\ij#Zfdglk\ijXe[
electronics necessary to make it run
Resilient increasingly resistant to attack and natural disasters as it becomes more decentralized and reinforced
with Smart Grid security protocols
Greenjcfnè^k_\X[mXeZ\f]^cfYXcZc`dXk\Z_Xe^\Xe[f\iè^X^\elè\gXk_kfnXi[j`ê`ZXek
environmental improvement
Applied across various key constituencies, the benefits of

creating a smarter grid are drawn in even sharper relief.
The more efficient their systems, the less utilities

need to spend.
The Smart Grid as it applies to utilities.
Given our nations population growth and the exponential
N_\k_\ik_\pi\èm\jkfi$fne\[#Zffg\iXk`m\cpfne\[fi
increase in the number of power-hungry digital components in
glYc`Z#lk`c`k`\jXi\[\[`ZXk\[kfgifm`[è^]fik_\glYc`Z^ff[
fli[`^`kXc\Zfefdp#X[[`k`feXcè]iXjkilZkli\dljkY\Yl`ck
`%\%#kXbè^ZXi\f]jfZ`\kpj\c\Zki`Z`kpe\\[jYpfg\iXkè^#
JdXikfiefk%8ZZfi[è^kfK_\9iXkkc\>iflg#èm\jkd\ekkfkXcè^
maintaining and building additional electric infrastructure. The
approximately $1.5 trillion will be required between 2010 and
costs associated with such tasks can run to billions of dollars
2030 to pay for this infrastructure. The Smart Grid holds the
annually and the challenges associated with them are enormous.
potential to be the most affordable alternative to building out

YpYl`c[è^c\jj#Xe[jXmè^dfi\\e\i^p%@kn`ccZc\Xicpi\hlì\
=fiXjdXik\iî`[kfY\e\kjfZ`\kp#`kdljki\[lZ\lk`c`k`\j
ZXg`kXcXe[&fifg\iXkè^\og\ej\jkf[Xpfii\[lZ\Zfjkjèk_\
future. It is estimated that Smart Grid enhancements will ease
investments that are not typical for utilities. But the overall
Y\e\kjf]jlZ_\fikjn`ccflkn\`^_k_\Zfjkj#Xjjfd\lk`c`k`\j
are already discovering.
Zfe^\jk`feXe[èZi\Xj\lk`c`qXk`fef]]lccZXgXZ`kp #j\e[è^,'
kf*''dfi\\c\Zki`Z`kpk_ifl^_\o`jkè^\e\i^pZfii`[fij%
17
SECTION FIVE : CONTINUED

COMPARE AND CONTRAST: A GRID WHERE EVERYTHING IS POSSIBLE
One afternoon in early 2008, the wind stopped blowing in Texas.

8c\X[\ièk_`ji\e\nXYc\\e\i^p#k_\jkXk\\og\i`\eZ\[Xjl[[\e#leXek`Z`gXk\[
Xe[[iXdXk`Z[ifgènè[gfn\i(*''Dnèaljkk_i\\_flij%8e\d\i^\eZp
demand response program was initiated in which large industrial and commercial
lj\iji\jkfi\[dfjkf]k_\cfjk^\e\iXk`fen`k_èk\edèlk\j#XZkè^XjXYl\i
for fluctuations in this intermittent resource. Smart Grid principles in action.
The Smart Grid as it applies to consumers.

=fidfjkZfejld\ij#\e\i^p_Xjcfe^Y\\eZfej`[\i\[XgXjj`m\gliZ_Xj\%
8]k\iXcc#n_XkZ_f`Z\_Xm\k_\pY\\e^`m\e6K_\kpg`ZXc\c\Zki`ZY`cc`jcXi^\cp
unintelligible to consumers and delivered days after the consumption actually
POWER SYSTEM FACT

In the United States, the average
generating station was built in the
1960s using even older technology. Today, the
average age of a substation transformer
is 42, two years more than their
expected life span.
occurs giving consumers no visibility into decisions they could be making

regarding their energy consumption.
?fn\m\i#`kgXpjkfcffbXk\c\Zki`ZY`ccjZcfj\cp`]]fieffk_\ii\Xjfek_Xek_`j2
they also typically include a hefty mortgage payment to pay for the infrastructure
needed to generate and deliver power to consumers.
8jligi`jè^cpjlYjkXek`Xcgfik`fef]pfli\c\Zki`ZY`ccY\kn\\e**,'`j
Zlii\ekcpXjj`ê\[kf]le[è^fliè]iXjkilZkli\dfik^X^\#fliZlii\ek\c\Zki`Z
infrastructure. This item is non-negotiable because that infrastructure power
gcXekj#kiXejd`jj`fecè\j#Xe[\m\ipk_è^\cj\k_XkZfee\Zkjk_\ddljkY\
dXèkXè\[kfb\\gk_\î`[ileeè^Xji\c`XYcpXj`k[f\j%@e]XZk#k_\kiXejd`jj`fe
Xe[[`jki`Ylk`feZ_Xi^\fek_\\c\Zki`ZY`cc`jjg\Z`ZXccp]fiè]iXjkilZkli\%
N`k_[\dXe[\jk`dXk\[kf[flYc\Yp)','Xe[dfi\gfn\igcXekj#kiXejd`jj`fe
cè\j#kiXej]fid\ijXe[jlYjkXk`fejkfY\Yl`ckk_\Zfjkjf]k_`jY`^ìfen`ccXcjf
show up on your bill in one way or another. (The only difference this time is that
^cfYXc[\dXe[]fik_\ìfe#jk\\c#Xe[ZfeZi\k\i\hlì\[kfYl`c[k_`jè]iXjkilZkli\
n`ccdXb\k_\j\Zfddf[`k`\j]Xidfi\Zfjkcp2è]XZk#k_\Zfjkf]dXepiXndXk\i`Xcj
Xe[î`[Zfdgfe\ekj_Xjdfi\k_Xeki`gc\[jèZ\)''-%
smart definition: real-time pricing K_\j\Xi\\e\i^pgi`Z\jk_XkXi\j\k]fiXjg\Z`Z

time period on an advance or forward basis and which may change according to price changes in the
dXib\k%Gi`Z\jgX`[]fi\e\i^pZfejld\[[liè^k_\j\g\i`f[jXi\kpg`ZXccp\jkXYc`j_\[Xe[befnekf
Zfejld\ijX[XpX_\X[[Xp$X_\X[gi`Zè^ fiXe_fliX_\X[_fli$X_\X[gi`Zè^ èX[mXeZ\f]jlZ_
Zfejldgk`fe#Xccfnè^k_\dkfmXipk_\ì[\dXe[Xe[ljX^\èi\jgfej\kfjlZ_gi`Z\jXe[dXeX^\
k_\ì\e\i^pZfjkjYpj_`]kè^ljX^\kfXcfn\iZfjkg\i`f[#fii\[lZè^Zfejldgk`fefm\iXcc%
18
Now for the good news. The Smart Grid connects consumers to the grid in a way that
`jY\e\Z`XckfYfk_#Y\ZXlj\`kkliejflkk_\i\jXcfkk_XkXm\iX^\Zfejld\ijZXe[f
to help the grid.
Simply by connecting to consumers by means of the right price signals and
jdXikXggc`XeZ\j#]fi\oXdgc\XjdXik\iî`[ZXei\[lZ\k_\e\\[]fijfd\f]k_Xk
è]iXjkilZkli\n_`c\b\\gè^\c\Zki`Z`kpi\c`XYc\Xe[Xfi[XYc\%8jefk\[#[liè^\g`jf[\j
f]g\Xb[\dXe[#jki\jjfek_\î`[k_i\Xk\ej`kji\c`XY`c`kpXe[iX`j\jk_\gifYXY`c`kpf]
widespread blackouts.
By enabling consumers to automatically reduce demand for brief periods through
e\nk\Z_efcf^`\jXe[dfk`mXkè^d\Z_Xe`jdjc`b\i\Xc$k`d\gi`Zè^#k_\î`[i\dXèj
reliable and consumers are compensated for their help.
Efficiency is the way.
Enabling consumer participation also provides tangible results for utilities which are
('f]Xcc^\e\iXk`feXjj\kjXe[
\og\i`\eZè^[`Zlckpèj`kèê\nkiXejd`jj`fecè\jXe[gfn\igcXekj%Lck`dXk\cp#
),f][`jki`Ylk`feè]iXjkilZkli\
tapping the collaborative power of millions of consumers to shed load will put
are required less than 400 hours
j`ê`ZXekYiXb\jfek_\e\\[]fie\nè]iXjkilZkli\XkXepZfjk%@ejk\X[#lk`c`k`\j
g\ip\Xi#ifl^_cp,f]k_\k`d\%
n`cc_Xm\k`d\kfYl`c[dfi\Zfjk$\Z`\eZ`\jèkfk_\ìj`kè^Xe[Yl`c[è^gcXej%
While Smart Grid approaches cant
Consumers are more willing to be engaged.
completely displace the need to
:fejld\ijXi\X[mfZXkè^]fiZ_f`Z\èdXib\kX]k\idXib\k#]ifdk\c\Zfdkf
Yl`c[e\nè]iXjkilZkli\#k_\p
entertainment. Already comfortable with the concept of time-differentiated service
n`cc\eXYc\e\n#dfi\g\ij`jk\ek
k_Xebjkfk`d\$[\g\e[\ekZ\ccg_fe\iXk\jXe[Xìcè\]Xi\j#`k]fccfnjk_Xkk_\paljk
forms of demand response that will
d`^_knXekèj`^_kXe[m`j`Y`c`kpèkfk_\\e\i^pZ_f`Z\jk_\pXi\dXbè^#kff%<eXYc\[
YpJdXik>i`[k\Z_efcf^pXe[[peXd`Zgi`Zè^#Zfejld\ijn`cc_Xm\k_\fggfikle`kpkf
see what price they are paying for energy before they buy a powerful motivator toward
succeed in deferring or avoiding

some of it.
managing their energy costs by reducing electric use during peak periods.
:lii\ekcp#i\Zfê`k`fef]k_\k`d\$[\g\e[\ekZfjkf]\e\i^pmXi`\jYpi\^`fe%@eXi\Xj
n_\i\ZfjkjXi\cfnXe[jg\Z`Xc`q\[iXk\jkfk_`jgfèkefe$\o`jk\ek#k_\i\`jc`kkc\
interest or economic incentive on the part of the consumer to modify usage or even
k_èbXYflk\e\i^p_Xmè^Xe_flicpZfjk%@e:Xc`]fie`X#feX_fkX]k\ieffe#Zfejld\ij
are well aware of the possibility of a blackout driven by peak demand and familiar with
X[aljkè^k_\ì\e\i^pljX^\XZZfi[è^cp%
The rewards of getting involved.

