Draft Stimulus Plan Has Billions for Smart Grid

President-elect Barack Obama promised that his massive stimulus plan would include big money for “smart grid” technologies — and his transition team and House Democrats are keeping the bargain.

Details released Thursday of a draft stimulus bill aimed at pumping $825 billion in tax cuts and spending into the flagging economy includes a big chunk — $32 billion — aimed at improving the nation’s transmission grid.

Of that, $4.5 billion is directed specifically at grants for projects that enable utilities and their customers to track and manage the flow of energy more effectively, curb peak demand, reduce blackouts and integrate renewable energy and storage (including electric and plug-in hybrid vehicle batteries) into the grid.

That’s likely good news for the host companies in the smart grid realm — smart meter makers like Itron, Sensus and Landis+Gyr, demand-response providers like EnerNOCand Comverge and smart grid communications and networking providers like Gridpoint, Grid Net and SmartSynch, among others.

That $4.5 billion is in the form of 50-percent matching grants for a series of regional demonstration projects, as well as regular smart grid investments, said Eric Miller, chief solutions officer at Trilliant, a smart grid communications and networking company.

“That’s a nice bump,” he said, since it implies support for up to $11 billion in smart grid investments. (Estimates for how much money it would take to bring the smart grid to nationwide reality range from $50 billion to $65 billion, according to the Edison Electric Institute).

Of course, this being a draft bill, those numbers could change, Miller warned. And he’s hoping that the U.S. Department of Energy review and selection process set up to administer the grant program gets up to speed quickly.

“The legislation pledges to have the process in place in 90 days, so its not terrible,” he said.

But the emphasis on building smart grid infrastructure also shows that Congress and the incoming Obama administration are serious about funding “shovel-ready infrastructure projects that can help create what people call green-collar jobs,” said Eric Dresselhuys, a vice president at Silver Spring Networks, a fellow smart grid communications and networking startup.

Matching grants could also help utilities struggling with making an economic case for smart grid investments, he added.

“In a lot of states, the regulators have been slow to get these projects approved,” he said. While many smart grid investments can pay for themselves, there are added environmental benefits “that are hard for utilities to capture.”

Miller noted other aspects of the $32 billion incentive package that could help the smart grid become a reality, such as research incentives.

Smart grid companies haven’t gotten everything they want from the stimulus bill, of course. So far, it doesn’t include a request by the Demand Response Smart Grid Coalition trade group in November for tax credits for technologies that reduce power consumption (see Smart Grid Coalition Seeks Tax Breaks for Negawatts).

And both Miller and Dresselhuys said they’re waiting for language that insists that smart grid deployments include open communication standards to ensure interoperability across different systems.

Smart grid wasn’t the only green technology getting a piece of the stimulus pie. The draft bill also included $20 billion in tax cuts for renewable energy providers and tax credits for research and development in renewables, energy conservation and energy efficiency. Another $6 billion is to weatherize low and moderate-income homes.