In a project launched earlier this year, researchers at the Pacific Northwest National Laboratory (PNNL) in Richland, WA have modified power-hungry appliances – such as water heaters and dryers – in hundreds of homes in the state to test how networked technology can both save homeowners money on electricity bills and relieve the strain on power grids.

The experiments are done under an umbrella project called GridWise, a U.S. Department of Energy-supported initiative to modernize the country’s power grids by installing telecommunication, sensor, and computer technology into the existing power infrastructure. By networking major appliances to the Internet in order to monitor real-time electricity prices, and equipping others with specialized chips to track grid stability, the researchers hope to overhaul the antiquated electricity infrastructure and harness the power of real-time tracking to optimize energy use.

“GridWise is the notion that information technology will revolutionize the way power grids work,” says Robert Pratt, manager of the program at PNNL.

The GridWise project consists of two parts: one gives customers the option to set appliance electricity consumption, to either optimize cost savings or comfort, and the other helps to automate electrical activity on a grid by monitoring use across a region. While consumers have more direct control over electricity use in their homes with the first project, Pratt says that both are aimed at creating a more cost-effective and reliable network.

The first portion of the project, which gives control over electrical use to individual homeowners, is the most ambitious, since it attempts to cull real-time data from households while load balancing the strain on the power grid. So far, 200 homes on Washington’s Olympic Peninsula have water heaters and thermostats wirelessly communicating with an Internet-capable “gateway” box that contains specialized software. The networked box, Pratt explains, monitors the cost of electricity every five minutes, a feature that depends on the overall supply and demand in the region. Then, according to the homeowner’s preference – for cost saving, comfort, or a combination of the two, registered through a website – the software automatically adjusts the thermostat and turns the water heater on or off, depending on the current price of electricity in the region, which is updated every five minutes.

Moderating electricity use based on real-time price is a radical departure from current utility fee structure. Today, most people buy electricity from utilities using a flat-rate structure, which can lead to higher charges per kilowatt-hour during certain times of day and days of the year, says Greg Bartolomei, vice president of engineering at GridPoint. For instance, the Pacific Gas & Electricity Company charges more than three times the amount during peak time in the summer than during off-peak times. Therefore, having a system that tracks these price changes in real time can save customers a significant amount of money, he says.

The second portion of GridWise, dubbed the Grid Friendly Appliance Project, is much simpler in design, allowing Northwest utilitiesto automatically monitor the energy needs of appliances and regulate power distribution more uniformly.

Currently, the testing involves placing Whirlpool dryersin 150 homes, with a chip in each one that monitors the amount of power coming into it. When the chip in the grid-friendly dryer registers a frequency drop below what the grid considers normal – the current entering the home usually oscillates at 60 cycles per second – the heating element on the dryers across the grid will randomly turn off, then turn back on when the grid is stabilized. It only takes a few extra minutes for clothes to dry, Pratt says, but when those appliances drop off the grid, he says, “it’s the equivalent of turning power stations on.”