Obama's smart grid funding leaves California out in the cold
Filed under: Energy, Technology
President Barack Obama announced today that he is pushing out $3.4 billion in stimulus spending to fund the development and construction of the much vaunted "smart grid." Significant portions of the funding will go toward subsidizing so-called smart electrical meters for large utilities. Utilities in Florida and Maryland are set to get multi-hundred million dollar grants to underwrite smart meters and other infrastructure upgrades. But a quick read of the stimulus list implies that the government will inadvertently penalize some utilities that have already moved quickly to build smart meter programs. The biggest loser of all? California. Big utilities in the Golden State got more or less shut of funding awards from Washington D.C. on this round, according to blog Earth2Tech.
The message this skewed award decision sends is stark. California and its utilities have traditionally been in the forefront of energy conservation. The Golden State ranks fourth in the country in per person energy consumption. Among larger states with populations of over 5 million, California ranks second, behind only New York (which benefits from the unfair advantage of New York City, the most energy efficient city in the U.S.).
California also has among the most progressive green energy policy in the country, mandating that 20 percent of power used by the state come from renewable sources by 2020. In preparation for that big push, California's large utilities, Southern California Edison (EIX) and Pacific Gas & Electric (PGC), had already launched fairly aggressive smart meter initiatives. Renewable energy on the grid can mean more variability in how much and when power hits the grid (when the wind blows, when the sun shines). So smart meters that make it easier to control consumption and eliminate potential brownout situations are valuable. But one can only imagine the executives at SCE and PGE, upon watching this latest round of stimulus awards, were smarting for having moved to quickly and aggressively to go green.
The stimulus decision is puzzling in other ways. California is a huge electoral player and was a big part of why Obama won the 2008 election. Shorting the cash-strapped Golden State on much need green energy stimulus funding is an odd policy path to embrace. Equally puzzling, California has abundant potential renewal energy resources including solar, geothermal, and wind power. Letting utilities build out smart meters would make it easier for them to bring on even more green power. But shorting them means that California's utilities will need to move more slowly to absorb green power that could prove an infrastructural headache due to its variability. In other words, you don't need Wall Street to create a moral hazard with government subsidies that encourage utilities towards bad behavior and a handout from Uncle Sam.
Alex Salkever is Senior Writer at AOL Daily Finance covering technology and greentech. Follow him on twitter @alexsalkever, read his articles, or email him at alex@dailyfinance.com.
Why is Oprah going to cable? Hint: It's nothing to get teary about
Kisses from Hershey: Candymaker may court Cadbury with $17 billion bid
D-Day for Harry Reid: Can he wrangle 60 votes for Senate health reform bill?
Reader Comments (Page 1 of 10)
10-27-2009 @ 2:16PM
Matt said...
Simple...they have no idea what they are doing in Washington these days.
Penalizing those that live well and think ahead of the curve seems to be the underlying theme in the Obama administration, and yes, we live well for the most part in California.
Time for the community that pays the bills to get organized. That is the business community, by the way.
Reply
10-27-2009 @ 5:23PM
guarded said...
true Matt; we do need to control our own affairs and watch our senators like a hawk. I'm nowhere near ready to take our state senate off its 2/3rd majority leash. So it's hard for them to agree on a budget but; what we get is the shaft if we give them rope.
10-27-2009 @ 5:40PM
les said...
We don't need funding for what we already have, we need to fix our broken levee system.
10-27-2009 @ 6:30PM
tr00fdetect0r3 said...
They know exactly what they are doing in Washington. Obama, Pukelosi and Reid are destroying America........ON PURPOSE!!!
10-28-2009 @ 5:30AM
harry said...
let me see if i have this right......obama wants to spend 3.4 billion mostly for smart meters....with these meters we will be able to see when we use electricity along with how much for a month. this is a grid solution? is it worth over three billion dollars so we know when we use the most electricity? maybe obama has relatives or backers that mfg these things.. i just don't get it.
11-05-2009 @ 9:34AM
obamathink said...
