WASHINGTON--The stimulus package is putting billions of dollars into the dream of a future where Americans can switch on a light and know that the electricity beaming through is coming from a clean source like wind power. But experts say the reality is that $11 billion is not enough to give the country what it needs to ensure this future --a modern power grid.

After 30 years of working with the existing electric grid, wind energy consultant Ken Bosley says that the stimulus money won’t go very far into building a new one.

“The $11 billion in the stimulus plan is just publicity,” Bosley says, “$11 billion is only a thousand miles of power lines.”

Between 200,000 miles and 300,000 miles of power lines make up the U.S. electric grid, a power system that was designed a hundred years ago. What the stimulus plan calls for is funding for a new “smart” grid.

The U.S. Energy Department defines a smart grid as a transmission network that brings electricity to consumers using digital technology, allowing electricity and information to flow both ways between a power source and users. This kind of connection, for instance, would be made between the appliances in your home and the power source miles away. Consumers would be more interactive with the grid and have more control of how much electricity they use. A February study by Midwest grid operators estimated it would take until 2024 to build a new system of powerlines that could cover the United States east of the Rockies, minus Texas and Florida.

The U.S. needs a new grid if it plans to deliver renewable energy, in forms like wind power, to the market. If more electricity could come from these renewable sources , carbon emissions in the U.S. could be reduced significantly. Electricity is responsible for the largest chunk of the U.S. carbon emissions, about 40 percent, according to an Energy Department report.

Tom Casey, the CEO of CURRENT, a company that develops smart grid technology, told Congress in February that a new grid could cut carbon emissions in the U.S. by 10 percent, which is the equivalent of taking 140 million cars off the road.

But Charles Ebinger, the director of the Energy Security Initiative at the Brookings Institution , says the stimulus does not come anywhere close to paying for one, citing a Federal Energy Regulatory Commission study which shows that the hardware and cables for the new grid would cost $220 billion over 10 years.

“The point is,” Ebinger says, “$11 billion isn’t going to do it.”

At a House committee hearing on the smart grid in February, the Vice President of IBM, Robert Gilligan acknowledged that the spending was not enough but said it was a good start for the grid.
“The stimulus money will be excellent seed money,” Gilligan says.

Gilligan explained to the committee that it was up to the Energy Department to spend the stimulus money in a way that will spur investment in the private sector. If the value of the grid could be shown to electric utility companies and they invested in it, that money would continue to transform the grid long after the government money has dried up, Gilligan says.

If a new grid is built, the country could harness readily-available wind power and use less electricity from carbon-emitting sources, such as coal, which currently generates 50 percent of U.S. electricity.

The U.S. has no shortage of spots that could generate significant wind power, but people in the industry say there’s just no place on the existing grid to handle delivery of that energy to markets. Some wind farms across the country have been forced to shut down because of congested power lines. This challenge has sent wind specialists like Bosley scouring for new wind sites near parts of the grid that have a little room left.

“The utility lines are totally filled up,” Bosley said in a telephone interview from the field in the mountains in Southern California. “There’s not enough capacity to build more (wind farms) and most of the known areas are already contracted out.”

There are other hurdles in the way of the smart grid though. Casey, the CEO of a smart grid technology company, was more skeptical about the willingness of utility companies to do their part in investing in a grid. Under the current model, a power company’s revenue is based on the number of electricity hours sold, multiplied by the price per hour of electricity. He told the same House committee in February that some incentive has to be given to the utilities.

“Regulated rate-based monopolists don’t have a lot of incentive to be more efficient,” Casey says.

This regulatory framework has stalled the building of the power grid, since it makes more sense for utilities to spend money on more traditional power plants rather than invest in new technology, Casey says.

For Gilligan from IBM, the hurdle at the top of his list, was the same one that’s fueling many other of the nation’s problems—the economy.

“Substantial capital investment,” is required upfront to build a smart grid, Gilligan says, and this is “made even more difficult with the current crisis in the capital and credit markets.”

To perhaps fill that gap, more public money may be on the way for the grid. Chairman Edward Markey, D-Mass. of the Select Committee on Global Warming and Energy Independence was very clear that the smart grid will continue to be on Congress’ agenda.

“Our intent is to obviously pass legislation this year, in this Congress, on these issues to add on to what was in the stimulus package,” Rep. Markey told his committee.