Stimulus gives boost to smart-grid companies

SUNDAY, FEB. 15, 2009

Whatever your opinion on the stimulus package, for several Inland Northwest companies its passage will be a smart move.

Smart, as in grid.

The bill contains $11 billion in tax credits and other incentives for utilities that install substations, circuit-breakers and switches that will increase the efficiency of the nation’s electricity transmission and distribution systems. Metering systems that allow utilities to talk to thermostats, or adjust electricity pricing by hour of the day, are also eligible.

For the Northwest, the package is sweetened further with a provision that will allow the Bonneville Power Administration to borrow an additional $3.25 billion to finance upgrades to its grid, which carries 70 percent of all electricity consumed in the region. The federal power-marketing agency wants to eliminate transmission bottlenecks and build new lines to wind power projects out of reach of existing wires.

One “shovel-ready” project would span the Columbia River south of Kennewick to connect with a proposed wind farm in Oregon. The result will be more green power and a $246 million shot in the arm during construction.

Bonneville has several more projects that would benefit from the funding, spokesman Scott Simms says.

But the bigger stimulus for the Inland Northwest lies in the opportunities the bill will create for companies like Itron Inc., Schweitzer Engineering Laboratories, Advantage IQ, and others. These are businesses – every one home-grown – that have been thinking about, and building, smart grid components for years.

Itron’s early technology allowed a meter reader using a hand-held device to collect information from a plug on the side of the house, print out a bill, and stuff it into a nearby, upside-down plastic receptacle. Fantastic, if the bill did not fall out and blow all the way to Rathdrum.

Jump forward two decades, and Itron technology does far more than read meters. Homeowners can see for themselves how much electricity they are consuming in real time, and shift use to hours of less demand when their utility might charge less. The utility, with the consent of the consumer, might even be able to adjust thermostats or take other measures to reduce consumption when electricity supplies are tight. The consumer and utility both save money.

“We feel smart meters are the foundation of the smart grid,” says Itron Chief Operating Officer Philip Mezey.

Itron has contracts with four utilities to deliver 14 million of these sophisticated meters, with 50,000 in the field now for testing. Those contracts are worth $4 billion over three to five years. Mezey says he hopes the stimulus bill’s tax credits and other incentives allow those four customers, and many more, to install smart meters much faster than would otherwise be affordable.

The Obama administration wants 40 million homes equipped with smart meters.

Schweitzer, or SEL, has been making digital switches, circuit-breakers and other equipment, up to complete substations, for more than a decade at its Pullman headquarters, where the company employs 1,400.

Vice President Erik Newman says stimulus bill incentives will enable SEL’s utility customers to access the credit they need to upgrade their networks. He estimates only one-third of the nation’s transmission and distribution grids have converted from dated electro-mechanical equipment to the digital technology like that sold by SEL.

“It will take a lot of funds, a lot of investment,” Newman says.

Potentially, a lot of revenue for SEL.

Other possible area beneficiaries of the smart grid initiative are Advantage IQ, which helps customers manage their energy use; ReliOn Inc., with makes fuel cells; and their many subcontractors.

Smart grids are smart economics.

A Bonneville program, GridWise, tested consumer response to some of the technology’s capabilities two years ago in Yakima, Gresham, Ore., and on the Olympic Peninsula. Participating homeowners reduced electricity use by 10 percent, and peak loads on their utilities fell 15 percent.

With more appliances demanding more juice — some flat panel televisions are energy hogs — giving consumers information they need to cut back makes sense for everyone. For area smart grid companies, it will make more dollars.

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