Representatives from 19 North American utility companies met in San Francisco on Thursday to explore ways of cutting IT energy consumption by offering rebates and other incentives.

The effort has been led by Pacific Gas & Electric (PG&E), which serves much of the San Francisco Bay Area and Silicon Valley, areas replete with technology companies and datacenters that have some of the greatest need to reduce energy consumption.

Thursday's meeting marked the first time utility representatives from across North America have met to discuss how to implement such incentive programs, which focus largely on datacenters but also include desktop PCs and other equipment.

Following a brief lull after the dot-com bubble, energy consumption at datacenters has been surging again, particularly at colocation facilities that provide capacity for other companies, said Mark Bramfitt, PG&E's principal program manager of customer energy efficiency.

He estimated the current total demand from data centers in the PG&E region is 400 to 500 megawatts at any given moment. That has increased by between 50 and 75 megawatts in just the past 18 months, he said, driven partly by new colocation facilities.

"We had tremendous growth in datacenter capacity in the dot-com boom that never got filled. I can tell you that that capacity is now full to the gills, and they are asking us for more power," he said.

The programs being developed use different techniques to encourage efficient power use, with utilities offering to cover as much as 70 percent of the cost for companies that meet program requirements.

Seattle City Light will launch a program in the coming weeks that rewards companies for installing network-based software that manages PC power consumption. Such products cost between $11 and $25 per PC, and Seattle City Light will contribute $8 per PC, said Greg Whiting, manager for energy conservation. Vendors offering such products include Verdiem and 1E. Companies that take part in the program should get a return on their investments within 18 months, according to Whiting.

BC Hydro, which serves British Columbia, hopes to introduce its first datacenter initiative in the coming months. It will offer to pay up to 60 percent of the cost of implementing virtualization software to consolidate servers, said David Rogers, an IT adviser at BC Hydro Power Smart.

Besides reining in escalating demand for power, the utility companies have a financial incentive to offer such programs. "Our goal is to avoid the capital cost of building new power plants," Whiting said. "Encouraging companies to conserve power makes more sense than for us to keep spending to add marginal capacity."

PG&E's program, launched in 2006, also rewards companies for using server virtualization. The company has 60 customers in the program and has made payments so far to seven companies, said Randall Cole, senior project manager for PG&E's server virtualization incentives.

The number of utilities offering such programs is still low, however. No more than a dozen utilities offer incentive programs for IT today, Bramfitt said, out of perhaps 200 utilities in North America. Other utilities at Thursday's meeting were from Southern California, the Pacific Northwest, Texas, and New York.

One challenge is that utility companies are not IT experts, so one goal of the meeting was to educate them about energy usage in datacenters. "One of the companies in our region is Microsoft, and they probably know 50 times more about the technology than we do," Whiting said.