Last month, POWER explored the growing importance of the smart grid, which is envisioned as using digital technologies to enable integrated, real-time control of all the system's elements, from generation to end use. This month we focus on the emerging technology of microgrids: controlled groupings of dispersed generation sources that are connected to the main electrical grid but that can function independent of it. We examine their benefits and their potential impact on 21st-century utilities and their customers.