October 27, 2009

CORRECTION:  The original version of this story incorrectly mentioned an ARRA loan guarantee program as being related to the grants. The corrected version is below. (Change made 2009-Oct-27 2:05 PM EDT).

President Obama will today announce 100 projects that DOE selected to receive smart grid stimulus grants -- through “a competitive, peer-review process that will benefit customers in 49 states,” Matt Rogers, senior adviser to the secretary at DOE, said during a White House press office briefing last night.

          The White House chose to name three of the 100 grant winners ahead of Obama's stimulus funding remarks, set to be delivered at the DeSoto Next Generation Solar Energy Center in Arcadia, Fla.

          Baltimore Gas & Electric (SGT, Jul-14) will haul in $200 million from Uncle Sam and put up $251 million to introduce 1.1 million smart meters and 400,000 in-home devices just north of the nation's capital.

          Sempra Energy's San Diego Gas & Electric (SGT, Aug-13) will get $28.1 million, promising to spend $31.9 million itself and setting out to accelerate its smart grid initiative with “an advanced wireless communication system that will allow it to monitor, communicate with and control” AMI and T&D equipment, said Rogers.

          Cobb Electric Membership Corp in Marietta, Ga, is matching evenly DOE's $16.9 million with plans to deploy 190,000 smart meters “so that every customer … will in fact have a smart meter in their home,” he added.

          The 100 projects range in duration from 12-36 months and DOE will send the money in the next two months, said Rogers.  Twenty-five large projects and 75 small ones make up the recipient pool, and Rogers noted that “the largest of the large projects” will receive $200 million each.

          Altogether, 100 grant recipients are set to deploy 18 million smart meters, 1 million in-home displays, 200,000 advanced transformers, 175,000 load-management devices, 170,000 smart thermostats and 700 automated substations, said Rogers.

          What about the concern Galvin Electricity Initiative Executive Director and former long-time EPRI Chief Kurt Yeager raised in an interview with us last month about DOE facing “congressional pressure to get the money out quickly,” we asked at the briefing.  Yeager worried the DOE would spread the funds “around widely on what might be called ‘shovel-ready projects,' not necessarily to really focus on building a truly smart grid,” (SGT, Sep-21).

          That is not a problem, Rogers replied.  “We were delighted by the quality of the application pipeline,” he told us.  “We were oversubscribed 4-1 in terms of the number of applications and 5-1 in terms of the dollar amount of applications we were able to provide.  The amount of shovel-ready projects out there, that are very high quality and meet all of the definitions of smart, was terrific.”

          When Yeager met with US Energy Secretary Steven Chu in June, they both focused on the importance of sending grants to projects that maximize consumer benefits of the smart grid, Yeager had recalled.

          Obama's announcement of “the largest-ever investment in the smart grid” is divided among “three categories,” with two being consumer-focused, Carol Browner, assistant to the president for energy and climate change and former EPA chief during the Clinton administration, said during the briefing.

          One category is “giving consumers access to information about their electricity use so they can make choices to use less electricity.” Another is “giving us the infrastructure we need to be able to move the renewables from the parts of the country where we find them the most to where the people are.” And the third is “new technology that will allow us to create the energy backbone and really, finally have a smart grid.”

          EPRI estimated that smart grid technology implementation could cut power use by over 4% by 2030, saving $20.4 billion for businesses and consumers in the US, she added.  The smart grid will have “transformational impact on how electricity is generated, delivered and consumed.  We have a very antiquated system in this country.  We need to … modernize that system.”

          The grants being announced today “will help customers reduce their energy use, help us integrate renewable energy resources into the grid and provide an important basis for higher reliability operations across the country,” Rogers said.

            It's all about spending

          About 200 reviewers worked for the last couple of months to sift through nearly 400 applications.  “The American taxpayer is going to get a very high return on these projects because we were able to select the very best projects possible,” he added.  “$3.4 billion of grant money complemented by $4.7 billion of cost share gives us a total project value of $8.1 billion.”

          Recipients matched ARRA dollars at a rate of 1.4-1, Jared Bernstein, chief economist and economic policy adviser to Vice President Biden, said during the briefing, adding, “So they've got some real skin in the game here.”

          The grants announced today will help utilities and other firms “overcome what can be a tough market constraint, especially in a period where credit has been tight,” Bernstein said.  “Even in a highly dynamic economy like our own, firms can under-invest in new technology if the barrier of startup costs is too high.  Helping firms to overcome that barrier in the cause for renewable energy investment makes a great deal of economic sense right now.”

            Demo grants not announced

          Regional smart grid demonstration project grants were not mentioned during last night's briefing.  DOE plans to spend about $800 million on them, Yeager told us recently.

          The federal government's smart grid investment via ARRA helps the White House accomplish one of its “most important economic goals -- building the new foundation for a robust, broadly shared recovery based on smart, productive investments versus speculative excess,” Bernstein said.

          The White House declined to specify which state is not part of today's grant announcement.