AstraZeneca PLC (NYSE: AZN) Cut to Underweight at JPMorgan.
BlackRock, Inc. (NYSE: BLK) Cut to Neutral at Stern Agee.
Broadcom Corp. (NASDAQ: BRCM) Reiterated Buy with $46 price target at Argus.
Constellation Energy Group, Inc. (NYSE: CEG) Cut to Neutral at Citigroup.
Consolidated Edison Inc. (NYSE: ED) Cut to Neutral at Citigroup.
eBay Inc. (NASDAQ: EBAY) Reiterated Buy with $40 price target at Argus.
LM Ericsson Telephone Co. (NASDAQ: ERIC) Cut to Neutral at Credit Suisse.
Exelon Corporation (NYSE: EXC) Cut to Neutral at Citigroup.
Google Inc. (NASDAQ: GOOG) downgraded to Hold at Benchmark; Raised targets at boutique firm Global Equities Research.
Netflix, Inc. (NASDAQ: NFLX) Maintained Underperform and cut estimates at Needham.
Nokia Corporation (NYSE: NOK) Raised to Outperform at Credit Suisse (full summary).
Pacific Sunwear of California Inc. (NASDAQ: PSUN) Raised to Buy at Janney Capital Markets.
ReneSola Ltd. (NYSE: SOL) named as the Bear of the Day at Zacks Investment Research.
SAP AG (NYSE: SAP) Raised to Neutral at BNP Paribas.
Sanofi (NYSE: SNY) Cut to Neutral at JPMorgan.
Trinity Industries, Inc. (NYSE: TRN) named as value stock of the day at Zacks.
United Parcel Service, Inc. (NYSE: UPS) Cut to Neutral at HSBC.
VIVUS Inc. (NASDAQ: VVUS) Started as Perform at Rodman & Renshaw.
VMware Inc. (NYSE: VWM) Started as Buy at Stern Agee.

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JON C. OGG

Yahoo! (NASDAQ: YHOO) is working on a deal with Alibaba to sell part of its stake in the Chinese company. (Reuters)

Toyota (NYSE: TM) expects record sales next year of 8.48 million, up 20% from this year. (Reuters)

Bank of America (NYSE: BAC) will pay $335 million due to a lending bias charge against its Countrywide operation. (Reuters)

Fitch warns the U.S.’s AAA rating is under pressure because of debt load. (Reuters)

EU antitrust officials have not been convinced by arguments that the NYSE Euronext (NYSE: NYX) and Deutsche Boerse should merge. (Reuters)

A study by Exane BNP Paribas shows that only a few people in Europe would buy the new Nokia (NYSE: NOK) Lumia smartphone. (Reuters)

Airbus should deliver 1,600 planes this year, which would significantly push down the market share of Boeing (NYSE: BA). (Reuters)

Hundreds of eurozone lenders have tapped the European Central Bank for $640 billion in low interest loans, a sign of trouble in the financial sector there. (WSJ)

Former Avon (NYSE: AVP) CEOs James Preston and David Mitchell say they are upset that current CEO Andrea Jung will stay as executive chairman after she steps down as CEO. (WSJ)

American Express (NYSE: AXP) looks at businesses beyond credit cards. (WSJ)

Nevada may allow online poker within its borders. (WSJ)

U.S. Transportation Secretary Ray LaHood says he will not back a proposal to eliminate use of cellphones in cars. (WSJ)

Michigan will further look into Detroit’s finances as it considers a takeover of the city. (WSJ)

The Justice Department says Exelon (NYSE: EXC) and Constellation Energy (NYSE: CEG) could merge if they sell several plants. (WSJ)

Aol (NYSE: AOL) says criticism of management’s plans by Starboard Value is misplaced. (WSJ)

The head of TheStreet.com (NASDAQ: TST) to depart. (WSJ)

The National Association of Realtors says home sales were 14% below forecasts from 2007 to 2010. (NYT)

M&A activity drops because of sovereign debt and economic slowdowns. (FT)

Greece’s creditors resist IMF pressure to take more write-offs on sovereign paper. (Bloomberg)

Douglas A. McIntyre

The merger would create the country’s largest wholesaler of market-priced electric power, and that’s the rub, according to The Wall Street Journal.  The combined companies will have the capacity to generate some 35,000 megawatts of electricity and Maryland officials, including the state’s governor, are worried that the combined companies would have sufficient market power to drive wholesale electricity higher.

