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Last week, for example, a mishap involving a single worker doing repairs on a power station near Yuma, Ariz., led to rolling blackouts over parts of Arizona, Southern California and Northern Mexico. The short circuit caused San Diego County's power-supply system to completely shut down after it was required to take on the demand of those affected in Arizona and buckled under the extra load.

Had a smart grid been in place, it might have helped isolate the outage and prevent it from spreading. By monitoring activity on transmission lines in real time, a smart grid also can help pinpoint a problem and redirect power accordingly.

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