The Green Button initiative was first announced in January with the support of six utilities. While the project clearly has industry support, it was created to meet a call-to-action by the White House to provide consumers with easy-to-understand data about their energy use.

The new utilities on board include heavyweights like American Electric Power, Austin Energy, Baltimore Gas and Electric, CenterPoint Energy, Commonwealth Edison, NSTAR, PECO, Reliant, and Virginia Dominion Power. The new energy vendors on board include Silver Spring Networks, Oracle, and Itron. Previous utilities supporting the project include PG&E, San Diego Gas & Electric, Southern California Edison, Glendale Power & Light, Oncor and Pepco Holdings.

With the additional utilities, close to 30 million households live in the footprint of a utility that will be offering energy data via Green Button.

As I discussed in a conversation with Nick Sinai, White House Senior Advisor, and Alex Laskey, founder of Opower, at the Verge conference last week, Green Button is just a first step to try to liberate energy data and make it useful to consumers. However, it’s currently a somewhat inefficient process — consumers have to download the energy data and then take another step to use it in a third party app — so some utilities are building a sort of more automated next-gen Green Button 2.0 service.

But the first step of Green Button is a big one, and dozens of companies are sending out letters of support for the project including Google, BT, Intel, Verizon, The Climate Group, Johnson Controls, GE Energy, and Kleiner Perkins.

Image courtesy of Opower.

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However, the new smart grid programs are noticeably light on funding commitments, which isn’t too surprising given the recent budget struggles.

It’s “important not to hurdle down this path without a plan,” said John Holdren, President Obama’s science and technology advisor and director of the White House Office of Science and Technology Policy, at the event on Monday. Nancy Sutley, Chair of the White House Council on Environmental Quality, pointed out at the event that creating smart grid projects and tools will create jobs in the U.S. that can’t be outsourced.

We’ve already installed 5 million smart meters nationwide, and we’ve deployed smart grid technology and research projects, and these new programs are a continuation of this commitment, said Department of Energy Secretary Steven Chu at the event.

So what are the new programs? Here’s 9 ways that the Obama administration is looking to spur the smart grid:

1. As part of the Department of Agriculture’s Rural Utility Service, the administration is offering a minimum of $250 million in loans for smart grid projects in rural places in the U.S., as well as a potential $106 million in upgrades.
2. The administration is launching a new non-profit program called Grid 21, which will focus on spurring consumer-facing tools that will enable consumers to reduce energy consumption, but also maintain privacy and security. The trade group the GridWise Alliance said in a release that Grid 21 will launch a new energy-savings contest called the “Biggest Energy Saver Campaign,” in conjunction with utilities Oncor, CenterPoint Energy, and San Diego Gas & Electric, smart meter makers Itron and Landis+Gyr and integrator IBM. The contest will deliver ways for consumers to reduce energy, and also will have prizes  for software developers that can create new tools.
3. The Department of Energy is working on new projects, including a crowd-sourced map to track progress of smart grid projects, a student competition around home energy efficiency, and an Energy Information Administration project on measuring energy efficiency progress.
4. The administration launched an initiative that will seek to share the lessons learned from the smart grid stimulus investments, will hold a series of stakeholder meetings, and has created a new website: www.SmartGrid.gov.
5. The administration unveiled a new “Renewable Energy Rapid Response Team,” that will review clean power and transmission line projects and improve “federal coordination” for getting clean power projects deployed. The team will be led by the White House Council on Environmental Quality, the Department of the Interior, and the Department of Energy.
6. The administration put an emphasis on grid security issues, and says it will create ways for grid operators to have access to information about threats to the power grid, help companies deliver new security tools, and create security standards.
7. In the President’s fiscal year 2012 budget, the DOE has asked for funds to build a “Smart Grid Innovation Hub,” that will be a collaboration of federal researchers, companies, and utilities representatives, and will support R&D and project deployments.
8. The DOE’s high-risk early stage program, the Advanced Research Project Agency-Energy (ARPA-E) will support new smart grid research and is working with utilities and military bases to test new tech.
9. The administration released a report that focuses on four ways to help modernize the grid, including how to better align economic incentives that will spur smart grid technologies, how to focus on standards and interoperability to boost innovation, how to help empower consumers with energy tools, and how to increase grid security and resilience.

