Xcel's "Smart Grid" Fails in Boulder, Colo.

The idea of a "smart grid" is sexy. A growing number of communications service providers think "smart grid" projects offer lots of revenue potential for machine to machine communications services. And a recent failure by Xcel Energy in Boulder, Colo. shows why communications service providers should be optimistic. 

Xcel Energy planned to launch "the world's biggest project" in Boulder, Colo., and got started in 2007.  

Xcel's "SmartGridCity" was supposed to manage power flows, allow more wind and solar on the grid, and enable consumers to control electricity consumption.

Among other things, Xcel spent $21 million to build its own broadband fiberoptic network linking homes, substations and central control in Boulder. Xcel it won't do that again. 

Five years later, costs have nearly tripled to $44.5 million, and Xcel wants its Colorado customers to pay for the cost overruns. 

That experience might suggest the advantage access providers have: they can provide the communications network function at a fraction of the cost of a power company building its own network.