President Barack Obama is expected to announce $3.4bn in government grants to help build a ‘smart’ electric grid to improve energy efficiency and save money on utility bills.

The grant marks the largest award made in a single day from the $787bn stimulus package approved by Congress, writes Reuters.

The move will also create tens of thousands of jobs while upgrading the US electric grid, according to administration officials.

The investment will not be used to build new power lines, but improve the capabilities of the electrical system.

The money will pay for about 18 million smart meters to help consumers manage energy use in their homes, 700 automated substations to make it faster for utilities to restore power knocked out by storms and 200,000 smart transformers that allow power companies to replace units before they fail, to avoid outages.

The grants, which range from $400,000 to $200m, will go to 100 companies, utilities, manufacturers, cities and other partners in 49 states.