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San Diego Utility's Smart Grid Plans: Cisco, IBM, WiMAX, DOE Funds

powerlineSan Diego Gas & Electric has always been a forward-looking utility when it comes to deploying IT — it was one of the first utilities to work with Google’s (s GOOG) PowerMeter and it’s now installing 1.4 million electric smart meters. But SDG&E also has one of the most aggressive and interesting smart grid wireless plans I’ve heard to date from a utility, including a portion of its network that could be built with the wireless standard WiMAX and potential partners like Cisco (s CSCO), IBM (s IBM), and Arcadian Networks.

SDG&E’s Director of Network & Communications Services, Jeff Nichols told us today that SDG&E has filed an application for $30 million in smart grid stimulus funds from the DOE for a $60 million smart grid wireless project called GridComm that will span the entire 4,100 square miles of its footprint. Nichols says GridComm will use different types of layered wireless technologies, and a portion of the network could potentially use wireless technology from Arcadian Networks. For about 30 percent of the network where higher bandwidth is required, the utility could use WiMAX. Nichols said SDG&E named Cisco and IBM in the application to the DOE, although he wouldn’t expand on the potential roles for those companies in the GridComm project.

Nichols says GridComm needs an option like WiMAX — a nascent, high-speed wireless technology that delivers a lot of bandwidth and has morphed into an alternative wireless option for cell phone companies’ next-generation networks — for areas of the network that will be collecting a lot of data. For example, around major grid assets, like substations, utilities collect data from phasor units, which monitor the reliability of the grid and collect information like voltage, current, and frequency in real time. Other examples he said could be using the network to deliver mapping information to mobile workers, or provide video services for facility monitoring.

Nichols said SDG&E hadn’t yet chosen a vendor for any WiMAX gear and the project is still a proposal, not a done deal. While we’ve heard of a couple WiMAX smart meter pilots, SDG&E is one of the first large utilities that I’ve heard of embracing WiMAX for the smart grid. It was just a matter of time before one did, as the ecosystem around WiMAX for the smart grid has grown considerably larger over the past year, and now includes smart meter software maker Grid Net, smart meter maker GE (s GE), Intel’s (s INTC) WiMAX chips and vendors like Alvarion eying the emerging smart grid market.

While Nichols wouldn’t elaborate on the roles of Cisco or IBM, both companies are playing major roles in the smart grid network rollouts of other large utilities, like Duke Energy and Cisco, so likely they would play a similar role for SDG&E. The utility has already started rolling out smart meters made by Itron (s ITRI) and Nichols says GridComm will be designed to connect with those.

I asked Nichols why the utility needs to build its own wireless network, as opposed to renting space off of a phone company’s cell phone network. He said there are three problems with the carrier option for the smart grid: coverage, performance and security. Outside of urban areas the coverage of carrier networks is inconsistent, which, Nichols says, can’t be tolerated for grid network operations. In terms of performance, Nichols says he doesn’t want utility services to compete with consumer use of the network, which can lead to congestion of the network. And finally Nichols says the security of a carrier network isn’t as high as he needs it for utility services.

If SDG&E is awarded funds from the DOE it could start construction in January 2010 and finish the wireless network in about two years. Without DOE funds, Nichols says the project will go forward but will take a lot longer.