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Smart energy management has two major aspects, the smart grid (transmission and distribution system) on one hand and programmable smart appliances on the other. This paper presents an architecture that enables the smart grid to provide real time demand and price feedback based on aggregate load conditions to select smart appliance control panels. The panels on receiving the signal automatically control the smart appliances to not only reduce peak loads but also distribute the demand so as to reduce the load variability. This dynamic demand re-distribution leads to lower operating costs for suppliers, lower energy costs for consumers and ultimately lower damage to the environment by reducing the rate of generation and transmission capacity expansion. The architecture of the smart energy management system makes use of sophisticated OLTP systems which decide the load conditions using aggregate demand data from AMIs and supply data from SCADA. High volume OLAP systems combine real time pricing with consumption data from individual appliances to provide customers deep insight into their consumption patterns in the form of costs per appliance.