When word broke last month that Google (s GOOG) had created a subsidiary called “Google Energy,” which was looking to buy and sell electricity on federally regulated wholesale markets, the Internet and energy industries alike were confounded. If Google got approved to buy and sell energy, what exactly would the search engine do? Well, the issue is no longer one of speculation — the U.S. Federal Energy Regulatory Commission (FERC) has approved Google’s application to buy and sell energy, reports PC World.
Despite the speculation — or fear — that Google could act as a utility one day, buying and selling electricity at will, Google has clearly stated why it says it wants to achieve “market-based rate authorization.” Google’s Niki Fenwick told us last month that Google has no plans to become an energy seller but that the creation of Google Energy is an attempt to proactively address hurdles it could face in its plans to go carbon neutral. Given the legal permission to act as a utility — basically buying and selling clean energy (it owns a large rooftop solar project at its headquarters) — Google could help offset its carbon emissions that result from its large power needs.
It’s actually not all that crazy for a large company — particularly one that consumes a lot of energy and has high energy bills — to seek that status. Last month Nathaniel Bullard, an analyst at Bloomberg New Energy Finance, pointed out to me that Wal-Mart created Texas Retail Energy, which allows it to procure its own power and get the lowest-cost electricity for their warehouses and retail stores. When news about Wal-Mart’s energy firm came out in 2007 there was a lot of speculation that Wal-Mart would get into the electricity selling business, too, and Wal-Mart said, at the time, that it hadn’t fully ruled that out for the long term.
Well, now Google, like Wal-Mart, has managed to gain approval to buy and sell energy. And specifically, the application says: “Google Energy states that it intends to act as a power marketer, purchasing electricity and reselling it to wholesale customers.” Interestingly enough, the California Public Utilities Commission also filed a motion to intervene in the application, shortly after Google filed it. The document doesn’t elaborate on why. I’m really eager to see what Google does with its newly achieved power.