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Energy credits a lure for IBM's green IT push

Sarah Varney, Technology Editor
Marking the one-year anniversary of Project Big Green, IBM recently threw a party, complete with announcements of little green data centers and expanded energy credit initiatives. Reddy Kilowatt, the iconic '50s spokestoon who

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banged the gong for increased electricity usage, was a no-show but Consolidated Edison Inc. stood up to announce its membership in Big Blue's expanded Intelligent Utility Network effort.

It's easy to poke fun, but IBM's commitment to green energy is broader than it seems, said Mike Kahn, managing director at The Clipper Group Inc., a high-tech consultancy based in Wellesley, Mass. "This isn't just something that IBM has cooked up. Over the past six months I've seen a lot of interest in this subject, particularly from large companies. Energy costs are a huge component for large companies. If you're a data center manager or a facilities manager for a building, you're facing many challenges in respect to energy."

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IBM's plan includes tapping utilities to educate CIOs and other IT managers and encourage them to lower energy costs. One concrete role will be to facilitate energy savings in order to earn IBM Energy Efficiency Certificates. Elaine Lennox, vice president for IBM Enterprise Systems, stressed that the certificate program has been extended to include both the data center and distributed facilities, along with office lighting systems and cooling requirements.

Consolidated Edison, which serves more than 3 million customers in New York City and New York's Westchester County, will work with IBM to measure and verify energy usage reductions for data center customers, according to Rebecca Craft, director of energy efficiency programs at New York-based Con Edison. IBM customers can earn credits through a certified Measurement and Verification program to use toward their energy bill. A third party -- Neuwing Energy Ventures LLC -- will manage the measurement and verification program along with the issuance of certificates.

Certificates vary in value from $5 per megawatt hour to $28 per megawatt hour, according to Matt Rosenblum, president of Neuwing. The 2-year-old company is based in New York. "I don't think that utility companies want to be in the measurement and verification business. They'll work with third parties for that," he said. Instead, utilities will act as liaisons for the certification process.

But not every utility company will rely on third parties to shepherd this process. In California, a so-called "mandate" state in which utility companies are required to pay back customers for energy savings, PG&E Corp. does it all in-house.

"We issue cash payments to our customers. There's no scrip. It's very straightforward," said Mark Bramfitt, principal program manager for high technology energy efficiency at San Francisco-based PG&E.

Care2 decrease energy costs?

Care2.com Inc., an advertiser-supported online community with 8 million members, just completed the energy credit process. Based in Redwood City, Calif., the company recently expanded its data center with IBM x86 blade servers. These servers run the company's production websites. "We wanted to practice what we preach," said Ed Traylor, CIO at Care2.com. "That [dedication to green IT] and performance were my primary reasons for going with IBM." Expandability was another factor.

We wanted to practice what we preach.
Ed Traylor
CIOCare2.com Inc.
The certification process took four months, Traylor said. Neuwing did manage the process in this case, even though the certificate was "retired" (instead of cashing in the credits, Care2.com keeps the certificate).

"It's a very difficult process to meet the requirements to get certified," Traylor added. Proof of purchase, measurement and verification of power consumption before and after the server upgrades and decreases in the number of physical servers and floor space all had to be verified. Now that Care2.com has its certificate in hand, it's going up on the wall like a mounted rhino head at a hunting lodge.

So Care2.com gets a warm, fuzzy feeling from its energy certification credit, but what's in it for other, less noble companies? A lot, actually. According to Don Clariza, CIO of Alpha Ten Technologies Inc., in San Marcos, Calif., the inclusion of green IT is now necessary to land U.S. Department of Defense (DoD) contracts. The company bids for DoD IT contracts worth anywhere from $100,000 to $1.5 billion, and it makes sure to include "green" technologies.

"The word is that you have to include green technology to win these contracts, and that mandate comes from the very top [of the Department of Defense]," Clariza said.

Let us know what you think about the story; email: Sarah Varney, Technology Editor


This was first published in June 2008

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