Smart Grid consumer mantra: Ask not what the grid
can do for you. Ask what you can do for the grid and
prepare to get paid for it.
19

POWER SYSTEM FACT

Given new awareness, understanding, tools and education made possible by a smarter
grid, all consumers will be able to make choices that save money, enhance personal
convenience, improve the environment or all three.
From 1988-98, U.S. electricity

demand rose by nearly 30 percent,
while the transmission networks capacity
The message from consumers about the Smart Grid: Keep It Simple.
grew by only 15%. Summer peak demand is
I\j\XiZ_è[`ZXk\jk_XkZfejld\ijXi\i\X[pkf\e^X^\n`k_k_\JdXik>i`[Xjcfe^
expected to increase by almost 20%
Xjk_\ìèk\i]XZ\n`k_k_\JdXik>i`[`jj`dgc\#XZZ\jj`Yc\Xe[èefnXpèk\i]\i\j
during the next 10 years.
with how they live their lives. Consumers are not interested in sitting around for an
hour a day to change how their house uses energy; what they will do is spend two
_flijg\ip\Xikfj\kk_\ìZfd]fik#gi`Z\Xe[\emìfed\ekXcgi\]\i\eZ\j\eXYcè^
collaboration with the grid to occur automatically on their behalf and saving money
each time.
8kk_\i\j`[\ek`Xcc\m\c#JdXik>i`[dljkY\j`dgc\#j\k$`k$Xe[$]fi^\k$`kk\Z_efcf^p#
\eXYcè^Zfejld\ijkf\Xj`cpX[aljkk_\ìfne\e\i^plj\%<hl`gg\[n`k_i`Z_#lj\]lc
è]fidXk`fe#Zfejld\ijZXe_\cgdXeX^\cfX[fe$g\XbkfjXm\dfe\pXe[\e\i^p]fi
k_\dj\cm\jXe[#lck`dXk\cp#Xccf]lj%
The Smart Grid as it applies to our environment.

N_`c\k_\eXk`fejkiXejgfikXk`fej\Zkfi\d`kj)'f]Xcck_\ZXiYfe[`fo`[\n\
gif[lZ\#k_\^\e\iXk`fef]\c\Zki`Z`kp\d`kj+'Zc\Xicpgi\j\ekè^Xe\efidflj
challenge for the electric power industry in terms of global climate change. Smart
>i`[[\gcfpd\ek`jXb\pkffcèX[[i\jjè^k_\Z_Xcc\e^\jf]Zc`dXk\Z_Xe^\#
lck`dXk\cpXe[j`ê`ZXekcpi\[lZè^î\\e_flj\^Xj\jXe[Zi`k\i`XgfcclkXekjjlZ_
XjEFo#JFoXe[gXik`ZlcXk\j%
=fik_\îfnèêldY\if]\emìfed\ekXccp$XnXi\Zfejld\ij#XjdXik\iî`[eXccp
provides a window for them to assess and react to their personal environmental
`dgXZkj%8ci\X[p#jfd\lk`c`k`\jXi\è]fidè^Zfejld\ijXYflkk_\ìZXiYfe
]ffkgièkXcfe^j`[\k_\ì\e\i^pZfjkj%@ek`d\#k_\JdXik>i`[n`cc\eXYc\Zfejld\ij
to react in near real-time to lessen their impacts.
smart definition: criteria pollutants - Criteria pollutants are six common

XìgfcclkXekjk_Xkk_\jZ`\ek`ZZfddle`kp_Xj\jkXYc`j_\[XjY\è^_Xid]lckffli_\Xck_
Xe[n\c]Xi\n_\egi\j\ekXkjg\Z`\[c\m\cj%K_\pèZcl[\e`kif^\e[`fo`[\EFo #ZXiYfe
dfefo`[\#fqfe\#c\X[#jlc]li[`fo`[\JFo Xe[gXik`ZlcXk\dXkk\i#n_`Z_èZcl[\j[ìk#jffk#
ZXiXe[kilZb\o_Xljk#Z`^Xi\kk\jdfb\#jgiXpgXèk[ifgc\kj#Xe[kfo`ZZ_\d`ZXcZfdgfle[j%
20
For utilities, adoption of the Smart Grid clears the air on several fronts.
Energy efficiency:
Fek_\cfX[j`[\#Zfejld\ijZXgXYc\f]\o\iZ`jè^ljX^\ZfekifcXi\jl[[\ecpXe[
j`dlckXe\fljcpXcjfXYc\kf\o\iZ`j\k_\ì\emìfed\ekXcjk\nXi[j_`g#i\jlckè^è
ki\d\e[fljZfejld\i$j`[\\e\i^p\Z`\eZ`\j%
Avoidance of new construction:
Increased asset optimization made possible by a smarter grid means more reliance
lgfek_\dfjk\Z`\ekgfn\igcXekjXe[c\jji\c`XeZ\lgfek_\c\Xjk\Z`\ek#dfi\
\og\ej`m\$kf$ileg\Xb\igcXekj%Fgk`d`qè^gfn\igcXeklk`c`qXk`feZflc[XcjfXccfn
utilities to defer new generation investments or reduce dependence upon sometimes
mfcXk`c\Xe[\og\ej`m\n_fc\jXc\dXib\kj%Lk`c`k`\jjkXe[kfY\e\k]ifdcfn\iZfjkj#
n_`Z_èZi\Xj\gifkj%
The ability to effectively manage load with existing transmission and distribution
infrastructure means that ultimately utilities would no longer have to build or
could at least defer infrastructure to account for rapidly increasing peak demand.
Integration of renewable energy sources:
>`m\ek_\j`ê`ZXekZfeZ\ieji\^Xi[è^Zc`dXk\Z_Xe^\#k_\e\\[]fi[`jki`Ylk\[
jfcXiXe[nè[gfn\i`jZi`k`ZXc%8ZZfi[è^kfk_\<lifg\XeNè[<e\i^p8jjfZ`Xk`fe#
èk\îXkè^nè[fijfcXigfn\ièkfk_\î`[XkjZXc\Xkc\m\cj_`^_\ik_Xe)'
will require advanced energy management techniques and approaches at the grid
operator level. The Smart Grids ability to dynamically manage all sources of power
on the grid means that more distributed generation can be integrated within it.
21

Preparation for the future:

A smarter grid is also a necessity for plugging in the next generation of
Xlkfdfk`m\m\_`Zc\jèZcl[è^gcl^$è_pYi`[\c\Zki`Zm\_`Zc\jG?<Mj
to provide services supporting grid operation. Such ancillary services hold
the potential for storing power and selling it back to the grid when the
grid requires it.
<eXYc\[Ype\nk\Z_efcf^`\j#gcl^$è_pYi`[m\_`Zc\jZlii\ekcp
scheduled for showroom floors by 2010 may dramatically reduce our
eXk`fej]fi\`êf`cY`cc%8ZZfi[è^kfk_\GXZ`ZEfik_n\jkEXk`feXc
To get a greener grid, you need

a Smart Grid.
CXYfiXkfip#\o`jkè^L%J%gfn\igcXekjZflc[d\\kk_\\c\Zki`Z`kpe\\[j
f].*f]k_\eXk`fejc`^_km\_`Zc\j`%\%#ZXijXe[jdXcckilZbj `]k_\
Solar and wind power are necessary
vehicles were replaced by plug-ins that recharged at night. Such a shift
and desirable components of a cleaner
nflc[i\[lZ\f`cZfejldgk`feYp-%)d`cc`feYXii\cjg\i[Xp#\c`dèXkè^
,)f]Zlii\ek`dgfikj%
Zc\Xe\i#`kn`cckXb\Xî`[ZXgXYc\f]
However, there is a lot more to realizing this potential than simply

plugging in.
Without an integrated communications infrastructure and corresponding
gi`Z\j`êXcj#_Xe[cè^k_\èZi\Xj\[cfX[f]gcl^$è_pYi`[jXe[\c\Zki`Z
m\_`Zc\jnflc[Y\\oZ\\[è^cp[`ZlckXe[è\Z`\ek%JdXik:_Xi^\ij#
however enabled by the Smart Grid will help manage this new
energy device on already constrained grids and avoid any unintended
consequences on the infrastructure.
smart definition : off peak

8g\i`f[f]i\cXk`m\cpcfnjpjk\d[\dXe[#f]k\efZZliiè^è[X`cp#n\\bcp#Xe[
j\XjfeXcgXkk\iej%F]]$g\Xbg\i`f[j[`]]\i]fi\XZ_è[`m`[lXc\c\Zki`Zlk`c`kp%
22
energy future. To make the grid run
dealing with the variable nature of

these renewable resources.
With a smarter grid at work, a community

without power is far from powerless.
What might the longer-term future look like?
power from a utility is absent. Combining distributed resources

f]\m\ip[\jZi`gk`feiff]kfgGMjfcXi #]l\cZ\ccj#\c\Zki`Z
It is a decade from now.
m\_`Zc\jk_\Zfddle`kpZXe^\e\iXk\jlZ`\ek\c\Zki`Z`kpkf
An unusually destructive storm has isolated a community or
b\\gk_\îfZ\ipjkfi\#k_\gfc`Z\[\gXikd\ek#kiXZc`^_kj#k_\
i\^`fe%K\ep\XijX^f#k_\nX`k]fik_\Xgg\XiXeZ\f]Xlk`c`kpj
phone system and the community health center up and running.
trouble trucks would begin. The citizens would remain literally

èk_\[Xib#k_\ì]ff[jgf`cè^#k_\ìj\Zli`kpZfdgifd`j\[Xe[
their families at risk.
@ejk\X[#n`k_]lccJdXik>i`[[\gcfpd\ek#k_`j]lkli\Zfddle`kp
`jefknX`kè^%@ejk\X[#`kjXYc\`dd\[`Xk\cpkfkXb\X[mXekX^\
of distributed resources and standards that support a Smart
Grid concept known as islanding. Islanding is the ability of
distributed generation to continue to generate power even when
N_`c\`kdXpkXb\Xn\\bkfi\jkfi\k_\cè\j#k_\^\e\iXk`fe
potential resident in the community means that citizens still
_Xm\jlZ`\ekgfn\ikfd\\kk_\ì\jj\ek`Xce\\[j%
THIS IS POWER
FROM THE PEOPLE.
And it is coming.
23
Getting from Point A to Point B from our

present grid to the Smart Grid requires
a brief examination of the history and
culture of the industrys primary custodians;
namely, utilities and regulators.
SECTION SIX:
FIRST THINGS FIRST:

TEASING OUT THE
COMPLEXITIES.
SMART GRID FACT

The American Public Power
Association (APPA) has launched
N_\e\c\Zki`Z`kpji\^lcXkfipZfdgXZknXjijkjkilZbèk_\(0*'j#
a nation with little appetite for monopolies recognized the provision
deploying Smart Grid technologies in
f]\c\Zki`Z`kpXjXeXkliXcdfefgfcpj\im`Z\#fe\Y\jkXZZfdgc`j_\[
a public-power environment.
YpXjè^c\\ek`kp#n_\k_\i`knXjèm\jkfi$fne\[#Xdle`Z`gXclk`c`kp
or a co-op.
Le[\ik_\k\idjf]k_\ZfdgXZk#è\oZ_Xe^\]figifm`[è^\c\Zki`Z
j\im`Z\kfXccZfejld\ijn`k_èk_\lk`c`kpjj\im`Z\k\ii`kfip#lk`c`k`\j
were provided a return on their investments plus a return on those
investments commensurate with risks they take in ensuring service
and reliability. State regulatory commissions were charged with
determining whether the investments made were prudent and what
a reasonable return on those investments should be.
24
a task force to develop a framework for
Fm\ik_\\ejlè^[\ZX[\j#dlZ__Xi[nfibnXj[fe\feYfk_
Lek`ci\cXk`m\cpi\Z\ekcp#k_`jjkXklkfipXiiXe^\d\ek_Xji\jlck\[
sides of the compact as much of the grid as we know it was built.
in little regulatory action among the states and little reason to

\e^X^\èZfcc\Zk`m\XZk`fefeXeXk`feXcYXj`j#Xck_fl^_k_\p
N`k_èlk`c`k`\j#\fikjkfnXi[k_`jfYa\Zk`m\n\i\kpg`ZXccp
work at common purposes through regional associations.
segmented or siloed. This division of labor worked well for

lk`c`k`\j#gifm`[è^\Z`\eZ`\jn`k_èk_\fi^Xe`qXk`fe]fihl`Zb
J`d`cXicp#i\^lcXk\[lk`c`k`\j_Xm\kiX[`k`feXccpY\\ei\XZk`m\#
execution and maintenance of system reliability.
with no need or incentive to be proactive on a national level.