A study conducted for the state indicates that the merger could increase wholesale electricity costs up by 12%-37% for parts of the market that the new company serves. According to an Exelon official, the study assumes that the combined company would sell large amounts of electricity into the market managed by PJM Interconnection LLC, when, in fact, the company sells a large part of its capacity directly through utilities and other resellers and would have little impact on the daily auctions the PJM conducts.

Utility stocks have been getting more interest as the US and global economies have gotten weaker. We have suggested that utilities are replacing certificates of deposit and bonds as preferred retirement investments.

Exelon’s annual dividend is $2.10 and its dividend yield is 5.20%. Constellation pays a $0.96 annual dividend and its dividend yield is 2.60%. At Entergy Corp. (NYSE: ETR), the dividend yield is also 5.20%, and American Electric Power Co. (NYSE: AEP) pays a yield of 5%.

In contrast 5- and 7-year US Treasuries currently pay a negative yield and 10-year Treasuries pay just 0.7%. An average CD pays less than 1.5%. For income investors, utilities are safe, high-dividend investments.

Whether a combined Exelon-Constellation would yield to investors than the two companies separately is certainly arguable, but assuming that Exelon’s yield doesn’t fall, Constellation shareholders have got to love the proposed merger. Now it’s up to Exelon to make state regulators at least like the deal.

Paul Ausick

Geithner says problems with EU sovereign debt pose a significant risk to the global economy. (Reuters)

A bill that would label China a currency manipulator moves forward in the Senate. (Reuters)

Samsung says Q3 earnings will be better than expected because of phone sales. (Reuters)

Dispute over smartphone sales between Apple (NASDAQ: AAPL) and Samsung concerning distribution in Australia will be settled in court next week. (Reuters)

Apple’s board worked with Steve Jobs beginning in 2004 to preserve his management approach. (WSJ)

California says it remains open to talks to settle foreclosure issues with banks, after it pulls out of broader discussions. (WSJ)

Obama to push for several votes on his jobs bill to force Congress to take action. (WSJ)

Central banks in the UK and parts of Europe move to counter slowdown in their economies. (WSJ)

Moody’s downgrades 12 UK financial firms. (WSJ)

The EPA suggests that some emission rules be eased. (WSJ)

Geithner says the administration will not try to determine how banks make their profits. (WSJ)

Portuguese central bank says the country will have to cut its deficit. (WSJ)

A national statistics agency says France’s growth has slowed considerably. (WSJ)

FCC head says his agency will make changes to an $8 billion federal phone subsidy program. (WSJ)

Oracle (NASDAQ: ORCL) agrees to pay $199.5 million to settle federal jobs claims. (WSJ)

General Electric (NYSE: GE) to grow its loan operations in Europe. (WSJ)

Gannett’s (NYSE: GCI) CEO leaves, citing poor health. (WSJ)

Maryland attacks a proposed $8 billion merger of Exelon (NYSE: EXC) and Constellation (NYSE: CEG). (WSJ)

Profits at smartphone company HTC rose 68% last quarter. (WSJ)

European Court of Human Rights supports a decision by French courts that charged George Soros with insider trading three decades ago. (WSJ)

Some economists argue that extending unemployment benefits hurts the economy and discourages workers. (NYT)

White House claims China took advantage of U.S. markets in over 200 programs that included solar energy. (NYT)

The ECB to hold rates at current levels and increase liquidity in the region. (FT)

A rise in China labor costs allows some jobs to return to the U.S., according to the Boston Consulting Group. (FT)

Yahoo! (NASDAQ: YHOO) may sell its Japan assets soon. (FT)

Mortgage rates in the U.S. fall below 4%. (FT)

