Addressing Policy and Logistical Challenges to Smart Grid Implementation, 57006-57011 [2010-23251]

Download as PDF 57006 Federal Register / Vol. 75, No. 180 / Friday, September 17, 2010 / Notices DRAFT EIS PUBLIC HEARINGS Location Day, date, time Directions Jacumba Highland Center, 44681 Old Highway 80, Jacumba, California 91934. Tuesday, October 5, 2010, 7–9 p.m. Boulevard Volunteer Fire Department, 39919 Highway 94, Boulevard, California 91905. Wednesday, October 6, 2010, 7–9 p.m. County of San Diego Department of Planning and Land Use Planning Commission Hearing Room, 5201 Ruffin Road, Suite B, San Diego, CA 92123. Thursday, October 7, 2010, 5–7 p.m. From the West, take I–8 East and take Exit 73 toward Jacumba. Turn right (South) onto Carrizo Gorge Road and drive South 1.1 miles. Turn right at Old Highway 80. Jacumba Highland Center will be on the left hand side. From the East, take I–8 West and take Exit 73 toward Jacumba. Turn left (South) onto Carrizo Gorge Road and drive South 1.1 miles. Turn right at Old Highway 80. Jacumba Highland Center will be on the left hand side. From the West, take I–8 East and take the CA–94 Exit (Exit 65), toward Campo/Boulevard. Turn right (South) onto CA–94/Ribbonwood Road and drive South 0.5 miles. Boulevard Volunteer Fire Station will be on the left-hand side. From the East, take I–8 West and take the CA–94 Exit toward Boulevard/Manzanita. Turn left (South) onto CA–94/Ribbonwood Road and drive South 0.6 miles. Boulevard Volunteer Fire Station will be on the lefthand side. From Downtown, take Highway 163 North and take Exit 7B towards CA–274/Balboa Boulevard East. Turn left on Kearny Villa Road and take the 1st right on Balboa Boulevard. Drive East 1.0 mile and turn left on Ruffin Road. From the East, take I–8 East to I–15 North. Take Exit 10, Clairemont Mesa Boulevard. Drive 0.5 miles, turn left on Ruffin Road. From the North, take Highway 805 South, and take Exit 23 for CA–52. Take Exit 7 for Kearny Villa Road. Turn right on Kearny Villa Road, drive 400 feet, and continue onto Ruffin Road. If you have any questions about the EIS or Presidential permit process, please contact Dr. Jerry Pell at the Office of Electricity Delivery and Energy Reliability (OE–20), U.S. Department of Energy, 1000 Independence Avenue, SW., Washington, DC 20585; Jerry.Pell@hq.doe.gov (preferred); telephone to 202–586–3362, or facsimile to 202–318–7761. For general information on the DOE NEPA process, contact Carol M. Borgstrom, Director, Office of NEPA Policy and Compliance (GC–54), U.S. Department of Energy, 1000 Independence Avenue, SW., Washington, DC 20585, telephone: 202– 586–4600 or leave a message at 800– 472–2756; facsimile: 202–586–7031. SUPPLEMENTARY INFORMATION: In order to ensure that all interested parties can be heard in the time available, speakers are asked to limit their presentation to three minutes; however, there is no limit on the amount of written material that can be submitted either at the hearings or otherwise before the close of the comment period. The public hearings will consist of the formal taking of comments with transcription by a court stenographer. The hearings will provide interested wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1 FOR FURTHER INFORMATION CONTACT: VerDate Mar<15>2010 14:46 Sep 16, 2010 Jkt 220001 parties the opportunity to view proposed project exhibits and make comments for consideration in the course of preparing the Final EIS. In advance of commencing the hearings, representatives from the applicant, DOE, and the County of San Diego as the cooperating agency will be available to informally (off the record) answer questions and provide additional information to attendees to the extent that additional information is available. Availability of the Draft EIS Copies of the Draft EIS have been distributed to appropriate Members of Congress, State and local government officials, American Indian tribal governments, and other Federal agencies, groups, and interested parties. Printed copies of the document may be obtained by contacting Dr. Pell at the above address. Copies of the Draft EIS and supporting documents are also available for inspection at the Jacumba Branch Library, 44605 Old Highway 80, Jacumba, CA 91934 and the CampoMorena Village Branch Library, 31466 Highway 94, Campo, CA 91906. The Draft EIS is also available on the EIS Web site at https://esjprojecteis.org and on the DOE NEPA Web site at https:// PO 00000 Frm 00028 Fmt 4703 Sfmt 4703 nepa.energy.gov/draft_environmental_ impact_statements.htm. Issued in Washington, DC, on September 13, 2010. Anthony J. Como, Director, Permitting and Siting, Office of Electricity Delivery and Energy Reliability. [FR Doc. 2010–23244 Filed 9–16–10; 8:45 am] BILLING CODE 6450–01–P DEPARTMENT OF ENERGY Addressing Policy and Logistical Challenges to Smart Grid Implementation Office of Electricity Delivery and Energy Reliability, Department of Energy. ACTION: Request for Information. AGENCY: The Department of Energy (DOE) is seeking comments from interested parties on policy and logistical challenges that confront smart grid implementation, as well as recommendations on how to best overcome those challenges. DOE is undertaking this Request for Information (RFI) on behalf of the Administration and in consultation with key stakeholders from state regulatory bodies. The RFI will assist these parties SUMMARY: E:\FR\FM\17SEN1.SGM 17SEN1 wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1 Federal Register / Vol. 75, No. 180 / Friday, September 17, 2010 / Notices as they seek to assure smart grid deployments benefit consumers, the economy and the environment. In particular, comments on the RFI will help inform the Administration’s analysis of policy challenges and possible solutions being developed by the Smart Grid Subcommittee of the National Science and Technology Council’s Committee on Technology. The Subcommittee seeks to base its analysis on an up-to-date understanding of the context in which smart grid technologies, business models and policies operate. This is the third in a series of RFIs issued by DOE regarding smart grid implementation. Prior RFIs sought comment on data access, data usage and privacy issues, and on communications requirements for the smart grid. In this RFI, DOE seeks specific input on: the best way to define the term ‘‘smart grid’’ for policymaking purposes; the consumer-level benefits from, and challenges to, smart grid deployment; the benefits and challenges associated with smart grid implementation on the ‘‘utility side’’ of the meter; the ways in which policy makers at all levels of government can share experience and resources; and the broader, economy-wide benefits and challenges associated with the smart grid. In so doing, this RFI avoids duplicating questions that were raised in prior RFIs. DATES: Comments must be transmitted or postmarked by no later than November 1, 2010. ADDRESSES: You may submit comments identified by ‘‘Smart Grid RFI: Addressing Policy and Logistical Challenges’’ via any of the following methods: Federal eRulemaking Portal: https:// www.regulations.gov (following the instructions for submitting comments); E-mail: smartgridpolicy@hq.doe.gov. Include ‘‘Smart Grid RFI: Addressing Policy and Logistical Challenges’’ in the subject line of the message; or Mail: U.S. Department of Energy, Office of Electricity Delivery and Energy Reliability, 1000 Independence Avenue, SW., Room 8H033, Washington, DC 20585. FOR FURTHER INFORMATION CONTACT: Michael Li, Electricity Policy Specialist (202) 287–5718. For media inquiries you may contact Tiffany Edwards at 202– 586–6683. SUPPLEMENTARY INFORMATION: Introduction As noted in earlier RFIs, the smart grid has significant promise. The smart grid better integrates information, communication, and intelligent control VerDate Mar<15>2010 14:46 Sep 16, 2010 Jkt 220001 technology, into the nation’s electrical system. It will offer new tools to maintain reliability and improve flexibility. It has the potential to improve power quality, manage power scarcities and reduce transmission congestion costs. A truly smart grid should achieve environmental goals at lower cost than the traditional grid, be able to respond more quickly to natural or man-made outages and, overall, operate the electrical system more efficiently without reducing system cyber security or reliability. President Obama’s energy and climate change policy aims to reduce harmful greenhouse gas emissions and U.S. dependence on foreign oil, to create jobs, and to help U.S. industry compete successfully in global markets for clean energy technology. Smart grid deployment is an important component of the Administration’s broader strategy. The American Recovery and Reinvestment Act of 2009 (‘‘Recovery Act’’) took large, initial steps to accelerate the smart grid transition. The Recovery Act included $11 billion for smart grid technologies, transmission system expansion and upgrades, and other investments to modernize and enhance the electric transmission infrastructure. To build on the Recovery Act’s initiatives, the National Science and Technology Council’s (NSTC) Committee on Technology has established a Subcommittee on Smart Grid, co-led by DOE’s Office of Electricity Delivery and Energy Reliability and the Department of Commerce’s National Institute of Standards and Technology (https:// www.smartgrid.gov/news/ nstc_subcommittee). The Subcommittee on Smart Grid is working to ensure the federal government develops and executes a long-term, comprehensive strategy in partnership with the states that will further President Obama’s comprehensive energy and climate plan, as well as the Recovery Act’s effort to catalyze the development of a smarter grid. The Subcommittee will develop policy options and recommendations for the Administration as a whole and guide federal-state cooperative efforts. It will investigate emerging technologies and provide analysis about ways to advance the smart grid in a costeffective and appropriate manner. DOE’s Office of General Counsel issued two RFIs on May 11, 2010 on smart grid policy issues. (75 FR 26203 and 75 FR 26206) The first RFI sought comments on ongoing federal, state and private sector efforts to make more effective use of consumer energy usage data, while at the same time PO 00000 Frm 00029 Fmt 4703 Sfmt 4703 57007 safeguarding consumer privacy. The second RFI sought comments to assist the Department in identifying the present