N\ccXc`ê\[]filk`c`kpfg\iXk`fej#k_\pXi\efke\Z\jjXi`cpn\cc
D\Xen_`c\#i\^lcXkfij]fZljfek_\ìi\jg\Zk`m\jkXk\jXjX
positioned for integrated strategic initiatives like the Smart Grid
dXkk\if]cXn#Xele[\ijkXe[XYc\ZìZldjkXeZ\^`m\ek_Xk\XZ_
jkXk\dljkXejn\iijkXe[]fi\dfjkkf`kjZ`k`q\ejXe[k_\ì
although they have collectively and forcefully advocated in the

past on issues such as security and climate change.
le`hl\j\kf]e\\[j#i\jfliZ\jXe[X^\e[Xj%
STATES TAKING ACTION:

30 states have developed and adopted renewable portfolio standards, which require
a pre-determined amount of a states energy portfolio (up to 20%) to come exclusively
from renewable sources by as early as 2010.
state
amount
year
rps administrator
Arizona
15%
2025
Arizona Corporation Commission
California
20%
2010
California Energy Commission
Colorado
20%
2020
Colorado Public Utilities Commission
Connecticut
23%
2020
Department of Public Utility Control
District of Columbia
11%
2022
DC Public Service Commission
Delaware
20%
2019
Delaware Energy Office
Hawaii
20%
2020
Iowa
105 MW
Hawaii Strategic Industries Division

Iowa Utilities Board
Illinois
25%
2025
Illinois Department of Commerce
Massachusetts
4%
2009
Massachusetts Division of Energy Resources
Maryland
9.5%
2022
Maryland Public Service Commission
Maine
10%
2017
Maine Public Utilities Commission
Minnesota
25%
2025
Minnesota Department of Commerce
Missouri*
11%
2020
Missouri Public Service Commission
Montana
15%
2015
Montana Public Service Commission
New Hampshire
16%
2025
New Hampshire Office of Energy and Planning
New Jersey
22.5%
2021
New Jersey Board of Public Utilities
New Mexico
20%
2020
New Mexico Public Regulation Commission
Nevada
20%
2015
Public Utilities Commission of Nevada
New York
24%
2013
New York Public Service Commission
North Carolina
12.5%
2021
North Carolina Utilities Commission
Oregon
25%
2025
Oregon Energy Office
Pennsylvania
18%
2020
Pennsylvania Public Utility Commission
Rhode Island
15%
2020
Rhode Island Public Utilities Commission
Texas
5,880 MW
2015
Public Utility Commission of Texas
Utah*
20%
2025
Utah Department of Environmental Quality
Vermont*
10%
2013
Vermont Department of Public Service
Virginia*
12%
2022
Virginia Department of Mines, Minerals, and Energy
Washington
15%
2020
Washington Secretary of State
Wisconsin
10%
2015
Public Service Commission of Wisconsin
* Four states, Missouri,

Utah, Vermont, &
Virginia, have set
voluntary goals for
adopting renewable
energy instead of
portfolio standards
with binding targets.
25
SECTION SIX : CONTINUED

FIRST THINGS FIRST: TEASING OUT THE COMPLEXITIES
N`k_îfnè^Zfej\ejljXifle[k_\ZilZ`Xce\\[]fiJdXik>i`[[\gcfpd\ek#
the cultures of these entities are now changing dramatically.
=fik_\ìgXik#i\^lcXkfijXi\XZk`m\cpj_Xiè^`[\XjXe[è]fidXk`fen`k_fk_\i
jkXk\j%8Zkè^n`k_Xe\p\kfnXi[eXk`feXcXî\\d\ek#kn\ekp$eè\jkXk\j
_Xm\Xcjf[\m\cfg\[Xe[X[fgk\[i\e\nXYc\gfik]fc`fjkXe[Xi[j#n_`Z_i\hlì\
Xgi\$[\k\idè\[Xdflekf]XjkXk\j\e\i^pgfik]fc`flgkf)' kfZfd\
exclusively from renewable sources by as early as 2010.
I\^lcXkfijfeYfk_k_\jkXk\Xe[]\[\iXcc\m\cXi\jk\ggè^lgk_\ì[`Xcf^%
JkXk\i\^lcXkfiji\gi\j\ek\[Ypk_\EXk`feXc8jjfZ`Xk`fef]I\^lcXkfip
Lk`c`kp:fdd`jj`fejE8IL: Xi\\ogcfiè^fgk`fej]fi\og\[`kè^JdXik
>i`[`dgc\d\ekXk`fen`k_k_\ì]\[\iXcZflek\igXik#k_\=\[\iXc<e\i^p
I\^lcXkfip:fdd`jj`fe=<I: %D\Xen_`c\#;F<`jgifm`[è^c\X[\ij_`gn`k_
k_\gXjjè^èkfcXnf]k_\<e\i^p@e[\g\e[\eZ\Xe[J\Zli`kp8Zkf])''.
<@J8 #n_`Z_Zf[`\jXi\j\XiZ_#[\m\cfgd\ekXe[[\dfejkiXk`fegifîXd
for Smart Grid technologies.
K_Xebjkfk_\j\Xe[fk_\i\fikj#dXepi\^lcXkfijXi\dfmè^kfnXi[e\n
regulations designed to incentivize utility investment in the Smart Grid.
8dfe^k_\j\Xi\[peXd`Zgi`Zè^#j\ccè^\e\i^pYXZbkfk_\î`[#Xe[gfc`Z`\j
k_Xk^lXiXek\\lk`c`k`\jZfjki\Zfm\ipXe[&fi]XmfiXYc\[\gi\Z`Xk`fefee\n
Smart Grid investments and legacy systems made obsolete by the switch
to smart meters and other Smart Grid investments.
26
8j]filk`c`k`\j#XeèZi\XjèêldY\if]k_\dXi\kXbè^Xdfi\èk\îXk\[
m`\nf]XjdXik\iî`[#gXik`ZlcXicpn_\ek_\i\Xi\Xi\Xjf]fm\icXgk_XkZXe
Y\c\m\iX^\[]fiZfjki\[lZk`fefiY\e\kèZi\Xj\%K_\i\Xi\i\^lcXkfip
`dgc`ZXk`fej_\i\Xjn\cc2`]lk`c`k`\jXi\kfXi^l\]fiZfjki\Zfm\ipgifa\Zk
Ypgifa\ZkiXk_\ik_XeYpjè^c\èk\îXk\[gcXe#jfd\Y\e\Z`XcXjg\Zkj
of deployment of a smarter grid could be lost.
@ek\îXk\[gcXejXi\Y\è^gifgfj\[Xe[Zfej`[\i\[%@e:Xc`]fie`X#jdXik
meters only became economic when the commission considered non-utility
Y\e\kjY\e\kjkfZfejld\ij]ifdcfn\iY`ccj%
KfXeè[ljkip_`jkfi`ZXccpi\^lcXk\[]figi`fièm\jkd\ek#k_\kiXej]fidXk`fe
to regulation for value delivery promises to stimulate substantial progress
and alignment around the Smart Grid vision and implementation. Keep in
dè[#k_fl^_#k_Xki\^lcXkfijn`ccZfekèl\kfi\hlì\Xj_fnè^k_Xkk_\
value of the investments to consumers whatever they may be ultimately
exceeds the costs.
SMART GRID FACT

To advance the modernization
of our nations electric grid, DOE has
entered into public/private partnerships
with leading champions of the Smart Grid
which include the GridWise Alliance,
EPRI/Intelligrid, and the Galvin
Electricity Initiative.
27
Open architecture. Internet protocol. Plug

and play. Common technology standards.
Non-proprietary. Interoperability.
Fine concepts all, yet one of the reasons
the electric industry has been slow to take
advantage of common technology standards
which would speed Smart Grid adoption is
a lack of agreement on what those standards
should be and who should issue them.
SECTION SEVEN:
HOW THINGS
WORK: CREATING
THE PLATFORM FOR
THE SMART GRID.
The industry is not without its role models in this regard.

Consider the ATM. It is available virtually anywhere. Every
le`k]\Xkli\jXj`d`cXilj\ièk\i]XZ\#le[\ijkXe[XYc\n_\k_\i
fiefkpflbefnk_\cfZXccXe^lX^\%Lj\ij[fek^`m\`kXj\Zfe[
k_fl^_k%@kj`dgcpnfibj%P\kk_\]XZkk_Xkk_\8KD\o`jkjXk
all was made possible only by industry-wide agreement on
Xdlck`kl[\f]ZfddfejkXe[Xi[j#]ifdZfddle`ZXk`fekf
security to business rules.
=fikleXk\cp#k_\X^\e[Xjf]lk`c`k`\j#i\^lcXkfijXe[XlkfdXk`fe
vendors are rapidly aligning and movement toward identifying
and adopting Smart Grid standards is gaining velocity.
28
DOE lists five fundamental technologies that will drive the Smart Grid:
@ek\îXk\[Zfddle`ZXk`fej#Zfee\Zkè^Zfdgfe\ekjkffg\eXiZ_`k\Zkli\]fii\Xc$k`d\
è]fidXk`feXe[Zfekifc#Xccfnè^\m\ipgXikf]k_\î`[kfYfk_kXcbXe[c`jk\e
J\ejè^Xe[d\Xjli\d\ekk\Z_efcf^`\j#kfjlggfik]Xjk\iXe[dfi\XZZliXk\i\jgfej\
jlZ_Xji\dfk\dfe`kfiè^#k`d\$f]$lj\gi`Zè^Xe[[\dXe[$j`[\dXeX^\d\ek
8[mXeZ\[Zfdgfe\ekj#kfXggcpk_\cXk\jki\j\XiZ_èjlg\iZfe[lZk`m`kp#jkfiX^\#gfn\i
electronics and diagnostics
8[mXeZ\[Zfekifcd\k_f[j#kfdfe`kfi\jj\ek`XcZfdgfe\ekj#\eXYcèîXg`[[`Xêfj`jXe[
precise solutions appropriate to any event
@dgifm\[èk\i]XZ\jXe[[\Z`j`fejlggfik#kfXdgc`]p_ldXe[\Z`j`fe$dXbè^#kiXej]fidè^î`[
operators and managers quite literally into visionaries when it come to seeing into their systems
killer app
N`cck_\G?<MY\k_\JdXik>i`[jb`cc\iXgg#k_\flknXi[\ogi\jj`fe
of the Smart Grid that consumers adopt en masse as they did e-mail?
There are plenty of experts who think so.
K_\EXk`feXc@ejk`klk\f]JkXe[Xi[jXe[K\Z_efcf^pE@JK #
The GridWise Architecture Council is an important resource
XeX^\eZpf]k_\L%J%;\gXikd\ekf]:fdd\iZ\#_XjY\\e
]fiE@JK%K_\:fleZ`c#i\gi\j\ekè^Xn`[\XiiXpf]lk`c`kpXe[
charged under EISA (Energy Independence and Security
k\Z_efcf^pjkXb\_fc[\ijXe[le[\ini`kk\eYp;F<#_XjY\\e
8Zk n`k_`[\ek`]pè^Xe[\mXclXkè^\o`jkè^jkXe[Xi[j#
nfibè^Zcfj\cpn`k_E@JKkf[\m\cfgZfddfegièZ`gc\jXe[Xe
d\Xjli\d\ekd\k_f[j#k\Z_efcf^`\j#Xe[fk_\ijlggfik
interoperability framework spanning the entire electricity delivery
èj\im`Z\kfJdXik>i`[X[fgk`fe%8[[`k`feXccp#k_\pn`ccY\
Z_Xè%8ci\X[p#k_\nfibf]k_\>i`[N`j\8iZ_`k\Zkli\:fleZ`cXe[
preparing a report to Congress recommending areas where
fk_\ifi^Xe`qXk`fejjlZ_Xj8EJ@8d\i`ZXeEXk`feXcJkXe[Xi[j
standards need to be developed.
@ejk`klk\ #@<<<@ejk`klk\f]<c\Zki`ZXcXe[<c\Zkife`Zj<e^è\\ij
and the ZigBee Alliance have enabled a smarter grid to readily
accept innovation across a wide spectrum of applications.
29
SECTION SEVEN : CONTINUED

