Smart grid companies want stimulus cash from feds

Proponents of smart grid technology, including investors, tell a Capitol Hill audience on Thursday that federal stimulus money should go to improve the country's electric grids.

Stephanie Condon Staff writer, CBSNews.com
Stephanie Condon is a political reporter for CBSNews.com.
Stephanie Condon
3 min read

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.

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