Smart grid policy in the United States refers to legislation and other governmental orders influencing the development of smart grids in the United States.
Background The term smart grid describes a next-generation electric power system, that is classified by the increased use of communication and information technology in the generation, delivery, and consumption of electrical energy. For individual consumers, smart grid technology offers more control over electricity consumption. Typically, the goal is overall greater energy efficiency (for example, programming home appliances to run at specific times when electrical demand is lowest).
The reliability and efficiency of the electrical grid can be enhanced by implementing smart grid technologies. However, this will require modifications to the current electrical system, and advances towards smart grid adoption in the United States have been slow. Key federal legislation driving the development of smart grid-related technology for the American electrical system includes Title XIII of the Energy Independence and Security Act of 2007 (EISA). Further, smart grid regulations will help to further drive the adoption of smart grid technology in the United States.
Timeline
Some milestones July 2003: DoE releases "Grid 2030" A National Vision for Electricity's Second 100 Years. The report calls for a gradual transition to Smart Grid technology August 8, 2005: Passage of the Energy Policy Act of 2005, which includes new power grid reliability standards and alternative energy incentive funding March 2007: DoE releases A Vision for the Modern Grid, with a call for an accelerated transition to a Smart Grid December 2007: Energy Independence and Security Act of 2007 (EISA) signed into law. NIST appointed to coordinate the development of Smart Grid Standards. The policy for implementation of a comprehensive smart grid in the United States was codified in Title IIV of the Energy Independence and Security Act of 2007 (EISA). June 2008: DoE workshop brings more than 140 government and industry representatives together to discuss EISA Smart Grid goals January 8, 2009: President-elect Barack Obama identifies transition to a Smart Grid as a high priority for his administration February 7, 2009: Under the guidance of President Barack Obama, Congress supplemented the Energy Independence and Security Act and the Administration acted to develop the Smart Grid. The Energy Independence and Security Act authorized demonstration projects for Smart Grid technologies. The landmark American Recovery and Reinvestment Act of 2009 added funds to the effort. The Department of Energy approved grants to several utilities to build the necessary infrastructure. (Rokach Unlocking...) March 19, 2009: FERC releases Smart Grid Policy — Proposed Policy Statement and Action Plan for public comment April 13, 2009: NIST names Dr. George W. Arnold as first National Coordinator for Smart Grid Interoperability April 28–29, 2009: Reston, Virginia, workshop to select first Interoperability Frameworks standards attracts 400 participants May 18, 2009: Secs. Chu and Locke announce increased funding for the development of Smart Grid Standards and demonstration projects and announce the selection of the first 16 proposed standards May 19–20, 2009: Stakeholder Summit held in Washington, DC September 2009: Target date for the release of Preliminary Roadmap for development of Interoperability Framework January 25, 2010: NIST releases: The NIST Interoperability Framework for the Smart Grid
Energy Independence and Security Act of 2007 Title XIII
Title XIII of the Energy Independence and Security Act of 2007 (Pub.L. 110–140) is the only major piece of federal legislation that addresses the modernization of the United States’ electric utility transmission and distribution system by upgrading to the Smart Grid.
Smart Grid on a broad scale, refers to an advanced distribution system, which accommodates for the “flow of information from a customer’s meter in two directions: both inside the house to thermostats, appliances, and other devices, and from the house back to the utility”. Smart Grid is designed to support operational and energy measures such as smart meters and appliances, renewable energy resources, as well as energy efficiency resources.
The Department of Energy (DoE) is required by Section 1304 of the act to conduct Smart Grid research, development, and demonstration. In addition, the National Institute of Standards and Technology is to establish protocols and standards for Smart Grid equipment and systems. Smart Grid technology is subsidized by the creation of a program within the DoE that “reimburses 20% of qualifying Smart Grid investments”. On a state level, utilities providers are encouraged to employ Smart Grid technology and to recover Smart Grid investments through rates.
Section 1301: Statement of policy on modernization of electricity grid The most comprehensive discussion of Smart Grid technology and its potential implementation in the United States is outlined in Title XIII of the Energy Independence and Security Act of 2007. This portion of the legislation states the policy position of the United States government to “support the modernization of the Nation’s electricity transmission and distribution system to maintain a reliable and secure electricity infrastructure that can meet future demand growth...” as well as to achieve several characteristic aspects of the Smart Grid. These aspects include smart metering, the use of digital controls to improve the efficiency, reliability, and security of the grid, deployment of smart technologies, and other key developments that would enhance the U.S. electric grid.