Overall, the programs don’t offer much more funding commitments, in comparison to the smart grid stimulus funds, and utilities might find these new programs to be “smart grid lite.” According to a new report from Black & Veatch launched Monday morning, utilities think that one of the biggest barriers to deploying a smarter grid is that once the stimulus funds have been committed there is uncertainty about how much more federal funding will be available.

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The Network

Digi has been a player in industrial M2M networking for over two decades, selling modems, communications modules, gateways and similar devices to companies in the industrial, transportation and health care fields, and has been weathering the economic downturn well, with revenues and profits increasing over the past two years. More recently it has gotten some traction in the smart grid industry as well, largely as a provider of ZigBee-based network gateways for in-home energy management systems, allowing in-home devices to connect with smart meters or broadband systems that can then connect back to third-party management systems or utility control rooms.

Digi’s technology now enables about 140,000 smart meter-to-home gateways in the field, mostly through its long-term contracts to manage the iThermostat program from Texas energy retailer TXU and demand response provider Comverge. From there, Digi has expanded to supply networking gear and support for smart thermostat and control platform partner Cooper Industries, and is helping major U.S. smart meter vendor Itron link its older, one-way communicating ERT meters to two-way networks.

Digi also provides the gateway to link up Schneider Electric’s new line of Wiser home energy management gear, and will be linking smart meters from Elster in a smart meter-smart home pilot in Naperville, Ill., to name some more partnerships.

In an interesting side note, Cisco’s home energy management display at the February 2011 DistribuTECH show featured a home dashboard unit from startup OpenPeak that appeared to be connected with one of Digi’s XBee ZigBee modules. A query to Cisco about its relationship with Digi hadn’t received a reply by the time this article was posted, however, and it isn’t clear which ZigBee networking partners, if any, new Cisco home energy partner Control4 might be using in its projects with the networking giant.

Apps & Services

In building these partnerships, Digi has collected a set of networked devices — as well as networking protocols beyond ZigBee — that as of late 2010 provided more data transactions per minute than Facebook and Twitter combined, Jordan Husney, solutions architect for Digi, told me last month.

That growing market share, in turn, has given Digi the opportunity to move past its traditional role as just a networking “plumbing company,” as Husney put it, and into a position of providing a cross-vendor smart grid network that can deliver the company’s own services and applications.

In March 2009, Digi launched what it calls “iDigi Energy,” a bundled hardware, hosted software and services platform for home energy networking adapted from a similar, cloud-hosted system called ConnectPort that Digi built for companies in the oil and gas monitoring industry. The iDigi Energy system allows network management, Web services, remote firmware upgrades and all the other functions that can become more difficult to manage as the number of devices grows from a handful to the thousands or millions, Husney explained. The product also comes with an application programming interface (API) that can be used by partners to write applications to perform home energy-specific tasks, such as isolating individual appliances and power loads in the home or connecting price data to energy use.

Digi has combined its gateways, modules and iDigi platform into what it calls its X-Grid, or extended grid, solutions platform. Lots of Digi customers are using various pieces of the X-Grid that include writing applications and hosting services on the iDigi cloud platform. Comverge, for example, has used it to upgrade iThermostats to deliver more frequent temperature and run time data on home air conditioners, David Mayne, Digi’s director of business development, told me in an interview earlier this month.

Another example is smart thermostat management startup EcoFactor, which has been using Digi’s platform to connect thermostats to EcoFactor’s own cloud-based software that helps fine-tune thermostats in homes to save energy for customers including Texas utility Oncor. Using Digi allows EcoFactor to connect to a variety of smart thermostats and manage them in a secure and reliable network, all while pulling data every 60 seconds or so via broadband connections in homes, Scott Hublou, EcoFactor co-founder and senior vice president of products, told me in a recent interview.

“A lot of people are using that Digi conduit to get access to their data,” he noted. “They’re a pure infrastructure kind of play, but a critical piece of infrastructure.”

The Cloud

Digi’s latest cloud-based, hosted product is part of a growing trend of smart grid companies leveraging the benefits of the cloud to manage the scaling-up of a growing array of sensor-enabled, remote-controlled, energy-aware devices.

