Obama announces $3.4 billion in grants for smart grid

By Steve Holland

ARCADIA, Florida (Reuters) - President Barack Obama on Tuesday announced $3.4 billion in grants to help build a "smart" electric grid meant to trim utility bills, reduce blackouts and carry power generated by solar and wind energy.

It was the largest award made in a single day from the $787 billion stimulus package approved by Congress. The White House said the award will create tens of thousands of jobs while upgrading the U.S. electric grid.

Republicans have heavily criticized the stimulus as wasteful spending that has done little to reduce America's 9.8 percent jobless rate.

The grants, which range from $400,000 to $200 million, will go to 100 companies, utilities, manufacturers, cities and other partners in 49 states -- every state except Alaska.

Obama made the announcement after taking a tour of an array of 90,000 solar panels that line a grassy plain of cow pastures deep in the muggy heart of Florida, apparently more panels than there are people in Arcadia.

Obama, doffing his suit coat against the heat and humidity, told a crowd the program was an important investment in the types of clean energy he would like to foster in the United States to wean the country off carbon fuels.

He said the grants would go to private companies, utilities and cities and were aimed at creating a "smarter, stronger and more secure electric grid."

"At this moment, there's something big happening in America when it comes to creating a clean energy economy," Obama said.

Carol Browner, Obama's top adviser on climate change and energy issues, told reporters that the current grid system was outdated and dilapidated.

"Not only do we need to make the current system bigger and add more watts, but we need to make it function better," she said.

"MORE THAN A FACE-LIFT"

The grants will not be used to build new power lines, but improve the capabilities of the electrical system. "I would say it's more than a face-lift," Browner said.

The money will pay for about 18 million smart meters that will help consumers manage energy use in their homes, 700 automated substations to make it faster for utilities to restore power knocked out by storms and 200,000 smart transformers that allow power companies to replace units before they fail, thus avoiding outages.

The winning companies have secured an additional $4.7 billion in private money to match their government grants, creating $8.1 billion in total investment in the smart grid.

One of the winning companies is Constellation Energy's Baltimore Gas and Electric Co, which will receive $200 million in grants to add to $250 million in private funds to deploy a smart meter network for all of its 1.1 million residential customers.