Christine,

Nicely stated blog. What you have described is very typical of utility industry behavior towards any new project that involves infrastructure. Utilities have very few choices to fund them - either they get funded by government handouts or by consumer rate increases to all customers that must first be approved by regulators. The latter option is always less desirable because remember regulators are mandated to keep rate increases to an absolute minimum unless heavily justified. An example of heavily justified rate increases would be to fund new generation being brought on line, etc.

Most utilities can find limited funds internally to pay for small pilot projects, but rarely are pilot projects implemented on a wide scale throughout their grid unless mandated by regulators or governments with the means to fund it. In the recent cases with Smart Grid project handouts from Washington, getting potential grants from government is always going to be sought after first.

As for the projects not funded lately by Washington's Smart Grid handouts, you can bet some will die and some will go ahead, depending the size of a utility's pockets. For utility companies with no internal funding, the grants may be their only hope of launching the projects.

The key thing to watch down the road will be how many pilot projects including the government funded ones end up getting deployed on a wide scale. Unless the public is prepared to swallow large unpalatable rate increase, or unless Washington is a bottom-less pit for more handouts, I wouldn't count on the majority of them making it.