Progress Energy is moving forward with its plan to spend $500 million to upgrade two of its electric utilities in Florida and the Carolinas to a smart-grid system.

Together the two utilities provide electricity service to over 3.1 million customers. The Raleigh,N.C.-based company is paying for the upgrade in part with a $200 million grant from the U.S. Department of Energy (DOE). The grant came out of the American Recovery and Reinvestment Act of 2009, and is part of the high-profile push by the Obama administration and many state leaders to upgrade U.S. electric grids.

The project is also a boon to IBM's efforts to grow its presence in the potentially lucrative industry of smart-grid analytics. Progress Energy plans to use IBM's WebSphere software platform as a tool to integrate distribution management and demand response systems. Big Blue has also been hired to help install and implement the systems in conjunction with Progress Energy, IBM announced today.

IBM has run several pilot programs to test smart-grid systems in the past four years, including a consumer-level one in North Carolina in 2009 which found that on average, the introduction of smart-grid technology and smart meters cut electricity use by 15 percent.

In the case of Progress Energy, however, IBM's services will concentrate on equipment and system upgrades, analytics, and management that will enable the company's utilities to better control things like voltage levels, as well as electricity distribution across power lines.

IBM is one of a number of blue-chip companies getting into the smart-grid industry in recent years through software and services. Many of them have done so by buying smaller companies with existing technology, as is the case with Johnson Controls' purchase of EnergyConnect, Honeywell's purchase of Akuacom, and Siemens' acquisition of Site Controls.