FERC Proposes Policy Statement on Smart-Grid Development

The Federal Energy Regulatory Commission (FERC) accelerated development of a smarter grid for the nation’s electric transmission system with a proposed policy statement and action plan that would help set the “rules of the road” of a modern grid.

“A smarter bulk power system, and the generation and demand resources associated with it, will operate more securely, reliably and efficiently,” Acting FERC Chairman Jon Wellinghoff said. “The Smart Grid will give consumers better information and the tools to control their electricity costs. And it will play a critical role in the integration of new renewable resources.”

Smart Grid advancements will apply digital technologies to the grid, and enable real-time coordination of information from both generating plants and demand-side resources. This will improve the efficiency of the bulk-power system with the goal of achieving long-term consumer savings. And it will enable demand response and other transactions and activities that give consumers the tools to control their electricity costs.

FERC’s proposed policy statement seeks public comment on standards for four priority issues critical to the smooth functioning and operation of the Smart Grid. After weighing public comments, FERC plans to adopt a final policy statement providing guidance to the electric power industry on standards for:

  • Cyber security
  • Communications among regional market operators, utilities, service providers and consumers
  • Ensuring that the bulk power system operators have “wide-area situational awareness” with equipment that allows them to monitor and operate their systems
  • Coordinating operation of the bulk power system with new and emerging technologies for renewable resources, demand resources, electricity storage and electric transportation systems.

Smart Grid Stimulus Funding

In a separate announcement, state and federal regulators outlined a list of criteria for the Department of Energy (DOE) to consider when it starts providing grant and other funding for Smart Grid projects under the 2009 stimulus bill.

The regulators, members of the Smart Grid Collaborative jointly sponsored by the National Association of Regulatory Utility Commissioners (NARUC) and FERC, developed the criteria as a consensus for establishing preconditions under which Smart Grid projects would be funded through the American Recovery and Reinvestment Act of 2009.

Collaborative members suggest that DOE should require that applications for smart-grid grant money demonstrate how the project will provide for interoperability in the absence of approved standards, address cyber security concerns, and maintain the reliability and integrity of the grid. Additionally, DOE’s criteria should state that grant-funded projects should focus on both the transmission and distribution system and include a range of technologies—not just meter installation.

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