Published: October 28, 2009

I'm going to tell you how to save some money.

It's an easy fix. You probably won't notice anything other than the savings.

It has to do with your icemaker.

If your house is anything like mine, there are certain sounds you've learned to ignore. My dishwasher, for example, makes a loud noise when it finishes the cycle and turns off. I've learned to live with it. Likewise, there's a floorboard upstairs that moans every time someone steps on it. I don't even hear it anymore, but it can wake a guest out of a sound sleep.

Another noise my mind has trained itself to process but ignore is the icemaker. You know the sound I mean: The muffled crash of a new batch of ice cubes falling from the icemaker into the ice bin.

Turns out that's one expensive noise.

Icemakers draw a tremendous amount of power. And they typically use power during the heat of the day. When you fill a pitcher or a cooler or even a glass up with ice, a sensor in your ice bin activates the ice maker to make enough ice to replace what you've just used. That tends to happen during the day when you want to make something cooler, typically because it is warm outside. That's when power is most expensive.

So if you want to save money, look inside your ice bin and raise the sensor arm so it thinks the ice bin is full. If you run low on ice, put the sensor down when you go to bed (Power is cheaper at night). You'll save money on power, you'll still have plenty of ice, and the sound, which you're already used to, won't keep you awake.

That's a low-tech solution.

The high-tech solution was announced yesterday.

President Barack Obama traveled to a progressively "green" power company in Florida -- FPL, which my colleague Tom Hutchison just wrote about. There the president said he would allocate $3.4 billion from the $787 billion stimulus program to upgrade the nation's increasingly beleaguered power grid.

The grid is the largest machine on earth. Some describe it as more of an ecosystem. This nationwide system of power distribution is a complicated web of power generating nodes, transformers, power lines and other equipment that must all work in concert to deliver power.

The grid has one serious, fundamental problem: It only goes one way. Once the power leaves the utility on the wires, there's no way to track it. Power coming into a home is metered so it can be paid for, but the power company has no earthly idea if power is actually flowing to houses and businesses in any given area unless a customer calls to report an outage. And there are plenty of other things a two-way grid could track. As of now, though, the system only works one-way.

Mr. Obama hopes to change that. (To be fair, I should mention that his plan is not entirely altruistic: He'd also like to create jobs, cut power usage during peak time and, hopefully, use less carbon-emitting coal.) Part of his solution is "smart meters."

These devices -- which use existing technology and are already in use in some areas -- can communicate with the power company and, eventually, with appliances that use power. Some smart meters are already integrated with building thermostats, which allow the power company to increase the temperature in your home on hot days during peak hours to conserve power.

In the future, your icemaker will automatically make ice only at night. Your washer and dryer will go into energy efficient mode during peak hours. And your plug-in vehicle won't draw any juice from the grid until nighttime. Other applications will save Americans billions on their power bills, and cut the amount of pricey power we use in peak times.

The Obama administration says these meters (and other parts of the grid that his $3.4 billion grant is funding) will create thousands of jobs. Plugging them in will save billions of dollars. Most people won't even notice the effects, but the overall plan -- which also included upgraded transformers and special sensors -- will make for a more efficient, less expensive power grid.

One hundred utility companies received grants from the feds, most of which they had to match or exceed with their own dollars. So the bottom line is that this federal largesse, part of the $787 billion stimulus package, will mean a total of $8.1 billion in grid-related spending.

While the good people at the Department of Energy tried to quantify every element of the story, one thing they didn't tabulate was the total number of these "smart meters" that utilities will be buying.

Well, I added it up. And I was shocked.

The answer is an astonishing 16.6 million. That's a lot of business for smart-meter makers. These 100 utilities are only a tiny fraction of the nation's 3,000 power providers, all of whom will be installing smart meters for their customers.

These three companies are major smart-meter manufacturers:

EnerNOC (Nasdaq: ENOC)
This $700 million company doesn't have any earnings, though it has promised a profit for 2010. Like Comverge, it has rising revenue but is still racking up losses, bleeding through $18 million in the first half of the year on about $60 million in revenue. The NOC in its name stands for Network Operations Center, where it monitors power streams for its  customers. While the rest of the energy community was tuned to the White House's announcement of smart-grid funding, EnerNoc was trumpeting a new contract with the state of Connecticut.

Of these three companies, Itron is the clear leader.

Itron's long history of rising profits shows it is attentive to industry, and it's poised to snag a large percentage of the 16.8 million new smart meters the Energy Department's latest grants will help fund, as well as millions more from other power producers. At $200 each, the CenterPoint contract alone could mean $440 million in revenue and, at a 10% margin, would add $44 million to the bottom line -- three times what the company earned last quarter.

In the future, smart meters and other intelligent appliances will help us conserve power.

In the meantime, you can save a few bucks turning off your icemaker during the day and flipping on the dishwasher on your way to bed. As for your portfolio, Itron appears to offer the best opportunity for growth-oriented investors right now.

-- Andy Obermeuller
Chief Investment Strategist
Government-Driven Investing