Press Release of Senator Cantwell

Senate Moves to Support Washington Innovation and Businesses

Cantwell Secures New Tax Credits for Smart Grid Technologies, Can Help Lower Electricity Costs and Prevent Blackouts

Tuesday, September 23,2008

WASHINGTON, DC – Today, the U.S. Senate passed by a vote of 93 to 2, a series of tax savings measures that will directly benefit Washington communities and businesses throughout the state, including Spokane. Included in this historic package are beneficial changes to the tax code that will help catalyze the widespread installation of smart meters and smart grid systems which can greatly improve electricity utilization and efficiency, save consumers money on electricity bills, and help in the drive for energy independence.

“Although our nation’s electricity grid is vital to our economy and way of life, it uses outmoded technology that makes it less reliable than it could be and requires greater generation resources than it should,” said Cantwell. “Upgrading America’s power grid will make it more efficient and dependable, reduce costs for consumers, and help prevent future blackouts. These tax savings are just the kind of tools businesses and consumers need to transform our nation’s electricity grid from a two lane dirt road to a superhighway.”

Specifically, the package provides utilities a tax incentive to put smart meters in Washington homes and businesses. For the first time smart meters and smart meter systems are allowed to use a 10 year accelerated depreciation schedule (down from 20 years), an incentive valued at $915 million dollars. Making the electricity grid more intelligent will provide double digit cost savings and help prevent power outages and power quality disturbances that cost the economy over $100 billion a year, as well as risking the health and safety of our citizens.

Washington state is home to Itron, one of the world’s largest smart meter manufacturers, as well as a number of leading edge smart grid companies and researchers. Itron employs more than 8,500 people globally and generated $1.5 billion in revenues for 2007.

"Our power grid needs to catch up to our 21st century economic and environmental realities," said LeRoy Nosbaum, Itron chairman and CEO. "Financing the Smart Grid requires updating our current accounting practices. That's why it makes sense-and why Itron supports-accelerated depreciation for intelligent devices."

The current grid system is based largely on centralized fossil fuel, nuclear, or hydropower plants managed primarily from the supply side, with little ability to manage demand in ways that are more efficient, reliable or clean. However, with recent and impending advances in sensors, networks and communications, there is now the potential to fully utilize the demand side of the equation to help manage the grid, improve reliability and efficiency, and minimize emissions. Such a smart grid would be flexible and allow:

homeowners and businesses to sell or buy electricity on to and off of the grid;
catalyze the development of a more distributed network of small interconnected generating sources;
allow utilities more accurately forecast and manage energy loads;
reduce reliance on more expensive and polluting “peak” generation sources;
help prevent and respond more quickly to blackouts;
enable plug-in hybrid vehicles to significantly reduce our foreign oil dependence;
And perhaps most importantly, allow for real-time electricity pricing which will harness market forces to catalyze efficiency by both electricity producers and consumers.

The Pacific Northwest National Lab (PNNL) recently completed a demonstration project that found a 10 percent savings on costumers’ electricity bills and reduce peak load demand without inconveniencing customers. The study found that there are no technical hurdles standing in the way of wide-scale adoption of grid friendly technologies and that these technologies are projected to reduce the need to build about $70 billion of new generation, transmission and distribution systems over a 20 year period.

Last year, Cantwell authored the smart grid title of the 2007 Energy Bill which established a $100 million annual smart grid research and development and demonstration program and required federal officials to establish a smart grid interoperability framework to ensure all these new technologies work seamlessly together. These smart metering tax credits have long been a priority for Cantwell, who first introduced relevant legislation in 2001.

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Maria's Monday Memo To sign up for Maria's weekly newsletter, enter your email address: Search The Site	News Press Release of Senator Cantwell Senate Moves to Support Washington Innovation and Businesses Cantwell Secures New Tax Credits for Smart Grid Technologies, Can Help Lower Electricity Costs and Prevent Blackouts Tuesday, September 23,2008 WASHINGTON, DC – Today, the U.S. Senate passed by a vote of 93 to 2, a series of tax savings measures that will directly benefit Washington communities and businesses throughout the state, including Spokane. Included in this historic package are beneficial changes to the tax code that will help catalyze the widespread installation of smart meters and smart grid systems which can greatly improve electricity utilization and efficiency, save consumers money on electricity bills, and help in the drive for energy independence. “Although our nation’s electricity grid is vital to our economy and way of life, it uses outmoded technology that makes it less reliable than it could be and requires greater generation resources than it should,” said Cantwell. “Upgrading America’s power grid will make it more efficient and dependable, reduce costs for consumers, and help prevent future blackouts. These tax savings are just the kind of tools businesses and consumers need to transform our nation’s electricity grid from a two lane dirt road to a superhighway.” Specifically, the package provides utilities a tax incentive to put smart meters in Washington homes and businesses. For the first time smart meters and smart meter systems are allowed to use a 10 year accelerated depreciation schedule (down from 20 years), an incentive valued at $915 million dollars. Making the electricity grid more intelligent will provide double digit cost savings and help prevent power outages and power quality disturbances that cost the economy over $100 billion a year, as well as risking the health and safety of our citizens. Washington state is home to Itron, one of the world’s largest smart meter manufacturers, as well as a number of leading edge smart grid companies and researchers. Itron employs more than 8,500 people globally and generated $1.5 billion in revenues for 2007. "Our power grid needs to catch up to our 21st century economic and environmental realities," said LeRoy Nosbaum, Itron chairman and CEO. "Financing the Smart Grid requires updating our current accounting practices. That's why it makes sense-and why Itron supports-accelerated depreciation for intelligent devices." The current grid system is based largely on centralized fossil fuel, nuclear, or hydropower plants managed primarily from the supply side, with little ability to manage demand in ways that are more efficient, reliable or clean. However, with recent and impending advances in sensors, networks and communications, there is now the potential to fully utilize the demand side of the equation to help manage the grid, improve reliability and efficiency, and minimize emissions. Such a smart grid would be flexible and allow: homeowners and businesses to sell or buy electricity on to and off of the grid; catalyze the development of a more distributed network of small interconnected generating sources; allow utilities more accurately forecast and manage energy loads; reduce reliance on more expensive and polluting “peak” generation sources; help prevent and respond more quickly to blackouts; enable plug-in hybrid vehicles to significantly reduce our foreign oil dependence; And perhaps most importantly, allow for real-time electricity pricing which will harness market forces to catalyze efficiency by both electricity producers and consumers. The Pacific Northwest National Lab (PNNL) recently completed a demonstration project that found a 10 percent savings on costumers’ electricity bills and reduce peak load demand without inconveniencing customers. The study found that there are no technical hurdles standing in the way of wide-scale adoption of grid friendly technologies and that these technologies are projected to reduce the need to build about $70 billion of new generation, transmission and distribution systems over a 20 year period. Last year, Cantwell authored the smart grid title of the 2007 Energy Bill which established a $100 million annual smart grid research and development and demonstration program and required federal officials to establish a smart grid interoperability framework to ensure all these new technologies work seamlessly together. These smart metering tax credits have long been a priority for Cantwell, who first introduced relevant legislation in 2001. # # #
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