The smart grid is the evolution of our current electrical grid, using new technology to optimize the conservation and delivery of power. All told, the smart grid promises to increase the efficiency of today’s system by around 9% by 2030, saving more than 400 billion kilowatt-hours each year. That’s huge. That means we could save $42 billion in year 1 and as we keep saving energy, its value each year only increases.

The "grid" refers to our nation's electric power infrastructure. Smart grid is the application of information technology, tools and techniques that can make the grid run more efficiently. The current electric grid is highly inefficient and very much in need of modernization.

Answered by various utilities, security is a top priority for utilities:

AEP Ohio: The privacy, protection and disclosure of personal information are important to AEP Ohio. Cyber security is essential to the success of any smart grid project. AEP Ohio intends to advance the cyber security of the smart grid by establishing a dedicated cyber security operations center in Columbus. Cyber security is a familiar concept to the utility industry. They have extensive experience maintaining security on the information systems needed to operate the electrical grid. Installing advanced meters adds a new component to their system, but the meters, communications and information management will be subject to the same Department of Energy security standards that keep the grid secure.

SDG&E: The Information Technology (IT) security controls SDG&E have in place for smart meters reflect energy industry best practices. They are designed to provide a very high level of assurance that our systems cannot be compromised. SDG&E considers security a top priority. SDG&E takes all reasonable and necessary steps to ensure the services they provide their customers are not only high quality and easily available, but also extremely secure. In addition, they constantly monitor for evolving threats and attempts to breach security and progressively update their system protection as needed.  They also regularly review, test and practice incident response processes.

SCE: Security protocols for Edison SmartConnect are adapted from the banking and defense sectors in order to ensure the highest levels of security and privacy. All information transmitted between meters and the utility is encrypted using U.S. government-approved and recommended standards, and we work with federal and state agencies to stay ahead of cyber threats.

Our electric system is more than 100 years old and although it has served us well, it needs upgrading. The energy industry is poised for a dramatic change. In the face of expanding customer expectations, increasing environmental regulation, and new technology, the traditional approach of building new power plants to meet energy demand can no longer be the only option. We must find ways to improve our service and meet our customers’ energy needs in a smart, lower-carbon way. Renewable generation and energy efficiency must, and will, play a larger role.

And consumers want more information and control, too; they want reliable and affordable energy that’s clean, and this requires a unique balancing act. By deploying digital energy technologies and modernizing our power grid, we can bring the grid into the 21st century, empower consumers to make wiser energy decisions, and help create a cleaner, lower-carbon and more energy-efficient world.