and future communications needs of electric utilities as smart grid technologies are deployed more broadly. This RFI seeks to collect information and open a dialogue about a wide range of additional issues dealing with smart grid technology, applications, consumer interaction, policy initiatives and economic impact. Background The smart grid has the potential to add devices and applications that improve power quality, reduce transmission congestion costs, read meters and provide prompt feedback that allows better decision making; better synchronize consumption with generation; help integrate variable renewable generation and electric vehicles into the electric system; detect and address equipment problems and outages; and provide central and enduser control over energy consumption. The United States can be a global leader in developing these innovative technologies. For many reasons, then, it is important to continue to research, develop and deploy smart grid systems. DOE is aware that technology, business, consumer and regulatory issues interact in complicated ways. The smart grid will be composed of numerous vast, evolving and interrelated systems including communication networks, sensors on transmission and distribution systems such as phasor measurement units (PMU) and advanced metering infrastructure (AMI), and controls such as programmable communicating thermostats. It will facilitate changes in how electricity is produced, distributed, consumed and conserved. DOE also recognizes that while it may be possible to estimate the benefits of current efforts to deploy smart grid technologies and applications, it may be unrealistic to precisely quantify their future impacts because the smart grid is not fully developed and its future applications are likely to change. Nevertheless, even unavoidable uncertainty should not deter federal and state authorities, utilities or other interested parties from assessing current implications of, barriers to, and the bestavailable estimates of the likely impact of making the grid smarter. For example, certain smart grid and demand-response applications have been deployed by utilities and electric cooperatives for E:\FR\FM\17SEN1.SGM 17SEN1 57008 Federal Register / Vol. 75, No. 180 / Friday, September 17, 2010 / Notices many years.1 These applications include automated collection of detailed meter data, direct load control, and systems that vary prices based on typical or actual grid conditions at the time the customer used power. We seek to learn from those preexisting efforts, as well as newer projects and pilots. Request for Information wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1 The following questions cover the major areas we seek comment on. They are not a determination of the final topics that DOE and the NSTC Smart Grid Subcommittee will address, and commenters may address any topic they believe to have important implications for smart grid policy regardless of whether this document mentions it. In response to any question that asks about smart grid technologies broadly defined, please describe the set of smart grid technologies your response considers. To aid the discussion of the relevant issues, commenters are welcome to use the following categories to classify the technologies they discuss, adding any clarifying language they view as appropriate. • Instrumenting and automating the transmission and generation system • Distribution automation • Upgraded metering, such as AMI or even enhanced technologies that improve the capabilities of traditional AMR • Consumer facing programs such as feedback, demand response, energy efficiency, and automation strategies • Integrating new end user equipment like distributed generation and electric vehicles Commenters can assume a high degree of general knowledge on the part of DOE and the Subcommittee. Commenters are encouraged to cite or include relevant data and analyses in their responses. In addressing the following questions, we ask stakeholders to be concise. We primarily seek facts and concrete recommendations that can augment that general knowledge. We encourage stakeholders to use concrete examples of benefits, costs, and challenges or to bring novel or underappreciated sources of evidence to our attention wherever possible. Definition and Scope The deployment of technology to make the nation’s electric grid a more interactive, efficient and responsive system is already underway. At the early stages of any major technological 1 Fed. Energy Regulatory Comm’n, Assessment of Demand Response and Advanced Metering, 8, 65 (Dec. 2008), available at https://www.ferc.gov/legal/ staff-reports/12–08-demand-response.pdf. VerDate Mar<15>2010 14:46 Sep 16, 2010 Jkt 220001 shift, stakeholders often use the same term-of-art to mean different things which can lead to miscommunication. To minimize confusion as we identify policy challenges and recommendations, this RFI uses the broad definition of Smart Grid laid out in Title XIII of the Energy Independence and Security Act of 2007 (EISA). Title XIII mentions that the smart grid uses communications, control, and information technology to optimize grid operations, integrate distributed resources including renewable resources, increase energy efficiency, deploy demand response, support electric vehicles, and integrate automated, interactive interoperable consumer devices. We encourage commenters to reference the full text of EISA section 1301. We invite comment however on whether this is the best way to define the smart grid. What significant policy challenges are likely to remain unaddressed if we employ Title XIII’s definition? If the definition is overly broad, what policy risks emerge as a result? We also invite comments on the geographic scope of standardization and interconnection of smart grid technologies. Should smart grid technologies be connected or use the same communications standard across a utility, state, or region? How does this vary between transmission, distribution, and customer-level standards? For example, is there need to go beyond ongoing standards development efforts to choose one consumer-facing device networking standard for states or regions so that consumers can take their smart appliances when they move and stores’ smart appliance will work in more than one service area? Interactions With and Implications for Consumers Typical consumers currently get limited feedback about their daily energy consumption patterns and associated costs. They also have limited understanding of variations in the cost of providing power over the course of the day and from day to day. Many smart grid technologies aim to narrow the typical consumers’ knowledge gap by empowering consumers with greater knowledge of and ability to control their consumption and expenditures. This vision transforms many consumers’ relationship with the grid, which prompts us to ask the following questions. • For consumers, what are the most important applications of the smart grid? What are the implications, costs and benefits of these applications? What PO 00000 Frm 00030 Fmt 4703 Sfmt 4703 new services enabled by the smart grid would customers see as beneficial? What approaches have helped pave the way for smart grid deployments that deliver these benefits or have the promise to do so in the future? • How well do customers understand and respond to pricing options, direct load control or other opportunities to save by changing when they use power? What evidence is available about their response? To what extent have specific consumer education programs been effective? What tools (e.g. education, incentives, and automation) increase impacts on power consumption behavior? What are reasonable expectations about how these programs could reshape consumer power usage? • To what extent might existing consumer incentives, knowledge and decision-making patterns create barriers to the adoption or effective use of smart grid technologies? For instance, are there behavioral barriers to the adoption and effective use of information feedback systems, demand response, energy management and home automation technologies? What are the best ways to address these barriers? Are steps necessary to make participation easier and more convenient, increase benefits to consumers, reduce risks, or otherwise better serve customers? Moreover, what role do factors like the trust, consumer control, and civic participation play in shaping consumer participation in demand response, timevarying pricing, and energy efficiency programs? How do these factors relate to other factors like consumer education, marketing and monthly savings opportunities? • How should combinations of education, technology, incentives, feedback and decision structure be used to help residential and small commercial customers make smarter, better informed choices? What steps are underway to identify the best combinations for different segments of the residential and commercial market? • Are education or communications campaigns necessary to inform customers prior to deploying smart grid applications? If so, what would these campaigns look like and who should deploy them? Which related education or public relations campaigns might be attractive models? • What should federal and state energy policymakers know about social norms (e.g. the use of feedback that compares a customers’ use to his neighbors) and habit formation? What are the important lessons from efforts to persuade people to recycle or engage in other environmentally friendly activity? What are the implications of these E:\FR\FM\17SEN1.SGM 17SEN1 Federal Register / Vol. 75, No. 180 / Friday, September 17, 2010 / Notices insights for determining which tasks are best automated and which should be subject to consumer control? When is it appropriate to use social norm based tools? • How should insights about consumer decision-making be incorporated into federal-state collaborative efforts such as the Federal Energy Regulatory Commission’s (FERC) National Action Plan on Demand Response? wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1 Interaction With Large Commercial and Industrial Customers Large commercial and industrial customers behave differently than residential consumers and small businesses. They regularly use sophisticated strategies to maximize their energy efficiency, to save money and to assure reliable business operations. Indeed, some already are or others are seeking to