GE & Google say: Get Smart

Imagine driving into a gas station, filling the tank and not knowing how much the gas cost–until a bill arrives at the end of the month. That’s how most of us buy electricity, it’s a crazy way to do business and, if all goes well, it won’t last.

Why? Because momentum is building behind the so-called smart grid, which, among other things, will make buying electricity more transparent. The $787-billion stimulus package signed into law today by President Obama includes $4.5 billion for a smart grid, along with tax incentives to promote solar and wind power.

This afternoon, an event called “Plug In to the Smart Grid” organized by General Electric and Google attracted a standing-room only crowd of more than 500 people to Google’s New York Avenue offices in Washington. Among the speakers were such power players as Carol Browner, the president’s climate czar (although she didn’t say anything), John Podesta, the head of Obama’s transition team and leader of the Center for American Progress think thank, and Chris Miller, a senior aide to Senate leader Harry Reid.

Washington’s renewable-energy crowd is downright giddy about the president’s push for clean energy.

“Look where President Obama has chosen to be today,” said Dan Reicher, a Google executive and former Clinton administration official who was co-host of the event, along with Bob Gilligan of GE. “He could be standing by a bridge or a highway. But he’s at the Denver Museum of Science, looking at a solar panel.”

Gilligan ticked off the advantages of the smart grid: “It enables higher penetration of renewables. It allows the utilities to operate in a more efficient manner. Most importantly, it empowers and enables consumers by giving them more information.”

Because a smart grid is essentially the application of information technology to the electricity business, Google (an IT company) and GE (an energy company) have joined together to push for better federal and state policy to enable the grid. This was their first outreach event in DC. Here are a few things I learned:

Information is power. Power over power, in this case. A smart grid will tell consumers how much their electricity costs at any given time of day, how much each appliance draws down from the grid, how their usage compares with their neighbor’s, perhaps even whether they are using clean or “dirty” power. So, for example, if consumers know that it’s cheaper to run the dishwasher or washing machine at night, many will do so. Can you think of a better way to promote energy efficiency in homes?

As Ed Lu, a Google executive (and former space shuttle astronaut for NASA), put it: “All of our work in this area is based on the premise that consumers ought to be able to see how much energy they are using.” Google’s working on a software, called the Google PowerMeter, to show consumers their consumption in real time.

Andy Karsner, the smart and outspoken former Bush administration energy official, said: “This is about full transparency and disclosure and empowerment of every consumer and small business in America. People ought to know how the biggest investment they make in their life performs, on the day they buy a new home.”

How that information will be delivered is no simple matter. It raises issues of privacy, intellectual property and security, among others.

The grid needs to get bigger and stronger, as well as smarter. Right now, there’s not enough transmission capacity to move wind power from the Great Plains to Chicago or solar power from the southwest to urban centers like Los Angeles.

“That’s going to require literally thousands and thousands of miles of new transmission, and we’ve seen very little (recently) in this country,” said Reicher.

To get major transmission lines built, the federal government will need more authority to site them, even over objections from state and local officials.

“Siting continues to be a problem,” Podesta said. It’s a lot easier to move oil and gas around this country than it is to move electricity, in part because the federal government exercises its power to get gas pipelines built.

Turning to Chris Miller, the Senate aide, Reicher asked: “Is the federal government going to end up with significantly more authority to site transmission lines?”

“Yes,” Miller replied. He said enhanced federal clout could be part of an energy bill that the Senate will take up this spring.

Karsner added: “This is not a question of the opportunity to bring solar from the southwest or wind from the Midwest. I would say it’s a necessity…If the planet could talk, it would say, stop choking me.”

Highlights from the Plug Into the Smart Grid event will be posted on Google’s DotOrg channel on YouTube (a Google property), where there’s also an interesting video about the Google PowerMeter gadget. We’ll also be looking at the smart grid during FORTUNE’s Brainstorm Green conference, with a panel that includes the CEOs of smart-grid firms GridPoint and Silver Spring Networks as well as venture capitalist and grid guru Chuck McDermott.

“An emotional, social, economic reset”

“This economic crisis doesn’t represent a cycle. It represents a reset,” Jeff Immelt, the CEO of General Electric, said today. “It’s an emotional, social, economic reset.”

And the biggest impact of this “reset” will be greater government involvement in the economy, and in the affairs of business, for better or worse.

“People who understand that will prosper,” Immelt said. “Those who don’t will be left behind.”

Immelt spoke to the annual conference of Business for Social Responsibility, an association of about 250 companies that are looking for more sustainable ways to do business. About 1,200 people from companies, NGOs, consulting firms, PR shops and government agencies are here for the group’s powwow in New York.

The GE chief executive didn’t put it exactly this way, but he made clear that the meltdown on Wall Street and the election of Barack Obama will bring an end to a couple of decades of nearly blind faith in free markets and deregulation. (Heck, even Alan Greenspan has admitted that.) Going forward, stronger government intervention will be a fact of life, here in the U.S. and around the world.

The question, of course, is how deep and how wide the government involvement will be. You can be sure that the Obama administration will regulate the financial industry. But will Washington bail out the automakers? Freeze foreclosures? Tax fossil fuels? Make it easier for workers to join unions? All of the above?

