As the electric grid gets smarter, you can choose to use electricty when it's cheapest.

RODALE NEWS, EMMAUS, PA—Late last week, President Obama and Energy Secretary Steven Chu announced that 100 utility companies in 49 states would receive $3.4 billion in government grants for making smart grid technology upgrades to power plants and transmission lines and installing smart meters on customers' homes. The money was allocated as part of the stimulus bill passed in February. But it follows on the heels of the Energy Independence and Security Act of 2007, which called for the implementation of smart grid technology to reduce the USA's reliance on foreign oil, and to boost domestic renewable-energy production.

Here are three ways that the new grants can mean more affordable electricity:

#1: The smart grid will react to demands for electricity.
So what exactly makes a grid "smart"? In his new book being released this week, Our Choice (Rodale, 2009), Al Gore likens the smart grid to the Internet, a system that allows both energy and information to flow two ways, making it possible for utilities to talk to end users about power needs, and for end users to feed renewable power back into the system. According to the U.S. Department of Energy, our demand for energy has exceeded transmission capability by 25 percent a year since 1982, and the existing system just can't keep up. Power outages cost homeowners and businesses $150 billion every year in food spoilage, lost revenue, and increased utility rates. Smart grid technology, as Gore writes in his follow-up to An Inconvenient Truth, can sense peak demands, turn on power sources to meet them, and turn them off again when demand is low. This ultimately saves money for utilities, cuts the strain on older transformers and transmission lines, and reduces greenhouse-gas emissions. During blackouts or power outages, a smart grid would be able to heal itself, "assisting utilities by instantly informing them of the exact location where emergency repairs are needed," writes Gore. The way the existing system is set up, a utility doesn't even know when homeowners lose power until customers call to report the problem.