Well over a year ago (prior to the launch of this blog) I wrote a newsletter article titled Lessons from the Mainframe Era - Don't Stifle Innovation!  It revisited IBM's decision in 1969, in response to an antitrust suit from the U.S. Justice Department, to unbundle its hardware and software - enabling 3rd parties to develop software on IBM hardware and unleasing a wave of innovation that created the software industry as we know it today.  The article drew an analogy to the utility industry of today and concluded that it was time for utilities, regulators and policy makers to revisit IBM’s decision in 1969 and promote open access to real-time consumer energy usage data - which would spark another wave of innovation – this time from independent providers of energy management and distributed generation services.

Google's announcement last week that it was opening up the application programming interface (API) to its PowerMeter consumer energy management portal would seem to be in line with the premise of my article.  However, will Google's actions alone, despite its size and influence in the market, actually drive innovation?

The National Association of Regulatory Utility Commissioners (NARUC) recently issued a statement opposing the regulation of power markets by the CFTC.  Their concern is that a a House bill on financial regulatory reform contains a clause that could be construed as  moving oversight for the power markets from the Federal Energy Regulatory Commission (FERC) to the Commodities Futures Trading Commission (CFTC).   Just thinking about the complexity of adding another layer of oversight - that physical deals on the power markets would need to be confirmed on ICE and NYMEX  - and the electronic information flow required to accomplish that makes ones head spin.

Boulder's local newspaper, the Boulder Daily Camera, recently reported that the Colorado Public Utilities Commission has decided to take a larger role in regulating Xcel Energy's SmartGridCity project in the same manner that it regulates other large capital investments like power plants.  This will increase the transparency of the project and is primarily a reaction to rising costs.  In March 2008, Xcel Energy projected that capital expenditures for SmartGridCity would be about $15.3 million.  The company now believes the total cost will reach $42.1 million, not including the costs of operating and maintaining the new grid.  It's widely believed that the all-in cost will be around the $100 million mark. 

In December, the Public Utilities Commission approved Xcel Energy's request to raise customers' rates 6.5 percent. The majority of the increase will be used to pay for Comanche 3, Xcel's new coal-fired unit at its power plant outside of Pueblo.  But $11 million from the rate increase - which went into effect Jan. 1 - is earmarked to cover costs associated with SmartGridCity, including capital investment, taxes and operation and maintenance fees for 2009 and 2010.

Whether or not a climate change bill passes the Congress this year, companies operating power generation, such as utilities and merchant generators, are facing increased regulation and enforcement by the EPA.  Two examples are the greenhouse gas reporting rule and the recent settlement involving the Duke Gallagher coal-fired plant.  It may be time for power generators to revisit their IT infrastructure supporting carbon management. 

On October 30, 2009, a consortium made up of Enel, Telecom Italia, Electrolux, and Indesit announced a plan to develop and test a new system, called Energy@Home. Energy@Home will enable "smart appliances" to manage themselves, consequently adjusting households' power consumption. The system will also relay information regarding actual household consumption measured by existing Enel smart metering infrastructure to the consumers on their PC, mobile phone, or on the appliance itself.

Take 400 applications, 200 reviewers, 5 months, $3.4 billion, one Secretary of Energy and bang!  100 utilities are off to the races. This afternoon the DOE announced the awardees that were eligible for the $3.4 billion in ARRA 2009 smart grid investment grants as defined by Section 1306 of the 2007 EISA. It is worth noting that the $615m in smart grid demonstration project grants (Section 1304 of EISA) are yet to be awarded.  So what's the net-net?

100 applications were approved to receive some amount of grant money in what is officially the 1^st of three rounds of grant money to be disbursed. The reality, however, is this is the last of one round of funding....

Despite the fact that utilities have never been early adopters of new technology, it has been interesting to note that some U.S. utilities have begun experimenting with social media tools like Twitter, Facebook and YouTube.  Maybe it's because, unlike a new customer information system or even a new consumer web portal, these tools require relatively little up front investment.  Maybe the utilities have been caught up in the buzz surrounding the smart grid – although I'm not sure that social media tools qualify as smart grid components.  And maybe we're seeing the impact of a demographic transition in the utility workforce and the utility customer base.  In any case it's an interesting trend.