Energy infrastructure modernization promises improved efficiency for producers and consumers. As the nation’s energy needs continue to grow, utilities face pressure to increase production through an aged delivery grid. From 1988 to 1998, U.S. electricity demand increased by 30 percent, while overall capacity increased only 15 percent. According to the U.S. Department of Energy, brownouts and blackouts cost American businesses an average of $100B per year since 2000. At the same time, concerns about greenhouse gas emissions are creating a focus on energy production, delivery, and consumption, where large improvements can be realized.

Under ARRA, Investor Owned Utilities (IOU) and municipal utilities can receive up to $4.4B in the form of matching grants to deploy pilot systems that use advanced technologies such as automated metering, distributed energy resources, transmission efficiency control, and storage systems. All of these advanced technologies require use of a two-way communications network capable of very high availability and security. In addition to providing funding, ARRA encourages applications that offer smart energy grid capabilities under the Commerce Department’s Broadband Technologies Opportunities Program (BTOP) and the Agriculture Department’s Rural Utilities Service (RUS) Broadband Initiatives Program (BIP) provisions.

A smart grid-ready network allows utilities to meet the fundamental forces of change. Many factors are driving utilities to adopt the smart energy model. These factors are both economic, environmental and regulatory. Improving grid efficiency or improving service reliability lowers operating costs, resulting in better financial performance. Public pressure to operate more cleanly drives the need to conserve energy, reduce emissions and prepare for emerging technologies such as energy storage and electric cars. Regulatory events such as EISA and ARRA provide the government mandate and funding to set the smart energy grid initiative in motion.

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