Adjusting to this new reality will take some doing, Immelt said. “I’m a free market guy and fundamentally a Republican,” he told BSR. (That put him in a distinct minority in this crowd, which is packed with Obama fans. A BSR survey released today found that nine in 10 of the conference participants believe Obama will have a positive impact on advancing the agenda of corporate responsibility.) But while he may be a free market guy, Immelt’s no ideologue. He acknowledged that the government has always been deeply involved in the economy; research funded by the defense department helped spur the technology revolution of the 1990s, for example. What’s more, he said, prosperity depends on what he called four “pillars” of education, energy, health care and a financial services sector that promotes innovation. Education is a government obligation, of course, and the other three sectors he cited–energy, health care and financial services–have always been heavily regulated.

Interestingly, Immelt suggested that President-elect Barack Obama make clean energy a top priority when he takes office. Energy’s a big problem, he said, but unlike, say, health care, it is a problem that can be solved relatively easily, and with substantial benefits for the economy and the environment. Not incidentally, GE, a big player in wind energy and nuclear power, and a wanna-be provider of “clean coal” plants, stands to gain from an aggressive government push for clean energy.

“Clean energy is a combination of technology and public policy,” Immelt said. “I think this is imminently solvable. It creates jobs. There’s not a lot of downside.” GE, he said, is devoting about half of its $6 billion a year in R&D investment to clean energy and clean water technologies.

Immelt also sounded a positive note about his work with the U.S. Climate Action Partnership, an alliance of GE, DuPont, Alcoa and other big companies with environmental NGOs like Environmental Defense Fund and the World Resources Institute. The GE executive is the big cahuna behind U.S. CAP, which favors mandatory regulation of greenhouse gases, a role that has taken him a long way from his days as a young GE plastics exec who had developed a “healthy dislike for environmental NGOs.” Now he’s pals with the likes of Fred Krupp of EDF and Jonathan Lash of WRI.

Having said that, Immelt made clear that neither his position on climate change, nor his belief in GE’s much-hyped EcoMagination initiative, spring from any personal love for the outdoors. “I’ve never camped,” he said. “I don’t fish.”

But the science of climate change is “pretty much irrefutable,” he said. What’s more, GE’s business of selling products that help solve environmental problems is growing, from about $5 billion when EcoMagination was launched to about $17 billion today.

Besides, big companies don’t like uncertainty and there’s an enormous amount of uncertainty right now about what a President Obama and Congress will do to regulate greenhouse gases. Even worse, Immelt noted, you could argue that the U.S. already has de facto, unspoken regulation because of the growing opposition to coal-fired power plants.

“The last 49 coal plants haven’t gotten permits,” Immelt said. “Guess what. When that happens, you do have an energy policy. You just don’t know it.”

Better to have a full-scale democratic debate about what our energy policy should be. You can be sure that when that debate unfolds next year, GE’s voice will be heard.

How GE gives away money

The easy way to do corporate philanthropy is to write a little check to everyone who asks. Many companies operate this way–$5,000 to the Boy’s Club, $5,000 to the YMCA, $5,000 to the local cancer society or heart association. This is mostly a feel-good exercise, performed, it must be said, with other people’s money.

Today’s Sustainability column at fortune.com and cnnmoney.com is about GE, and the company efforts to be strategic in its corporate giving. I met Bob Corcoran, who runs the GE Foundation, on a trip to Ghana in 2004, and had a chance to see GE’s health care initiative in action there—the company donated medical equipment, a generator, money and lots of expertise to a hospital in rural Ghana. Last week, Bob and I had a chance to catch up when he was in Washington.

Here’s how the column begins:

I’m not a big fan of corporate philanthropy. Too often, it’s a feel-good exercise, generating little value for a company’s shareholders. At its worst, it allows CEOs to use other people’s money to glorify themselves. (Tyco once pledged $5 million to Seton Hall University, which named a building or two after its then-CEO, Dennis Kozlowski.) Rarely is corporate giving both benevolent and strategic.

General Electric (GE, Fortune 500) is one company that does philanthropy right. On Monday, the company announced a new donation – a five-year $18 million grant from the GE Foundation to the New York City public schools, the largest-ever single corporate contribution to the school system. New York is the sixth city to join in what GE calls its “Developing Futures” program, which is aimed at improving schools in Atlanta, Cincinnati, Louisville, Stamford, CT and Erie, PA, all places where GE operates. GE has been working on school reform for decades.

The company’s other charitable focus – health care in poor countries – is newer. I had a chance to see it up close in 2004 when I traveled to Ghana, with Bob Corcoran, GE’s vice president for corporate citizenship and president of the GE Foundation. (See Money and Morals at GE in the Fortune archive.) Back then, GE had promised to donate $20 million of equipment and to lend its expertise to public hospitals and clinics in Africa, beginning in Ghana – a country where it does no business. Corcoran and GE’s CEO, Jeff Immelt, justified the Africa initiative in several ways: They told me the company had been asked to do more in Africa by its African-American employees, that GE wanted to develop good will in a region that soon could grow into a real market, and that knowledge gained from working in poor countries might pay off in unexpected ways for GE.

You can read the rest here.