Money to Burn

Deck: 

Smart-grid stimulus targets the wrong problem.

Fortnightly Magazine - March 2009
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The $800 billion stimulus bill has spawned a feeding frenzy among would-be recipients of the money. Smart-grid technology companies, for example, are excited about the bill’s $4.5 billion in 50/50 matching grants to “modernize the electric grid.”

However, not everybody is cheering. Some industry veterans at the Distribu-TECH trade show in San Diego last month expressed disappointment and skepticism about the bill. They found three main reasons for looking this gift horse in the mouth.

First, utilities and smart-grid vendors aren’t geared up to handle $9 billion in orders in 16 months. Second, bad projects don’t deserve government grants, while good projects don’t need them. Third, the smart-grid stimulus won’t resolve the real problem—the utility industry’s outdated business model.

$9 Billion in 500 Days

In the 1985 film, Brewster’s Millions, the late Richard Pryor played the role of Montgomery Brewster, a man who must waste $30 million within 30 days in order to inherit a greater fortune from a long-lost relative. As Brewster learns, blowing $1 million every day isn’t necessarily as easy as it might seem.

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