AUGUST 13, 2010

The U.S. Department of Energy (DOE) approved a $33.9 million matching grant to NRECA last week, essentially firing the starter pistol for a nationwide smart grid demonstration project. The project involves 19 electric cooperatives that will deploy more than 153,000 smart grid components and test their value to cooperative members.

The smart grid research grant is part of $3.4 billion in awards made available by the American Recovery and Reinvestment Act of 2009, representing a potential joint public-private investment of more than $8 billion in smart grid technology.

The Electric Power Research Institute estimates the widespread implementation of smart grid technologies could reduce electricity use by more than 4 percent by 2030. That would save U.S. businesses and consumers roughly $20.4 billion, according to DOE.

The cooperatives’ demonstration project will serve as an unprecedented nationwide pilot, testing end-to-end connectivity from power plants to homes. A portion of the project will expand MultiSpeak®—a utility software standard developed by NRECA to facilitate system interoperability—and address cyber security.

Funds will go to cooperatives in 10 states: Illinois, Wisconsin, Iowa, New York, Georgia, Hawaii, Kentucky, Indiana, Louisiana and New Hampshire (see “Stimulus Grants to NHEC Fund Smart Grid Technology, Demonstration Program,” Solutions News Bulletin, May 14, 2010).

JULY 23, 2010

A beta website for the U.S. Department of Energy-funded Smart Grid Information Clearinghouse was launched this month. The site—now in a public testing phase—is designed to appeal to a wide audience, including consumers, utilities and regulators, and is managed and run by the Virginia Tech Advanced Research Institute (ARI) in Arlington, Va.

Educating consumers is a top goal of the portal. “We believe that by providing information about electricity usage, pricing and incentives, we can help motivate better consumer purchasing patterns,” said Saifur Rahman, ARI director. “Active consumer participation is very important to achieving a more efficient and reliable operation of the overall grid.”

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JULY 16, 2010

Smart Spending | Cumulative global investments in smart grid technology will approach $46 billion by 2015, according to a new report from Oyster Bay, N.Y.-based ABI Research. The majority will have been spent on transmission and distribution upgrades, the report estimates, with $41 billion in investments worldwide. Smart meter deployment will account for roughly $4.8 billion through 2015. ABI notes the investments are driven primarily by needed upgrades to an aging transmission and distribution infrastructure, and new demands placed on the system by intermittent renewable sources of energy. More information on the study, “Smart Grid Applications: Smart Meters, Demand Response and Distributed Generation,” is available on ABI’s website.

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CFOs Play It Safe | U.S. corporate finance executives are turning to safe, conservative investment patterns in the wake of the recession, according to the Association for Financial Professionals (AFP). AFP’s 2010 Liquidity Survey found many corporations are expanding cash stockpiles and investing in more conservative vehicles: Organizations are allocating an average 74 percent (up from 56 percent in 2006) of short-term investment balances in bank deposits, money market mutual funds and Treasury securities. Many companies have no immediate plans to start deploying cash in their businesses. AFP notes that although it is uncertain when investment comfort levels will begin to recover, increased cash holdings will make it possible to act quickly when organizations do choose to seize opportunities. Full survey results are available on AFP’s website.

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Ratings Upswing | U.S. credit-rating upgrades may exceed downgrades this quarter, a balance that has not occurred since the second quarter of 2007, according to data compiled by Bloomberg. At the end of last month Standard & Poor’s had lifted ratings of 238 U.S. issuers, while cutting 210. Moody’s Investors Service had upped ratings on 200 borrowers while downgrading 129. Investors look to the ratio for insight into the overall business cycle because credit quality varies with the state of the economy as a whole, according to Bloomberg.

MAY 7, 2010

Texas A&M University has announced a six-month research study and consortium to help rural electric cooperatives, municipal electric utilities and other publicly owned utilities evaluate the business case for smart grid investments.

“The economic costs and benefits of individual smart grid components depend on a large number of factors that are especially difficult for electric co-ops, municipal and other public utilities to address,” said consortium leader Jerry Jackson, an energy economist and associate professor in the university’s Architecture College.

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MARCH 12, 2010

The Electric Power Research Institute (EPRI) recently defined a 10-step cost-benefit analysis method for comparing various smart grid technologies in a standardized way. The process was developed to help the U.S. Department of Energy (DOE) and EPRI evaluate demonstration projects, but the concepts can be used by anyone wanting to evaluate smart grid options.

One goal of U.S. energy policy is to implement smart grid technology to modernize the nation’s electricity grid. DOE has undertaken numerous initiatives to determine the best way to do this. While smart grid applications often have a common objective, such as reducing peak demand, different technologies approach that objective in different ways, making it difficult to compare and contrast alternatives.

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