We’ve heard about the “smart grid” in the news and advertising. It’s a part of the new Waxman-Markey Energy Bill, and the President even mentioned it in his inaugural address. It all sounds promising, if a little short on details. So what exactly is a smart grid?

First a quick review of how electricity gets to us. Electricity travels through wires, sometimes hundreds of miles, from power plants, solar panels, and wind farms to homes and businesses. If you imagine these wires are roads, the high-voltage lines you see strung on huge metal towers are eight-lane freeways with the capacity to move a large volume of electricity.

Substations are off-ramps, where the high-voltage electricity is stepped down by transformers before moving out on lower voltage distribution lines into neighborhoods and commercial zones. Think surface streets.

This complex system was built over decades and has grown with each new wave of development. The responsibility for maintaining the extensive grid belongs to the utilities that use it to deliver electricity. Utilities act both as road crews and traffic cops: they build and repair lines and other system hardware, and monitor and control the flow of electricity as demand varies by region, and fluctuates hour to hour. It’s a big job that includes everything from the critical finding of the source of power outages, to the technical gathering of information about supply and demand throughout the system, to the routine measuring of the amount of power delivered. All these functions have been performed by individuals since electric utilities first began.

Enter the digital age of wireless Internet connections and the advent of the smart grid.

The smart grid combines technologies, hardware, and software applications that make it easier to gather and relay information and respond more quickly to changing conditions.

For the utility, the hardware includes sensors positioned at regular intervals along the lines and transceivers that permit reports of downed lines, or points of congestion, to be relayed, and power appropriately re-routed. New software will calculate the availability of renewable energy sources — when the wind is blowing and where the sun is shining — and factor that information into the overall picture, enabling utilities to maximize the use of renewable sources in the power they generate.

On the consumer side there are a number of “smart home” components that interface with the smart grid. Smart appliances will let you monitor your power usage from any Internet-connected computer and program them to run during off-peak hours, or put them on standby when you’re away. Smart fueling will make it possible to charge up electric or plug-in hybrid vehicles at night when electricity is in low demand and return some of that stored power to the grid at times of the day when it’s most needed. Smart meters will replace meter readers, and price electricity based on the time it’s used. That way, consumers can save money by conserving power and using certain appliances during off-peak hours. By logging onto your account with your utility, you’ll be able to check your consumption and decide where to cut back or change usage habits.

That same instant information from the new meters will also be useful to the utility. A direct connection with your smart appliances will allow utilities to power them down for periods so brief you won’t even notice. The cumulative effect over millions of households will help to balance supply and demand, avoid system overloads, and prevent brownouts and blackouts.

Simple, but ingenious, smart grids represent a long-range vision for electricity that will make this indispensable service more efficient, responsive, and easier on the environment. For those who struggle with change, it’s important to remember that one thing won’t change: at the end of the day, when you turn on the lights, the lights will still go on.