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Numerous recent studies have assessed the feasibility of vehicle-to-grid (V2G) mode of discharging, which provides an option to use the energy stored in a battery in electric vehicles to support the power grid. This paper aims at demonstrating the potential benefits of battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) as dynamically configurable dispersed energy storage acting in a vehicle-to-building (V2B) operating mode. V2B is a concept that is practically viable today being far simpler than V2G, and it may be implemented on a 3-5 year time horizon while V2G may take 10-15 years to gain wider acceptance. Based on the battery characteristics, the benefits of using BEVs/PHEVs as energy storage for demand side management (DSM) and outage management (OM) are discussed in detail. This paper is also focused on the implementation issues of DSM and OM in the smart distribution grid. A strategy for adopting BEVs/PHEV uses in the V2B mode under the peak load and during outage condition is proposed and demonstrated with test cases and numerical results.