Pacific Gas & Electric is asking Cisco Systems for technology that could help about 75,000 California businesses manage their electricity better.

That's not to say that PG&E has settled on Cisco for the job, or that it will get done at such a large scale if the $85 million project doesn't get a stimulus grant from the Department of Energy (see PG&E Seeks $42.5 in Stimulus Grants).

But the networking giant has a "working relationship" with the utility on the plan, Jana Cory, PG&E's Energy Information Network director, said Tuesday.

"None of these vendors are going to win the whole thing, but they're going into the test phase with us," she said.

That makes Cisco one of many companies being vetted for the project, which also envisions measuring power output from neighborhood solar panels and other distributed generation sources, as well as demand response assets – things that can be turned down to save power – to balance local grids for better efficiency, she said. PG&E hopes a DOE grant will help it complete the project by 2012.

PG&E is yet another U.S. utility to publicly cozy up to Cisco's smart grid ambitions, which entail networking almost everything on the grid, including office buildings (see Cisco Rolls Out Building Management 'Mediator').

Florida Power & Light and Duke Energy have also asked Cisco to help them with smart grid projects – FPL on a $200 million smart meter deployment and Duke for as-yet unspecified smart grid plans (see Duke Energy Enlists Cisco in Smart Grid Efforts).

PG&E is asking Cisco to figure out how to link smart meters to an array of devices in customers' buildings, Cory said. Among other information that could be carried on such a network, PG&E plans to transmit time-varying electricity prices that the California Pubic Utilities Commission has said it must start using for commercial and industrial customers, starting in 2011, she said.

Time-of-use and peak pricing plans are at the heart of many utilities' smart meter plans. The idea is to encourage people to cut power when utilities face expensive peak power demand – in PG&E's case, mostly on hot summer afternoons – without shutting down their air conditioners through central control, or, paying people for signing up for such direct-control demand response programs.

But networked devices will probably work better when customers can preset them to shut down power loads when prices get too high, rather than forcing employees to sit around and watch a display screen for a flashing red warning light.

Either, however, is probably more efficient than calling up customers to ask them to power down equipment, as some demand response is handled today.

"The most important thing right now is to get the consumers the information," with simple thermostat displays if necessary, Cory said. Cheaper devices could be given out for free, while more affluent customers may install their own energy management systems that can link to PG&E's network.

"But that said, in the future, what's really exciting is when you have some kind of intelligent controller in the home that allows you to communicate with multiple devices" to power them up or down, she said.

General Electric, Whirlpool and other appliance makers are working on just such "smart" appliances right now, and a host of startups like Tendril and IT giants like Google and Microsoft are also on the home energy management task.

But PG&E hasn't settled on just what kind of in-premise devices it will be using for the pilot project, which will start out in the homes of volunteer utility employees some time next year, Cory said.

But one thing PG&E asks is that would-be partners use ZigBee, the wireless protocol that PG&E and many other North American utilities have selected for their smart grid plans (see RF Mesh, ZigBee Top North American Utilities' Smart Meter Wish Lists).

PG&E has installed 1.45 million electric meters and 1.9 million gas meters with two-way communications so far, and of those, 1.2 million electric meters and 1.8 million gas meters are now being billed through the utility's network, spokesman Paul Moreno said in an email.

General Electric and Landis+Gyr are making the meters, and they're communicating through Silver Spring Networks' wireless mesh and Aclara'sTWACS powerline carrier technologies. PG&E is spending $2.2 billion to install about 10 million smart meters by 2011.

Silver Spring, which is networking PG&E's smart electric meters, already integrates a second ZigBee radio in its modules to talk with devices in the home (see Green Light post). Those include thermostats, smart plugs, home automation systems and other energy-linked devices that could someday respond to utility price or command signals to power down when the grid is facing stress.

As for integrating solar panels into the grid, PG&E isn't as far along in naming partners, though Swiss transmission and distribution giant ABB is working with the utility, Cory said.

Managing the constantly shifting ups and downs of solar panels, wind turbines, and other small-scale generation sources – and matching them to the demand sags that will come from turning down networked energy-saving buildings en masse – will be hard for grids that were built to carry electricity from central power plants to millions of endpoints without any interference (see Green Light post).

If PG&E doesn't get the DOE grant, that could limit the project to about 10,000 businesses by 2012, Cory said. Anyone applying for DOE's smart grid stimulus grants is likely to be making contingency plans, since applications outmatch the $3.4 billion available for commercial-scale projects (see Green Light post).

Interact with smart grid industry visionaries from North American utilities, innovative hardware and software vendors and leading industry consortiums at The Networked Grid on November 4 in San Francisco.