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Department of Energy Announces $3.4 Billion in Stimulus Grants to Develop Nation’s “Smart Grid”


On October 27, 2009, the U.S. Department of Energy announced the recipients of $3.4 billion in federal grants for smart-grid projects throughout the nation. The grants, funded under the 2009 Stimulus Act, will be matched by industry investment for a total public-private investment of $8.1 billion. The funds will support approximately 100 projects in 45 different states and are intended to “spur the nation’s transition to a smarter, stronger, more efficient, and reliable electric system.”[1]

While the overarching goal of the grants is to modernize the country’s energy distribution systems, there are a variety of projects that fall under the category of smart-grid projects. These include the installation of digital thermostats, digital in-home energy management displays, and advanced transformers and load management devices. However, the most common type of project is the installation of approximately 18 million electrical meters, known as smart meters, which have the ability to identify electricity consumption in more detail and transmit this information electronically back to the utility.

Utilities that have already begun the installation of smart meters have met with public outcry. For instance, Pacific Gas & Electric, which recently installed hundreds of thousands of smart meters in its customers’ central California homes, has received hundreds of customer complaints blaming the new meters for large increases in electricity bills and has been called to public hearings to explain the rate hikes.[2]

Another potentially contentious issue is that many of the utilities receiving grants have not yet received clearance to use the customer funds they pledged in their applications to match the federal dollars. They now must go to their respective state utility commissions to receive such permission. These are but a few examples of the potential obstacles utilities are likely to face in implementing their federally funded smart-grid projects.



  1. Press Release, The White House Office of the Press Secretary, President Obama Announces $3.4 Billion Investment to Spur Transition to Smart Energy Grid (Oct. 27, 2009).
  2. Gene Haagenson, PG&E Smart Meters Under Fire, Oct. 21, 2009, available at http://abclocal.go.com/kfsn/story?section=news/local&id=7076636.


Submitted by:
Kris Kavanaugh
Balch & Bingham, LLP
Birmingham, Alabama

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