ELECTRICITY:

Obama admin invests $3.4B in 'smart grid' projects

President Obama will pour $3.4 billion today into the country's electric transmission grid, in an effort to push the stiff and aging existing system toward a smoothly digital operation that consumers can access from their homes to save power.

The White House announced last night that 100 projects in 49 states will receive economic stimulus grants, a massive outflow of money that Carol Browner, Obama's chief of climate change, said is the "largest-ever investment in the smart grid."

Companies are matching the federal funding with $4.7 billion in private cash, a spurt of spending that will buy 18 million smart meters, enough for 13 percent of the nation. It will also prompt a major overhaul of sensors and transformers across the country. That will help the grid handle fluctuating surges of renewable energy from wind farms and solar arrays.

"It's something that will give us sort of a transformational impact on how electricity is generated, delivered and consumed," Browner said on a conference call with reporters. "We have a very antiquated system in this country. We need to upgrade that system, we need to modernize that system, and with it will come tremendous benefits for consumers and our environment."

Obama will reveal all 100 companies selected for grants today at the nation's largest solar array in Arcadia, Fla., the DeSoto Next Generation Solar Energy Center, operated by the Florida Power & Light Co.

The visit underscores the importance of modernizing the grid to enable the use of renewable energy. Today's analog system is not spry enough to quickly respond to highly variable ebbs and flows of wind power, for example. Dirty and expensive fossil fuel plants might have to be fired up on short notice to sustain power at peak demand.

A modern grid, however, might be able to store renewable power until it's needed, perhaps through a fleet of plug-in electric cars, which can use new interfaces in the grid to charge up or turn stored power back onto the transmission system.

Baltimore's consumers to become 'smarter'

Baltimore Gas & Electric, for example, will receive $200 million to install smart meters in the homes of every one of its customers, or about 1.1 million people. The company is providing $250 million in private funding. The project will allow customers to see the amount of power they're using, and how much it costs. They can cut their energy bills by choosing to buy power at off-peak times.

BGE believes it can reduce its peak power demand by 1,750 megawatts, perhaps preventing the need for a new power plant, according to Matt Rogers, senior adviser to Energy Secretary Steven Chu.

"This will help customers reduce their energy use, it will help us integrate renewable energy resources into the grid, and it will provide an important basis for higher-reliability operations across the country," Rogers said of the overall program.

Administration officials identified four grant recipients last night. Energy Smart Florida will receive $200 to install 2.6 million smart meters. San Diego Gas & Electric Co. is receiving $28.1 million to implement a wireless communications system to connect more than 1 million smart meters that are already in place. And Cobb Electric Membership Corp. in Georgia will receive $16.8 million to deploy 190,000 smart meters and 40,000 load devices, which allow the utility, with the customer's permission, to shift energy use at the home to off-peak times.

Altogether, today's announcement will result in 18 million new smart meters; 200,000 smart transformers that help utilities replace units poised to fail; and 700 automated substations, about 5 percent nationally, that will help utilities restore service faster.

Sensors to spur the use of renewable energy

The program will also upgrade 850 sensors, called "phasor measurement units," that will help grid operators incorporate chunks of intermittent renewable energy into the system. That accounts for every one of this type of sensor in the country, and essentially "takes takes the entire transmission network in the United States and upgrades it to a digital technology to enable much safer, much more reliable operation at the transmission level," Rogers said.

The grants are expected to create or save tens of thousands of jobs, said Jared Bernstein, chief economist and economic policy adviser to Vice President Joseph Biden.

"We're helping to unleash the vast potential of our economy to develop the infrastructure that will support the president's goal of replacing demand for foreign fossil fuels with renewable energy produced here at home," he added.

The effort to construct a smart grid will be drawn-out. Overhauling the nation's elderly web of wires to allow two-way communication between power generators and customers will take years. There are more challenges than just technology. State regulations also need to change, observers say, to allow -- or make -- utilities to offer suites of different prices for energy at different periods of demand.

Right now, consumers use the power without asking how much it costs. In the future, that will likely change, as customers shop around for the cheapest -- and cleanest -- power products. A smarter grid could help them make that decision.

"This is really going to jump-start smart grid," Katherine Hamilton, president of the GridWise Alliance, said of the funding. "This will sort of uncork other private investments."

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