Smart Grid Stocks

Written By Brian Hicks

Posted August 10, 2009

The multi-billion-dollar conga line of U.S. utilities into the "energy internet" just keeps growing.

Late last week, over a dozen of the biggest publicly-traded power players in domestic transmission staked their claim on an energy revolution. . .

Now it’s your turn.

They’re lining Up for Smart Grid Stimulus

Smart grid technology sounds like what it is: an intelligent way for energy consumers and producers to actively exchange information and achieve better load balance.

Today’s one of those days in my part of the country where scaled metering is essential to avoid outages — the mercury is inching towards 100 degrees and A/C units all over Baltimore are cranking.

But instead of sitting on their hands while generation-old dials whir away towards the brink of brownout, the nation’s largest utilities are asking for Uncle Sam’s help to realize their own profit proposition.

Duke Energy (NYSE:DUK) has a billion-buck smart grid plan for Ohio, Kentucky, and Indiana. And on August 6, Duke applied for $200 million from Washington to nudge its new meter installations forward in those states. In Ohio, the company wants to convert 600,000 homes to smart metering by 2012. Duke’s going even bigger in Indiana, where 800,000 is the target.

National Grid, the country’s #2 utility, serves five million customers in Massachusetts, New Hampshire, Rhode Island, and New York. It’s interesting to note that NG (NYSE:NGG) is headquartered in the United Kingdom, but London isn’t the capital city that’s calling them now, as they turn their focus to Washington.

National Grid is also seeking about $200 million in federal stimulus on this side of the pond to expand its knowledge systems in both electricity and natural gas metering.

Add in old Yankee standbys like NYC’s Consolidated Edison (ConEd), which also put in for $172 million in stimulus funds under the government’s Smart Grid Investment Grant Program. ConEd (NYSE:ED) is expected to ask for another $33 million by September, and it has a pilot program ready to go in Queens.

Now it’s great to see all of these long-galumphing energy giants moving into high-tech metering. But simply applying hi-tech to old energy resources isn’t as exciting as the real story here. . .

Smart Grid’s Renewable Energy Advantage

ConEd’s $6 million Queens scheme includes a large solar power project and plug-in electric vehicle charging stations. Both of those will probe and prove renewable energy’s place in smart grid infrastructure. And by optimizing clean energy resources to work with existing electricity infrastructure, every step forward for smart grid means two steps ahead for companies like Echelon Corporation.

It has been announced that Echelon (NASDAQ:ELON), a Bay Area company with operations all over the world, will create the hundreds of thousands — soon millions — of two-way meters for Duke Energy and other smart utilities.

Echelon stock has gone stratospheric with this story, rocketing up by 40% in early Monday’s trading.

And the smart grid stimulus to that stock and others is far from finished. The handful of utilities we’ve covered here are just a few of more than 3,000 that operate across the United States.

In Europe, Echelon has already brought 30 million customers online in the energy internet, and the wave of that California company’s success has now rippled back across the Atlantic to carry clear across the United States.

Other Golden State dot-com survivors want in on the action, too.

Cisco Systems (NASDAQ:CSCO) is going big into smart grid with its Energy Wise technology, and smaller startups are developing into IPO’s as you read this.

They’re being ranked by efficiency of implementation and watched for specific advances in incorporating solar, wind, geothermal, and a host of other renewable resources. The Solar Electric Power Association has its top 10, and nine of them are in California and Hawaii, where grid parity means sunshine can now produce electricity as cheaply as carbon.

Solar power grid parity, combined with two-way smart grid technology, means not only will utilities save themselves and us the hassle of power outages — they’ll also get to add capacity from residential and commercial installations that generate more juice than is needed on-site.

Since smart grid conversion consists of little more than software and meter modules, this is perhaps the most cost-effective revolution the world has ever seen.

This is all happening quickly, folks. It’s momentous and it’s profitable, and it’s not over. Stick with us for the latest on the smart grid and the best stocks to play it.


Sam Hopkins
Sam Hopkins

International Editor

P.S. My colleague Nick Hodge and I have discovered that, as in Echelon’s case, there are a gang of U.S. companies that are known better around the world than on their own shores. The fact is that Germany, France, Italy, and even Russia have appreciated smart grid for a long time. What’s more, a select group of U.S.-listed foreign companies are generating profits hand-over-fist for investors who know where to find them on Wall Street. In Green Chip International, we exploit opportunities wherever they’re found. Give GCI a closer look today and don’t miss the next smart grid winner.

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