Is the Smart Grid Really a Smart Idea? A Smart Electrical System Can Bring Social Benefits, But Smaller Customers May Pay Too High a Price. A More Modest Plan, Guided by Government Policy, Would Be Better (Smart GRID‪)‬

It is hard to quarrel with the idea that it is good to be smart. That presumably is why the proponents of some radical changes in the design of the U.S. electrical system came up with the name "smart grid." The Obama administration has signed on. So have members of Congress from both parties and state utility regulators all over the country. Propelled by promises of greater energy efficiency and reduced greenhouse gas emissions, the smart grid is on a roll. The smart grid has the potential to bring the United States a more stable, economical, and environmentally friendly electrical system. Unfortunately, it is far from the unalloyed plus portrayed to the public. The cost will be high: Although the economic stimulus program approved by Congress last year included $4.5 billion to help create the smart grid, the full build-out will cost at least a couple of hundred billion dollars more. The potential savings will justify the cost only if the smart grid brings sweeping changes in the way consumers use and pay for electricity. But these changes have the potential to saddle them with unnecessarily high prices, force them to bear unnecessary risks, and make their local utility company an uninvited participant in the intimate details of their everyday lives. These potential changes deserve a thorough airing before the United States commits to such large investments in the name of smartness.