In this article for Electric Perspectives, Navigant's Eugene L. Shlatz discusses the challenges utilities face as they invest in smart-grid technology and try to quantify the benefits of these investments. As with any other investment, utilities must demonstrate that these smart grid investments provide both short- and long-term value while meeting the needs of all stakeholders. Shlatz notes that utilities can begin by quantifying the real costs and benefits over the life of the assets in order to make a critical and unbiased comparison to traditional investments. The article describes the various benefits smart-grid technology can bring to both utilities and their customers, then discusses ways to quantify those benefits. A case study compares a portfolio of smart-grid investments to traditional utility investments using life cycle economic evaluation methods and identifies the types of smart-grid projects that tend to provide the highest value.