Welding system and method permit exchange of data with Smart Grid monitors and/or controllers. The welding systems include a welding power supply configured to convert power between the power grid and the welding power supply. A grid interface cooperates with control circuitry to transmit data to and/or from the grid monitors and/or controllers on the grid side. The control circuitry may control operation of the welding power supply based upon data from the grid. The system may include power generation devices (e.g., engine-drive generators) and energy storage devices (e.g., batteries). The control circuitry may control operation of such devices, the exchange of power between them, and the draw of power from the grid or the application of power to the grid based upon the data exchanged with the grid monitors and/or controllers.