This paper is meant to help policymakers in particular by describing what the smart grid is and isn’t, examining its potential, surveying who is investing in smart grid, and examining its potential costs and savings. The full-scale transition to a smart grid would represent one of the most fundamental shifts that the electric power industry has ever experienced; yet most aspects of the smart grid exist now only in the form of large-scale pilot programs. Some of the devices upon which the smart grid will incorporate, such as plug-in hybrid vehicles or sophisticated battery technology, are still under development; others are well developed. Similarly, the policies, regulations and operating protocols that would govern the smart grid are still under development.
This document aims to respond to a few of the issues identified above by providing a brief description of the smart grid and its potential and then laying out a series of questions that state policymakers may find helpful as they confront the burgeoning interest in smart grid.