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As gasoline prices rise, Battery Electric Vehicles (BEVs) and Plug-in Hybrid Electric Vehicles (PHEVs) may be quickly becoming an economical choice for transportation. Numerous recent studies have assessed the feasibility of grid-to-vehicle (G2V) and vehicle-to-grid (V2G) scenarios. This paper discusses the potential benefits of using BEVs/PHEVs as dynamically configurable dispersed energy storage in smart grid, which provides an option to use the battery energy in electric vehicles to support the power grid. By serving in two modes, G2V and V2G, the benefits of using BEVs/PHEVs as energy storage for demand-side management, outage management, and asset management are discussed in detail.