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Electricity has a shelf life, meaning it is difficult to store, and transferring it from where it is generated to where it is needed also can cause power to be lost. Smart grids make energy transfer more efficient, therefore saving electricity without any new power generation being necessary.
As the current grid was constructed piecemeal, as needed and as the country expanded, it doesn't make sense given our current energy production and consumption models. A smart grid would replace the current infrastructure with one that is better engineered to serve the power needs of the whole country. It integrates the various ways in which we generate power to maximize efficiencies.
A smart grid also prevents the massive waste of electricity that currently takes place, in ghost loads and appliances that are not being used, but still consume electricity, as well as water heaters that are continually on, etc. So part of a smart grid would have to be extended into peoples homes and new construction as well.
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