Dexia shares suspended as the firm moves toward a break up. (FT)

EU leaders under pressure to set a program to help the region’s banks. (Bloomberg)

Angela Merkel and Nicolas Sarkozy are at odds about how to handle bailouts of EU-based banks. (Bloomberg)

Douglas A. McIntyre

Some of the more recent dividend hikes in the utility sector have been in shares of Duke Energy Corporation (NYSE: DUK), American Water Works Company, Inc. (NYSE: AWK), American States Water Company (NYSE: AWR), Xcel Energy Inc. (NYSE: XEL), and DTE Energy Co. (NYSE: DTE).  What we are trying to show you is that the trend of dividend hikes is not without precedent in utilities.

24/7 Wall St. is looking for utility dividend hike candidates after some recent hikes in the sector.  We have evaluated 9 large-cap or mid-cap dividend producing utility stocks for investors where you can expect a dividend hike in the coming months.  These include, in alphabetic order: American Electric Power Co., Inc. (NYSE: AEP), Constellation Energy Group, Inc. (NYSE: CEG), Dominion Resources, Inc. (NYSE: D), Entergy Corporation (NYSE: ETR), FirstEnergy Corp. (NYSE: FE), NextEra Energy, Inc. (NYSE: NEE), Pinnacle West Capital Corporation (NYSE: PNW), PPL Corporation (NYSE: PPL), and Progress Energy Inc. (NYSE: PGN).

Now that the Supreme Court has rejected some carbon-cutting measures, some additional drag has been removed from this sector that might have otherwise been victim to higher ten-year Treasury yields.  We would also like to note that we have tried to consider mergers in our analysis as this sector continues to consolidate.  Our basis is more of a standalone merger basis rather than solely due to mergers  into consideration here because we are looking for the companies which can grow their dividends based solely upon their own metrics.

American Electric Power Co., Inc. (NYSE: AEP) is perhaps our favorite utility and it was named as one of our ten stocks to own for the next decade.  Its shares recently traded at $38.18 and has a current dividend yield of 4.9%.  Its 52-week trading range is $30.34 to $38.99.  Thomson Reuters has estimates of $3.13 EPS for 2011 and $3.22 EPS for 2012.  AEP has had three straight quarters of a $0.46 dividend and this is likely to be grown in the months ahead.  The prior $0.42 quarterly dividend was only in place for two quarters before being raised.  The current pace comes to $1.84 per year.  Our take, look for $0.48 per quarter.  We are not looking for an equal hike this time around as earnings growth is only expected to be almost 3% next year.

Constellation Energy Group, Inc. (NYSE: CEG) is often treated as a controversial stock in the world of utilities.  While we said we are not taking M&A into consideration, it is in a pending deal with Excelon and we are still evaluating this on a standalone basis.  It recently traded at $37.70 and has a current dividend yield of 2.55%.  Its 52-week trading range is $27.24 to $37.87.  Thomson Reuters has estimates of $3.20 EPS for 2011 and $2.46 EPS for 2012.  Its dividend used to be far higher and has been $0.24 per quarter for about ten quarters in a row.  It is hard to know about the “when” but the “if” seems a shoe-in if it somehow is not merged.

Dominion Resources, Inc. (NYSE: D) recently traded at $48.61 and has a current dividend yield of almost 4.1%.  Its 52-week trading range is $36.98 to $49.07.  Thomson Reuters has estimates of $3.14 EPS for 2011 and $3.25 EPS for 2012.  The company has been in the habit of hiking payouts more than once a year if the last hike was a sign.  If no dividend hike is made in the fall, it could be announced late this year.  The current payout is $1.97 per year, leaving well more than $1.00 per share for operations ahead.