HOW THINGS WORK: CREATING THE PLATFORM FOR THE SMART GRID.
Integration in practice.
FeNXj_è^kfejFcpdg`ZG\eèjlcX#X;F<[\dfejkiXk`fegifa\Zkj\kè
Steps toward a common language.
motion a sophisticated system that responded to simple instructions set

ègcXZ\YpXZfejld\iè_`jfi_\igi\]\i\eZ\gifc\%D\Xen_`c\#èk_\
K_\è[\g\e[\ek#efe$gifk<c\Zki`Z
YXZbîfle[#\e\i^pnXjdXeX^\[fek_\Zfejld\ijY\_Xc]kfjXm\dfe\p
Gfn\iI\j\XiZ_@ejk`klk\<GI@ `j
and reduce the impact on the grid.
also conducting research on key

issues facing the electric power
:fejld\ijjXm\[Xggifo`dXk\cp('fek_\ìY`ccj%Dfi\j`ê`ZXekcp#g\Xb
cfX[nXji\[lZ\[Yp(,#Yiè^è^k_\ZfejkiXè\[i\^`feXcî`[Xefk_\i
*$,p\Xijf]g\XbcfX[îfnk_Xe[\eXYcè^k_\èjkXccXk`fef]Zc\Xe\i#
dfi\\Z`\ekk\Z_efcf^`\j]fijlggcp%
industry and working towards the

development of open standards for
the Smart Grid. The International
<c\ZkifK\Z_e`ZXc:fdd`jj`fe@<:
8Zifjjk_\eXk`fe#ZfdgXe`\jXi\[\m\cfgèê\nJdXik>i`[k\Z_efcf^`\j
i\Z\ekcpglYc`j_\[<GI@j@ek\cc`>i`[
for utility-scale deployments that are progressively raising the bar on what
is possible and practical.
D\k_f[fcf^p]fi;\m\cfgè^
I\hlì\d\ekj]fi<e\i^pJpjk\dj
XjXglYc`ZcpXmX`cXYc\jg\Z`ZXk`fe%
30
Another look at the future: PHEV (Plug-in Hybrid Electric Vehicles)

8jjldè^Zljkfd\iXZZ\gkXeZ\i\^Xi[è^gi`Z\#g\i]fidXeZ\Xe[cfe^\m`kp#k_\j\
vehicles offer consumers the opportunity to shift use of oil and gasoline to electricity
Xe[kfgfn\iXZXi]fik_\\hl`mXc\ekf]%0'g\i^Xccfe%8jè\Z`\ekXjk_\î`[
`jkf[Xp#`k`jZc\Xe\ifeYXcXeZ\k_Xef`cXe[^Xjfcè\% :fejld\ij^\k]Xidfi\
Xfi[XYc\kiXejgfikXk`fe%I\cpè^dfi\fe\c\Zki`Z`kp]fikiXejgfikXk`feXe[c\jj
on fossil fuels increases our energy independence as well as our environmental
gifjg\Zkj%G?<MjkXb\X[mXekX^\f]cfn\iZfjkXe[f$g\XbZXgXZ`kpXe[ZXegifm`[\
grid support during the peak periods.
advancements also in development

Zero-net energy commercial buildings:
N_\k_\id\Xjli\[YpZfjk#\e\i^p#fiZXiYfe\d`jj`fej#jkilZkli\j\hl`gg\[n`k_JdXik
Grid technologies capable of balancing energy generation and energy conservation.
Superconducting power cables:

Capable of reducing line losses and carrying 3-5 times more power in a smaller
right of way than traditional copper-based cable.
Energy storage:
N_`c\\c\Zki`Z`kpZXeefkY\\Zfefd`ZXccpjkfi\[#\e\i^pZXeY\n`k_k_\Xggc`ZXk`fe
f]JdXik>i`[k\Z_efcf^`\j%K_\idXcjkfiX^\#jfd\k`d\jZXcc\[_pYi`[XìZfe[`k`feè^#
holds promising potential for positively affecting peak load today. Also of note is the
e\Xi$k\idgfk\ek`Xcf]c`k_`ld$`feYXkk\i`\j]fiG?<MXggc`ZXk`fej%
Advanced sensors:
Dfe`kfiè^Xe[i\gfikè^cè\Zfe[`k`fejèi\Xck`d\#X[mXeZ\[j\ejfij\eXYc\dfi\
power to flow over existing lines.
31
The Department of Energy is actively

engaged in supporting a wide variety of
Smart Grid projects. The role of DOE is to
act as an objective facilitator, allowing the
best ideas to prove themselves. Smart Grid
efforts are well underway on several key
fronts, from forward-thinking utilities to
the 50th state.
SECTION EIGHT:
PROGRESS NOW!:
A LOOK AT CURRENT
SMART GRID EFFORTS
AND HOW THEYRE
SUCCEEDING.
SMART GRID FACT

States such as Texas, California,
Ohio, New Jersey, Illinois, New York
and others are already actively exploring
ways to increase the use of tools and
technologies toward the realization
of a smarter grid.
32
Distribution Management System (DMS) Platform by the University of Hawaii

K_\èk\îXk\[\e\i^pdXeX^\d\ekgcXk]fidn`ccY\[\m\cfg\[#]\Xkliè^X[mXeZ\[]leZk`fej]fi
home energy management by consumers and for improved distribution system operations by utilities.
K_`jgcXk]fidn`ccèk\îXk\8D@XjX_fd\gfikXc]fi[\dXe[i\jgfej\2_fd\XlkfdXk`fe]fi\e\i^p
Zfej\imXk`fe2fgk`dXc[`jgXkZ_f][`jki`Ylk\[^\e\iXk`fe#jkfiX^\#Xe[cfX[jèk_\[`jki`Ylk`fe
jpjk\d#Xe[ZfekifcjkfdXb\k_\[`jki`Ylk`fejpjk\dX[`jgXkZ_XYc\\ek`kpkfZfccXYfiXk\n`k_fk_\i
entities in the bulk grid.
?fd\\e\i^pdXeX^\d\ekf]k_`jkpg\n`cc\eXYc\Zfejld\ijkfkXb\Zfekifc#XlkfdXkè^\e\i^p
conservation and demand response practices based on their personal preferences.
K_\_fd\XlkfdXk`fen`ccY\YXj\[fek_\JdXikD\k\iXe[\Zf;Xj_YfXi[gif[lZkj]ifd>\e\iXc
<c\Zki`Z%K_\JdXikD\k\in`k_XQ`^9\\e\knfibn`ccZfddle`ZXk\n`k__flj\_fc[Xggc`XeZ\j#Xe[
k_\[Xj_YfXi[n`ccXlkfdXk\Zfekifcjf]k_\ìfg\iXk`fej%@eX[[`k`fe#k_`jgcXk]fidn`ccgifm`[\XeZ`ccXip
j\im`Z\jkfk_\cfZXclk`c`kpjlZ_Xjjgèeèî\j\im\#cfX[$]fccfnèî\^lcXk`fe#Xe[èk\id`kk\eZp
dXeX^\d\ek]finè[Xe[jfcXi\e\i^p%K_`jgcXk]fidn`ccY\[\gcfp\[Xkk_\DXl`CXe`JlYjkXk`fe
èDXl`#?XnX``%
Perfect Power by Illinois Institute of Technology (IIT)

8G\i]\ZkGfn\ijpjk\d`j[\e\[Xj18e\c\Zki`Zjpjk\dk_XkZXeefk]X`ckfd\\kk_\\c\Zki`Ze\\[j
f]k_\è[`m`[lXc\e[$lj\i%8G\i]\ZkGfn\ijpjk\d_Xjk_\\o`Y`c`kpkfjlggcpk_\gfn\ii\hlì\[Yp
various types of end-users and their needs without fail. The functionalities of such a system will be
enabled by the Smart Grid.
K_`jgifa\Zkn`cc[\j`êXG\i]\ZkGfn\igifkfkpg\k_Xkc\m\iX^\jX[mXeZ\[k\Z_efcf^pkfZi\Xk\
microgrids responding to grid conditions and providing increased reliability and demand reduction.
This prototype model will be demonstrated at the IIT campus to showcase its operations to the
industry. The model is designed to be replicable in any municipality-sized system where customers
can participate in electric market opportunities.
33
SECTION EIGHT : CONTINUED

PROGRESS NOW! : A LOOK AT CURRENT SMART GRID EFFORTS AND HOW THEYRE SUCCEEDING
West Virginia Super Circuit by Allegheny Energy

K_\jlg\iZìZl`kgifa\Zk`j[\j`ê\[kf[\dfejkiXk\XeX[mXeZ\[[`jki`Ylk`feZìZl`k
with improved reliability and security through integration of distributed resources
Xe[X[mXeZ\[dfe`kfiè^#Zfekifc#Xe[gifk\Zk`fek\Z_efcf^`\j%K_`jZìZl`kn`cc
èk\îXk\Y`f[`\j\c^\e\iXk`feXe[\e\i^pjkfiX^\n`k_k_\8D@Xe[Xd\j_$YXj\[
N`$=`Zfddle`ZXk`feje\knfib]fiiXg`[]XlckXek`Z`gXk`feXe[cfZXk`feXe[iXg`[]Xlck
restoration with minimized impact to customers.
:lii\ekcp[liè^XZìZl`k]Xlck#XccZljkfd\ijfek_`jZìZl`kXi\Y\è^X\Zk\[n`k_
power loss or with power quality issues. The super circuit will demonstrate an ability
kf[peXd`ZXccpi\Zfe^li\k_\ZìZl`kkfXccfn`jfcXk`fef]k_\]Xlck\[j\^d\ek#
kiXej]\ileèk\iilgk\[j\im`Z\jkfle]Xlck\[j\^d\ekj#Xe[kXgjligcljZXgXZ`kp
]ifdX[aXZ\ek]\\[\ijkffgk`d`q\Zfejld\ij\im`Z\%
Beach Cities MicroGrid by San Diego Gas & Electric