participate directly in wholesale energy and ancillary services markets. Please identify benefits from, and challenges to, smart grid deployment that might be unique to this part of the market and lessons that can be carried over to the residential and small business market. Please identify unmet smart grid infrastructure or policy needs for large customers. Assessing and Allocating Costs and Benefits Regulators pay a great deal of attention to the costs and benefits of new investments, appropriate allocation of risk and protection of vulnerable customer segments. The many unknowns associated with smart grid programs make these ubiquitous questions particularly challenging, which suggests a great need to share perspectives and lessons. • How should the benefits of smart grid investments be quantified? What criteria and processes should regulators use when considering the value of smart grid applications? • When will the benefits and costs of smart grid investments be typically realized for consumers? How should uncertainty about whether smart grid implementations will deliver on their potential to avoid other generation, transmission and distribution investments affect the calculation of benefits and decisions about risk sharing? How should the costs and benefits of enabling devices (e.g. programmable communicating thermostats, in home displays, home area networks (HAN), or smart appliances) factor into regulatory assessments of smart grid projects? If these applications are described as benefits to sell the projects, should the VerDate Mar<15>2010 14:46 Sep 16, 2010 Jkt 220001 costs also be factored into the costbenefit analysis? • How does the notion that only some customers might opt in to consumerfacing smart grid programs affect the costs and benefits of AMI deployments? • How do the costs and benefits of upgrading existing AMR technology compare with installing new AMI technology? • How does the magnitude and certainty of the cost effectiveness of other approaches like direct load management that pay consumers to give the utility the right to temporarily turn off air conditioners or other equipment during peak demand periods compare to that of AMI or other smart grid programs? • How likely are significant cost overruns? What can regulators do to reduce the probability of significant cost overruns? How should cost overruns be addressed? • With numerous energy efficiency and renewable energy programs across the country competing for ratepayer funding, how should State Commissions assess proposals to invest in smart grid projects where the benefits are more difficult to quantify and the costs are more uncertain? • What are appropriate ways to track the progress of smart grid implementation efforts? What additional information about, for example, customer interactions should be collected from future pilots and program implementations? How are State Commissions studying smart grid and smart meter applications in pilots? In conducting pilots, what best practical approaches are emerging to better ascertain the benefits and costs of realistic options while protecting participants? • How should the costs of smart grid technologies be allocated? To what degree should State Commissions try to ensure that the beneficiaries of smart grid capital expenditures carry the cost burdens? Which stakeholder(s) should bear the risks if expected benefits do not materialize? How should smart grid investments be aligned so customers’ expectations are met? • When should ratepayers have the right to opt out of receiving and paying for smart grid technologies or programs like meters, in home displays, or critical peak rebates? When do system-wide benefits justify uniform adoption of technological upgrades? How does the answer depend on the nature of the offering? How should regulators address customer segments that might not use smart grid technologies? • How might consumer-side smart grid technologies, such as HANs, PO 00000 Frm 00031 Fmt 4703 Sfmt 4703 57009 whether controlled by a central server or managed by consumers, programmable thermostats, or metering technology (whether AMR or AMI), or applications (such as dynamic pricing, peak time rebates, and remote disconnect) benefit, harm, or otherwise affect vulnerable populations? What steps could ensure acceptable outcomes for vulnerable populations? Utilities, Device Manufacturers and Energy Management Firms Electricity policy involves the interaction of local distribution utilities, bulk power markets and competitive markets for electrical appliances and equipment. Retail electricity service is under state and local jurisdiction. Generally, bulk power markets are under FERC jurisdiction. Appliances comply with federal safety and efficiency rules. Smart grid technologies will change the interactions among these actors and should create new opportunities for federal-state collaboration to better serve citizens. Greater collaboration seems essential. Some state regulatory agencies already oversee energy efficiency programs that help ratepayers acquire equipment like energy efficient appliances. Those appliances also are subject to federal regulatory oversight. As the smart grid evolves, these types of ties are likely to deepen. Moreover, EISA foresees a federal role in developing potentially mandatory standards for some smart grid equipment and voluntary standards for smart-grid enabled mass-produced electric appliances and equipment for homes and businesses. Many commentators suggest that utilities may lack appropriate incentives to invest in the most cost effective smart grid infrastructure and allow that infrastructure to be used to conserve energy, because most service providers generate revenue based on the number of kilowatt hours sold and pass through the capital costs of things like smart grid infrastructure. If this is accurate, then those disincentives are an impediment to achieving national and state goals and, therefore, merit state and federal policy makers’ attention. In issuing this RFI, DOE is mindful that the states oversee retail electric service and that state regulation differs state by state. Within states different types of service providers may be subject to different regulatory schemes depending, for example, on whether the service provider is investor owned, publicly owned or a cooperative. Recognizing the primary role of states in this area, we ask the following questions: E:\FR\FM\17SEN1.SGM 17SEN1 wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1 57010 Federal Register / Vol. 75, No. 180 / Friday, September 17, 2010 / Notices • How can state regulators and the federal government best work together to achieve the benefits of a smart grid? For example, what are the most appropriate roles with respect to development, adoption and application of interoperability standards; supporting technology demonstrations and consumer behavior studies; and transferring lessons from one project to other smart grid projects? • How can federal and state regulators work together to better coordinate wholesale and retail power markets and remove barriers to an effective smart grid (e.g. regional transmission organization require that all loads buy ‘‘capacity’’ to ensure the availability of power for them during peak demand periods, which makes sense for price insensitive loads but requires price sensitive loads to pay to ensure the availability of power they would never buy)? • How will programs that use pricing, rebates, or load control to reduce consumption during scarcity periods affect the operations, efficiency, and competiveness of wholesale power markets? Will other smart grid programs have important impacts on wholesale markets? Can policies improve these interactions? • Do electric service providers have the right incentives to use smart grid technologies to help customers save energy or change load shapes given current regulatory structures? • What is the potential for third-party firms to provide smart grid enabled products and services for use on either or both the consumer and utility side of the meter? In particular, are changes needed to the current standards or standard-setting process, level of access to the market, and deployment of networks that allow add-on products to access information about grid conditions? How should the interaction between third-party firms and regulated utilities be structured to maximize benefits to consumers and society? • How should customer-facing equipment such as programmable communicating thermostats, feedback systems, energy management systems and home area networks be made available and financed? Are there consumers behavior or incentive barriers to the market achieving efficient technology adoption levels without policy intervention? • Given the current marketplace and NIST Smart Grid Interoperability Panel efforts, is there a need for additional third-party testing and certification initiatives to assure that smart grid technologies comply with applicable standards? If there is a need for VerDate Mar<15>2010 14:46 Sep 16, 2010 Jkt 220001 additional certification, what would need to be certified, and what are the trade-offs between having public and private entities do the certification? Is there a need for certifying bodies to oversee compliance with other smart grid policies, such as privacy standards? Commenters should feel free to describe current and planned deployments of advanced distribution automation equipment, architectures, and consumer-facing programs in order to illustrate marketplace trends, successes, and challenges. And they should feel free to identify any major policy changes they feel would encourage appropriate deployment of these technologies. Long Term Issues: Managing a Grid With High Penetration of New Technologies Significant change in the technologies used to generate power and to keep supply and demand balanced is likely to occur over the foreseeable future. We invite comments on the steps that should be taken now to give the grid the flexibility it will need to deal with transitions that are likely in the next few decades. Commenters might address the following questions, some of which have more immediate implications. • What are the most promising ways to integrate large amounts of electric vehicles, photovoltaic cells, wind turbines, or inflexible nuclear plants? What approaches make sense to address the possibility that large numbers of other consumer devices that might simultaneously