Smart grid companies want stimulus cash from feds

WASHINGTON--When politicians are doling out trillions of tax dollars in bailouts and so-called stimulus spending, nobody should be surprised if the line of businesses queuing for cash snakes all the way around the Capitol building. The latest idea: more spending on smart grids.

The idea of a smart grid is an alluring one: A far more intelligent electric power system that takes advantage of technological developments to deliver power in a more optimal, energy-efficient way. A household dishwasher could decide to turn on when prices are low at off-peak times, and plug-in electric cars could feed power back into the grid when necessary.

To make the case that a smart grid is deserving of some serious federal largesse, utility companies and their business partners organized an event here on Thursday that drew hundreds of congressional staffers and random political lurkers (the free sandwiches probably helped). The companies demonstrated "smart" thermostats and smart phone applications to monitor energy usage--and then delivered the punch line: significant checks from the U.S. Treasury are necessary to make all this happen.

Given that electric companies make money from energy consumption, they need some government encouragement to adopt smart grid technologies, they said.

Congressman Jay Inslee (D-Wash.) gave his support Thursday for using stimulus money to invest in smart grid technology.

(Credit: Jay Inslee's congressional Web site)

The federal government should provide "the right incentives to allow the utilities to do the right thing," said Bob Gilligan, vice president of transmission and development for GE Energy.

It is expected, business representatives said, that Congress will soon authorize using taxpayer funds for smart grid technology, if not through the upcoming stimulus package, then in either an energy bill or a separate climate change bill.

Rep. Jay Inslee (D-Wash.), who belongs to the House Select Committee on Energy Independence and Global Warming, the Energy and Commerce Committee, and the Natural Resources Committee, was on hand to endorse the spending allocation.

"We know this is driven principally by private enterprise and private inventors, but Uncle Sam needs to belly up to the bar and be the spark plug for this revolution," Inslee said. "We know the world demands clean energy technology. The world is going to go to the door of the country that will develop these new technologies."

Along with increasing loan guarantee programs and research and development funding for such technologies, the federal government could take steps to incentivize the use of smart grids by decoupling utility revenues from the amount of electricity sold, Inslee said. The development of a smart grid system could also be dovetailed with a renewable energy portfolio standard, he said.

"We should not allow this economic crisis to be wasted," Inslee said. "We intend to use this stimulus package to promote investment in these technologies."

Tax vehicles such as investment tax credits would be cleanest way to spur smart grid use, said Dan Delurey, executive director for the Demand Response and Smart Grid Coalition, a trade association.

"The smart grid does qualify for stimulus," he said. "It's infrastructure, and it's shovel ready. There will be R&D, but there are technologies out there that will be deployed now."

Better business models and policy frameworks are needed, the business representatives said, before the country can embrace renewable energies like wind and solar, which are not especially useful on a calm day or when the sun isn't shining. The energy produced by those sources, they said, needs to be integrated into a smart grid that can use other sources of power when necessary.

Furthermore, smart grids can let customers know when energy from environment-friendly sources is available.

"We have the opportunity to put into the hands of Americans the means to save our economy money and address a grave threat" such as climate change, said Dan Abbasi, senior director for the investment firm MissionPoint Capital Partners. (Abbasi's company has invested in companies including Trilliant Networks, which sells "intelligent network solutions that power the Smart Grid," and stands to make a handsome profit from Uncle Sam's generosity.)

Smart grid implementation could also result in installation jobs in every congressional district in the country, he said.

The benefits of the smart grid are spread to all energy participants, not just utilities, said Trilliant CEO Bill Vogel.

However, "like the Internet, the government needs to have some influence and then back out to get something started correctly," he said of the smart grid.

"Through innovation and standards, it is the gift that keeps on giving," he said.

CNET's Declan McCullagh contributed to this report

[martin_c_e]

The 'smart grid' is just another ploy to jack up electricity rates. It may be useful in the long run; but right now it will be used to raise rates in the guise of saving us from climate change.

[javsewpc]

I think the stimulus package is a great opportunity to answer the question of the EWPC article ?Will Dr. Chu Turn Around the Power Industry?? as can be seen in the Internet link http://www.energyblogs.com/ewpc/index.cfm/2008/12/12/Will-Dr-Chu-Turn-Around-the-Power-Industry

[scdecade]

If these people's grid is so smart how come they need government blood money? Why is the force of gov't necessary if their product is any good? Cnet please stop referring to "companies" which beg for government handouts as "companies" and call them what they are: special interest corporate welfare apologizers.

[Manhattan2]

The Manhattan2 Project has crafted a Dynamic Grid that can change and flex with mobile vehicles in mind. Where is the power coming from that will go over this new grid everyone talks about. Without knowing where Solar Transfer technologies will be delivering the power to how can you make a plan on distribution?

[lynettemcinnes]

Great article, Stephanie and thanks for covering this important story. The truth is that there is a need for federal backing of any serious smart grid initiative, because otherwise there won't be the needed push to ensure that this huge and important upgrade of our nation's grid system is undertaken. Furthermore, a smart grid is a far more cost-effective solution in the long-run than the alternative, which is to keep patching a faltering system. And as President elect Obama so clearly recognizes, the smart grid will create jobs and help jumpstart our economy on a number of levels as we pave the way towards clean, green alternatives to our current carbon-based systems. Here's more on our take at Optimal on this issue: http://tinyurl.com/94john.

[JWHIII]

The powers that be [Money Rich Few] don't care if you suffer.

When the current grid is down YOU DIE, they may DIE too, but there drunk on Dom, so it's like, no biggie

Get it together, this wave is cresting, DO YOU RIDE IT LIKE A PRO? OR DO YOU LAY BACK AND BLOW?

ROCK OUT NOW!!! OR GET SMASHED ON THE REEF BRO'S

IT'S YOU CALL, GET SMART OR SUFFER

pEaCe OUT