8j`kjeXd\`dgc`\j#Xd`Zifî`[i\j\dYc\jfliZlii\ekî`[Xck_fl^_feXdlZ_
jdXcc\ijZXc\%@k`jle`hl\è`kjXY`c`kp[liè^XdXafiî`[[`jkliYXeZ\kf`jfcXk\
from the utility seamlessly with little or no disruption to the loads within it and
seamlessly reconnect later.
K_\9\XZ_:`k`\jD`Zifî`[Gifa\Zkn`ccY\[\dfejkiXk\[XkXe\o`jkè^jlYjkXk`fe
`[\ek`\[Xj9\XZ_:`kpJlYjkXk`fe%@k`jèk\e[\[kff\iXYcl\gièkkfXcc[`jki`Ylk`fe
utilities proving the effectiveness of integrating multiple distributed energy resources
with advanced controls and communications. It seeks to improve reliability and reduce
peak loads on grid components such as distribution feeders and substations.
9fk_lk`c`kp$fne\[Xe[Zljkfd\i$fne\[^\e\iXk`fe#`%\%#g_fkfmfckX`ZGM jpjk\dj
Xe[Y`f[`\j\c$]l\c\[^\e\iXkfij#Xe[\e\i^pjkfiX^\n`ccY\èk\îXk\[Xcfe^n`k_
X[mXeZ\[d\k\iè^è]iXjkilZkli\8D@ èkfk_\i\Xc$nfic[jlYjkXk`fefg\iXk`fej
n`k_Xg\XbcfX[f]Xggifo`dXk\cp,'DN%
Beach Cities will serve as a guide for improved asset use as well as for operating the
entire distribution network in the future. Successfully building such capabilities
will enable customer participation in reliability- and price-driven load management
giXZk`Z\j#Yfk_f]n_`Z_Xi\b\pkfk_\i\Xc`qXk`fef]XjdXik\iî`[%
34
High Penetration of Clean Energy Technologies by The City of Fort Collins

K_\Z`kpXe[`kjZ`kp$fne\[=fik:fccèjLk`c`kpjlggfikXn`[\mXi`\kpf]Zc\Xe\e\i^p
è`k`Xk`m\j#èZcl[è^k_\\jkXYc`j_d\ekf]XQ\if<e\i^p;`jki`Zkn`k_èk_\Z`kp
befneXj=fikQ<; %
Fe\jlZ_è`k`Xk`m\j\\bjkfdf[\ie`q\Xe[kiXej]fidk_\\c\Zki`ZXc[`jki`Ylk`fe
system by developing and demonstrating an integrated system of mixed distributed
resources to increase the penetration of renewables such as solar and wind while
[\c`m\iè^`dgifm\[\Z`\eZpXe[i\c`XY`c`kp%
These and other distributed resources will be fully integrated into the electrical
[`jki`Ylk`fejpjk\dkfjlggfikXZ_`\m\d\ekf]XQ\if<e\i^p;`jki`Zk%@e]XZk#k_`j
;F<$jlggfik\[gifa\Zkèmfcm\jk_\èk\îXk`fef]Xdòf]e\Xicp*'[`jki`Ylk\[
^\e\iXk`fe#i\e\nXYc\\e\i^p#Xe[[\dXe[i\jgfej\i\jfliZ\jXZifjj,Zljkfd\i
cfZXk`fej]fiXeX^î\^Xk\[ZXgXZ`kpf]dfi\k_Xe*%,D\^XnXkkj%
The resources being integrated include:
photovoltaic (PV)
d`ZifkliYè\jjdXccZfdYljk`fekliYè\jk_Xk
produce between 25 kW and 500 kW of power)
[lXc$]l\cZfdYè\[gfn\iXe[_\Xk:?G jpjk\dj
(utilizing the by-product methane generated from
a water treatment plant operation)
i\Z`gifZXkè^fièk\ieXcZfdYljk`fe \e^è\j
YXZblg^\e\iXkfij
nè[
gcl^$è_pYi`[\c\Zki`Zm\_`Zc\jG?<M èXe
ancillary-services role
]l\cZ\ccj
K_`jgifa\Zkn`cc_\cg[\k\idè\k_\dXo`dld[\î\\f]g\e\kiXk`fef][`jki`Ylk\[
resources based on system performance and economics.
35
When Smart Grid implementation

becomes reality, everyone wins
and what were once our risks become
our strengths.
SECTION NINE:
EDISON UNBOUND:
WHATS YOUR
STAKE IN ALL THIS?
36
LETS REVISIT THAT LIST:

EFFICIENCY: It is estimated that tens of billions of dollars
kfnXi[\e\i^pè[\g\e[\eZ\]ifd]fi\`ê\e\i^pjfliZ\j#
will be saved thanks to demand-response programs that
n_`Z_k_\dj\cm\jdXpY\kXi^\kj]fiXkkXZb#flkj`[\f]fli
gifm`[\d\XjliXYc\#g\ij`jk\ekjXmè^jXe[i\hlì\ef
protection and control.
human intervention or behavior change. The dramatically

reduced need to build more power plants and transmission
ENVIRONMENT/CLIMATE CHANGE::c\Xe#i\e\nXYc\
cè\jn`cc_\cg#kff%
jfliZ\jf]\e\i^pc`b\jfcXi#nè[#Xe[^\fk_\idXcZXe\Xj`cp
be integrated into the nations grid. We reduce our carbon
RELIABILITY: 8JdXik>i`[k_XkXek`Z`gXk\j#[\k\ZkjXe[
footprint and stake a claim to global environmental leadership.
responds to problems rapidly reduces wide-area blackouts to
We are being
presented with unprecedented
opportunity and challenge across
our industry. By coming together
around a shared vision of a smarter grid,
we have an equally unprecedented opportunity
and challenge for shaping our industrys
and our nations future.
STEVEN G HAUSER president,
the gridwise alliance
near zero (and will have a similarly diminishing effect on the
NATIONAL ECONOMY: Fg\eè^k_\î`[kfèefmXk`fen`cc
cfjkgif[lZk`m`kp %
enable markets to grow unfettered and innovation to flourish.

=fiZfdgXi`jfejjXb\#Zfej`[\ik_\dXib\k$dXbè^\\Zk
AFFORDABILITY:<e\i^pgi`Z\jn`cci`j\2_fn\m\i#k_\
of the opening of the telephone industry in the 1980s. With
kiXa\Zkfipf]]lkli\ZfjkèZi\Xj\jn`ccY\]Xidfi\îX[lXc
i\m\el\jf]**Y`cc`feXkk_\k`d\#k_\\ejlè^gifc`]\iXk`fe
gfjk$JdXik>i`[%JdXik>i`[k\Z_efcf^`\j#kffcj#Xe[
of consumer-centric products and services transformed it into
techniques will also provide customers with new options for
X((.Y`cc`fedXib\kXjf])''-%
managing their own electricity consumption and controlling

their own utility bills.
GLOBAL COMPETITIVENESS:I\^Xèè^fli\Xicpc\X[èjfcXi
and wind will create an enduring green-collar economy.
SECURITY: The Smart Grid will be more resistant to attack

Xe[eXkliXc[`jXjk\ij%Jf]fik`\[#`kn`ccXcjfdfm\lj
37
SECTION NINE : CONTINUED

EDISON UNBOUND: WHATS YOUR STAKE IN ALL THIS?
TODAYs GRID. AND TOMORROWs.

Characteristic
38
Todays Grid
Smart Grid
Enables active participation

by consumers
Consumers are uninformed and

non-participative with power system
Informed, involved, and active

consumers - demand response and
distributed energy resources.
Accommodates all generation

and storage options
Dominated by central generation- many

obstacles exist for distributed energy
resources interconnection
Many distributed energy resources

with plug-and-play convenience focus
on renewables
Enables new products, services

and markets
Limited wholesale markets, not well

integrated - limited opportunities for
consumers
Mature, well-integrated wholesale

markets, growth of new electricity
markets for consumers
Provides power quality for the

digital economy
Focus on outages - slow response to power

quality issues
Power quality is a priority with a variety

of quality/price options - rapid resolution
of issues
Optimizes assets & operates

efficiently
Little integration of operational data with

asset management - business process silos
Greatly expanded data acquisition of

grid parameters - focus on prevention,
minimizing impact to consumers
Anticipates and responds to system

disturbances (self-heals)
Responds to prevent further damage- focus

is on protecting assets following fault
Automatically detects and responds

to problems - focus on prevention,
minimizing impact to consumer
Operates resiliently against attack

and natural disaster
Vulnerable to malicious acts of terror and

natural disasters
Resilient to attack and natural disasters

with rapid restoration capabilities
K_\JdXik>i`[Zi\Xk\jmXcl\lgXe[[fnek_\mXcl\Z_Xè#dlZ_c`b\k_\
èk\ie\k_Xj%8jn\m\\og\i`\eZ\[n`k_k_\èk\ie\k#Xfi[XYc\#iXg`[Xe[
le`m\ijXcZfddle`ZXk`feZXe\eXYc\jfg_`jk`ZXk\[kiXejXZk`fej#Zi\Xk\
entirely new business models and sweep across society with surprising speed.
Consider for a moment your iPod, YouTube, internet banking
Gi`fikfk_\èk\ie\kjX[fgk`fe#dXib\kj[`[ek_Xm\k_\XY`c`kpkffg\iXk\Xj
Zfjk$\\Zk`m\cpXe[gif[lZk`m\cpXjk_\p[fkf[Xp%=\ngi\[`Zk\[k_Xkg\fgc\
would engage as seriously with the internet as they have. And no one could
have predicted the revolutionary advancements it has fostered.
J`d`cXicp#n\_X[ef`[\Xk_Xkk_\èk\ie\knflc[i\mfclk`fe`q\jfdXep
aspects of our lives.
The Smart Grid represents the relatively simple extension of this movement
to power consumption.
K_fdXj<[`jfe#K_\N`qXi[f]D\ecfGXib#nflc[Xggifm\f]k_\\ek\igi`j\
and innovation that drive the Smart Grid. He might even ask what took
ljjfcfe^%E\nk\Z_efcf^`\jXe[glYc`Zgfc`Z`\j#\Zfefd`ZèZ\ek`m\jXe[
regulations are aligning to bring the Smart Grid to full implementation. Its
success is imperative to the economic growth and vitality of America far
into the future.
We hope that The Smart Grid: An Introduction has given you a clearer
understanding of the need for immediate and concerted action in the
kiXej]fidXk`fef]flieXk`fej\c\Zki`ZXcî`[%Kfc\Xiedfi\#gc\Xj\m`j`k
the websites listed on the following page.
If we all did the things we are capable of doing,

we would literally astound ourselves.
thomas a. edison (1847-1931)
39
RESOURCES
2007 INTERGRAPH ROCKET CITY GEOSPATIAL CONFERENCE:
Presentation:_kkg1&&nnn%[ì\Zk`fejdX^%Zfd&`dX^\j&I:>&DXè&;Xdfe)';fl^_\ikp%ggk),.#*#N_Xk)'`j)'JdXik)'>i`[
COLUMBIA UNIVERSITY1_kkg1&&nnn%c[\f%ZfcldY`X%\[l&i\j&g`&+[+&k\jkY\[j&JdXik$>i`[$N_`k\$GXg\i%g[]
EEI :