Praise be to Allah and our brother in the faith, Barrack Hussein Obama. Follow him infidels and you will be blessed. He can lead you to the promised land of purity in the soul and flesh. Praise be to our brother as he struggles with this nation of weaklings. California must work their own situation out since they have welcomed the infidels from the south and it has cost them money they do not have. Barrack Hussein Obama has a plan to help you if you will allow it. Praise be to Allah!
10-27-2009 @ 2:36PM
gapper11 said...
This goes along with Obama....Do not reward someone who is trying to do the right thing.
Reply
10-27-2009 @ 3:06PM
john said...
3.4 billion for energy ifrastructure is like a fart in a hurricane means nothing and wont create many jobs we so need.just another obama flop or should we say fart
Reply
10-27-2009 @ 4:40PM
lola said...
FART! LOL
Maybe he is getting back at our blue dog senators.
10-27-2009 @ 11:35PM
Mel said...
Maybe we should put up windmills in DC....with all the "farts" they keep passing on we could generate energy for the whole east coast!!!!
10-27-2009 @ 3:08PM
imme534333 said...
Using the reasoning of this article, most of us are penalized for doing right. I work hard so I don't receive welfare. Am I being penalized?
Reply
10-27-2009 @ 4:00PM
pst2868 said...
It is like life insurance? Are you better off your family is not collecting the benefit?
Or health insurance? Are you better off you don't have any hospital bills to pay?
10-27-2009 @ 3:19PM
tellgil said...
California has always been the leader in development of energy alternatives. Were the ones with the model of grid. So to say that California is being left out is silly. We might not get any funding for it. Which is more than likely why this article was written. For the people who expect another handout from the Mr. Obama. I'm saying this...We already have started this system. We don't need the help. Other states just need to take their funding and buy the technology from us and follow our example.
Reply
10-27-2009 @ 3:39PM
JF said...
Currently California leads the country with it's deficit. Thanks for showing us what the country will look like under liberal control.
10-27-2009 @ 7:35PM
Frank said...
Follow the Pelosi, Boxer, Feinstein and Jerry Brown model? No thank you. Keep your politicians, your fresh new ideas and your deficit to yourself.
10-30-2009 @ 11:34PM
bloodirs said...
JF...don't blame Obama for California's deficit...blame Arnold...the Republican governor for creating it.
10-27-2009 @ 3:23PM
Lance Manly said...
I don't think I understand the point of this article. By my understanding, the whole purpose of the "smart grid" stimulus package is to help areas where limited, if any, smart grid technology is currently implemented. Since California is an acknowledged leader in this area, it seems obvious that they would not get the funding. This funding is called a "stimulus package" because it is supposed to "stimulate" the growth/adoption of smart grid technology. I think the author has failed to grasp the literal meaning of the word stimulus. As a result, he comes off sounding petty and jealous that California was not rewarded for their early adoption of this technology. He argues that because of this early adoption, they deserve a prize, in the form of tax payer money. This is completely backward reasoning.
Speaking of backward reasoning, I could not believe what I was reading when he later suggested that because California supported Obama in the last election, the president owed it to the state to include them in the funding. To quote directly from the article: "The stimulus decision is puzzling in other ways. California is a huge electoral player and was a big part of why Obama won the 2008 election. Shorting the cash-strapped Golden State on much need green energy stimulus funding is an odd policy path to embrace." This sounds exactly like the kind of reasoning that leads to corrupt decisions and allocations, which are the exact thing that should be avoided!!!
I think the author should put a little more time into his reasoning before the next article he writes. Although, having said that, I did read this entire article and had a strong enough opinion to write a comment about it, so mission accomplished I guess.
Reply
10-27-2009 @ 7:34PM
matt said...
Lance, thank you finally someone with a head on thier shoulders
10-27-2009 @ 6:45PM
next said...
Good post Lance. We don't need funding for what we have already accomplished but, we do need to fix our levees.
I agree that the convaluted logic in this article is an intent to inflame; as if tearing down one accomplishment will exhault the promise of another.
10-28-2009 @ 1:00AM
Reader said...
I'm glad you wrote. Your opinion was clear and well presented. It's rare and refreshing to read intelligent comments.