Why smart-grid, broadband stimulus applicants need each other

(Part 1 of 2)

This week the Department of Energy awarded $3.4 billion in stimulus funding to one-fourth of the 400 smart grid stimulus applicants spanning 49 states. The funding was the biggest single grant the DOE has given out in one day, but it’s not the end of its awards. There is still $7.2 billion in American Recovery and Reinvestment Act (ARRA) funding set aside for broadband grant hopefuls. According to Craig Settles, a consultant and founder of Successful.com, it’s time to strike while the iron’s hot. The two industries – including those that won grants and those that want to proceed anyways – are ripe for partnership.

The community broadband projects that survive round one of broadband stimulus funding will be asked to go into a due diligence phase to refine their proposals to the National Telecommunications Industry Association (NTIA) and the Rural Utilities Service (RUS). Settles’ advice is for those applicants to quickly get with smart-grid grant winners in their area and determine a way to work that project into their broadband proposal. And with the NTIA and RUS announcing today they will delay naming the recipients of broadband stimulus grants for at least one month, companies have time to get a head start. Securing a utility, an established customer, could be the difference between a broadband proposal with reasonable expectations of sustainability and one that is reliable and financially viable, he said.

“During that time, a broadband applicant can meet up with a utility that has won a grant and figure out how to integrate the broadband applicant’s proposal to take advantage of that utility in some way,” Settles said. “Conversely, if they haven’t thought out their broadband plan in detail, have the applicant address how the broadband network can be part of the smart grid, so when they go in for due diligence, they now have an institutional customer.”

Two-way communication is critical to essentially all the advanced features of the smart grid, over which consumption data is backhauled. A community can either lend its fiber network to the utility for this backhaul or rely on the utility’s fiber network, if they choose to build their own, for their purposes. 

funding went to public utilities, so local governments and the community can influence the discussion, Settles said. The players that stand to benefit the most are urban areas submitting broadband adoption and public computer center proposals, and urban areas that may have given up on ARRA altogether after seeing the NOFA, or Notice of Funds Availability, rules, he added.

“If the smart grid people have fiber, you want to tap into that to provide services to the rest of the community,” Settles said. “If its wireless, it’s a question of can that do double duty and support the smart grid? The intent is to support both. You may get some smart grid folks who say the data is too sensitive. To me it’s the great hypothetical, can it be done? Each community has to figure out the particulars based on all the players involved.”

An example of the intersection between broadband service providers and the smart grid comes from home management company iControl. Using home security as the entry point, the company helps broadband providers leverage their network for additional applications like home energy management. iControl’s president Paul Dawes said that while the smart grid stimulus money may help utilities put in smart meters and networking infrastructure in place, it won’t change consumer’s behavior if it’s not tied into a broadband home management system. The two industries are inextricably linked and the stimulus money should only strengthen the tie.

“If you look at what’s happening with the stimulus money out there, the utilities are putting these smart meters into their rate base, they are charging subscribers more now because they have smart meter,” Dawes said. “In order for there to be value to consumers, they have to save money. In order to save money, they have to have services managed in the home.”

Outside the home, broadband applicants are also already proposing anchor tenants for their networks for churches, hospitals, libraries and schools, creating a path to broadband for the rest of the community, Settles said. Therefore, if a smart grid project builds a fiber network as part of its infrastructure, it will be easier for these institutions to extend their networks out. They only need to go to the utility and request an extension.

There will be political complexities in coordinating the efforts of big utilities in large cities and it will take a lot of leg work, but the bottom line is that if a community, institution or service provider is already building a project that relies on broadband, it behooves the people applying for broadband to also link up with smart grid projects for economies of scale as a result of the project, Settles said.

“Those people applying need to hurry up and touch base with smart grid people, so if there’s an opportunity to build up the strength of their application for broadband, that relationship would do that,” he said. “Then whoever wins the broadband grants would get that bid.”

Next: Exploring in-home energy management opportunities