_kkg1&&nnn%\\`%fi^&è[ljkipV`jjl\j&\c\Zki`Z`kpVgfc`Zp&X[mXeZ\[Vd\k\iè^Vè]iXjkilZkli\%_kd
_kkg1&&nnn%\\`%fi^&dX^Xqè\&\[`kfi`XcVZfek\ek&efeXmVjkfi`\j&)''.$'0$'($JdXik%g[]
_kkg1&&nnn%\\`%fi^&dX^Xqè\&\[`kfi`XcVZfek\ek&efeXmVjkfi`\j&)'',$'($'($JdXik\i%g[]
ENERGY FUTURE COALITION :

Smart Grid Working Group:_kkg1&&nnn%\e\i^p]lkli\ZfXc`k`fe%fi^&gi\m`\n%Z]d6ZXk@;4(*
Reports:_kkg1&&nnn%\e\i^p]lkli\ZfXc`k`fe%fi^&glYj&XggVjdXikVî`[%g[]

_kkg1&&\e\i^p]lkli\ZfXc`k`fe%fi^&glYj&GADjdXikî`[%g[]
ELSTER:

_kkg1&&nnn%\\`%fi^&d\\kè^j&efeXmV)''/$')$'-$aX&>iXpV<cjk\i%g[]
_kkg1&&nnn%\\`%fi^&è[ljkipV`jjl\j&\c\Zki`Z`kpVgfc`Zp&]\[\iXcVc\^`jcXk`fe&[\Z`[è^VfeVjdXikVd\k\ij%g[]
GRIDPOINT1_kkg1&&nnn%\c\Zki`Z`kp[\c`m\ip]fild%fi^&g[]j&>i`[gfèkVJdXik>i`[%g[]
NATIONAL ELECTRICAL MANUFACTURERS ASSOCIATION:
Presentation:_kkg1&&nnn%e\dX%fi^&^fm&\e\i^p&jdXikî`[&lgcfX[&Gi\j\ekXk`fe$JdXik$>i`[%g[]
NATIONAL ENERGY TECHNOLOGIES LABORATORY:
Presentation:_kkg1&&nnn%\e\i^\k`Zj%Zfd&jlg\iZfe'.&g[]j&E<KCVJpe\i^`\jVf]Vk_\VJdXik>i`[VXe[VJlg\iZfe[lZ`k`m`kpVGlccèj%g[]
THE PEW CENTER ON GLOBAL CLIMATE CHANGE:
Workshop Proceedings:_kkg1&&nnn%g\nZc`dXk\%fi^&[fZLgcfX[j&('$,'V8e[\ijfeV()'-'+V()'.(*%g[]
SAN DIEGO SMART GRID STUDY1_kkg1&&nnn%jXe[`\^f%\[l&\g`Z&glYc`ZXk`fej&[fZld\ekj&'-('(.VJ;JdXik>i`[Jkl[p=@E8C%g[]
SMART GRID NEWS: _kkg1&&nnn%jdXikî`[e\nj%Zfd&XikdXe&glYc`j_&è[\o%_kdc
XCEL ENERGY:
Smart Grid City Web site:_kkg1&&nnn%oZ\c\e\i^p%Zfd&OCN<9&:;8&'#*'/'#($($(V(,,*(V+*(+(V+-0*)$*0//+$'V'V'$'#''%_kdc
EPRI INTELLIGRID1_kkg1&&èk\cc`î`[%\gi`%Zfd&
PNNL GRIDWISE: _kkg1&&î`[n`j\%gec%^fm&
SMART GRID TASK FORCE: _kkg1&&nnn%f\%\e\i^p%^fm&jdXikî`[VkXjb]fiZ\%_kd
SMART GRID: _kkg1&&nnn%f\%\e\i^p%^fm&jdXikî`[%_kd
GRIDWISE ALLIANCE: www.gridwise.org
GRID WEEK: www.gridweek.com
SOURCES
Sources for this book include the Department of Energy, the GridWise Alliance, the Galvin Electricity Initiative
and EPRI/Intelligrid.
40
GLOSSARY:
COMING TO TERMS WITH THE SMART GRID
AMI:8[mXeZ\[D\k\iè^@e]iXjkilZkli\`jXk\id[\efkè^\c\Zki`Z`kpd\k\ijk_Xkd\Xjli\Xe[i\Zfi[ljX^\[XkXXkXdè`dld#è_flicp
èk\imXcj#Xe[gifm`[\ljX^\[XkXkfYfk_Zfejld\ijXe[\e\i^pZfdgXe`\jXkc\XjkfeZ\[X`cp%
AMR:8lkfdXk\[D\k\iI\X[è^`jXk\id[\efkè^\c\Zki`Z`kpd\k\ijk_XkZfcc\Zk[XkX]fiY`ccè^gligfj\jfecpXe[kiXejd`kk_`j[XkXfe\nXp#
usually from the customer to the distribution utility.
ANCILLARY SERVICES: Services that ensure reliability and support the transmission of electricity from generation sites to customer loads. Such
j\im`Z\jdXpèZcl[\1cfX[i\^lcXk`fe#jgèeèî\j\im\#efe$jgèeèî\j\im\#i\gcXZ\d\eki\j\im\#Xe[mfckX^\jlggfik%
APPLIANCE:8g`\Z\f]\hl`gd\ek#Zfddfecpgfn\i\[Yp\c\Zki`Z`kp#lj\[kfg\i]fidXgXik`ZlcXi\e\i^p$[i`m\e]leZk`fe%<oXdgc\jf]Zfddfe
Xggc`XeZ\jXi\i\]i`^\iXkfij#Zcfk_\jnXj_\ijXe[[`j_nXj_\ij#Zfem\ek`feXciXe^\j&fm\ejXe[d`ZifnXm\fm\ej#_ld`[`\ijXe[[\_ld`[`\ij#
kfXjk\ij#iX[`fj#Xe[k\c\m`j`fej%Efk\18ggc`XeZ\jXi\fi[èXi`cpj\c]$ZfekXè\[n`k_i\jg\Zkkfk_\ì]leZk`fe%K_lj#\hl`gd\ekjlZ_XjZ\ekiXc
_\Xkè^Xe[XìZfe[`k`feè^jpjk\djXe[nXk\i_\Xk\ij#n_`Z_Xi\Zfee\Zk\[kf[`jki`Ylk`fejpjk\djè_\i\ekkfk_\ìgligfj\j#Xi\efk
considered appliances.
CAPITAL COST:K_\Zfjkf]\c[[\m\cfgd\ekXe[gcXekZfejkilZk`feXe[k_\\hl`gd\eki\hlì\[]fiè[ljkipfg\iXk`fej%
CARBON DIOXIDE (CO2):8Zfcfic\jj#f[fic\jj#efe$gf`jfeflj^Xjk_Xk`jXefidXcgXikf]<Xik_jXkdfjg_\i\%:XiYfe[`fo`[\`jXgif[lZkf]
]fjj`c$]l\cZfdYljk`feXjn\ccXjfk_\igifZ\jj\j%@k`jZfej`[\i\[Xî\\e_flj\^XjXj`kkiXgj_\Xkè]iXi\[\e\i^p iX[`Xk\[Ypk_\<Xik_èkf
k_\Xkdfjg_\i\Xe[k_\i\YpZfeki`Ylk\jkfk_\gfk\ek`Xc]fi^cfYXcnXidè^%K_\^cfYXcnXidè^gfk\ek`Xc>NG f]fk_\iî\\e_flj\^Xj\j`j
d\Xjli\[èi\cXk`fekfk_Xkf]ZXiYfe[`fo`[\#n_`Z_Ypèk\ieXk`feXcjZ`\ek`ZZfem\ek`fe`jXjj`ê\[XmXcl\f]fe\( %
CLIMATE CHANGE:8k\idlj\[kfi\]\ikfXcc]fidjf]Zc`dXk`ZèZfej`jk\eZp#Ylk\jg\Z`Xccpkfj`ê`ZXekZ_Xe^\]ifdfe\gi\mX`cè^Zc`dXk`Z
Zfe[`k`fekfXefk_\i%@ejfd\ZXj\j#Zc`dXk\Z_Xe^\_XjY\\elj\[jpefepdfljcpn`k_k_\k\id^cfYXcnXidè^2jZ`\ek`jkj#_fn\m\i#k\e[kf
lj\k_\k\idèXn`[\ij\ej\èZclj`m\f]eXkliXcZ_Xe^\jèZc`dXk\#èZcl[è^Zc`dXk`ZZffcè^%
CONGESTION:8Zfe[`k`fek_XkfZZlijn_\eèjlZ`\ekkiXej]\iZXgXZ`kp`jXmX`cXYc\kf`dgc\d\ekXccf]k_\gi\]\ii\[jZ_\[lc\j]fi\c\Zki`Z`kp
transmission simultaneously.
DSM:K_`j;\dXe[$J`[\DXeX^\d\ekZXk\^fipi\gi\j\ekjk_\Xdflekf]Zfejld\icfX[i\[lZk`feXkk_\k`d\f]jpjk\dg\Xb[l\kflk`c`kp
programs that reduce consumer load during many hours of the year. Examples include utility rebate and shared savings activities for the
èjkXccXk`fef]\e\i^p\Z`\ekXggc`XeZ\j#c`^_kè^Xe[\c\Zki`ZXcdXZ_è\ip#Xe[n\Xk_\i`qXk`fedXk\i`Xcj%@eX[[`k`fe#k_`jZXk\^fipèZcl[\jXcc
fk_\i;\dXe[$J`[\DXeX^\d\ekXZk`m`k`\j#jlZ_Xjk_\idXcjkfiX^\#k`d\$f]$lj\iXk\j#]l\cjlYjk`klk`fe#d\Xjli\d\ekXe[\mXclXk`fe#Xe[Xep
fk_\ilk`c`kp$X[dè`jk\i\[;\dXe[$J`[\DXeX^\d\ekXZk`m`kp[\j`ê\[kfi\[lZ\[\dXe[Xe[&fi\c\Zki`Z`kplj\%
DISTRIBUTED GENERATOR: 8^\e\iXkfik_Xk`jcfZXk\[Zcfj\kfk_\gXik`ZlcXicfX[k_Xk`k`jèk\e[\[kfj\im\%>\e\iXc#Ylkefe$\oZclj`m\#
characteristics of these generators include: an operating strategy that supports the served load; and interconnection to a distribution or subtransmission system.
DISTRIBUTION: The delivery of energy to retail customers.
DISTRIBUTION SYSTEM: The portion of the transmission and facilities of an electric system that is dedicated to delivering electric energy
to an end-user.
ELECTRIC GENERATION INDUSTRY: Stationary and mobile generating units that are connected to the electric power grid and can generate
\c\Zki`Z`kp%K_\\c\Zki`Z^\e\iXk`feè[ljkipèZcl[\jk_\\c\Zki`Zgfn\ij\Zkfilk`c`kp^\e\iXkfijXe[è[\g\e[\ekgfn\igif[lZ\ij Xe[
è[ljki`XcXe[Zfdd\iZ`Xcgfn\i^\e\iXkfij#èZcl[è^ZfdYè\[$_\Xk$Xe[$gfn\igif[lZ\ij#Ylk\oZcl[\jle`kjXkjè^c\$]Xd`cp[n\ccè^j%
ELECTRIC GENERATOR:8]XZ`c`kpk_Xkgif[lZ\jfecp\c\Zki`Z`kp#Zfddfecp\ogi\jj\[èb`cfnXkk_flijbN_ fid\^XnXkk_flijDN_ %<c\Zki`Z
generators include electric utilities and independent power producers.
ELECTRIC POWER: The rate at which electric energy is transferred. Electric power is measured by capacity and is commonly expressed in
d\^XnXkkjDN %
ELECTRIC POWER GRID: A system of synchronized power providers and consumers connected by transmission and distribution lines and operated