In the U.K., home energy and security startup and Google PowerMeter partner AlertMe is using a cloud computing platform to manage devices it’s testing with utility British Gas, and startup Intamac is using the cloud to link in-home devices in Europe and Australia. In the U.S., Palo Alto, Calif.-based startup People Power is plotting a similar cloud services energy management platform, both to control its in-house wireless energy management modules it’s hoping to embed in a number of third party appliances, and devices made by others.

Cisco, IBM and Microsoft are all rolling out cloud computing platforms for managing energy-smart, interconnected urban environments. In Cisco’s case, that may include home energy management partners like Control4, which is working with Cisco. Demand response — turning down power loads in factories, office buildings or homes to help utilities manage peak power loads — is also moving toward cloud services, as Lockheed Martin’s launch of a cloud-based smart meter and demand response platform for cooperative utilities earlier this month indicates.

Likewise, smart meter data management software vendor eMeter’s decision to offer cloud-hosted services with Verizon earlier this year indicates how managing the terabytes of data to come from new smart grid systems could require utility IT systems to scale up in a big way.

The Standards Challenge

All of these cloud computing-based services could hit a speed bump given the variety of standards floating around the smart grid. Take the race for home energy networking dominance between ZigBee and other wireless standards like Z-Wave, Wi-Fi and even cellular. Startups like Tendril and EnergyHub and giants like General Electric are all using ZigBee for home energy networking today, but others are contemplating these other networking technologies.

The complications extend to just how data is carried from in-home networks back up to the utility back-office system — or the cloud computing platform. Millions of smart meters are now being deployed with the ability to connect wirelessly to home energy management systems, but then, homes can also be linked via broadband connections, cellular communications, and other proprietary technologies. Then there’s the networks for demand response, variable pricing signals, customer support and billing, and interconnections to utility grid operations and maintenance systems.

It could get even more complicated as other systems, like rooftop solar panels and wind turbines enter the picture, Digi’s Husney said. Little surprise, then, that Digi’s radios now reside in wind turbines makers and solar power inverters as well, he said. Digi recently launched a solar photovoltaic monitoring project with inverter and monitoring company SolarEdge, which could one day provide a linkage between home energy management and solar and wind power systems.

Image courtesy of Digi International.

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That’s the question I was asking Thursday at the Texas Electricity Professionals Association fall conference in Houston. TEPA is an organization of Texas REPs, retail electricity providers like Reliant Energy, TXU, Constellation New Energy, Green Mountain Energy, and many others, and ABCs, the aggregators, brokers and consultants that play a role in more than half of the power sold to commercial and industrial customers in the state today.

Texas’ power market is split up between power generators, the utilities that transmit and distribute it to end users, and the REPs that sell it to customers. ABCs connect those REPs to customers, and are expected to protect their customers’ interests as they seek to secure the best deals from power retailers and other power market players such as demand response providers.

That’s a far more complicated structure than the vertically integrated utility model still prevalent in most of the country — but it’s far from unique. Some 16 states have deregulated their power markets since the late 1990’s, including Maryland, Illinois, Pennsylvania, Ohio, New York, New Jersey, Connecticut and Massachusetts.

Competitive power market customers in those states add up to about 600 terawatt-hours, a little less than one-sixth of the country’s total power usage of 3,800 TWhs, Taff Tschamler, executive director of utility consultancy KEMA, said Thursday. That competitive power market was worth about $45 billion this year, and that included gross margins of some $5 billion for participating retail power providers, he said.

Tschamler said that another 1,300 TWhs in the U.S. could well be “eligible” for a shift to competitive markets, as a count of potential customer bases in deregulated states that haven’t yet taken the plunge. Not all of that is likely to be captured, however. KEMA predicts that competitive power markets will grow to about 700 TWhs by 2015 or so.

About half of all commercial and industrial (C&I) power consumers in the U.S. now buy power in competitive markets, Tschamler said. That’s a figure that has gone up from about 25 percent in 2003, and could grow to about 60 percent of all C&I customers by 2015, as more and more take advantage of increasing technological and market sophistication to use power when it’s cheap and lower use when prices are high.

Residential customers make up a far smaller percentage — about 22 percent today, up from less than 10 percent in 2003, he said. But residential customers also present deregulation with a serious political challenge — after all, if everyday homeowners are upset about their power bills, that gets the attention of state regulators, who may decide to turn back moves toward more competitive markets, he noted.

