As the smart grid evolves through advances in technology, the benefits of deploying and leveraging "smart" systems are becoming more and more significant relative to the costs. EPRI's Smart Grid Demonstration project is conducting research focused on integration of distributed energy resources to help advance widespread deployment of these systems. This report provides a technical description of the hardware, software, and communication infrastructure in one such system. Specifically, it documents an ongoing two-way electric water heater direct load control project pilot, including lessons learned in the installation process. Future reports will provide analytical results based on the performance of the project.