increase power consumption as soon as power prices drop? For instance, what is known about the viability of and tradeoffs between frequently updated prices and direct load control as approaches to help keep the system balanced? How do factors like the speed of optimization algorithms, demand for reliability and the availability of grid friendly appliances affect those trade-offs? • What are these strategies’ implications for competition among demand response, storage and fast reacting generation? What research is needed to identify and develop effective strategies to manage a grid that is evolving to, for example, have an increasing number of devices that can respond to grid conditions and to be increasingly reliant on variable renewable resources? • What policies, if any, are necessary to ensure that technologies that can increase the efficiency of ancillary services provision can enter the market and compete on a level playing field? • What policies, if any, are necessary to ensure that distributed generation PO 00000 Frm 00032 Fmt 4703 Sfmt 4703 and storage of thermal and electrical energy can compete with other supply and demand resources on a level playing field? • What barriers exist to the deployment of grid infrastructure to enable electric vehicles? What policies are needed to address them? Reliability and Cyber-Security We invite comment on the reliability opportunities and challenges that smart grid technologies create, including: What smart grid technologies are or will become available to help reduce the electric system’s susceptibility to service disruptions? • What policies are needed to facilitate the data sharing that will allow sensors (e.g., phasor measurement units) and grid automation to achieve their potential to make reliability and performance improvements in the grid? Is there a need to revisit the legal and institutional approaches to generation and transmission system data collection and interchange? • What is the role of federal, state, and local governments in assuring smart grid technologies are optimized, implemented, and maintained in a manner that ensures cyber security? How should the Federal and State entities coordinate with one another as well as with the private and nonprofit sector to fulfill this objective? Managing Transitions and Overall Questions The following questions focus on managing incremental change during the gradual evolution of the grid that may transform the power sector over the next few decades. • What are the best present-day strategies for transitioning from the status quo to an environment in which consumer-facing smart grid programs (e.g., alternative pricing structures and feedback) are common? What has been learned from different implementations? What lessons fall into the ‘‘it would have been good to know that when we started’’ category? What additional mechanisms, if any, would help share such lessons among key stakeholders quickly? • Recognizing that most equipment on the electric grid, including meters, can last a decade or more, what cyber security, compatibility and integration issues affect legacy equipment and merit attention? What are some strategies for integrating legacy equipment into a robust, modernized grid? What strategies are appropriate for investing in equipment today that will be more valuable if it can delay obsolescence by E:\FR\FM\17SEN1.SGM 17SEN1 Federal Register / Vol. 75, No. 180 / Friday, September 17, 2010 / Notices integrating gracefully with future generations of technology? • How will smart grid technologies change the business model for electric service providers, if at all? What are the implications of these changes? • What are the costs and benefits of delaying investment in metering and other smart grid infrastructure while the technology and our understanding of it is rapidly evolving? How does that affect the choice of an appropriate time to invest? • What policy changes would ensure that the U.S. maintains global competiveness in smart grid technology and related businesses? • What should be the priority areas for federally funded research that can support smart grid deployment? Finally, as noted at the outset, we invite commenters to address any other significant issues that they believe implicate the success or failure of the transition to smart grid technology. Issued in Washington, DC, on September 13, 2010. Patricia Hoffman, Assistant Secretary. [FR Doc. 2010–23251 Filed 9–16–10; 8:45 am] BILLING CODE 6450–01–P DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Docket No. CP10–494–000] Tallulah Gas Storage LLC; Notice of Application wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1 September 9, 2010. Take notice that on August 31, 2010, Tallulah Gas Storage LLC (Tallulah), 10370 Richmond Avenue, Suite 510, Houston, TX 77042, filed in Docket No. CP10–494–000, an application, pursuant to section 7(c) of the Natural Gas Act, subpart F of part 157, and subpart G of part 284 of the Commission’s regulations for: (1) A certificate of public convenience and necessity authorizing Tallulah to construct and operate a natural gas storage facility and pipeline facilities connecting with Midcontinent Express Pipeline LLC (Midcontinent Express), Columbia Gulf Transmission Co. (Columbia Gulf), Gulf South Pipeline Co., LP (Gulf South) and Southeast Supply Header, LLC (SESH) in Madison Parish Louisiana; (2) a blanket certificate authorizing Tallulah to construct, acquire, operate, rearrange, and abandon facilities; (3) a blanket certificate authorizing Tallulah to provide open access firm and interruptible gas storage services on VerDate Mar<15>2010 14:46 Sep 16, 2010 Jkt 220001 behalf of others in interstate commerce with pre-granted abandonment of such services; and (4) waivers of Commission regulations, all as more fully set forth in the application which is on file with the Commission and open to public inspection. Specifically, Tallulah proposes to construct, own, operate, and maintain a new underground natural gas salt cavern storage facility consisting of three caverns, each with a working gas capacity of 8 billion cubic feet (Bcf), and approximately 3.4 Bcf of base gas, having a combined maximum daily withdrawal rate of 1,575 million cubic feet per day (MMcf/d) and a maximum injection capability of 900 MMcf/d. Tallulah also states that the facility will have a total capacity of approximately 11.4 Bcf and a peak deliverability of 525 MMcf/d. Tallulah also proposes to construct approximately 3.3 miles of dual 24-inch diameter lateral pipeline to four new meter and regulator stations interconnecting with Midcontinent Express, Columbia Gulf, Gulf South, and SESH. Tallulah will also install six natural gas-fired compressors totaling 28,410 horsepower as well as associated interconnecting piping and appurtenant facilities. Tallulah seeks authorization to charge market-based rates for its proposed services. The filing may be viewed on the web at https://www.ferc.gov using the ‘‘eLibrary’’ link. Enter the docket number excluding the last three digits in the docket number field to access the document. For assistance, contact FERC at FERCOnlineSupport@ferc.gov or call toll-free, (886) 208–3676 or TYY, (202) 502–8659. Any questions regarding this application should be directed to Mark Fullerton, Tallulah Gas Storage LLC, 10370 Richmond Avenue, Suite 510, Houston, TX 77042, or by calling (713) 403–6454 (telephone) or (713) 403–6461 (fax), mfullerton@icon-ngs.com, or to John S. Decker, Vinson & Elkins L.L.P., 1455 Pennsylvania Avenue, NW., Suite 600, Washington, DC 20004–1008, or by calling (202) 639–6599 (telephone) or (202) 879–8899 (fax), jdecker@velaw.com. Pursuant to § 157.9 of the Commission’s rules, 18 CFR 157.9, within 90 days of this Notice the Commission staff will either: Complete its environmental assessment (EA) and place it into the Commission’s public record (eLibrary) for this proceeding; or issue a Notice of Schedule for Environmental Review. If a Notice of Schedule for Environmental Review is issued, it will indicate, among other milestones, the anticipated date for the Commission staff’s issuance of the final PO 00000 Frm 00033 Fmt 4703 Sfmt 4703 57011 environmental impact statement (FEIS) or EA for this proposal. The filing of the EA in the Commission’s public record for this proceeding or the issuance of a Notice of Schedule for Environmental Review will serve to notify federal and state agencies of the timing for the completion of all necessary reviews, and the subsequent need to complete all Federal authorizations within 90 days of the date of issuance of the Commission staff’s FEIS or EA. There are two ways to become involved in the Commission’s review of this project. First, any person wishing to obtain legal status by becoming a party to the proceedings for this project should, on or before the comment date stated below, file with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, a motion to intervene in accordance with the requirements of the Commission’s Rules of Practice and Procedure (18 CFR 385.214 or 385.211) and the Regulations under the NGA (18 CFR 157.10). A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies of all documents filed by the applicant and by all other parties. A party must submit 14 copies of filings made with the Commission and must mail a copy to the applicant and to every other party in the proceeding. Only parties to the proceeding can ask for court review of Commission orders in the proceeding. However, a person does not have to intervene in order to have comments considered. The second way to participate is by filing with the Secretary of the Commission, as soon as possible, an original and two copies of comments in support of or in opposition to this project. The Commission will consider these comments in determining the appropriate action to be taken, but the filing of a comment alone will not serve to make the filer a party to the proceeding. The Commission’s rules require that persons filing comments in opposition to the project provide copies of their protests only to the party or parties directly involved in the protest. Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commentors will be placed on the Commission’s environmental mailing list, will receive copies of the environmental documents, and will be notified of meetings associated with the Commission’s environmental review process. Environmental commentors will not be E:\FR\FM\17SEN1.SGM 17SEN1

