February 19, 2010, 9:32 AM — Google has received federal approval to buy and sell energy on the open market, giving it more options for the way it powers its data centers and opening the door to a potential move into the energy-trading business.
Google applied for the authorization last December through a wholly owned subsidiary called Google Energy. The U.S. Federal Energy Regulatory Commission (FERC) approved its application Thursday, granting Google "market-based rate authorization," or the authority to buy and sell energy on a wholesale basis.
"We made this filing so we can have more flexibility in procuring power for Google's own operations, including our data centers," Google spokeswoman Niki Fenwick said via e-mail.
Data centers are big consumers of energy and Google operates several large facilities around the world -- it hasn't disclosed exactly how many. That makes ensuring a steady supply of affordable energy critical to running its business.
Google has also said it is committed to being "carbon neutral," in part by using as much renewable energy, such as solar and wind power, as possible. "FERC authority will improve our ability to hedge our purchases of energy and incorporate renewables into our energy portfolio," Fenwick said.
She declined to elaborate, but the company told the Wall Street Journal last month that FERC approval would allow it to approach producers of renewable energy directly to buy power for its operations.
The authorization also raises the prospect that Google may start to buy and sell energy as a business. Its application asked that Google Energy be able to "act as a power marketer, purchasing electricity and reselling it to wholesale customers."
Google didn't respond to a question about that Thursday. Fenwick told the Journal last month that the company has "no plans" to become an energy trader or to sell energy services, but she also acknowledged that the company was "not sure" how it planned to proceed.
FERC's notice shows that the California Public Utilities Commission filed a motion to intervene in the application. It was unclear what concerns the Commission had, if any, and a Commission spokesman could not immediately comment.
The approval is effective Feb. 23, as Google requested. The company told FERC it does not own or control any wholesale electrical generation or transmission facilities, so the agency determined that Google does not have "market power" or the ability to create barriers to entry.
