Google Hacks Power Regulators to Build Greener Grid

• BY ROBERT MCMILLAN
• 04.19.13

Google has figured out a brand new way to get cleaner power into old-fashioned power grids. It’s hacking the regulators.
The company has cooked up a plan with North Carolina’s Duke Energy that will let companies like Google pay for cleaner energy — something that’s surprisingly tricky to do thanks to the regulatory restrictions in certain states.
Google wants to introduce a new class of product to North Carolina’s tightly regulated energy market that would allow Duke to sell large volumes of clean energy power at a different rate from the rest of its grid. It gives Google a green alternative to Duke’s grid, which is largely powered by coal and nuclear power.
Duke sells power at a variety of rates, which are set by state regulators. There’s one rate for consumers, another for businesses, and still another for large scale users like Google.
If things go well, the new green energy service rate — called a “tariff” in regulatory parlance could be available to Duke’s customers by year’s end. But first, the North Carolina Utilities Commission have to sign off. Duke will file a proposal for the tariff within the next 90 days, says Michael Terrell, senior policy counsel, with Google.
Google has already invested more than $1 billion in wind and solar energy companies, so presumably it already has a pipeline of companies that could infuse green power into to North Carolina’s grid. This new renewable energy tariff will give them a way to actually buy it.
“This is a mechanism that could really allow renewable energy to be scaled much more quickly, because it would enable the purchasing of large amounts of renewable power,” Terrell says. “It also brings in many other players in to the mix and gives them access to renewable energy from utilities.”
This could solve a growing problem for Google, Facebook, Apple, and other companies that are building massive data centers in North Carolina’s notoriously dirty power grid. It lets them acquire power, while still maintaining its reputation as an environmentally friendly company.
And it’s an idea that’s staring to pop up in at least one other state. In December, Virginia’s big utility company, Dominion, proposed a similar pilot program to state regulators.
Both Apple and Google have expansion plans in North Carolina. Google, for example, has already built a $600 million data center in Lenoir. The company now says that it plans another $600 million expansion.
Apple cares about green power too. Last month it said that its data centers had “achieved 100 percent renewable energy,” even though it was still buying energy from Duke’s energy grid. Apple has built solar arrays and green methane-powered fuel cells, but it makes up the difference by buying Duke power and offsetting that with renewable energy credits from green-energy providers. Renewable energy credits are a way of sponsoring green energy without directly buying the power.
But with Google’s tariff plan, Apple and others will have a new option.
Greenpeace Analyst Gary Cook says he’s eager to see the final proposal approved by regulators, but he thinks that Google’s approach could make a big difference in states like North Carolina or Georgia, where there’s a monopoly utility and few green options. “This could be a big deal, but time will tell,” Cook says.