Agencies

[Federal Register Volume 75, Number 180 (Friday, September 17, 2010)]
[Notices]
[Pages 57006-57011]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-23251]


-----------------------------------------------------------------------

DEPARTMENT OF ENERGY


Addressing Policy and Logistical Challenges to Smart Grid 
Implementation

AGENCY: Office of Electricity Delivery and Energy Reliability, 
Department of Energy.

ACTION: Request for Information.

-----------------------------------------------------------------------

SUMMARY: The Department of Energy (DOE) is seeking comments from 
interested parties on policy and logistical challenges that confront 
smart grid implementation, as well as recommendations on how to best 
overcome those challenges. DOE is undertaking this Request for 
Information (RFI) on behalf of the Administration and in consultation 
with key stakeholders from state regulatory bodies. The RFI will assist 
these parties

[[Page 57007]]

as they seek to assure smart grid deployments benefit consumers, the 
economy and the environment. In particular, comments on the RFI will 
help inform the Administration's analysis of policy challenges and 
possible solutions being developed by the Smart Grid Subcommittee of 
the National Science and Technology Council's Committee on Technology. 
The Subcommittee seeks to base its analysis on an up-to-date 
understanding of the context in which smart grid technologies, business 
models and policies operate. This is the third in a series of RFIs 
issued by DOE regarding smart grid implementation. Prior RFIs sought 
comment on data access, data usage and privacy issues, and on 
communications requirements for the smart grid. In this RFI, DOE seeks 
specific input on: the best way to define the term ``smart grid'' for 
policymaking purposes; the consumer-level benefits from, and challenges 
to, smart grid deployment; the benefits and challenges associated with 
smart grid implementation on the ``utility side'' of the meter; the 
ways in which policy makers at all levels of government can share 
experience and resources; and the broader, economy-wide benefits and 
challenges associated with the smart grid. In so doing, this RFI avoids 
duplicating questions that were raised in prior RFIs.

DATES: Comments must be transmitted or postmarked by no later than 
November 1, 2010.

ADDRESSES: You may submit comments identified by ``Smart Grid RFI: 
Addressing Policy and Logistical Challenges'' via any of the following 
methods:
    Federal eRulemaking Portal: https://www.regulations.gov (following 
the instructions for submitting comments);
    E-mail: smartgridpolicy@hq.doe.gov. Include ``Smart Grid RFI: 
Addressing Policy and Logistical Challenges'' in the subject line of 
the message; or
    Mail: U.S. Department of Energy, Office of Electricity Delivery and 
Energy Reliability, 1000 Independence Avenue, SW., Room 8H033, 
Washington, DC 20585.

FOR FURTHER INFORMATION CONTACT: Michael Li, Electricity Policy 
Specialist (202) 287-5718. For media inquiries you may contact Tiffany 
Edwards at 202-586-6683.

