Let the smart grid stimulus race begin.
Texas utility Oncor went public Tuesday with plans to request $317 million in federal smart grid funds, becoming among one of the first utilities in the nation to set a dollar amount on its stimulus aspirations.
The request comes days after the Department of Energy on Friday published long-awaited guidelines on how it would disburse $3.9 billion for projects that add two-way communication and controls to the nation's electricity grids (see DOE Issues Rules for $3.9B in Smart Grid Stimulus Grants).
With utilities around the nation hoping to get some of the 50 percent matching funds for projects both commercial-scale and experimental, Oncor's announcement is sure to be the first of many.
Utilities such as Xcel Energy, NStar, National Grid and Florida Power & Light have "all mentioned to me that they're putting together their applications and wanted to be ready to go as soon as the FOA came out," Rick Nicholson, vice president of research for IDC company Energy Insights, said Tuesday (see Massachusetts Mulls Smart Meter Pilots).
The DOE's funding opportunity announcement (FOA) laid out a $200 million maximum for requests under its $3.4 billion Smart Grid Investment Program, aimed at commercial-scale deployments. It further specified that it would direct about two-fifths of that amount to projects under $20 million, and the rest to project from $20 million to the $200 million maximum.
Oncor will go for the maximum with a request for $200 million to lower the cost of its 3.4-million smart meter deployment, it announced. So far it has installed about 250,000 meters made by Landis+Gyr, and plans to have all of them deployed by 2012.
Oncor is also requesting more than $58 million for telecommunications and networks for its smart grid initiatives. It also wants more than $58 million for distribution automation systems that monitor and, in some cases, control the section of the grid that carries power from transmission substations to neighborhoods (see A Feeling and Thinking Distribution Grid and GE Offers WiMax Smart Grid Solution). All of the requests are for projects already underway, Carol Peters, Oncor spokeswoman, said in a Tuesday email.
That could fit in with the emphasis the DOE is expected to give to projects that can quickly boost employment, said Ben Schuman, an analyst with Pacific Crest Securities.
"I think the feds are looking for projects that will be incremental to what has already been improved," he said.
Nicholson agreed that the DOE likely would be "looking to utilities like Oncor that have already received state PUC approval and already have a plan in place, and wanted to accelerate" deployments, he said.
Given that there are many utilities now underway with smart meter deployments, some in the multi-billion dollar range, there's likely to be a lot of competition for the roughly $2 billion set aside for projects in the $20 million to $200 million range.
Florida Power and Light, for one, has said it will seek stimulus funds for a $200 million project to install about one million smart meters in Miami in partnership with General Electric, Silver Spring Networks and Cisco Systems (see A Million Smart Meters for Miami).
Not all of the DOE's money is aimed at commercial-scale projects, however. Friday's FOA also sets aside $615 million for what it calls smart grid demonstration projects aimed at making advances on current technologies, with a maximum of $100 million for a single proposal.
California utilities Pacific Gas & Electric Co., Southern California Edison and San Diego Gas & Electric have briefed the California Public Utilities Commission on some stimulus-worthy projects that might well fit into that category. Those include projects to test regional smart grid integration, new forms of energy storage and electric vehicle integration into the grid (see Green Light post).
The DOE may also require testing and certification of the cybersecurity of smart grid systems – particular smart meters that link utility IT systems to customers or to the public internet.
Its Friday FOA makes a point of prioritizing security "where different networks of varying security levels converge to share information," a concern that has arisen with reports of foreign spies hacking grid systems and security firms claiming that existing smart meter deployments can be infiltrated to potentially cause widespread blackouts (see Hacking the Grid: Is Smarter Less Secure?).