Ypfe\fidfi\ZfekifcZ\ek\ij%@ek_\Zfekè\ekXcLe`k\[JkXk\j#k_\\c\Zki`Zgfn\iî`[Zfej`jkjf]k_i\\jpjk\dj1k_\<Xjk\ie@ek\iZfee\Zk#
k_\N\jk\ie@ek\iZfee\Zk#Xe[k_\K\oXj@ek\iZfee\Zk%@e8cXjbXXe[?XnX``#j\m\iXcjpjk\dj\eZfdgXjjXi\XjjdXcc\ik_Xek_\JkXk\\%^%#k_\
èk\iZfee\Zkj\imè^8eZ_fiX^\#=XìYXebj#Xe[k_\B\eX`G\eèjlcX2è[`m`[lXc`jcXe[j %
ELECTRIC SYSTEM RELIABILITY: The degree to which the performance of the elements of the electrical system results in power being delivered
kfZfejld\ijn`k_èXZZ\gk\[jkXe[Xi[jXe[èk_\Xdflek[\jì\[%I\c`XY`c`kp\eZfdgXjj\jknfZfeZ\gkj#X[\hlXZpXe[j\Zli`kp%8[\hlXZp
`dgc`\jk_Xkk_\i\Xi\jlZ`\ek^\e\iXk`feXe[kiXejd`jj`fei\jfliZ\jèjkXcc\[Xe[XmX`cXYc\kfd\\kgifa\Zk\[\c\Zki`ZXc[\dXe[gclji\j\im\j
]fiZfekè^\eZ`\j%J\Zli`kp`dgc`\jk_Xkk_\jpjk\dn`cci\dXèèkXZkfg\iXk`feXccp`%\%#n`cc_Xm\jlZ`\ekXmX`cXYc\fg\iXkè^ZXgXZ`kp \m\e
X]k\iflkX^\jfifk_\i\hl`gd\ek]X`cli\%K_\[\î\\f]i\c`XY`c`kpdXpY\d\Xjli\[Ypk_\]i\hl\eZp#[liXk`fe#Xe[dXê`kl[\f]X[m\ij\\\Zkj
on consumer service.
42
41
GLOSSARY
(CONTD)
ELECTRIC UTILITY:8ep\ek`kpk_Xk^\e\iXk\j#kiXejd`kj#fi[`jki`Ylk\j\c\Zki`Z`kpXe[i\Zfm\ijk_\Zfjkf]`kj^\e\iXk`fe#kiXejd`jj`fefi
[`jki`Ylk`feXjj\kjXe[fg\iXk`fej#\`k_\i[ì\Zkcpfiè[ì\Zkcp#k_ifl^_Zfjk$YXj\[iXk\jj\kYpXj\gXiXk\i\^lcXkfipXlk_fi`kp\%^%#JkXk\GlYc`Z
J\im`Z\:fdd`jj`fe #fi`jfne\[YpX^fm\ied\ekXcle`kfik_\Zfejld\ijk_Xkk_\\ek`kpj\im\j%<oXdgc\jf]k_\j\\ek`k`\jèZcl[\1èm\jkfi$
fne\[\ek`k`\j#glYc`Zgfn\i[`jki`Zkj#glYc`Zlk`c`kp[`jki`Zkj#dle`Z`gXc`k`\j#iliXc\c\Zki`ZZffg\iXk`m\j#Xe[JkXk\Xe[=\[\iXcX^\eZ`\j%
ELECTRICITY CONGESTION:8Zfe[`k`fek_XkfZZlijn_\eèjlZ`\ekkiXejd`jj`feZXgXZ`kp`jXmX`cXYc\kf`dgc\d\ekXccf]k_\[\jì\[
transactions simultaneously.
ELECTRICITY DEMAND:K_\iXk\Xkn_`Z_\e\i^p`j[\c`m\i\[kfcfX[jXe[jZ_\[lcè^gfèkjYp^\e\iXk`fe#kiXejd`jj`fe#Xe[[`jki`Ylk`fe
facilities.
ENERGY EFFICIENCY, ELECTRICITY:I\]\ijkfgifîXdjk_XkXi\X`d\[Xki\[lZè^k_\\e\i^plj\[Ypjg\Z`Z\e[$lj\[\m`Z\jXe[jpjk\dj#
kpg`ZXccpn`k_flkX\Zkè^k_\j\im`Z\jgifm`[\[%K_\j\gifîXdji\[lZ\fm\iXcc\c\Zki`Z`kpZfejldgk`fei\gfik\[èd\^XnXkk_flij #f]k\e
without explicit consideration for the timing of program-induced savings. Such savings are generally achieved by substituting technologically
dfi\X[mXeZ\[\hl`gd\ekkfgif[lZ\k_\jXd\c\m\cf]\e[$lj\j\im`Z\j\%^%c`^_kè^#_\Xkè^#dfkfi[i`m\ n`k_c\jj\c\Zki`Z`kp%<oXdgc\j
èZcl[\_`^_$\Z`\eZpXggc`XeZ\j#\Z`\ekc`^_kè^gifîXdj#_`^_$\Z`\eZp_\Xkè^#m\ek`cXkè^Xe[XìZfe[`k`feè^?M8: jpjk\djfiZfekifc
df[`ZXk`fej#\Z`\ekYl`c[è^[\j`ê#X[mXeZ\[\c\Zki`Zdfkfi[i`m\j#Xe[_\Xki\Zfm\ipjpjk\dj%
ENERGY SAVINGS:8i\[lZk`feèk_\Xdflekf]\c\Zki`Z`kplj\[Yp\e[lj\ijXjXi\jlckf]gXik`Z`gXk`feè\e\i^p\Z`\eZpgifîXdjXe[cfX[
management programs.
ENERGY SERVICE PROVIDER: An energy entity that provides service to a retail or end-use customer.
FEDERAL ENERGY REGULATORY COMMISSION (FERC):K_\=\[\iXcX^\eZpn`k_ali`j[`Zk`fefm\ièk\ijkXk\\c\Zki`Z`kpjXc\j#n_fc\jXc\\c\Zki`Z
iXk\j#_p[if\c\Zki`Zc`Z\ejè^#eXkliXc^Xjgi`Zè^#f`cg`g\cè\iXk\j#Xe[^Xjg`g\cè\Z\ik`ZXk`fe%=<I:`jXeè[\g\e[\eki\^lcXkfipX^\eZp
n`k_èk_\;\gXikd\ekf]<e\i^pXe[`jk_\jlZZ\jjfikfk_\=\[\iXcGfn\i:fdd`jj`fe%
FUEL CELL:8[\m`Z\ZXgXYc\f]^\e\iXkè^Xe\c\Zki`ZXcZlii\ekYpZfem\ikè^k_\Z_\d`ZXc\e\i^pf]X]l\c\%^%#_p[if^\e [ì\Zkcpèkf\c\Zki`ZXc
\e\i^p%=l\cZ\ccj[`\i]ifdZfem\ek`feXc\c\Zki`ZXcZ\ccjèk_Xkk_\XZk`m\dXk\i`XcjjlZ_Xj]l\cXe[fop^\eXi\efkZfekXè\[n`k_èk_\Z\ccYlk
Xi\jlggc`\[]ifdflkj`[\%@k[f\jefkZfekXèXeèk\id\[`Xk\_\XkZpZc\#Xj[fdfjkfk_\i\c\Zki`ZXc^\e\iXk`fek\Z_e`hl\j%
GENERATION: K_\gifZ\jjf]gif[lZè^\c\Zki`Z\e\i^pYpkiXej]fidè^fk_\i]fidjf]\e\i^p2Xcjf#k_\Xdflekf]\c\Zki`Z\e\i^pgif[lZ\[#
expressed in kilowatthours.
GLOBAL WARMING: An increase in the near surface temperature of the Earth. Global warming has occurred in the distant past as the result
f]eXkliXcèl\eZ\j#Ylkk_\k\id`jkf[Xpdfjkf]k\elj\[kfi\]\ikfk_\nXidè^jfd\jZ`\ek`jkjgi\[`Zkn`ccfZZliXjXi\jlckf]èZi\Xj\[
anthropogenic emissions of greenhouse gases.
GREENHOUSE GASES: K_fj\^Xj\j#jlZ_XjnXk\imXgfi#ZXiYfe[`fo`[\#e`kifljfo`[\#d\k_Xe\#_p[if]clfifZXiYfej?=:j #
g\i]clfifZXiYfejG=:j Xe[jlc]li_\oX]clfi`[\#k_XkXi\kiXejgXi\ekkfjfcXij_fik$nXm\ iX[`Xk`feYlkfgXhl\kfcfe^$nXm\è]iXi\[
iX[`Xk`fe#k_ljgi\m\ekè^cfe^$nXm\iX[`Xek\e\i^p]ifdc\Xmè^<Xik_jXkdfjg_\i\%K_\e\k\]]\Zk`jXkiXggè^f]XYjfiY\[iX[`Xk`fe
and a tendency to warm the planets surface.
INTERMITTENT ELECTRIC GENERATOR OR INTERMITTENT RESOURCE: An electric generating plant with output controlled by the natural
mXi`XY`c`kpf]k_\\e\i^pi\jfliZ\iXk_\ik_Xe[`jgXkZ_\[YXj\[fejpjk\di\hlì\d\ekj%@ek\id`kk\ekflkglkljlXccpi\jlckj]ifdk_\[ì\Zk#efe$
jkfi\[Zfem\ij`fef]eXkliXccpfZZliiè^\e\i^plo\jjlZ_XjjfcXi\e\i^p#nè[\e\i^p#fik_\\e\i^pf]]i\\$fnèî`m\ijk_Xk`j#ile$f]$i`m\i
_p[if\c\Zki`Z`kp %
INTERRUPTIBLE LOAD:K_`j;\dXe[$J`[\DXeX^\d\ekZXk\^fipi\gi\j\ekjk_\Zfejld\icfX[k_Xk#èXZZfi[XeZ\n`k_ZfekiXZklXc
XiiXe^\d\ekj#ZXeY\èk\iilgk\[Xkk_\k`d\f]XeelXcg\XbcfX[Ypk_\XZk`fef]k_\Zfejld\iXkk_\[ì\Zki\hl\jkf]k_\jpjk\dfg\iXkfi%K_`j
kpg\f]ZfekifcljlXccpèmfcm\jcXi^\$mfcld\Zfdd\iZ`XcXe[è[ljki`XcZfejld\ij%@ek\iilgk`Yc\CfX[[f\jefkèZcl[\;ì\ZkCfX[:fekifc%
LINE LOSS:<c\Zki`Z\e\i^pcfjkY\ZXlj\f]k_\kiXejd`jj`fef]\c\Zki`Z`kp%DlZ_f]k_\cfjj`jk_\idXcèeXkli\%
LOAD (ELECTRIC):K_\Xdflekf]\c\Zki`Zgfn\i[\c`m\i\[fii\hlì\[XkXepjg\Z`ZgfèkfigfèkjfeXjpjk\d%K_\i\hlì\d\ekfi`^èXk\jXk
the energy-consuming equipment of the consumers.
LOAD CONTROL PROGRAM: A program in which the utility company offers a lower rate in return for having permission to turn off the air
conditioner or water heater for short periods of time by remote control. This control allows the utility to reduce peak demand.
OFF PEAK:G\i`f[f]i\cXk`m\cpcfnjpjk\d[\dXe[%K_\j\g\i`f[jf]k\efZZliè[X`cp#n\\bcp#Xe[j\XjfeXcgXkk\iej2k_\j\f$g\Xbg\i`f[j[`\i
for each individual electric utility.
ON PEAK:G\i`f[jf]i\cXk`m\cp_`^_jpjk\d[\dXe[%K_\j\g\i`f[jf]k\efZZliè[X`cp#n\\bcp#Xe[j\XjfeXcgXkk\iej2k_\j\fe$g\Xbg\i`f[j
differ for each individual electric utility.
OUTAGE:K_\g\i`f[[liè^n_`Z_X^\e\iXkè^le`k#kiXejd`jj`fecè\#fifk_\i]XZ`c`kp`jflkf]j\im`Z\%
42
PEAK DEMAND OR PEAK LOAD:K_\dXo`dldcfX[[liè^Xjg\Z`\[g\i`f[f]k`d\%