SUPPLEMENTARY INFORMATION:

Introduction

    As noted in earlier RFIs, the smart grid has significant promise. 
The smart grid better integrates information, communication, and 
intelligent control technology, into the nation's electrical system. It 
will offer new tools to maintain reliability and improve flexibility. 
It has the potential to improve power quality, manage power scarcities 
and reduce transmission congestion costs. A truly smart grid should 
achieve environmental goals at lower cost than the traditional grid, be 
able to respond more quickly to natural or man-made outages and, 
overall, operate the electrical system more efficiently without 
reducing system cyber security or reliability.
    President Obama's energy and climate change policy aims to reduce 
harmful greenhouse gas emissions and U.S. dependence on foreign oil, to 
create jobs, and to help U.S. industry compete successfully in global 
markets for clean energy technology. Smart grid deployment is an 
important component of the Administration's broader strategy. The 
American Recovery and Reinvestment Act of 2009 (``Recovery Act'') took 
large, initial steps to accelerate the smart grid transition. The 
Recovery Act included $11 billion for smart grid technologies, 
transmission system expansion and upgrades, and other investments to 
modernize and enhance the electric transmission infrastructure.
    To build on the Recovery Act's initiatives, the National Science 
and Technology Council's (NSTC) Committee on Technology has established 
a Subcommittee on Smart Grid, co-led by DOE's Office of Electricity 
Delivery and Energy Reliability and the Department of Commerce's 
National Institute of Standards and Technology (https://www.smartgrid.gov/news/nstc_subcommittee). The Subcommittee on Smart 
Grid is working to ensure the federal government develops and executes 
a long-term, comprehensive strategy in partnership with the states that 
will further President Obama's comprehensive energy and climate plan, 
as well as the Recovery Act's effort to catalyze the development of a 
smarter grid. The Subcommittee will develop policy options and 
recommendations for the Administration as a whole and guide federal-
state cooperative efforts. It will investigate emerging technologies 
and provide analysis about ways to advance the smart grid in a cost-
effective and appropriate manner.
    DOE's Office of General Counsel issued two RFIs on May 11, 2010 on 
smart grid policy issues. (75 FR 26203 and 75 FR 26206) The first RFI 
sought comments on ongoing federal, state and private sector efforts to 
make more effective use of consumer energy usage data, while at the 
same time safeguarding consumer privacy. The second RFI sought comments 
to assist the Department in identifying the present and future 
communications needs of electric utilities as smart grid technologies 
are deployed more broadly. This RFI seeks to collect information and 
open a dialogue about a wide range of additional issues dealing with 
smart grid technology, applications, consumer interaction, policy 
initiatives and economic impact.

Background

    The smart grid has the potential to add devices and applications 
that improve power quality, reduce transmission congestion costs, read 
meters and provide prompt feedback that allows better decision making; 
better synchronize consumption with generation; help integrate variable 
renewable generation and electric vehicles into the electric system; 
detect and address equipment problems and outages; and provide central 
and end-user control over energy consumption. The United States can be 
a global leader in developing these innovative technologies. For many 
reasons, then, it is important to continue to research, develop and 
deploy smart grid systems.
    DOE is aware that technology, business, consumer and regulatory 
issues interact in complicated ways. The smart grid will be composed of 
numerous vast, evolving and interrelated systems including 
communication networks, sensors on transmission and distribution 
systems such as phasor measurement units (PMU) and advanced metering 
infrastructure (AMI), and controls such as programmable communicating 
thermostats. It will facilitate changes in how electricity is produced, 
distributed, consumed and conserved.
    DOE also recognizes that while it may be possible to estimate the 
benefits of current efforts to deploy smart grid technologies and 
applications, it may be unrealistic to precisely quantify their future 
impacts because the smart grid is not fully developed and its future 
applications are likely to change. Nevertheless, even unavoidable 
uncertainty should not deter federal and state authorities, utilities 
or other interested parties from assessing current implications of, 
barriers to, and the best-available estimates of the likely impact of 
making the grid smarter. For example, certain smart grid and demand-
response applications have been deployed by utilities and electric 
cooperatives for

[[Page 57008]]

many years.\1\ These applications include automated collection of 
detailed meter data, direct load control, and systems that vary prices 
based on typical or actual grid conditions at the time the customer 
used power. We seek to learn from those preexisting efforts, as well as 
newer projects and pilots.
---------------------------------------------------------------------------

    \1\ Fed. Energy Regulatory Comm'n, Assessment of Demand Response 
and Advanced Metering, 8, 65 (Dec. 2008), available at https://www.ferc.gov/legal/staff-reports/12-08-demand-response.pdf.
---------------------------------------------------------------------------

Request for Information

    The following questions cover the major areas we seek comment on. 
They are not a determination of the final topics that DOE and the NSTC 
Smart Grid Subcommittee will address, and commenters may address any 
topic they believe to have important implications for smart grid policy 
regardless of whether this document mentions it.
    In response to any question that asks about smart grid technologies 
broadly defined, please describe the set of smart grid technologies 
your response considers. To aid the discussion of the relevant issues, 
commenters are welcome to use the following categories to classify the 
technologies they discuss, adding any clarifying language they view as 
appropriate.

 Instrumenting and automating the transmission and generation 
system
 Distribution automation
 Upgraded metering, such as AMI or even enhanced technologies 
that improve the capabilities of traditional AMR
 Consumer facing programs such as feedback, demand response, 
energy efficiency, and automation strategies
 Integrating new end user equipment like distributed generation 
and electric vehicles

Commenters can assume a high degree of general knowledge on the part of 
DOE and the Subcommittee. Commenters are encouraged to cite or include 
relevant data and analyses in their responses. In addressing the 
following questions, we ask stakeholders to be concise. We primarily 
seek facts and concrete recommendations that can augment that general 
knowledge. We encourage stakeholders to use concrete examples of 
benefits, costs, and challenges or to bring novel or underappreciated 
sources of evidence to our attention wherever possible.

Definition and Scope

    The deployment of technology to make the nation's electric grid a 
more interactive, efficient and responsive system is already underway. 
At the early stages of any major technological shift, stakeholders 
often use the same term-of-art to mean different things which can lead 
to miscommunication. To minimize confusion as we identify policy 
challenges and recommendations, this RFI uses the broad definition of 
Smart Grid laid out in Title XIII of the Energy Independence and 
Security Act of 2007 (EISA). Title XIII mentions that the smart grid 
uses communications, control, and information technology to optimize 
grid operations, integrate distributed resources including renewable 
resources, increase energy efficiency, deploy demand response, support 
electric vehicles, and integrate automated, interactive interoperable 
consumer devices. We encourage commenters to reference the full text of 
EISA section 1301.
    We invite comment however on whether this is the best way to define 
the smart grid. What significant policy challenges are likely to remain 
unaddressed if we employ Title XIII's definition? If the definition is 
overly broad, what policy risks emerge as a result?
    We also invite comments on the geographic scope of standardization 
and interconnection of smart grid technologies. Should smart grid 
technologies be connected or use the same communications standard 
across a utility, state, or region? How does this vary between 
transmission, distribution, and customer-level standards? For example, 
is there need to go beyond ongoing standards development efforts to 
choose one consumer-facing device networking standard for states or 
regions so that consumers can take their smart appliances when they 
move and stores' smart appliance will work in more than one service 
area?

