Cold Shoulder for Smart Grid Stimulus Actually a Vote of Confidence, Says PG&E

powergridgeneric71Updated with clarification and additional information about the utilities’ stimulus funding: Two major California utilities – Pacific Gas & Electric (s PCG) and Southern California Edison — were noticeably absent from the $3.4 billion in smart grid stimulus grants announced last week, despite both being widely recognized as leaders in the adoption of technologies to upgrade their networks. “More money should have come to California,” said Thomas Bailek, San Diego Gas & Electric’s chief engineer for the smart grid, while speaking at The Networked Grid conference in San Francisco yesterday.

But Kevin Dasso, senior director of strategy and regulation for PG&E, who spoke on the same panel, took a positive spin on the announcement. While the utility is “disappointed” to have not won a grant (see update below), the utility’s senior director for strategy and regulation said the broader picture is that the funding “reinforced” PG&E’s decision for deploying smart meters. “PG&E is already down that road so it was a vote of confidence in that regard,” he said.

Many of the grant winners proposed projects that involved installing smart meters. Washington, D.C.’s Potomac Electric Power Company was awarded $104 million to install 570,000 smart meters along with other communication infrastructure, and Florida Power & Light won $200 million to place 2.6 million smart meters in its service area. PG&E, which leads the nation in smart meter deployments and aims to have 5.3 million installed for its electric customers by 2011, had requested $42.5 million for a home area network in conjunction with the city of San Jose and Stanford University. California’s snub can’t be too painful for Bailek, however, because SDG&E won $28 million to implement a wireless communications system for its smart meters.

North Carolina brought in $400 million followed by Florida with $267 million. California was third with about $200 million. Southern California Edison, which did not have a representative on the conference panel, had requested $50 million in stimulus smart grid funds. The two big California utilities PG&E may have been passed over because they both have it has already invested heavily in rolling out smart meters.

Still, the two utilities could win stimulus funding as part of separate demonstration grants. PG&E has requested $25 million for a compressed air energy storage project. SCE has asked for a total of $65 million for two projects, including $25 million for a wind energy storage project (partners include A123Systems (s AONE) and $40 million a regional smart grid demo in conjunction with General Electric (s GE), Itron (s ITRI) and others.. $60 million for a wind energy storage project and a regional smart grid demo in conjunction with Cisco, A123Systems and others.

Update: PG&E did not win the $42.5 million grant it had requested for a home area network project. But it did garner $25 million as part of the $53.9 million in stimulus funds awarded to the Western Electricity Coordinating Council to deploy what are known as synchrophasors. The project is meant to improve the reliability of the bulk transmission power grid that spans 14 western states. As a member of the council, SCE (which did not request stimulus funding to deploy smart meters) will also receive funds through that grant.