PEAKER PLANT OR PEAK LOAD PLANT:8gcXekljlXccp_fljè^fc[#cfn$\Z`\eZpjk\Xdle`kj#^XjkliYè\j#[`\j\cj#figldg\[$jkfiX^\
hydroelectric equipment normally used during the peak-load periods.
PEAKING CAPACITY::XgXZ`kpf]^\e\iXkè^\hl`gd\ekefidXccpi\j\im\[]fifg\iXk`fe[liè^k_\_flijf]_`^_\jk[X`cp#n\\bcp#fij\XjfeXc
loads. Some generating equipment may be operated at certain times as peaking capacity and at other times to serve loads on an around-theclock basis.
RATE BASE:K_\mXcl\f]gifg\ikplgfen_`Z_Xlk`c`kp`jg\id`kk\[kf\XieXjg\Z`\[iXk\f]i\klieXj\jkXYc`j_\[YpXi\^lcXkfipXlk_fi`kp%K_\
rate base generally represents the value of property used by the utility in providing service and may be calculated by any one or a combination
f]k_\]fccfnè^XZZflekè^d\k_f[j1]XìmXcl\#gil[\ekèm\jkd\ek#i\gif[lZk`feZfjk#fifi`^èXcZfjk%;\g\e[è^fen_`Z_d\k_f[`jlj\[#k_\
iXk\YXj\èZcl[\jZXj_#nfibè^ZXg`kXc#dXk\i`XcjXe[jlggc`\j#[\[lZk`fej]fiXZZldlcXk\[gifm`j`fej]fi[\gi\Z`Xk`fe#Zfeki`Ylk`fejèX`[f]
ZfejkilZk`fe#Zljkfd\iX[mXeZ\j]fiZfejkilZk`fe#XZZldlcXk\[[\]\ii\[èZfd\kXo\j#Xe[XZZldlcXk\[[\]\ii\[èm\jkd\ekkXoZi\[`kj%
RATE CASE:8gifZ\\[è^#ljlXccpY\]fi\Xi\^lcXkfipZfdd`jj`fe#èmfcmè^k_\iXk\jkfY\Z_Xi^\[]fiXglYc`Zlk`c`kpj\im`Z\%
RATE FEATURES:Jg\Z`XciXk\jZ_\[lc\jfikXi`jf\i\[kfZljkfd\ijYp\c\Zki`ZXe[&fieXkliXc^Xjlk`c`k`\j%
RATE OF RETURN: The ratio of net operating income earned by a utility is calculated as a percentage of its rate base.
RATE OF RETURN ON RATE BASE:K_\iXk`ff]e\kfg\iXkè^èZfd\\Xie\[YpXlk`c`kp#ZXcZlcXk\[XjXg\iZ\ekX^\f]`kjiXk\YXj\%
RATE SCHEDULE (ELECTRIC):8jkXk\d\ekf]k_\eXeZ`Xck\idjXe[Zfe[`k`fej^fm\ieè^XZcXjjfiZcXjj\jf]lk`c`kpj\im`Z\jgifm`[\[kfX
customer. Approval of the schedule is given by the appropriate rate-making authority.
RATEMAKING AUTHORITY: 8lk`c`kpZfdd`jj`fejc\^XcXlk_fi`kpkfo#df[`]p#Xggifm\#fi[`jXggifm\iXk\jXj[\k\idè\[Ypk_\gfn\ij^`m\e
k_\Zfdd`jj`feYpXJkXk\fi=\[\iXcc\^`jcXkli\%
RATES:K_\Xlk_fi`q\[Z_Xi^\jg\ile`kfic\m\cf]Zfejldgk`fe]fiXjg\Z`\[k`d\g\i`f[]fiXepf]k_\ZcXjj\jf]lk`c`kpj\im`Z\jgifm`[\[kfX
customer.
RELIABILITY (ELECTRIC SYSTEM): A measure of the ability of the system to continue operation while some lines or generators are out of service.
I\c`XY`c`kp[\Xcjn`k_k_\g\i]fidXeZ\f]k_\jpjk\dle[\ijki\jj%
RENEWABLE ENERGY RESOURCES: Energy resources that are naturally replenishing but flow-limited. They are virtually inexhaustible in duration
Ylkc`d`k\[èk_\Xdflekf]\e\i^pk_Xk`jXmX`cXYc\g\ile`kf]k`d\%I\e\nXYc\\e\i^pi\jfliZ\jèZcl[\1Y`fdXjj#_p[if#^\fk_\idXc#jfcXi#
nè[#fZ\Xek_\idXc#nXm\XZk`fe#Xe[k`[XcXZk`fe%
SOLAR ENERGY:K_\iX[`Xek\e\i^pf]k_\jle#n_`Z_ZXeY\Zfem\ik\[èkffk_\i]fidjf]\e\i^p#jlZ_Xj_\Xkfi\c\Zki`Z`kp%
TARIFF: A published volume of rate schedules and general terms and conditions under which a product or service will be supplied.
THERMAL ENERGY STORAGE:K_\jkfiX^\f]_\Xk\e\i^p[liè^lk`c`kpf$g\Xbk`d\jXke`^_k#]filj\[liè^k_\e\ok[Xpn`k_flkèZliiè^
daytime peak electric rates.
THERMAL LIMIT:K_\dXo`dldXdflekf]gfn\iXkiXejd`jj`fecè\ZXeZXiipn`k_flkjl\iè^_\Xk$i\cXk\[[\k\i`fiXk`fef]cè\\hl`gd\ek#
particularly conductors.
TIME-OF-DAY PRICING: A special electric rate feature under which the price per kilowatthour depends on the time of day.
TIME-OF-DAY RATE: The rate charged by an electric utility for service to various classes of customers. The rate reflects the different costs of
providing the service at different times of the day.
TRANSMISSION AND DISTRIBUTION LOSS:<c\Zki`Z\e\i^pcfjk[l\kfk_\kiXejd`jj`feXe[[`jki`Ylk`fef]\c\Zki`Z`kp%DlZ_f]k_\cfjj`j
thermal in nature.
TRANSMISSION (ELECTRIC) (VERB): The movement or transfer of electric energy over an interconnected group of lines and associated
equipment between points of supply and points at which it is transformed for delivery to consumers or is delivered to other electric systems.
Transmission is considered to end when the energy is transformed for distribution to the consumer.
UTILITY GENERATION: Generation by electric systems engaged in selling electric energy to the public.
UTILITY-SPONSORED CONSERVATION PROGRAM: 8epgifîXdjgfejfi\[YpXe\c\Zki`ZXe[&fieXkliXc^Xjlk`c`kpkfi\m`\n\hl`gd\ekXe[
ZfejkilZk`fe]\Xkli\jèYl`c[è^jXe[X[m`j\fenXpjkfèZi\Xj\k_\\e\i^p\Z`\eZpf]Yl`c[è^j%8cjfèZcl[\[Xi\lk`c`kp$jgfejfi\[gifîXdj
kf\eZfliX^\k_\lj\f]dfi\\e\i^p$\Z`\ek\hl`gd\ek%@eZcl[\[Xi\gifîXdjkf`dgifm\k_\\e\i^p\Z`\eZpèk_\c`^_kè^jpjk\dfi
Yl`c[è^\hl`gd\ekfik_\k_\idXc\Z`\eZpf]k_\Yl`c[è^j_\cc%
WIND ENERGY:Bè\k`Z\e\i^pgi\j\ekènè[dfk`fek_XkZXeY\Zfem\ik\[kfd\Z_Xe`ZXc\e\i^p]fi[i`mè^gldgj#d`ccj#Xe[\c\Zki`Zgfn\i
generators.
43
www.energy.gov

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Smart Grid

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Exploring the imperative of revitalizing

Americas electric infrastructure.

How a smarter grid works as an enabling engine

IT IS A COLOSSAL TASK. BUT IT IS A TASK

It is to this mission that The Smart Grid: An Introduction is dedicated.

From the Department of Energy

means for our country

ONE Introduction: We Dont Have Much Time.

Toward an orderly transition to a smarter grid

TWO Edison vs. Graham Bell: The Case for Revitalization.

THREE The Grid as It Stands: Whats at Risk?

FOUR The Smart Grid: What It Is. What It Isnt.

FIVE Compare and Contrast: A Grid Where Everything is Possible.

SIX First Things First: Teasing Out the Complexities.

Making it possible for consumers to participate

From West Virginia to California to Hawaii, a smarter grid is taking shape

NINE Edison Unbound: Whats Your Stake in All This?

Benefits for everyone

Resources and Glossary

Coming to terms with the Smart Grid...

WE DONT HAVE MUCH TIME.

A tale of two timelines

Menlo Park Workshop

Pearl Street Station

First Street Lamps

Compact Fluorescent Light

There is a popular comparison that

The story goes like this:

Operator Switching Stations

Rotary Dial with Ringer

While this thought experiment speaks volumes about

Given that the growth of the nations global economic leadership

familiar with the grids basic infrastructure and perhaps even an

to human involvement and endeavor that it has alternately (and

Everything must work almost perfectly at all times and does.

megawatts of generating capacity connected to more than

the industry ever know about it.

POWER SYSTEM FACT

Engineered and operated by dedicated professionals over

Academy of Engineering set about identifying the single most

important engineering achievement of the 20th century. The

offer us among the highest levels of reliability in the world for

Academy compiled an estimable list of twenty accomplishments

which have affected virtually everyone in the developed world.

But we all of us have taken this marvelous machine for

achievement of the 20th Century.

has begun to fail us more frequently and presents us with

Long Distance Calling

First Telecom Satellite

Phone Over the Internet

Since 1982, growth in peak demand for electricity

hundreds of thousands of high-voltage transmission

issues are estimated to cost American business more

than $100 billion on average each year.

In short, the grid is struggling to keep up.

Based on 20TH century design requirements and having matured

Energy efficiency? A marginal consideration at best when

of blackouts has far broader implications than simply waiting

Environmental impacts? Simply not a primary concern when

the existing grid was designed.

transactions rendered inoperable. Such are the effects of even

Customer choice? What was that?

did you know

POWER SYSTEM FACT