The political equation is key to the deregulation picture, he added. In 2009, about $90 million was spent in lobbying state and federal legislatures against “customer choice,” he noted, compared to some $17 million spent to support it.

Competitive power markets are meant to leverage profit motives to get utilities to work harder, cut costs, maximize regulated returns on investments and deliver power more cheaply. One TEPA conference attendee I spoke to cited Homer Simpson in relating his experience in switching over Chicago-area utility Commonwealth Edison to a deregulated model.

ComEd, he said, was running many of its nuclear power plants at only 60 percent capacity when he came to help them meet Illinois deregulation mandates, and their payback had already been guaranteed in a rate case. When he left, those plants — under a new ownership structure — were running at 95 percent capacity, he said.

But deregulation also opens power consumers to the sometimes-wild swings in commodity pricing for natural gas, the nation’s top heating fuel as well the feedstock for the power plants that cover the peaks and valleys of our nation’s demand for electrical power. It can also open up power consumers to manipulation from utilities and power brokers that use their more complete knowledge of the market to secure higher profits for themselves at the expense of their customers.

Indeed, deregulated states paid about 30 percent more for their power in 2007 than regulated states, up from a 24 percent gap in 1990, according to an Associated Press analysis of Department of Energy data. Of course, that was during a time of generally rising natural gas prices. Since the economic downturn and opening of new resources, prices for natural gas have fallen significantly, and as many conference participants noted to me, with natural gas prices this low, it’s hard to justify spending much on energy efficiency.

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We’ve been tracking Texas’s distinctive smart meter landscape for some time, including its status as a fully deregulated market. That means big transmission and distribution utilities like Oncor, CenterPoint and AEP have to open their end customers to dozens of retail electricity providers (REPs) like TXU. That also makes the state’s power market a lot more like consumer cable or broadband markets, where companies can compete on products and services.

As I explain in my article for GigaOM Pro (subscription required), perhaps that’s why Texas’s legislature has decided to force its utilities and regulators to push out smart meters. The Texas Legislature passed a law in 2005 giving the Public Utility Commission of Texas a mandate to move forward with smart metering projects, as well as leeway to allow utilities to pass on surcharges to customers to recover the costs of doing so.

That, in turn, has allowed the PUCT to allow utilities to pass on some pretty hefty customer cost increases to pay for smart meters. Texas utility Oncor is charging $2.21 per customer per month, a rate increase that included set-asides for customer education and aiding low-income customers, PUCT Chairman Barry Smitherman said in a smart metering conference call last week. Smaller Texas utility CenterPoint was able to charge $3.24 per month increases for the first two years and $3.05 thereafter.

By comparison, California’s Pacific Gas & Electric — the utility leading the country with some 6.4 million smart meters deployed so far — sought average monthly increases of only 49 cents to 99 cents per customer, and Chicago utility Commonwealth Edison is asking customers to pay just $5 more per year, or about 42 cents per month.

Texas is also leading the way in collecting and presenting its smart meter data to customers. Its Smart Meter Texas Portal went live earlier this year, and allows customers to access information on power usage, billing and pricing, as fast as today’s technology can deliver it. It also opens that information to REPs and other designated third parties — perhaps one reason why Google, which is developing third-party home energy management platform PowerMeter, has pointed to Texas as a model it would like California and other states to emulate in connecting customers to smart meter energy data.

Texas also seems to have weathered the consumer backlash against smart meters pretty well so far. A lawsuit accusing Oncor’s smart meters of jacking up customer bills has been sent back to the PUCT’s more friendly jurisdiction, and a study by Navigant Consulting (pdf) reported this summer that smart meters in Texas are working properly. In this supportive environment, even Texas utilities not subject to deregulation — municipal utilities such as Austin Energy, or cooperatives like Bluebonnet Electric Cooperative — are moving forward with smart meters.

Still, as a recent study by consultancy KEMA noted, Texas customers are like their brethren around the country in that they don’t particularly care about managing their energy use and don’t want to pay more for power. All of the state’s cutting-edge smart meter deployments and customer communications efforts will have to fight those trends if more advanced home energy management, demand response and other next-generation smart meter applications are to take root.

To read my full report, and my daily news articles and story links, check out GigaOM Pro’s Green IT section.

