The Department of Energy's proposed $20 million cap on smart grid stimulus investment grants has been boosted to $200 million, potentially satisfying worries that large-scale smart meter deployments and other "shovel-ready" smart grid projects might miss out on the jolt the package was meant to provide.

That's the news out of a Monday meeting at the White House, featuring Energy Secretary Steven Chu, Commerce Secretary Gary Locke and scores of government, utility and industry officials.

The meeting's main purpose was to advance efforts to develop standards for smart grid technologies, and DOE did release a list of its first set of proposed standards (see chart here).

But the DOE's decision to lift the proposed cap on grants from the $4.5 billion in smart grid funding set in February's stimulus package is likely to have a bigger immediate impact on how smart grid companies, utilities and the commissions that regulate them go about planning their smart grid efforts.

The DOE's original plan released in March called for individual awards from the $3.375 billion set aside for so-called smart grid investment grants to be capped at $20 million apiece. The grants are to cover up to half the cost of an individual project (see Smart Grid Stimulus: What To Expect).

But that raised objections from utilities, regulators and companies like Google Inc. (NASDAQ: GOOG) that said such a low cap would exempt the larger-scale smart meter deployments that were most likely to lead to an immediate boost in investment and employment (see Stimulus Money Going, Going...).

One example is the $200 million smart meter deployment announced last month by Florida Power and Light involving General Electric, Silver Spring Networks and Cisco, which FPL said would be a candidate for smart grid stimulus money (see A Million Smart Meters for Miami).

Raising the cap to $200 million will likely help satisfy those complaints, though the DOE also said in a Monday press release that it would "ensure that funding is provided to a diversity of applications, including small projects as well as end-to-end larger projects."

The DOE also said it would raise the cap on the $615 million it set aside for so-called smart grid demonstration projects from $40 million to $100 million. Those grants are aimed at three key areas – regional smart grid demonstrations, demonstrations of systems using phasor measurement units to monitor transmission systems, and utility scale energy storage demonstrations.

Of course, the DOE has not issued its final funding guidelines for its smart grid stimulus program, and things could change between now and the tentative June 17 deadline for delivering it.

But the decision to raise the grant cap drew praise from the Gridwise Alliance, an industry group that includes a who's-who of smart grid players, large and small alike, which had previously complained that the old cap was too small.

As for Monday's news on the DOE's progress in setting out standards for smart grid projects, the alliance said it would be important to "build on the standards we have while integrating the new standards as we move forward."

The list of standards released Monday seems to take that advice to heart, including a number of well-established standards in use by many utilities for managing substation automation devices, meter revenue data, and other established utility operations.

It also listed the standards being worked out by the ZigBee Alliance and the HomePlug Powerline Alliance as a proposed basis for home area networks – the mesh of energy monitoring and management devices and systems being developed to link homes and utilities to communicate and save energy.

That pleased Adrian Tuck, CEO of Tendril Networks, which uses ZigBee for its suite of home energy management devices and software.

Of course, Monday's standards list isn't final, said Tuck, who took part in Monday's meeting. Rather, it represents a starting point for a much longer standards-setting process.

"This doesn't mean these are set in concrete – they are being supported, and they can still evolve," he said. After all, he said, there are more than 100 standards to settle on, some of them more controversial than others.

For example, Monday's standards list did not list any standards for smart meter networking and communications. Whether or not to make Internet protocol a required piece of such networks has been the subject of some controversy (see Smart Grid: A Matter of Standards).

"It wouldn't make sense to (slow) the deployment of smart meters, which are very mature, with standards for such things as plug-in hybrid vehicles," which have years before they exist in large enough numbers to represent a concern for utilities, Tuck noted.

Still, according to a release from smart meter maker Itron Inc. (NDSQ: ITRI), Monday's meeting did push the idea that meter makers need to work toward interoperability based on open standards — something Itron said it was doing by "fully extending IP support within its market-leading advanced metering solution." 

The National Institute of Standards and Technology, which is in charge of the smart grid standards process, has a timeline that calls for a more complete "roadmap" to be released in September.