The Federal Regulatory Energy Commission has granted Google Energy, a wholly owned subsidiary of the search giant, the right to behave like a utility.
The order grants Google Energy the power to sell energy, capacity and services at market rates.
Why does Google want to do this? Right now, the company rakes in billions of dollars from ads and it doesn't have to have extensive support desks and remote repair teams -- i.e., the kind of people power providers must have on staff -- in order to do it. Selling power is a much more hands-on business.
Google has said it wants to go carbon neutral. With the FERC order, it can now effectively erect as many solar panels and install as many fuel cells as it likes without worrying about having purchased too much capacity; the company can now sell off the extra power it generates.
But more importantly, Google can now exploit its massive data centers to provide services for controlling power consumption in commercial buildings, industrial sites, and homes. It is largely a task that should be handed off to large computer rooms.
Providing these services will allow Google to better leverage its hardware resources. Search will get cheaper because the hardware budget can be amortized over more services. Both Web 2.0 companies and energy services companies will complain about being undercut by the big G. Consumers will also have to get used to Google having even more information about their daily habits.
But can Google charge for energy management services? That could be a challenge. The average person might rightly balk at suddenly being asked to write a monthly check to one of the biggest companies in the world, particularly if other companies offer the same services.
This is where the power part comes in. Consumers will pay for power. If Google combines its services -- for free -- with competitively priced electricity, consumers will likely lose that reticence. It will be a better combination than what their utility can provide.
Conversely, Google could charge for these services the same way energy services companies like Siemens do: if Google saves you $200 on your utility bill, you pay the company half. You pay, but you still save. It's a theory, but clearly the company and its founders are obsessed with alternative energy.