Millions of homes to get smart meters

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NEW YORK (CNNMoney.com) -- Some 18 million smart meters are set to make their way into American homes as part of the economic stimulus plan focusing on energy efficiency, Energy Department officials said Tuesday.

The meters, which are designed to more effectively communicate with utilities and appliances, and help consumers manage their electricity more efficiently, are being distributed by utilities around the country with partial funding from the federal government that was allocated under the stimulus plan.

The 18 million meters represent roughly 13% of all electricity meters nationwide. Ultimately, the administration hopes to distribute 40 million smart meters over the next few years.

The smart meters are part of a wider government effort to upgrade the nation's aging utility grid. The government announced $3.4 billion in funding Tuesday to help move the country toward a so-called smart grid. Utilities are putting in another $4.7 billion in matching funds.

According to the White House, these investments could reduce U.S. electricity use by 4% a year.

The money is part of nearly $100 billion in spending and tax cuts the government authorized under the stimulus plan for a variety of energy projects.

Other projects announced Tuesday include the modernization of electric substations and transmission centers.

All told, 100 projects were announced Tuesday in 49 states that are expected to create tens of thousand of jobs across the country. The White House billed it as the largest single energy grid modernization effort in the country's history.

Experts have long said the country needs to update its electricity grid, much of which was built during the early part of last century, if it is to deliver power more efficiently and handle electricity generated from sources such as wind and solar.

The funding announced Tuesday is just a fraction of what experts say is needed to build new transmission lines, computerize substations and meters, and build storage devices for a modern utility grid.