The idea of the smart grid and the ability to communicate real time electrical market data to consumers will allow people to choose when to use electricity based on the smart grid rates. There is a lot involved in the electrical market and power pricing. Basically electricity is more expensive during higher demand times, usually mid week, mid day to evening. During the times if high demand electricity rates go up exponentially. This is due in part to the lack of generation capability and availability.

With the smart grid the communication of real time electricity rates to the consumer will be possible. This will allow people to choose not to use as much power during peak times to avoid high costs; this will overall reduce the demand. Smart grid compatible appliances or grid friendly appliances will be able to turn off and on automatically based on the cost of electricity at any given moment in time.

A map of smart meter installations by state provided by the Institute for Electric Efficiency illustrates progress. As of May 2012, 36 million smart meters have been installed across the country. By 2015, approximately 65 million smart meters are expected to be installed—that’s more than half of all U.S. households.

The smart grid empowers customers by creating the foundation necessary for a number of new technology-driven energy alternatives, emission reductions, efficiency improvements, a shift to a lower emitting fuel for transpor­tation, and encourages more energy efficiency by providing real-time energy usage data to customers. Research shows that when customers know how much energy they’re using, they will reduce their use by 5 to 10 percent. Additionally, the smart grid promotes integration of the vast amount of renewable energy that is currently being mandated and that is already in the pipeline for development.

• A smart grid senses problems and reroutes power automatically.  This prevents some outages and reduces the length of those that do occur.

• A smart grid helps meet growing demand for electricity while limiting the need to invest in new power plants.

• A smart grid delivers the power “quality” necessary to run our increasingly digital homes – power with fewer sags, spikes, and interruptions.

• Smart grid reduces greenhouse gas emissions by making it easier to connect renewable energy sources to the electricity grid.

• Smart grid and smart meters help consumers save money by providing near real time energy usage information and the ability to manage electricity use.

• Smart grid and smart meters make it easier for utilities to offer new kinds of rate plans to help customers manage energy usage and cost -- for example, by shifting some types of usage to times of day when electricity costs less. 

• Smart meters eliminate the need for meter reading – instead, usage information is transmitted directly to the utility for timely, accurate billing.  There is never a need to send an estimated bill to the customer.