The ETFs include Utilities Select Sector SPDR (NYSE: XLU), iShares Dow Jones US Utilities (NYSE: IDU), Rydex S&P Equal Weight Utilities (NYSE: RYU), and Ulta Utilities ProShares (NYSE: UPW). The closed-end funds we looked at include Cohen & Steers Utility Fund Inc. (NYSE: UTF), Reaves Utility Income Fund (AMEX: UTG), Wells Fargo Advantage Utilities and High Income Fund (AMEX: ERH), and DNP Select Income Fund, Inc. (NYSE: DNP). The mutual funds we looked included Invesco Utilities Investor (FSTUX), Rydex Utilities (RYAUX), and Franklin Utilities A (FKUTX).

The utilities sector posts a price/earnings ratio of 18.50, higher than the tech, financial, conglomerates, and materials sectors. The sector’s return on equity is the lowest of all but the financial sector, but its dividend yield of 3.94% is higher than any other sector.

Utilities Select Sector SPDR (NYSE: XLU) holds net assets of $4.33 billion and it’s year-to-date return is 6.81%, while its yield is 3.94%. XLU’s three largest holdings are Southern Company (NYSE: SO) at 8.32.% of assets, Exelon Corp. (NYSE: EXC), and Dominion Resources, Inc. (NYSE: D). The fund’s 52-week range is $27.92-$34.30, and it closed last week at $33.19. Shares are up about 18% in the past 12 months and about 19% from the annual low.

iShares Dow Jones US Utilities (NYSE: IDU) claims net assets of $511 million and its year-to-date return is 7.94%, while its yield is 3.57%. It’s three largest holdings are also Southern Company (6.39%), Exelon, and Dominion. The fund’s 52-week range is $67.94-$84.54, and it closed last week at $81.85. Shares are up nearly 20% in the past 12 months, and about the same from the annual low.

Rydex S&P Equal Weight Utilities (NYSE: RYU) has net assets of $24.5 million, and its year-to-date return is 7.48%, while its yield is 3.27%. Its top three holdings are Constellation Energy Group, Inc. (NYSE: CEG), which is being acquired by Exelon, at 2.7% of total assets, NRG Energy, Inc. (NYSE: NRG), and NiSource Inc. (NYSE: NI). RYU also includes some communications stocks, such as MetroPCS Communications, Inc. (NYSE: PCS) and Verizon Communications (NYSE: VZ). As its name would lead you to believe, its tenth-largest holding accounts for 2.54% of total assets. The fund’s 52-week range is $43.51-$56.28, and it closed last week at $54.47. Shares are up about 24% in the past 12 months and about 25% from the annual low.

ProShares Ultra Utilities (NYSE: UPW) has net assets of $14.45 million, and its year-to-date return is 15.65%, while its yield is 2.32%. Its top three holdings are Southern Company at 5.62%, Exelon, and NextEra Energy, Inc. (NYSE: NEE). The fund’s 52-week range is $32.19-$50.52, and it closed last week at $47.37. Shares are up about 45% in the past 12 months and about 47% from the annual low.

Normally a merger between a couple of giant power generators wouldn’t be considered as alt energy news, but this one is a bit different. Exelon, the nation’s largest nuclear power generator, is paying $7.9 billion in stock to acquire Constellation Energy, which generates about 21% of its 12,000-megawatt capacity from nuclear and renewable sources.

Both companies own coal-fired plants as well. Exelon generates about 5% of its more than 25,000-megawatt capacity from coal. Constellation generates 23% of its capacity from coal. Combined, of the approximately 35,000-megawatt capacity, about 11% will come from coal-fired generation. Last August, Exelon bought 735 megawatts of wind generation from Deere & Co. (NYSE: DE).

The merged company’s generation capacity will comprise about 55% nuclear, 24% natural gas, 8% renewable and hydro, and the remaining 13% coal- and oil-fired. Exelon has also received 20-year extensions on two of its nuclear power plants, one of which is Three-Mile Island.

As part of the deal, the merged company has agreed to invest more than $250 million in various projects in Maryland, home of Constellation. Part of the deal includes a promise not to cut jobs at Baltimore Gas & Electric for at least two years after the transaction closes. The merger is subject to regulatory and shareholder approvals, and is expected to close in early 2012.

