(November 2009)Regulators are in the unenviable position of determining an allowance for ROE that’s fair to consumers and investors in a volatile economy. The cases that stand out this year...
Transforming DR and smart-grid policies into reality.
Looking ahead, it’s clear that most of the tasks remaining to implement the DR and smart-grid policies need to be accomplished at the state and local levels, with the need and opportunity for interested parties to engage at those levels. This doesn’t necessarily mean that it makes sense for the products and services that will serve this new industry to be developed with a local focus. The transformation of the electricity system brought through DR and the smart grid is national in scope. Solutions, products, and services can—and should—be developed to serve this new national market. This won’t happen if the rules and procedures require a different solution in each region, state, or locality. The way to improve the chances that it will is through advocacy for, and implementation of, policies that will capitalize on the intense interest of technology innovators, new service providers, entrepreneurs, and advocacy organizations in developing the tools and services that will serve this new market.
1. Demand response is the active participation in electric markets by purchasers of electricity through changes in consumption in response to price or system conditions. The smart grid is an electricity infrastructure that uses advanced digital technologies and interactive communications to optimize the efficiency of all components of the electric system.
2. Federal Energy Regulatory Commission, “2008 Assessment of Demand Response and Advanced Metering,” at i, 23, December 2008.
3. Department of Energy, “Smart Grid System Report,” at vi, July 2009.
5. Dan Delurey, “Policy Overview,” presentation at National Town Meeting on Demand Response and Smart Grid, Washington, D.C., July 13-14, 2009. Details of the State activities reported by Delurey are found in “Demand Response and Smart Metering Policy Actions Since the Energy Policy Act of 2005: A Summary for State Officials,” prepared by the U.S. Demand Response Coordinating Committee for the National Council on Electric Policy, Fall 2008.
6. Federal Energy Regulatory Commission, “2009 Assessment of Demand Response and Advanced Metering,” at pp. 10 and 12, September 2009. “Dynamic pricing” generally refers to retail rate structures under which retail rates vary with wholesale prices or system conditions.
7. The total amount of ARRA funding committed to all smart-grid activities actually totals a whopping $11 billion.
8. DOE Electric Advisory Committee, “Smart Grid: Enabler of the New Energy Economy,” p.4, December 2008.
10. See, e.g. , New York State Public Service Commission Case No. 09-E-0310, “In the Matter of the American Recovery and Reinvestment Act of 2009 - Utility Filings for New York Economic Stimulus.” In addition to the ARRA funds available from DOE, the Department of Agriculture’s Rural Utility Service and the Commerce Department’s National Telecommunications and Information Administration are making $4 billion available to fund new smart-grid broadband infrastructure projects, for which $28 billion in applications has been submitted .
11. “Are Stimulus Funds Working Against Smart Grids?” Sept. 28, 2009; TMCnet .
12. The Wall Street Journal , Sept. 28, 2009 (on-line service).
13. Zachs Equity Research, Sept. 18, 2009 .
15. See, note 19, infra.