Google gets go ahead to buy, sell energy — just like a utility

Last month, Google announced that it was applying to buy and sell electricity on federally-regulated wholesale energy markets via a new subsidiary called Google Energy. Well, it just got the green light from the Federal Energy Regulatory Commission — giving it the same rights and abilities as any other utility company, just like PG&E. The question now becomes: how will it exercise its new power?
It still seems unlikely that Google will actually set up its own utility company. It doesn’t seem to have any interest in selling electricity to average homeowners. Instead, it plans to buy lower cost energy wholesale to slash its own massive energy bills. On top of that, it claims that it will use its new authority to buy more energy generated from renewable sources, hoping to hit its goal of carbon neutrality sooner than expected.
This isn’t the first time a major company has gone this route. As Earth2Tech highlighted last month, Wal-Mart set up its own energy venture, Texas Retail Energy, after it got similar approval, in order to reduce its annual electricity costs. It makes sense for corporations with huge energy demands (think of all Google’s gigantic data centers across the country) to buy it in bulk. And in the two years Texas Retail has existed, Wal-Mart hasn’t propelled itself into the utility market — though it hasn’t publicly ruled out the option.
So far, it seems like Google will follow in its footsteps. As goody-goody as it sounds, its entirely plausible that the search engine would go the extra mile to green its power mix. It already owns and operates its own rooftop solar array on its sprawling Mountain View, Calif. campus, and it has a group of employees dedicated to making its business practices — even its cafeteria operations — more eco-friendly.
Even if this is the case, however, not everyone is happy about Google’s entry into the energy space. The California Public Utilities Commission filed a motion to block the search engine’s application to the FERC as soon as the idea for Google Energy surfaced, as the Environmental Leader reports. Unfortunately for the CPUC, it missed the deadline to object to the application by one day. Oddly, another group called the Mabuhay Alliance objected to Google being able to market energy on grounds that Asian Americans would be adversely affected. Unclear why or how.
Other watchdogs have been concerned about this language in Google’s FERC application: “Google Energy states that it intends to act as a power marketer, purchasing electricity and reselling it to wholesale customers.” And indeed, that does make it sound like Google wants to compete directly with other electricity vendors. But the sentence right before that one, that the purpose of the motion is “to identify and develop opportunities to contain and manage the cost of energy for Google,” seems to defuse this worry.
Google has been poking around the energy space for more than a year now, having launched its home energy management tool Google PowerMeter last spring. As recently as November, the company said that it had no grand plans for the service, and that it is really just a humanitarian offering at this point. This definitely sounds suspect, considering how Microsoft, Oracle, Cisco and other IT giants are quickly moving into the Smart Grid and energy management arenas.
Google also famously denied its interest in every launching a phone of its own — a claim now unabashedly debunked by the release of the Nexus One and Motorola Droid. So while the debut of a Google utility seems unlikely right now, it wouldn’t be shocking if it happened eventually.