Solar PV maker Evergreen Solar has had a tough year. The stock’s 52-week high was 52 weeks ago, while the 52-week low was posted just 5 weeks ago. Evergreen’s shares are down more than -25% today, to $1.52 about half an hour after the market opened today. They had fallen to $1.37 before bouncing back. The 52-week range is $1.18-$7.14.

Evergreen announced some preliminary data on its first quarter results prior to its scheduled May 2nd earnings release. The company said that first quarter shipments totaled just 18 megawatts at an average selling price of $1.86/watt. In the same period a year ago the company sold 47 megawatts at an average price of $1.90. That’s a double whammy of bad news.

Then came the triple whammy — Evergreen is running short of cash. As the company’s CEO put it, “Our near term liquidity has been negatively impacted [by lower sales] and may require us to secure additional sources of cash sooner than expected.”

Part of the company’s strategy is to restructure its debt “in order to significantly deleverage” and get into a position to secure additional financing. How, exactly, does a company with just $33 million in the bank make a dent in some $427 million in long-term debt?

Back when Evergreen closed its plant in Devens, Massachusetts, the company’s CEO noted that low wages at Evergreen’s Chinese plant were not the primary reason for manufacturing in China. The main reason is access to cheap loans for companies that build factories in China.

In a different world, Evergreen would probably be shutting down about now, or at least issuing a “going concern” notice. That’s not happening because the company might be able to get some cheap money. We should know the answer pretty soon.

Beacon Power makes a flywheel device designed to help regulate frequency services on the US power grid. The company is nearing completion of its first 20-megawatt flywheel storage plant in New York state, and has just received approval from the US Department of Energy to draw up to 95% of a $24 million federal grant to begin work on its second plant in Pennsylvania.

The company has also filed a shelf registration with the US SEC for up to $100 million. The company said it would use the registration to build merchant plants, manufacture more flywheel storage systems, and “funding ongoing operations.”

That last is probably the reason for the stock’s faltering price today. Beacon’s shares are trading down more than -2%, at $1.68, near the bottom of its 52-week range of $1.51-$5.00.

Paul Ausick

To show just how bad the market has been even to utilities, the leading ETF is the Utilities Select Sector SPDR (NYSE: XLU) and its shares have fallen 4.6% since Friday closing Wednesday at $30.99 with a 52-week range of $25.76 to $32.89.  We did of course not cover every single utility with nuclear power, but our coverage below accounts for a combined market capitalization rate of more than $100 billion.  Our review focused on Ameren Corporation (NYSE: AEE), Constellation Energy Group, Inc. (NYSE: CEG), Entergy Corporation (NYSE: ETR), Exelon Corporation (NYSE: EXC), FirstEnergy Corp. (NYSE: FE), Progress Energy Inc. (NYSE: PGN) and Southern Company (NYSE: SO).

We broke out how much each of the partial US nuclear energy complex has fallen since Friday, what the 52-week range is, what the market caps are, and which are some of the listed nuclear properties which we took from the U.S. Nuclear Energy Institute.

Ameren Corporation (NYSE: AEE) is down only about 3.5% since Friday with shares at $26.79; 52-week range is $23.09 to $29.89 and its market cap is $6.4 billion. Nuclear properties include Callaway.

Constellation Energy Group, Inc. (NYSE: CEG) is down about 6% since Friday with shares at $30.30; 52-week trading range is $27.64 to $38.73 and its market cap is roughly $6 billion.  Nuclear properties include Calvert Cliffs, Ginna, and Nine Mile Point.

Entergy Corporation (NYSE: ETR) is down almost 9.5% since Friday with shares at $66.65; its 52-week trading range is $66.31 (hit today) to $84.33 and its market cap is about $12 billion.  Nuclear properties include Arkansas Nuke 1 & 2, Grand Gulf, Indian Point, James A. Fitzpatrick, Palisades, and River Bend.

Exelon Corporation (NYSE: EXC) is down almost 7% since Friday with shares at $39.95; its 52-week trading range is $16.78 to $45.56 and its market cap is $26.5 billion. Nuclear properties include Braidwood, Bryon, Clinton, Dresden, La Salle, Limerick, Oyster Creek, Peach Bottom, Quad Cities, Salem, and Three Mile Island.

