Obama Trumpets Energy Grants
October 28, 2009
Arcadia, FL -- The Obama administration launched a clean-energy blitz Tuesday, with President Barack Obama sweeping into this Central Florida hamlet to unveil $3.4 billion in stimulus grants for advanced electricity-grid projects and Vice President Joe Biden traveling to his home state of Delaware to open an electric-automobile plant.
The administration Tuesday released a list of about 100 companies and communities in 45 states and territories that will receive federal subsidies to modernize the electric grid. The administration promised the projects would create "tens of thousands of jobs."
Among the big winners are companies and communities in Florida, which received more than $267 million in grants, and North Carolina, which got more than $400 million, including more than $200 million for units of utility giant Duke Energy Corp., which has supported administration efforts to modernize technology and cap greenhouse-gas emissions.
When combined with funds from utility customers, the federal program is expected to inject more than $8 billion into grid-modernization efforts nationally, administration officials said. Even so, that represents just a fraction of what would be needed to bring the entire U.S. electrical grid into the digital age.
With 3,000 utilities in the U.S., federal funding still will leave millions of customers untouched. Department of Energy officials said they hope mass deployments would drive down costs for those utilities that haven't yet taken action and would help blaze a path.
Vendors still were sorting out whether they benefit from specific grants because many utilities didn't name specific vendors in applications. In some cases, utilities must now go to state utility commissions for permission to begin the projects because many don't have clearance to use the ratepayer funds they pledged in their grant applications. Grants passed over some big utilities in states like California, Texas and Illinois that have been pushing ahead with meter projects, perhaps on the assumption that no further assistance was needed.
A main goal of grid modernization is to give customers and utilities more data to use energy more efficiently -- which represents an opportunity for software vendors as well as companies that make electrical-system hardware. "The richness of the information you get starts to explode" as digital meters and other controllers are put in place, said Jon Arnold, managing director of Microsoft Corp.'s power and utilities business.
Tuesday's twin events, and last Friday's presidential visit to a wind-energy-testing lab in Boston, signal a renewed push on energy issues by the Obama administration, after weeks during which energy and climate change have taken a back seat to fights over health care and future strategy in Afghanistan. The Senate Environment and Public Works Committee held its first hearing Tuesday on long-stalled climate-change legislation.
The administration also sought to tie its energy initiatives to jobs. In Delaware, Mr. Biden presided over the reopening of a shuttered General Motors plant in Wilmington that has been acquired by Fisker Automotive, which plans to use it to build a new line of plug-in hybrid electric vehicles. In September, Energy Secretary Steven Chu announced a $528.7 million conditional loan for Fisker to develop two lines of plug-in hybrids, $359 million of which will go to revive manufacturing at the Boxwood Plant in Wilmington.
In Florida, Lewis Hay III, chief executive of Florida Power & Light parent FPL Group Inc., introduced Mr. Obama as "the man who's done more to advance the cause of renewable energy than anyone in the nation's history."
Florida Power & Light, with its large renewable-energy portfolio, stands to be a big winner if legislation is passed that caps greenhouse-gas emissions and puts a price on carbon emissions. By the company's calculations, if it can free up 30 million megawatt hours of electricity from long-term contracts for sale in a carbon market, the utility could generate earnings of $309 million with carbon priced at $20 a ton, the firm's midrange estimate. At the high end, 40 million megawatt hours with carbon priced at $30 a ton would mean $645 million in revenue, according to company estimates.
The Department of Energy said grants of $400,000 to $200 million will lead to the installation of at least 18 million advanced digital meters, sometimes called "smart meters," which should bring the nation's total to about 40 million, or enough to cover 31% of U.S. housing units.
Digital meters are electronic, not electro-mechanical like conventional meters, and can offer two-way communication between utilities and customers. They are the backbone of demand-reduction efforts because they would allow utilities to charge different rates at different times of day and they could be programmed to alert consumers when grid conditions require special action.