Interactions With and Implications for Consumers

    Typical consumers currently get limited feedback about their daily 
energy consumption patterns and associated costs. They also have 
limited understanding of variations in the cost of providing power over 
the course of the day and from day to day. Many smart grid technologies 
aim to narrow the typical consumers' knowledge gap by empowering 
consumers with greater knowledge of and ability to control their 
consumption and expenditures. This vision transforms many consumers' 
relationship with the grid, which prompts us to ask the following 
questions.
     For consumers, what are the most important applications of 
the smart grid? What are the implications, costs and benefits of these 
applications? What new services enabled by the smart grid would 
customers see as beneficial? What approaches have helped pave the way 
for smart grid deployments that deliver these benefits or have the 
promise to do so in the future?
     How well do customers understand and respond to pricing 
options, direct load control or other opportunities to save by changing 
when they use power? What evidence is available about their response? 
To what extent have specific consumer education programs been 
effective? What tools (e.g. education, incentives, and automation) 
increase impacts on power consumption behavior? What are reasonable 
expectations about how these programs could reshape consumer power 
usage?
     To what extent might existing consumer incentives, 
knowledge and decision-making patterns create barriers to the adoption 
or effective use of smart grid technologies? For instance, are there 
behavioral barriers to the adoption and effective use of information 
feedback systems, demand response, energy management and home 
automation technologies? What are the best ways to address these 
barriers? Are steps necessary to make participation easier and more 
convenient, increase benefits to consumers, reduce risks, or otherwise 
better serve customers? Moreover, what role do factors like the trust, 
consumer control, and civic participation play in shaping consumer 
participation in demand response, time-varying pricing, and energy 
efficiency programs? How do these factors relate to other factors like 
consumer education, marketing and monthly savings opportunities?
     How should combinations of education, technology, 
incentives, feedback and decision structure be used to help residential 
and small commercial customers make smarter, better informed choices? 
What steps are underway to identify the best combinations for different 
segments of the residential and commercial market?
     Are education or communications campaigns necessary to 
inform customers prior to deploying smart grid applications? If so, 
what would these campaigns look like and who should deploy them? Which 
related education or public relations campaigns might be attractive 
models?
     What should federal and state energy policymakers know 
about social norms (e.g. the use of feedback that compares a customers' 
use to his neighbors) and habit formation? What are the important 
lessons from efforts to persuade people to recycle or engage in other 
environmentally friendly activity? What are the implications of these

[[Page 57009]]

insights for determining which tasks are best automated and which 
should be subject to consumer control? When is it appropriate to use 
social norm based tools?
     How should insights about consumer decision-making be 
incorporated into federal-state collaborative efforts such as the 
Federal Energy Regulatory Commission's (FERC) National Action Plan on 
Demand Response?

Interaction With Large Commercial and Industrial Customers

    Large commercial and industrial customers behave differently than 
residential consumers and small businesses. They regularly use 
sophisticated strategies to maximize their energy efficiency, to save 
money and to assure reliable business operations. Indeed, some already 
are or others are seeking to participate directly in wholesale energy 
and ancillary services markets. Please identify benefits from, and 
challenges to, smart grid deployment that might be unique to this part 
of the market and lessons that can be carried over to the residential 
and small business market. Please identify unmet smart grid 
infrastructure or policy needs for large customers.

Assessing and Allocating Costs and Benefits

    Regulators pay a great deal of attention to the costs and benefits 
of new investments, appropriate allocation of risk and protection of 
vulnerable customer segments. The many unknowns associated with smart 
grid programs make these ubiquitous questions particularly challenging, 
which suggests a great need to share perspectives and lessons.
     How should the benefits of smart grid investments be 
quantified? What criteria and processes should regulators use when 
considering the value of smart grid applications?
     When will the benefits and costs of smart grid investments 
be typically realized for consumers? How should uncertainty about 
whether smart grid implementations will deliver on their potential to 
avoid other generation, transmission and distribution investments 
affect the calculation of benefits and decisions about risk sharing? 
How should the costs and benefits of enabling devices (e.g. 
programmable communicating thermostats, in home displays, home area 
networks (HAN), or smart appliances) factor into regulatory assessments 
of smart grid projects? If these applications are described as benefits 
to sell the projects, should the costs also be factored into the cost-
benefit analysis?
     How does the notion that only some customers might opt in 
to consumer-facing smart grid programs affect the costs and benefits of 
AMI deployments?
     How do the costs and benefits of upgrading existing AMR 
technology compare with installing new AMI technology?
     How does the magnitude and certainty of the cost 
effectiveness of other approaches like direct load management that pay 
consumers to give the utility the right to temporarily turn off air 
conditioners or other equipment during peak demand periods compare to 
that of AMI or other smart grid programs?
     How likely are significant cost overruns? What can 
regulators do to reduce the probability of significant cost overruns? 
How should cost overruns be addressed?
     With numerous energy efficiency and renewable energy 
programs across the country competing for ratepayer funding, how should 
State Commissions assess proposals to invest in smart grid projects 
where the benefits are more difficult to quantify and the costs are 
more uncertain?
     What are appropriate ways to track the progress of smart 
grid implementation efforts? What additional information about, for 
example, customer interactions should be collected from future pilots 
and program implementations? How are State Commissions studying smart 
grid and smart meter applications in pilots? In conducting pilots, what 
best practical approaches are emerging to better ascertain the benefits 
and costs of realistic options while protecting participants?
     How should the costs of smart grid technologies be 
allocated? To what degree should State Commissions try to ensure that 
the beneficiaries of smart grid capital expenditures carry the cost 
burdens? Which stakeholder(s) should bear the risks if expected 
benefits do not materialize? How should smart grid investments be 
aligned so customers' expectations are met?
     When should ratepayers have the right to opt out of 
receiving and paying for smart grid technologies or programs like 
meters, in home displays, or critical peak rebates? When do system-wide 
benefits justify uniform adoption of technological upgrades? How does 
the answer depend on the nature of the offering? How should regulators 
address customer segments that might not use smart grid technologies?
     How might consumer-side smart grid technologies, such as 
HANs, whether controlled by a central server or managed by consumers, 
programmable thermostats, or metering technology (whether AMR or AMI), 
or applications (such as dynamic pricing, peak time rebates, and remote 
disconnect) benefit, harm, or otherwise affect vulnerable populations? 
What steps could ensure acceptable outcomes for vulnerable populations?

