The smart grid holds great potential but smart grid investments will be cost-effective only if their benefits outweigh the substantial costs. Regulators and consumers need to know how the smart grid will deliver these benefits and make electric bills more manageable. Consumers must have dynamic pricing options and automated controls. Policies must support clean distributed resources,  and at the highest policy level, regulators should recognize that energy and environmental goals are interlocked.

In a series of policy papers, RAP examines strategies for improving the efficiency of utility distribution systems. We define the potential benefits for energy efficiency and demand response, and we show how the smart grid can unlock additional benefits for distributed generation for owners and utilities.

With an understanding of the potential benefits of smart grids for energy efficiency and clean distributed generation, state regulators can use their broad authority to put in place a regulatory framework that will tap the smart grid’s full potential.