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The Greening of IT
70 How Companies Can Make a Difference for the Environment

Electric-utility-rate-case incentives work this way. The PUC that has
jurisdiction over the electric utility allows (usually encourages) a utility to
increase electric rates with the additional revenue due to the increase ear-
marked as rebates to the utility’s customers when it buys energy-efficient
equipment (for example, virtual servers for its data centers). The rebate
incentives vary widely over the country, with some utilities (for example,
California’s PG&E in conjunction with the California PUC) on the leading
edge. These rebates can go to home owners as well as businesses and cover
more exotic energy-saving technology such as solar cells for electric genera-
tion on your rooftop. As the global economy evolves from heavy dependence
on oil to a mixture of energy alternatives, the marketplace will push for new
alternatives in the supply and demand of energy. Electric utilities are in posi-
tion to have a significant role in motivating companies to move to green IT.

The Significant Role of Electric Utilities and IT Energy
Ratings in Green IT

Electric utilities and governments now often offer financial incentives to ptg
encourage investments in energy-efficiency measures. As the largest portion
of the cost of generating electricity is in plant (capital) expenditures, it is
actually good business (as well as good for our planet) if utilities use existing
facilities more efficiently while reducing wasteful demand. Providing elec-
tricity for energy-efficient equipment—as opposed to planning capacity for
inefficient equipment—can be a win-win situation for both electric utilities
and their customers. Such financial incentives for commercial and individual
energy consumers help buy down the additional cost of more-efficient prod-
ucts (when initial product costs are higher than costs for less-efficient prod-
ucts); help compensate for the increased effort needed to learn about and
locate energy-efficient equipment; draw attention to technologies; and legit-
imize these technologies in the eyes of consumers.
Currently, the most active utility in the data center sector is the Pacific
Gas and Electric (PG&E) Company in Northern California, which offers
incentives for server consolidation, among other strategies. Corporations in
California can receive up to $4 million in incentives for data center energy-
efficiency projects such as the migration to virtual servers. Virtualization
drives up IT equipment utilization, reduces infrastructure power and cooling
demands, and helps organizations meet application performance needs with
a flexible and resilient technology that uses much more sustainable than