Giant Grants for the Smart Grid

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Last month, we saw Uncle Sam (or Uncle Chu, to be more accurate) dish out $800 million in grants for alternative transportation and renewable energy projects. That was small potatoes compared to the grants unveiled by President Obama at FPL Group's (NYSE: FPL) DeSoto Next Generation Solar Energy Center earlier this week. The Smart Grid Investment Grant awards, part of the greater stimulus plan, weigh in at $3.4 billion.

Let's take a look at where our money is going.

Houston's CenterPoint Energy and Baltimore Gas & Electric, the regulated utility arm of Constellation Energy Group (NYSE: CEG), pulled down $200 million apiece for smart meter deployment in their respective cities. The "smart grid," being pushed by everyone from GE (NYSE: GE) to Google (Nasdaq: GOOG), is one vision of a path to reduce electricity consumption and increase the efficiency of this country's energy distribution network. Fresno, Calif., residents might tell you that smart meters are a total ripoff, and only drive rates higher. Whether boon or boondoggle, they're coming to a city near you.

In the realm of electric distribution systems, Consolidated Edison got the biggest grant, weighing in at $136 million. This will go toward implementing automation, monitoring, and two-way communication in Con Ed's New York/New Jersey service area.

There wasn't much funding allocated to the smart appliance category, but Whirlpool did walk away with a little cash to develop devices like smart dryers that modify electricity consumption in response to variable or time-of-use utility pricing.

Finally, in the integrated and/or crosscutting systems category, a catch-all for multifaceted smart grid deployment, big winners included Duke Energy (NYSE: DUK), Progress Energy, and of course FPL. Each picked up $200 million for their comprehensive projects.

While utilities caught the headlines, plenty of other companies stand to benefit from this government greening of the grid. Two names that spring to mind are Echelon (Nasdaq: ELON) and Quanta Services (NYSE: PWR), but perhaps you've got an even more compelling smart grid play. Go ahead and share an idea in the comments section below.