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Obama awards $3.4 billion in 'smart grid' grants

President Obama announced Tuesday $3.4 billion in stimulus funding to 'smart grid' projects aimed at promoting green power and reducing electricity bills and blackouts.

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"Finally we have a technology that will benefit regular consumers - not just the guy driving his BMW home to fire up his hot tub," says Katherine Hamilton, president of the GridWise Alliance, a coalition of companies working to promote smart-grid technology. "This funding will deploy technology that allows everyone to understand how they use energy and give them tools to adjust their energy usage."

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That's been happening already in pockets around the country. One $200 million award went to help
install smart meters for many more of the 1.2 million customers of Baltimore Gas & Electric (BGE). This summer 1,000 Baltimore residents who participated in a smart-grid demonstration project slashed peak energy usage by one-third, according to Ken DeFontes, president of BGE. A survey found nearly all of them asked to continue being able to see their energy use moment by moment.

"In the new world, you'll be able to see electricity use hour by hour in real time," Mr. DeFontes said in a teleconference. "All the customer is doing is paying attention to their energy use just a little bit more ... it gives them control over their energy usage."

Long-term savings

But even energy efficiency advocates who favor smart-grid technology acknowledge that it will be perhaps a decade before the nation begins to see major energy savings.

"There are still lots of questions in the short term about how to do it right, but smart grid will be important for the nation in the long term," says Steve Nadel, executive director of American Council for an Energy-Efficient Economy.

Appliance standards, revamped building codes, and energy efficiency programs will be more important in the short run, he says.

Challenges for the system include cyber security. Digital meters that can be read over the Internet can also be hacked. Utilities, under pressure from federal regulators, are pressing to implement strict safety standards.

"Cyber security is clearly an issue for the smart grid," Ms. Hamilton says. "But we expect that as they install this equipment, the digital components will have cyber security built into it."

Beside the $3.4 billion in matching grants, another $1.1 billion will fund other smart-grid components, including $615 million for demonstration projects and $100 million for work force development.

The latter is critical, Ms. Hamilton notes, since more than half of all utility engineers and other energy workers will retire over the next five years.


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