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Technology & Innovation

Can Software Make a Smart Power Grid?

Software has enabled one utility company to cut power consumption by up to 50 percent by more intelligently managing the delivery of electricity to homes and businesses. 

What’s the Latest Development?

In a small test of electricity grids in Washington state, new computer software developed by I.B.M. reduced power consumption by up to 50 percent, saving customers an average of 10 percent on their bills. That system is now set to be tested on a much larger scale, ultimately knitting together the electricity grids of five states and 11 utility companies. The project will “integrate wind power, store power from the grid, accommodate electric vehicle charging, and establish ‘microgrids’ that can survive on their own in the event of a power outage.”

What’s the Big Idea?

As America’s infrastructure rapidly ages, smart grids are one potential way to modernize the nation’s power system. The software developed by I.B.M., which was funded by the Recovery Act of 2009, “sends signals to the smart thermostats and appliances about how much it currently costs the utility to provide it electricity. Then, based on the preferences entered by the consumer, the smart systems in a home send signals back to the utility about how much power they will use.”


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