Consolidated Edison (ED) has recently applied to the U.S. Department of Energy (DOE) demanding about $172 million from the federal stimulus fund in order to finance smart grid projects in the service areas of its subsidiaries, Con Edison Company of New York and Orange & Rockland Utilities. The company intends to apply for another $33 million of federal funds for facilitating smart grid pilot projects, later this month.
 
A smart grid integrates information and communication technology into electricity generation, delivery and consumption so as to save energy, reduce cost and increase reliability and transparency. The DOE plans to shell out $3.9 billion under the American Recovery and Reinvestment Act of 2009 to facilitate smart grid initiatives of different companies. Out of this, around $3.3 billion has been set aside for deployment and implementation of smart grid technologies across the U.S. and the remaining $615 million for smart grid pilot projects.
 
Con Edison has taken several initiatives under its smart grid projects to modernize the electric grids. These will help to lessen carbon footprint, enhance energy efficiency and improve reliability. The company also aims to develop smart meter infrastructure technology and accommodate renewable energy resources into the electricity distribution system.
 
Shares of Con Edison closed at $39.86 on Friday, trading at 16.28X trailing 12-month EPS. We maintain our Neutral recommendation for the company.
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