Stimulus included a significant down payment on upgrading the nation's grid
President Barack Obama pledged to turn the nation's electricity grid into a "smart grid,” making sure it was based on the latest technology. The 2009 economic stimulus helped him go a long way toward keeping that promise.
Obama's vision for a smart grid had two primary components. The first was updating the parts of the electricity grid that handle transmission and distribution, so that the systems are efficient and can detect and respond to power outages. The second part was modernizing electricity on the customer's end, ideally so that people could make decisions to use energy at off-peak times when it's less expensive.
The end goal, according to a Government Accountability Office report, is an energy grid "that is more reliable and efficient; facilitates alternative forms of generation, including renewable energy; and gives consumers real-time information about fluctuating energy costs.”
Massoud Amin, a professor of electrical and computer engineering at the University of Minnesota, said one reason the U.S. needs to upgrade its grid is that other countries are doing it -- and if we don't, it could "reshuffle the world pecking order. Emerging markets could leapfrog other nations.”
Data shows that power outages have been increasing in recent years, and the costs are substantial. Amin estimated that current power outages cost the economy between $80 billion and $188 billion annually. He projects that "a smarter, stronger grid" would reduce power outage costs by $49 billion and would increase system efficiency by enough to save another $20.4 billion. A smarter grid would also reduce carbon dioxide emissions by 12 to 18 percent, he said.
As for the costs, Amin estimated a fully smart grid would cost us between $25 billion and $30 billion a year for 20 years.
The administration hasn't spent that much, but it has made a significant down payment.
Official federal support for the smart grid actually started under President George W. Bush, with the Energy Independence and Security Act of 2007. But Obama committed additional money to the effort when the American Recovery and Reinvestment Act, better known as the stimulus, became law.
The stimulus provided $4.5 billion for this goal, according to the Energy Department, matched by an additional $5 billion in private funding. Those dollars have gone primarily to two initiatives.
One is the Smart Grid Investment Grant program, which allocated about $8 billion toward 99 separate projects. Of that amount, $3.4 billion was federal money.
The other is the Smart Grid Demonstration Program, which has supported 32 projects with a total budget of $1.6 billion. The federal share was about $600 million.
In addition, the stimulus funded more than 50 smart grid workforce development programs to train the next generation of electrical workers, as well as energy restoration training to over 600 local government and utility workers, according to the Energy Department.
The most noticeable part of the pathway between generation and electricity use is the residential "smart meter” -- a device that tracks a home's real-time energy usage and shares that information with utilities so that both parties can adjust their power needs. According to the Energy Department, more than 23 percent of all U.S. electrical customers -- 33 million customers -- had smart meters by 2011. An additional 3 million smart meters were installed between January 2012 and August 2012.
While Amin acknowledged that "a lot more needs to be done for the benefit of smart grids to kick in,” he said the administration deserves credit for what it's done so far. Most of what Obama pledged during the 2008 campaign has come to pass, with significant outlays in support. We rate this a Promise Kept.
SmartGrid.gov website, accessed Dec. 13, 2012
Energy Department, Smart Grid Investment Grant web page, accessed Dec. 13, 2012
SmartGrid.gov, Smart Grid Demonstration Program web page, accessed Dec. 13, 2012
SmartGrid.gov, "Smart meter deployments continue to rise,” accessed Dec. 13, 2012
Congressional Research Service, "Weather-Related Power Outages and Electric System Resiliency," Aug. 28, 2012
Government Accountability Office, "Challenges in Securing the Modernized Electricity Grid," Feb. 28, 2012
Evan Mills (Lawrence Berkeley National Laboratory), "Electric Grid Disruptions and Extreme Weather," updated Aug. 30, 2012
Washington Post, "White House pushes policies to upgrade nation"s aging electrical network," June 13, 2011
Email interview with Massoud Amin, professor of electrical and computer engineering at the University of Minnesota, Dec. 12, 2012
Obama takes additional steps to upgrade the Grid
The Grid is about to get an upgrade.
President Barack Obama announced on Oct. 27, 2009, that the Energy Department would be investing $3.4 billion in the nation's electricity infrastructure.
