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Power Industry Sees New Phase In Energy Use

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Power Industry Sees New Phase In Energy Use

Power Industry Sees New Phase In Energy Use

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RENEE MONTAGNE, host:

The U.S. electricity grid is about to undergo some big changes. Billions of dollars will be spent in the near future upgrading the grid to allow for higher demand and more forms of renewable energy. All this week, NPR is looking closely at the grid and today we focus on utilities. While some proponents for changing the grid can be almost breathless in their enthusiasm, utilities are a more conservative lot, as NPR's Jeff Brady reports.

JEFF BRADY: Just turn on your TV, and amid all those beer and pharmaceutical ads you'll find enticing commercials about the future of the U.S. electricity grid.

(Soundbite of commercial)

Unidentified Man #1: Imagine plugging in your pickup truck and driving all over hell's half acres on clean energy made right here in America. The boys in Tehran might not like it…

BRADY: This is from Al Gore's group, the Alliance for Climate Protection. For a dream world such as this to happen, it'll require a huge investment. In fact, you can't find a specific estimate for how much it'll cost. The stimulus legislation passed in February includes $11 billion to upgrade the country's electricity grid, but that's just a down payment. Utilities and their rate payers will foot much of the bill for thousands of miles of new power lines and millions of updated meters. So utilities tend to paint a more sober view of the future.

(Soundbite of commercial)

Unidentified Man #2: The most abundant energy source in America is coal, but it'll take more than coal to power the future. At Southern Company, we're finding energy efficiency programs.

BRADY: The folks who work at utilities tend to be practical people with one big important job - to keep the lights on. They're good at it too. The U.S. grid is 99.97 percent reliable, so they can get a little defensive when an outsider comes along and suggests a major overhaul of their business.

Martha Duggan is quite familiar with the utility culture. Before working at solar company SunEdison, she was immersed in it. Duggan says an engineer once confided that his job was either to get ignored or criticized.

Ms. MARTHA DUGGAN (SunEdison): I get ignored when the lights come on and I get criticized when they don't come on. And so his goal really was to be ignored. And as you might imagine, the opportunity for creativity or new ideas is not necessarily in top of mind for folks who work in that environment.

BRADY: Duggan says there are a few exceptions around the country. She points to Xcel Energy, which is in the process of creating the first smart grid for an entire city - in Boulder, Colorado. Just recently, Florida Power and Light launched a $200 million upgrade to the electricity grid in Miami-Dade County. But for most of the other utilities, we're left with an impression of big stodgy companies that are resistant to change.

Mr. DAVID RATCLIFFE (Southern Company): Well, absolutely. I think that's a total misperception.

BRADY: David Ratcliffe is CEO of the Southern Company. Based in Atlanta, it has customers in Georgia, Mississippi, Alabama and Florida.

Mr. RATCLIFFE: We've deployed a million new automated meters and we'll move to four and a half million. We've deployed automated switching on our transmission and distribution networks.

BRADY: And his company is spending hundreds of millions of dollars researching new technologies. But take something like those automated or smart meters Ratcliffe was talking about. It's not as simple as just ripping out the old ones and installing new ones, then charging the customer a little extra to cover the cost. Utilities by-in-large are still regulated monopolies. Ahmad Faruqui is an economist with the consulting firm The Brattle Group.

Mr. AHMAD FARUQUI (The Brattle Group): There are all kinds of regulatory financing issues here. The utilities are concerned that they will not be able to collect all the money. They still have the previous meters that are fully functioning that are not fully amortized.

BRADY: The finer points of regulation don't tend to make it into those breathless advertisements about the brave new world for the U.S. electricity grid. And really in the end, David Ratcliffe's job as a utility CEO still is to keep the lights on.

Mr. RATCLIFFE: It doesn't have the same kind of sex appeal as new technologies and new sort of golly-gee-whiz, whether it's a new computer or software program or a new computer itself.

BRADY: So don't expect the smart grid to be unveiled like the latest iPod. Utilities will build out this updated grid methodically, as befits their conservative nature.

But Ratcliffe says change is underway, and there's a new generation of utility executives coming up through the ranks who tend to be more comfortable with change and the new technologies that will remake the country's electricity grid.

Jeff Brady, NPR News.

MONTAGNE: You can see some plans for expanding the electricity grid at our Web site. And we've got an interactive map, plus other resources at npr.org/grid.

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