Google has caused a bit of a stir with its application to the FERC (Federal Energy Regulatory Commission) for the right to buy and sell energy on the wholesale market.
Analysts and bloggers have questioned just what Google's aim is in pursuing this application. Is the company trying to profit from selling consumers marked-up Google-watts of electricity? Or maybe the company seeks to entice people to buy the Android by bundling it with discount electricity for charging the device?
Although Google conceivably could use its FERC authority to sell excess energy (the way Amazon sells off excess computing power), it's more likely Google is hedging its bet that as its energy demands continue to increase, so too will energy prices. Future legislation to cap carbon emissions could spur a price spike, for example. Having a license to buy power at wholesale prices gives the company a clear economic edge.
Notably, it's not uncommon for large energy consumers to apply for the right to buy and resell electricity. Safeway and Wal-Mart have made similar applications to the FERC in the past.
This isn't Google's first investment in the energy market that's likely aimed at containing future electricity costs. In 2007, the company powered on a vast installation of solar panels that produces 1.6 megawatts of energy. In a similar vein, tech companies such as HP, Cisco, AMD, Apple, Intel, and others have made clean-tech investments.
Google says that its motivation here isn't purely financial. The company has pledged to be carbon neutral -- itself an inexact science -- and using renewable energy can help the company achieve said goal. According to a Google spokesperson, "this FERC authority would improve our ability to hedge our purchases of energy and incorporate renewables into our energy portfolio."
Google has requested a decision from FERC within 60 days.