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With such a difficult situation, Friday’s discussion, sponsored by Smart Grid Today, didn’t yield any easy answers. This year has seen regulators in Maryland, Hawaii, Michigan, Indiana and Colorado pushing back against utilities raising rates on customers to pay back the costs of smart grid deployments. More could be coming from regulators in Virginia, as well as other states, warned John Anderson, CEO of the Electricity Consumers Resource Council, which represents commercial and industrial power users.

Those commercial and industrial users “say they aren’t going to get the benefits, but they are going to get the costs” of smart grid deployments, said Anderson, and those are big power users who are used to interval meters and time-of-use rates. Residential customers are less likely to accept changes to how they pay for power without some immediate reward, he noted. “To spend money, even a few dollars a month, for something they don’t really want, is something I really question,” he said.

But most smart meter deployments can’t justify their costs on operational benefits to the utility alone, said Rob Wilhite, a senior vice president at KEMA Consulting. That means consumer and broader societal benefits must be included. But it’s hard for utilities to put a price on greater reliability, shorter blackouts, being able to integrate more rooftop solar power and other longer-range benefits of smart meters, he noted. (KEMA lays out ways that utilities can recover costs to pay for smart meters here (pdf)).

Wilhite noted that utilities should also look to outside sources of capital for their AMI investments: “There are a lot of capital firms seeking to make new investments” in today’s down economy, and utilities are good credit risks. The danger there is that utilities will also seek to shift some of the risk onto their smart grid vendor partners, said Wilhite, which could shut out startups with innovative technology.

The challenge is compounded by the state-by-state regulation of the utility industry. For example, in Texas, which has a legislative mandate to install smart meters and a deregulated market that allows customers to switch retail power providers at a moment’s notice, the state’s Public Utilities Commission has been able to approve smart meter plans that have added several dollars per month to each customers’ power bill, said commission chairman Barry Smitherman. It’s also done a study showing that smart meters in the state are working properly, similar to a study done for Pacific Gas & Electric in California.

But getting a smart meter is only the first step in a smart grid plan that could include household power displays and power controls, as well as direct utility control, noted Alan Schriber, chairman of the Public Utilities Commission of Ohio.

“We need to let the customer know they can interact with their utility, that a relationship can be established there,” he said. At the same time, traditional demand response-type programs that allow utilities to shut off air conditioners, water heaters, pool pumps and other household power loads “could save a certain amount of money, and could be implemented by the utility. The key is that there be some kind of customer override, so people don’t feel like the utility’s taking over.” As for how the smart meter rollouts now underway in Ohio are hitting customers’ monthly bills, Schriber said it’s too early to tell.

KEMA’s Wilhite noted another smart meter cost that may be getting overlooked: the cost of cybersecurity and privacy protections. The Department of Energy made cybersecurity a must-have for projects receiving part of its $3.4 billion dollars in smart grid stimulus grants, and many state utility regulators are now adding it to their requirements.

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Is the Opt-Out Model the Future of Home Energy Management

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Take OPOWER (formerly Positive Energy). The Arlington, Va.-based home energy software startup crunches household and neighborhood energy use and other information to deliver personalized energy-saving tips. It has an online portal, like many in the home energy space. But its primary connection with the consumer is a monthly energy efficiency report that arrives in a utility-addressed envelope — and, critically, customers automatically get this report, unless they tell the utility they don’t want it.

“I think that’s fundamental,” OPOWER’s Ogi Kavazovic told me earlier this month. Only 5 percent or so of utility customers tend to actively engage in home energy management pilots, he said. But opt-out can yield a 98 percent participation rate, since it requires a conscious effort to reject the chance to save on power bills. Starting from this far broader, if potentially far less engaged, customer base, OPOWER can get people to cut energy use by 2 percent or so. That’s low, compared to the 10 to 15 percent energy reductions promised by more high-tech systems — but those higher numbers haven’t really been proven yet in commercial deployments.

Utilities also like opt-out’s increased control — an important factor when customers can’t be relied on to predictably lower their energy use. A recent survey by Honeywell showed two-thirds of customers chose comfort (i.e. air conditioning) over saving money during this summer’s heat wave. Smart meters and home energy platforms can help, but only if they’re hands-off. One such pilot, the PowerCentsDC program, found that customers prefer plans with up-front savings and narrow “critical peak” price windows, rather than those asking them to monitor energy use every day.