Utilities, Device Manufacturers and Energy Management Firms

    Electricity policy involves the interaction of local distribution 
utilities, bulk power markets and competitive markets for electrical 
appliances and equipment. Retail electricity service is under state and 
local jurisdiction. Generally, bulk power markets are under FERC 
jurisdiction. Appliances comply with federal safety and efficiency 
rules. Smart grid technologies will change the interactions among these 
actors and should create new opportunities for federal-state 
collaboration to better serve citizens.
    Greater collaboration seems essential. Some state regulatory 
agencies already oversee energy efficiency programs that help 
ratepayers acquire equipment like energy efficient appliances. Those 
appliances also are subject to federal regulatory oversight. As the 
smart grid evolves, these types of ties are likely to deepen. Moreover, 
EISA foresees a federal role in developing potentially mandatory 
standards for some smart grid equipment and voluntary standards for 
smart-grid enabled mass-produced electric appliances and equipment for 
homes and businesses. Many commentators suggest that utilities may lack 
appropriate incentives to invest in the most cost effective smart grid 
infrastructure and allow that infrastructure to be used to conserve 
energy, because most service providers generate revenue based on the 
number of kilowatt hours sold and pass through the capital costs of 
things like smart grid infrastructure. If this is accurate, then those 
disincentives are an impediment to achieving national and state goals 
and, therefore, merit state and federal policy makers' attention.
    In issuing this RFI, DOE is mindful that the states oversee retail 
electric service and that state regulation differs state by state. 
Within states different types of service providers may be subject to 
different regulatory schemes depending, for example, on whether the 
service provider is investor owned, publicly owned or a cooperative. 
Recognizing the primary role of states in this area, we ask the 
following questions:

[[Page 57010]]

     How can state regulators and the federal government best 
work together to achieve the benefits of a smart grid? For example, 
what are the most appropriate roles with respect to development, 
adoption and application of interoperability standards; supporting 
technology demonstrations and consumer behavior studies; and 
transferring lessons from one project to other smart grid projects?
     How can federal and state regulators work together to 
better coordinate wholesale and retail power markets and remove 
barriers to an effective smart grid (e.g. regional transmission 
organization require that all loads buy ``capacity'' to ensure the 
availability of power for them during peak demand periods, which makes 
sense for price insensitive loads but requires price sensitive loads to 
pay to ensure the availability of power they would never buy)?
     How will programs that use pricing, rebates, or load 
control to reduce consumption during scarcity periods affect the 
operations, efficiency, and competiveness of wholesale power markets? 
Will other smart grid programs have important impacts on wholesale 
markets? Can policies improve these interactions?
     Do electric service providers have the right incentives to 
use smart grid technologies to help customers save energy or change 
load shapes given current regulatory structures?
     What is the potential for third-party firms to provide 
smart grid enabled products and services for use on either or both the 
consumer and utility side of the meter? In particular, are changes 
needed to the current standards or standard-setting process, level of 
access to the market, and deployment of networks that allow add-on 
products to access information about grid conditions? How should the 
interaction between third-party firms and regulated utilities be 
structured to maximize benefits to consumers and society?
     How should customer-facing equipment such as programmable 
communicating thermostats, feedback systems, energy management systems 
and home area networks be made available and financed? Are there 
consumers behavior or incentive barriers to the market achieving 
efficient technology adoption levels without policy intervention?
     Given the current marketplace and NIST Smart Grid 
Interoperability Panel efforts, is there a need for additional third-
party testing and certification initiatives to assure that smart grid 
technologies comply with applicable standards? If there is a need for 
additional certification, what would need to be certified, and what are 
the trade-offs between having public and private entities do the 
certification? Is there a need for certifying bodies to oversee 
compliance with other smart grid policies, such as privacy standards?
    Commenters should feel free to describe current and planned 
deployments of advanced distribution automation equipment, 
architectures, and consumer-facing programs in order to illustrate 
marketplace trends, successes, and challenges. And they should feel 
free to identify any major policy changes they feel would encourage 
appropriate deployment of these technologies.

Long Term Issues: Managing a Grid With High Penetration of New 
Technologies

    Significant change in the technologies used to generate power and 
to keep supply and demand balanced is likely to occur over the 
foreseeable future. We invite comments on the steps that should be 
taken now to give the grid the flexibility it will need to deal with 
transitions that are likely in the next few decades. Commenters might 
address the following questions, some of which have more immediate 
implications.
     What are the most promising ways to integrate large 
amounts of electric vehicles, photovoltaic cells, wind turbines, or 
inflexible nuclear plants? What approaches make sense to address the 
possibility that large numbers of other consumer devices that might 
simultaneously increase power consumption as soon as power prices drop? 
For instance, what is known about the viability of and tradeoffs 
between frequently updated prices and direct load control as approaches 
to help keep the system balanced? How do factors like the speed of 
optimization algorithms, demand for reliability and the availability of 
grid friendly appliances affect those trade-offs?
     What are these strategies' implications for competition 
among demand response, storage and fast reacting generation? What 
research is needed to identify and develop effective strategies to 
manage a grid that is evolving to, for example, have an increasing 
number of devices that can respond to grid conditions and to be 
increasingly reliant on variable renewable resources?
     What policies, if any, are necessary to ensure that 
technologies that can increase the efficiency of ancillary services 
provision can enter the market and compete on a level playing field?
     What policies, if any, are necessary to ensure that 
distributed generation and storage of thermal and electrical energy can 
compete with other supply and demand resources on a level playing 
field?
     What barriers exist to the deployment of grid 
infrastructure to enable electric vehicles? What policies are needed to 
address them?

Reliability and Cyber-Security

    We invite comment on the reliability opportunities and challenges 
that smart grid technologies create, including: What smart grid 
technologies are or will become available to help reduce the electric 
system's susceptibility to service disruptions?
     What policies are needed to facilitate the data sharing 
that will allow sensors (e.g., phasor measurement units) and grid 
automation to achieve their potential to make reliability and 
performance improvements in the grid? Is there a need to revisit the 
legal and institutional approaches to generation and transmission 
system data collection and interchange?
     What is the role of federal, state, and local governments 
in assuring smart grid technologies are optimized, implemented, and 
maintained in a manner that ensures cyber security? How should the 
Federal and State entities coordinate with one another as well as with 
the private and nonprofit sector to fulfill this objective?

Managing Transitions and Overall Questions

    The following questions focus on managing incremental change during 
the gradual evolution of the grid that may transform the power sector 
over the next few decades.
     What are the best present-day strategies for transitioning 
from the status quo to an environment in which consumer-facing smart 
grid programs (e.g., alternative pricing structures and feedback) are 
common? What has been learned from different implementations? What 
lessons fall into the ``it would have been good to know that when we 
started'' category? What additional mechanisms, if any, would help 
share such lessons among key stakeholders quickly?
     Recognizing that most equipment on the electric grid, 
including meters, can last a decade or more, what cyber security, 
compatibility and integration issues affect legacy equipment and merit 
attention? What are some strategies for integrating legacy equipment 
into a robust, modernized grid? What strategies are appropriate for 
investing in equipment today that will be more valuable if it can delay 
obsolescence by

[[Page 57011]]

integrating gracefully with future generations of technology?
     How will smart grid technologies change the business model 
for electric service providers, if at all? What are the implications of 
these changes?
     What are the costs and benefits of delaying investment in 
metering and other smart grid infrastructure while the technology and 
our understanding of it is rapidly evolving? How does that affect the 
choice of an appropriate time to invest?
     What policy changes would ensure that the U.S. maintains 
global competiveness in smart grid technology and related businesses?
     What should be the priority areas for federally funded 
research that can support smart grid deployment?

Finally, as noted at the outset, we invite commenters to address any 
other significant issues that they believe implicate the success or 
failure of the transition to smart grid technology.

    Issued in Washington, DC, on September 13, 2010.
Patricia Hoffman,
Assistant Secretary.
[FR Doc. 2010-23251 Filed 9-16-10; 8:45 am]
BILLING CODE 6450-01-P
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