In New York State, up to 10% of total electrical energy generated is lost in transmission and distribution networks before getting to the customer. Over the past 10 years, electric utilities operating in New York State have spent $17 billion to maintain its electric power grid. That cost is predicted to jump to $30 billion over the next decade. Investments in smart grid technologies can improve efficiency and delivery, reduce the severity of unplanned outages, and accommodate a diverse supply of clean energy generation sources and transportation. A smart grid is systematically modernized with advanced equipment and automated data collection and communications technologies.

Technologies in development such as sophisticated sensor systems allow utilities to monitor issues in the grid. The sensors also offer ways to manage power generated from multiple sources including solar electric systems.

Existing electricity transmission lines have limits on how much electricity that they can carry and are often called on to deliver more. From 1988 to 1998, U.S. electricity demand rose by nearly 30%, but transmission capacity grew by only 15%. Combined heat and power (CHP) systems can locally and cost-effectively generate power and heat and cool buildings. Incorporating CHP into smart grids could help with local short-term spikes in energy demand.