Silver Spring: A Growing Presence in Green Tech

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Google is likely to use Silver Spring's meter technology as part of its own PowerMeter, an online service now under development that would give users up-to-the-minute information about their energy use. "At Google, we are committed to helping enable a future where access to personal energy information helps everyone make smarter energy choices," according to an explanation of the project on Google's Web site. The company says studies have shown that access to such information could help consumers cut their energy consumption by 5% to 15%. Google is testing the service internally and later this year plans to conduct pilot projects with consumers.

To fulfill its promise, Silver Spring must continue to navigate the complex waters of the heavily regulated utility industry. The hefty price tag of smart grid technology has already triggered criticism from some politicians and consumer watchdogs. In late 2007, when PG&E asked the state for a further $677 million to pay for more smart grid technology, the San Francisco Board of Supervisors challenged the plan. PG&E has since reduced the amount requested to about $572 million. On Feb. 20, the California Public Utilities Commission is expected to rule on whether the utility can spend more than the already approved amount.

Will Meter Readers Become Extinct?

Other consumer advocates question whether the meters will reduce power usage and bridle at the rising cost to utility customers. PG&E is seeking rate increases that range from 49¢ to 99¢ for the average user of gas and electric service for the first five years before decreasing afterward.

Utilities are steadfast in their view that technology will cut costs and help the environment by conserving energy. Since the meters transmit data about power usage over wireless networks, thousands of meter readers may go the way of the milkman. And technicians may no longer be needed to drive their trucks to homes to turn the power on or off; accounts could be controlled with a keystroke. "Rather than dispatching someone to reconnect service we can do it online," says Brian Alford, spokesman for Oklahoma Gas & Electric, which has a pilot program with 6,600 meters running on Silver Spring technology.

Other cost savings could come from spreading out power usage to times when it is cheaper. Now, consumers have no idea how much power costs on a minute-to-minute basis. But with smart meters, utilities could send consumers price information in real time over the Internet, giving them an incentive to use power, say, at night when it is costs less. That could help eliminate the need to build more plants or use so-called peaker plants, the oldest and dirtiest power plants that kick in when normal plants are tapped out. "All this technology helps us become more efficient with how we move power around the grid," says PG&E's Tang.

Benefiting from the Stimulus Plan

Silver Spring should also get a boost from the $11 billion that Congress allocated to smart grid technology in the stimulus package. Because utilities will be able to tap those funds, analysts say it could double or triple the rate of smart meter deployments.

Now, Silver Spring needs to prove that its technology will work on a massive scale. In addition to smart meters and networking gear, the company offers utilities a range of software programs designed to help them manage power flows and outages and customer billing. Silver Spring is also poised to announce some new customers from Australia and other regions outside the U.S. "If we execute well, this is a global play that becomes a brand name known to every citizen in the world," says Lang.

Ante is an associate editor for BusinessWeek.