FirstEnergy Corp. (NYSE: FE) down almost 6% since Friday with shares at $36.59; 52-week range is $33.57 to $40.80 and its market cap is $11.2 billion.  Nuclear properties include Beaver Valley and Perry.

Progress Energy Inc. (NYSE: PGN) is down ‘only’ almost 4% since Friday with shares at $44.55; 52-week trading range is $37.13 to $46.83 and the market cap is about $13.1 billion.  Nuclear properties include Brunswick, Crystal River, H.B. Robinson, and Shearon Harris.

Southern Company (NYSE: SO) is down close to 4% since Friday with shares at $36.80; 52-week range is $32.04 to $38.79 and its market cap is close to $31 billion.  Nuclear properties include E.I. Hatch, J.M. Farley and Vogtle.

Many of these plants have switch-over capabilities, but there is one thing to consider here.  Despite these plants being old, shutting these plants down in any short order is just not likely in the cards barring maintenance or other disasters.  Switching to fossil fuels is also a much more costly initiative for consumers.

What seems to be at issue is that newer regulations would come with a higher cost of securing and operating “safe nukes” if there is such a real term.  Our take is that nuclear expenses will rise as a result, but the future demand damage of uranium may make the fuel cheaper ahead and any higher regulatory and security costs that the plants take on will probably be passed down to Joe America.

JON C. OGG

A full earnings calendar is available here for the week, including INTC, JPM, GE, APOL, SWY, AMD, GOOG, JBHT, INFY, and MAT.  Also, gold is getting jittery now and Friday’s $1,345 handle closed right in the middle of Thursday’s more than $30 point swing from high to low as it traded above $1,360 and below $1,330.  We took a look at the gold stocks and included a list of gold stocks that appear to be overvalued against peers and a list that appears to be undervalued gold stock against peers.

Alexza Pharmaceuticals Inc. (NASDAQ: ALXA) has an FDA PDUFA date for Monday regarding a decision on its AZ-004 as its lead program for treatment of agitation in schizophrenic or bipolar disorder. patients.  At $3.03, its 52-week range is $1.93 to $3.92 and shares traded roughly in a $3.10 to $2.70 range in the last week.

Alkermes, Inc. (NASDAQ: ALKS) has a decision due Tuesday for the approval of its opioid addiction treatment Vivitrol.  The drug is already approved as an injection treatment for alcohol dependence and the company has already had Phase III results showing that Vivitrol helped patients against opioid addiction. A panel has already recommended approval of the drug.  At $15.92, it hit a new 52-week high on Friday and the range is $7.54 to $15.98 and it traded in a wide range last week with a low close to $14.60 before it hit a new 52-week high.

AllianceBernstein Holding L.P. (NYSE: AB) was given the cover story from Barron’s this weekend. The article titled “A Deep Value Play” said that it got hit worse than most of its rivals in the financial crisis and it wonders if its new CEO (former Goldman Sachs member) turn it around.  Barron’s  points out that at $26.59 on October 1, shares were trading 64.7% below a pre-crisis high of $75.35.

Apple Inc. (NASDAQ: AAPL) has not yet formally announced its decision to sell the CDMA phone via Verizon Communications Inc. (NYSE: VZ).  The latest rumor is the umpteenth time the rumor has been out that a CDMA iPhone is coming to Verizon.  We expect formal confirmation on this soon, maybe as soon as this week or next week.

China New Borun Corporation (NASDAQ: BORN) is new as a stock and it produces and distributes corn-based edible alcohol in China. The company probably just got a lot more famous (if it was even known before) after this weekend because it unseated Netflix as the #1 stock in the Investors Business Daily 100.  The IBD 100 might not ramp it but it will be more on the map than ever now for many momentum investors.  IBD gave it a positive article last week as well and last Monday it was trading under $11.00 per share.  At $16.08, it hit a 52-week high on Friday and the post-IPO range this year is $4.80 to $16.14.