Section 1302: Smart grid system report According to Title XIII Section 1302, reports are to be made to Congress one year after enactment and every two years subsequently to give “the status of smart grid deployments nationwide as well as any regulatory or government barriers to continued deployment”. The Smart Grid Task Force established in section 1303 will assist with this, and provide the current status and prospects of the smart grid including “information on technology penetration, communications network capabilities, costs, and obstacles”. This task force can make recommendations for State and Federal policies or actions to ease in the transition to a smart grid.
Section 1303. Smart grid advisory committee and smart grid task force Title XIII Sec. 1303(a-b) provides for the creation of a Smart Grid Task Force and Advisory Committee. The purpose of the Smart Grid task force is to undertake research and development about the smart grid, developing relevant standards and protocols, defining the relationship between smart grid technologies and practices and current electric utility regulation, as well as researching the development of smart grid infrastructure. The task force is intended to collaborate with the Smart Grid Advisory Committee, whose purpose is to advise policymakers on the development of smart grid technologies and the progress of the country in adopting and transitioning to these technologies. Section 1302 of Title XIII calls for a biyearly Smart Grid system report to be generated by the Secretary of Energy and the Smart Grid Task Force with contributions from the Smart Grid Advisory Committee to brief Congress on the status of smart grid deployments throughout the country as well as “any regulatory or government barriers to continued deployment”. The report is to address the current status and outlook of the development and implementation of the smart grid.
Section 1304. Smart grid technology research, development and demonstration Sec. 1304(a) also calls for the implementation of a program to develop power grid digital information technology, such as developing sophisticated techniques for determining peak load reductions and energy-efficiency savings from smart metering and other smart grid components. Other responsibilities of this program include creating algorithms to use in electric transmission system software applications and to investigate potential access by electric utilities to the electricity stored in alternative vehicles to meet peak demand loads. A smart grid regional demonstration initiative was also established by EISA Title XIII Sec. 1304(b) that is composed of demonstration projects aimed towards advanced technologies in the power grid. The goals of the ‘Initiative’ include demonstrating the potential benefits of investing in advanced grids and facilitating in the transition from the current grid system to the smart grid. These and other goals are to be carried out in the form of demonstrations in different electricity control areas.
Section 1305. Smart grid interoperability framework A Smart Grid Interoperability Framework is mandated by Section 1305(a-e) of Title XIII whose purpose is to develop protocols and standards for the management of information so that smart grid devices and systems can interoperate within the existing electrical grid. The overarching goal of this framework is to “align policy, business, and technology approaches in a manner that would enable all electric resources, including demand-side resources, to contribute to an efficient, reliable electricity network”.
Section 1306. Federal matching fund for smart grid investment costs Sec. 1306(a) provides for a federal matching fund for smart grid investment costs in which 20% of qualifying smart grid investments will be reimbursed by the grant program. Qualifying investments that are provided for in section 1306(b) include certain household appliances, specialized electricity-using equipment like motors and drivers, metering devices and transmission and distribution equipment. The computer software that enables devices to engage in Smart Grid functions is also considered qualifying investments, as well as hybrid vehicles.
Section 1307. State consideration for smart grid Section 1307 provides that electric utilities in individual states should consider and report to the state on investing in a qualified smart grid system based on a variety of economic, social, and technological factors. These factors listed in Sec. 1307(a)(16)(A)include the total costs and cost-effectiveness, "improved reliability, security, system performance, and societal benefit". State electric utilities are also permitted in Sec. 1307(a)(16)(B)to recover any capital, operating expenditure, or other costs of the electric utility relating to the deployment of the smart grid, from ratepayers. Electricity purchasers are likewise entitled to direct access to information from their electricity provider on the smart grid such as prices, usage, intervals and projections, and sources from which their power was generated. Purchasers are also allowed to access their power information through the internet or other means as granted through Sec. 1307(a)(17)(B).
Section 1308. Study of the effect of private wire laws on development Studies on both the effect of private wire laws on the development of combined heat and power facilities as well as on security attributes of smart grid systems are also provided for in this piece of the legislation. A study of the laws and regulations affecting the siting of privately owned electric distribution wires on and across public rights-of-way is to be conducted according to Sec. 1308(a)(1). The required evaluation must address the purposes of the laws and the “effect the laws have on the development of combined heat and power facilities”. The study must also determine whether a change in the laws would have any major impacts on electric utilities and the customers of the utilities. Lastly, it must assess whether privately owned electric distribution wires would result in “duplicative facilities” and whether these are necessary or desirable.
Section 1309. DoE study of security attributes of smart grid systems