Late last month, the U.S. Department of Energy (DOE) listed 100 utilities that had won matching grants from the $11 billion federal stimulus package, which the U.S. established to modernize the electricity grid (see February 18, 2009 LRPJ — client registration required). The utilities, listed by category and by state, are among the first to receive matching grants.
Unsurprisingly, many of the largest winners had announced spending and partnerships prior to the award distribution (see the April 22, 2009 LRPJ and the August 12, 2009 LRPJ — client registration required). Florida Power and Light (FPL), PECO/Exelon, and Duke Energy received the maximum $200 million in grants. Other utilities that received the maximum award include CenterPoint Energy, Baltimore Gas and Electric/Constellation Energy, and Progress Energy. Each of these six utilities plan to install between 160,000 and 2.6 million smart meters as part of their proposals. Seven more utilities received between $100 million and $200 million. Overall, the awards will affect utilities operating in 49 of the 50 states.
The DOE organized the awards into six different categories:
- Advanced metering infrastructure (AMI)
- Customer systems
- Electric distribution systems
- Electric transmission systems
- Equipment manufacturing, and
- Integrated and/or crosscutting systems
The largest grants were in the first and last categories, demonstrating a strong emphasis on smart metering and meter networks over transmission and distribution. While this is certainly music to the ears of companies like GE (FPL’s metering partner), Silver Spring Networks and Cisco (FPL’s networking partners), and Echelon (Duke Energy’s metering partner), the business models for these AMI deployments are far from proven. While having more information can never hurt, the size of the grants seems disproportionate to the nebulous benefits of these smart meters.
Until utilities demonstrate smart meters improve either energy efficiency or cost savings, government funds might be better spent on upgrading/expanding transmission and distribution infrastructure to prevent costly blackouts, or figuring out ways to increase the proportion of renewable power generation on the grid. Bulk energy storage is another great candidate for government support, which could help it attract buy-in from conservative utilities. Throwing billions of dollars at a solution to issues that seem indirect at best hardly seems prudent in these economic times.