CIT Group, Inc. (NYSE: CIT) was given a very positive article in Barron’s called “On the Road to Redemption.” Barron’s noted, “The financial crisis pushed CIT into bankruptcy and John Thain out the door at Merrill Lynch. Together, they seem to be faring a lot better.”  At $40.79, its 52-week range is $24.83 to $42.94.  Look for a pop on Monday if the market holds up.

A variety of utilities and companies have received federal grants to implement various pieces of the smart grid. Constellation Energy Inc. (NYSE:CEG), CenterPoint Energy (NYSE:CNP), Duke Energy (NYSE:DUK), NextEra Energy (NYSE:NEE), Progress Energy (NYSE:PGN), and Exelon (NYSE:EXC) have all been awarded the maximum $200 million stimulus grants. Honeywell International (NYSE:HON), Consolidated Edison (NYSE:ED), and Whirlpool Corp. (NYSE:WHR) have been awarded grants for projects related to customer systems, electric distribution systems, and equipment manufacturing, respectively. General Electric Co. (NYSE:GE) also recently announced a $200 million investment in smart grid. Two other companies, Echelon (NASDAQ:ELON) and MasTec (NYSE:MTZ) have been working on partnerships in smart metering and energy management (Echelon) and building out transmission and distribution lines (MasTec). There’s even an ETF play available, the First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index ETF (NASDAQ:GRID).

The concept of the smart grid is to open a two-way, real-time communications path between utilities and consumers. The current grid is not able to handle real-time events, such as lower prices at certain times of the day when electricity rates are in less demand and therefore lower. Smart meters, sophisticated and scalable demand response systems, and meter data management all need to be able to communicate with one another as well as with utility companies and customers over all kinds of networks.

By comparison with today’s grid, the smart grid is a supercomputer replacing an abacus. Utility companies now get monthly meter readings and batch them up before sending them to the billing system. Under a smart grid system, the utility company will be able to handle millions of data transactions every day.

One research firm estimates that for every million smart meters a utility company’s smart metering operations must support every day over 2,000 meter sways, more than 1,000 customer moves, 10,000 missing reads, 20 meter failures, and more than 97 million meter reads. This is a sea change on an order of magnitude that utility companies have never faced before.

So let’s assume that the smart grid is in place. What are the benefits, both the utility and to the customer? The chief gain to a utility will come from its ability better to balance supply and demand, and to provide greater reliability by making their power purchases more rational. From a strategic perspective, better use of assets such as generating plants and other infrastructure will help utilities make better investment decisions. Operationally, load factors will improve and system losses and outages will decline. As a result, costs should fall.

For consumers get new tools that will help them see how much electricity they are using, when they are using, and how much it costs at exactly the time they use it. Savvy consumers will have far more control over their use of electricity, and once the initial cost of the smart meters and appliances is amortized, consumers will save money.

An almost forgotten benefit of the smart grid is the reduction in CO2 emissions. Because supply will be better fitted to demand, fewer new generating plants will need to be built. Electricity will be more efficiently used and, thus, less will be required. The federal government has targeted a 5%-8% improvement in energy efficiency by 2020 to go along with a 12%-15% renewable energy generation target.

Renewable generation projects using solar PV cost about $396/MWh, solar thermal projects cost about $257/MWh, and onshore wind projects cost about $149/MWh. Energy efficiency projects cost about $50/MWh. And energy efficiency is the goal of the push for a smart grid.

The US Energy Information Administration estimates that an investment of $520 billion in the smart grid will return $1.2 trillion in gross savings by 2020. No other technology even comes close to that kind of return.

Over the next four or five years investment in the smart grid could reach $215 billion, according to an analyst at the Bank of America. The total investment needed to revamp the US electricity grid could be into the trillions of dollars, according to the American Society of Civil Engineers.

The takeaway here is that smart grid technologies boost energy efficiency, which the most cost-effective way we have to reduce energy consumption and CO2 emissions. Nothing else comes close.

Paul Ausick