People normally ignore the inner workings or our electrical grid. Why shouldn't they? There are more interesting things to think about, like whether life still has meaning after Tom Cruise and Katie Holmes divorce. Yet suddenly the power grid has leapt to center stage as many East Coast denizens labor through a massive heat wave with no electricity. Surely an obscure weather event shouldn't have such a devastating impact on our modern systems. What can be done to prevent this in future? And how might a savvy investor play the theme?

Farah Saeed, Frost & Sullivan's energy and power systems principal consultant, says: "While nothing can prevent Mother Nature from taking its course, this grim situation does raise the question of whether a smarter grid could have accelerated power restoration. Power outage management and detections are among the arguments for making investments in distribution automation."

I've been running a series of articles related to investment opportunities in smart grid development. If you're not fully up to speed on the basics, start with our smart grid primer. Then sidle on back this way.

Grid, heal thyself
Let's begin with a quick definition. Distribution automation (DA) extends intelligent control over electricity grid functions to the distribution level and beyond. Let's pretend your kitchen is the electrical grid. DA would turn down your oven before your cookies burned because you were off dancing to Eye of the Tiger in your skivvies, lower the temperature in your freezer because you stuck hot food in there that was melting everything else, and stop the coffee maker until you eventually realized that you have to put the pot under the nozzle. This is not to pick on you. We customers are hard to optimize, and DA gets around us entirely. Many analysts believe that is the sweet spot that allows the inevitable smart grid future of electricity to pay for itself.

DA shines brightly when it comes to promoting a self-healing grid. You might remember the Northeast blackout of 2003, and its hallucinatory images of Wall Street traders walking the many miles home because civilization as we knew it briefly ground to a halt. What caused this massive event? A tree in northern Ohio. Well, a tree, and a distribution grid that wasn't designed optimally.

DA can help mitigate blackouts and other grid-related issues. Indeed, a recent survey of utility executives found that DA was their first priority in smart grid applications.

DA provides many benefits. It increases the flexibility and carrying capacity of transmission and distribution assets. It improves workforce effectiveness by automating functions that humans don't fulfill particularly well. It enables the effective use of microgrids, which are tiny localized grids that typically serve very small communities or systems. Perhaps most importantly, DA creates semi-autonomy within the grid, removing the kind of dependencies that caused the unnecessary cascade of power loss across the East Coast in 2003.

Is now the right time?
There has been much movement in the DA arena in recent months. Indeed, it appears this space may be ripe for both investment and industry consolidation. The U.S. market for DA is predicted to reach $3 billion by 2015. The four giants of the DA space -- Siemens (NYSE: SI), Schneider Electric, ABB (NYSE: ABB), and General Electric (NYSE: GE) -- have been spending billions on acquisitions to fill gaps in their DA portfolios. There is a lot of money flying around here, folks.

ABB, the Swiss electric grid equipment behemoth, has been among the most acquisitive smart grid players since 2010, outspending rivals by orders of magnitude. Each acquisition adds another dimension to the company's smart grid portfolio. ABB is currently trading near its 52-week low, and its P/E ratio is a palatable 11.9. It might just be poised for a resurgence.

Siemens, the German energy and industrial leviathan, came late to the party. As of last summer, the company was nesting on a $27 billion cash egg and had made only modest acquisitions. Its real moves began in December, when it started making strategic purchases to flesh out its offerings. Considering the sale prices, Siemens still has plenty left to spend. The company is trading near multiyear lows, and pays a 3.4% dividend. Still, investors will need to be patient with this one. Siemens' CEO said it may struggle to meet its guidance because of ongoing structural weaknesses in Europe and China.

GE has played a leading role in DA for some time now. While its recent acquisitions have not been as significant as others', the company is still making meaningful purchases to complement its offerings. Meanwhile, GE recently launched Grid IQ, its "smart grid as a service" offering that should give smaller municipalities and cooperatives access to DA systems.

While some of GE's other businesses are suffering -- it's a tough time for its solar unit -- GE is a safe stock with a 3.3% dividend that should continue to perform well over the long term. With low yields on safe investments, GE is a fantastic opportunity for all investors. You can find all the opportunities, as well as impediments, in our brand-new premium General Electric research service.

These developments are not just some passing fad. Major players such as Duke Energy (NYSE: DUK) are aggressively deploying DA solutions, such as Duke's "self-healing" networks that greatly reduce the number of customers whom power outages affect. While Duke is not the cheapest stock out there, it has increased its dividend every year since 2007.

DA is here to stay. It will definitely make your electricity more reliable, and if you play your cards right, it could give your portfolio a boost, too.

If you're interested in other dividend payers with something special that sets them apart, you would be remiss not to treat yourself to our free report "The 3 Dow Stocks Dividend Investors Need."