Northern California utility Pacific Gas & Electric Co. won't be asking the federal government for financial help in its multi-billion dollar smart meter deployment.

Instead, PG&E will seek $42.5 million in Department of Energy smart grid stimulus grants to boost an $85-million plan to install energy displays and controllers at about 75,000 of its commercial and industrial customers.

That news came late Thursday from PG&E spokesman Paul Moreno. It's the first public announcement from any of the three big California investor-owned utilities - PG&E, Southern California Edison and San Diego Gas & Electric - on how they might ask for grants from DOE's Smart Grid Investment Grant Program (see DOE Issues Rules for $3.9B in Smart Grid Stimulus Grants).

Thursday was the deadline for the first round of applications for that program, and as analysts had predicted, it appears to be oversubscribed. As of last count, dozens of utilities had submitted applications totaling about $2.85 billion in requests - and its likely that other applications not widely publicized could bring the total amount being sought over the $3.4 billion available (see Smart Grid Stimulus Applications at $2.85B and Counting).

Many of those applications seek to max out the program's $200 million cap on individual grants, and many of those large requests are for help in deploying smart meters. That's the case for applications from Duke Energy, PECO, Dominion Virginia Power, Oncor, and possibly Florida Light & Power, among others (see Oncor Makes $317M Smart Grid Pitch and Smart Grid Stimulus Applications Accelerate as Deadline Approaches).

But Moreno said that PG&E didn't see the need to seek stimulus help for its $2.2 billion plan to bring about 10 million smart electric and gas meters to its customers by 2011, since it has already been approved by state regulators (see Green Light post).

The utility didn't release too many details about the $85 million, 75,000-customer project it was seeking stimulus funding for - for example, it hasn't publicly announced which companies will be supplying technology for it.

The project will involve devices that can give customers more detailed energy usage information, as well as notification of "Critical Peak Event Days," Moreno said.

That's for customers in PG&E's Critical Peak Pricing Program, which offers customers the option of getting power more cheaply most of the time, if they agree to pay higher prices when the utility is facing peak demand.

That's one of many ways that utilities seek to encourage customers to cut power use during peak power demand times. Most of the smart meter deployments now being undertaken plan to institute similar pricing or direct load control functions as a second step in their deployment (see The Elusive Smart Meter-Demand Response Combo).

PG&E's $85 million project will also include systems to monitor grid conditions and better-manage parts of the grid that have a high concentration of solar photovoltaic power systems, Moreno said.

Integrating solar and wind, which produce power intermittently depending on when the sun is shining and the wind is blowing, into the grid is another looming challenge before utilities that are trying to boost their share of such renewable resources.

PG&E's application does fit into some of the projects it said it might target for stimulus during a March meeting before the California Public Utilities Commission (see Green Light post).