Historically, distribution systems have had a minimal role in power system operation and control. Many distribution utilities have employed demand management schemes that switch loads such as water heaters and air conditioner to reduce load during peak conditions or emergency situations. The controllability offered by such schemes has been rather limited, however. This lack of involvement of distribution is largely a consequence of the technical difficulties involved in communicating (with sufficient bandwidth) with consumers. Smart grids promise cost-effective technology that overcomes these limitations, allowing consumers to respond to power system conditions and hence actively participate in system operations.