First, the announcement fulfills Obama's promise to create a matching program. Private companies, utilities, manufacturers and cities will be able to tap $3.4 billion in stimulus money. That funding will be matched by $4.7 billion in private investment for a total of $8 billion.
That money will be used to expand the existing electricity grid and to manage peak load and energy efficiency more effectively, as stated in the second part of Obama's promise. For example, Florida Power & Light will be getting $200 million to install smart meters, devices that show hour-by-hour energy pricing, in customers' homes.
Other high tech improvements will include the installation of 850 sensors meant to help grid operators prevent blackouts and outages. Those sensors will also help incorporate renewable energy, like wind and solar power, into the grid; this will help solve the long-standing problem of distributing alternative energies throughout the country.
The last part of his promise — to use some of the money for demonstration projects — has yet to materialize. Expect to see an announcement about $615 million for power grid sensing, communications, analysis and power flow control before the end of the year, according to the Energy Department.
Until then, we're keeping this one at In the Works.
Energy Department, President Obama Announces $3.4 Billion Investment to Spur Transition to Smart Energy Grid , Oct. 27, 2009
Stimulus jolts electricity grid
Modernizing the electricity grid has been an important priority for President Obama's ambitious green agenda.
As with so many of President Obama's campaign promises, the massive $789 billion economic stimulus package afforded him an opportunity to take a major step toward that goal early in his presidency.
In the stimulus bill, under the heading "Electricity Delivery and Energy Reliability," there is $4.5 billion set aside for modernizing the nation's electrical grid, making it more efficient and better able to adapt to disruptions.
There's also money for enhanced security, energy storage research, and for specific projects like the Bonneville Power Admininistration, which got $3.25 billion in additional borrowing authority to expand its Northwest power grid.
The White House says the investments will result in more than 3,000 miles of new or modernized transmission lines. The plan also will deploy 40 million "Smart Meters” in American homes, which track energy consumption in more detail and in real time and can lower utility bills and reduce power outages.
In all, a White House analysis says there is more than $11 billion in the recovery plan to create a "bigger, better, smarter electric grid."
"We will transform the way we use energy," Obama said at the signing of the American Recovery and Reinvestment Act in Denver on Feb. 17, noting that the nation had been relying on a grid that dates back to Thomas Edison.
"The investment we are making today will create a newer, smarter electric grid that will allow for the broader use of alternative energy," he said.
This is a controversial plan in some circles, particularly among manufacturers of electricity meters that might have to change dramatically because of the new grid, and it will be a complex undertaking that will unfold over years. The White House acknowledged that this new nationwide "superhighway" will require long-term policy changes and years of planning.
"This gets the ball moving," said Phil West, a spokesman for the U.S. Energy Department.
We agree, and move this promise status to In the Works.
USA Today, "Smart-grid standards an issue in economic stimulus bill," by Paul Davidson, Feb. 4, 2009
Taxpayers for Common sense, Final version: American Recovery and Reinvestment Act
CQ Transcripts, Remarks of President Obama at the signing of the American Recovery and Reinvestment Act, Feb. 17, 2009
Grid gets in line for funding
Certainly no one is happy that the U.S. economy is in such dire straits that policymakers are talking about a stimulus plan that could cost more than $500 billion. But an unintended benefit for Barack Obama is that the bill gives him a chance to make good on a number of his more expensive campaign promises.
Obama discussed the broad outline of his hopes for the bill in a speech at George Mason University on Jan. 8, 2009.
"It is not just another public-works program," Obama said. "It's a plan that recognizes both the paradox and the promise of this moment — the fact that there are millions of Americans trying to find work even as all around the country there's so much work to be done. That's why we'll invest in priorities like energy and education; health care and a new infrastructure that are necessary to keep us strong and competitive in the 21st century."
Democrats in the U.S. House released a broad outline of what they hope to include in the 2009 stimulus bill and it contained many ideas Obama promised during the campaign, including $32 billion to create a "smarter and better grid" for energy transmission distribution and production. The plan says the focus will be on renewable technology.
Granted, this is still a proposal, but it's concrete enough that we're moving the Obameter from No Action to In the Works.
New York Times, Barack Obama speech on the economy at George Mason University , Jan. 8, 2009