Redwood City, Calif.-based EcoFactor is taking this fact into account. The startup has software that balances home comfort and power savings without homeowner involvement, and is teaming up with Texas utility Oncor to cut AC loads during hot summer afternoons, much like Comverge and others residential demand response providers do. Those programs are all opt-in, however — whether technology can make the process invisible enough for opt-out remains to be seen.

In the home energy networking space, startups Consert and Sequentric are aimed at giving utilities direct control over household energy loads. Consert recently raised money from General Electric, Qualcomm and Verizon, suggesting potential strategic partnerships. Sequentric is working with Itron and several utility projects, including Duke Energy’s Charlotte, N.C. “virtual power plant” project to directly manage household loads — though both companies have declined to comment on the relationship.

CEO Jim Rogers has said that Duke wants to “own every piece” of its smart grid, including systems in customers’ homes, though some “consumer-first” comments from CTO David Mohler somewhat contradict that. Duke is also working with Cisco, which launched its Home Energy Controller this summer. It will be interesting to see if Duke chooses to use an opt-out model to deploy it.

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Is the Opt-Out Model the Future of Home Energy Management

State PUC’s haven’t been the most friendly venues for utility smart meter plans lately (see Baltimore Gas & Electric). But Oncor does have a study verifying that the vast majority of its meters are working accurately to back it up. That independent analysis (pdf) by Navigant Consulting found that Oncor’s smart meters, mostly made by Landis+Gyr and supported by IBM and meter data management software startup Ecologic Analytics performed to a high degree of accuracy. The report also gave a clean bill of health to smart meters being deployed by CenterPoint and AEP.

California utility Pacific Gas & Electric is facing a similar class-action lawsuit, and the California PUC has announced plans (pdf) to reveal a similar report on PG&E’s smart meter accuracy on Thursday. PG&E spokesman Kenny Boyles said Monday that a state judge has said he’d like to see the report before he makes further rulings on the PG&E customer lawsuit. Whether or not the Texas decision plays into the future of the California lawsuit remains to be seen.

One thing’s for sure — both Oncor and PG&E are paying a lot more attention to customers when it comes to their multi-million smart meter plans. Oncor admitted early on that human error and less-than-stellar customer support played a role in upsetting new smart meter-enabled customers. PG&E has beefed up its customer relations to include a dedicated smart meter hotline and walk-in centers in Oakland, Fresno and, of course, Bakersfield, the home of the customers at the center of the class-action lawsuit.

It will be interesting to see how the Texas ruling affects smart meter deployments elsewhere. It’s almost certain that utilities would much rather argue their smart meter cases to the state regulators they’re used to dealing with, rather than a potentially hostile court system. However, those same utility commissions are increasingly demanding that utilities find a way to avoid putting the costs of smart meter upgrades on consumers, as recent decisions in Maryland and Hawaii point out.

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The ability to watch Vimeo web videos on Apple products is the result of a new player that autodetects the capabilities of the browser and device on which the user is trying to view the video. For devices like the iPhone and iPad, which don’t support Adobe Flash, that means delivering HTML5 video files instead. The universal player will also detect the appropriate codec, file size and bit rate for each device or browser it sends video to.

Vimeo’s embrace of HTML5 is not new, as it rolled out limited support for the nascent web standard in January. But users that wanted to view its videos in HTML5 had to choose to do so, and the HTML5 player was only available on certain browsers and for certain videos. Now all videos will be viewable in the best-supported format through the universal player.

In addition to the new universal player, Vimeo has announced the availability of a new channel on Roku broadband set-top boxes that will allow a users to watch videos on their TVs. The Roku player is the first connected TV device that Vimeo videos will be viewable through, as the company looks to expand beyond just being viewable through standard web browsers. Not all videos will be available; instead, popular videos selected by the Vimeo staff will show up on the Roku channel. Users with a Vimeo account will also be able to access their own videos and those that they’ve saved through the site’s new “Watch Later” feature.

“Watch Later,” which is also new today, will allow users on any device to mark a video they’d like to watch at another time and save it onto a playlist. Users can watch saved videos in any of Vimeo’s players, whether they are on Vimeo.com, the Vimeo mobile site or the Roku player. “Watch Later” will also be available through Vimeo’s API, which will allow third-party developers to build applications that take advantage of the new feature.

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