Price-Responsive demand, EPA regulations, and merger policy will be on the agenda for the coming year as the Federal Energy Regulatory Commission works its way through the list of key cases that...
The smart grid and the slippery business of setting industry standards.
conformance testing and implementation by a vendor. Category 4 would represent interoperability testing (implementation by multiple vendors working together). Lastly, Category 5 would denote cyber security certification.
Jennifer Sanford, senior manager for smart grid policy at Cisco, pointed out that implementing interoperability standards might require licenses to file dozens, or even hundreds of patents per standard, meaning that stakeholders and participants in the standard-setting process should include information about possible licensing of intellectual property rights in their recommendations and evaluations.
As Sanford noted, standards development organizations generally have policies that specify that if patents are essential to the implementation of a standard, that the owners will agree to license the patents on reasonable and nondiscriminatory (RAND) terms, but that “unfortunately,” as she explained, “there’s no consensus on what licensing terms are reasonable.”
One last problem (on which FERC asked specifically for ideas in the follow-up comments) concerned so-called “normative references,” or lesser-included standards that are nested within larger standards, to save time or space. Such nested standards could be out of date or could lack the same degree of cyber security as the primary standard, thus undermining the entire construct.
Dr. Stanley Klein of Open Secure Energy Control Systems warned in his comments that any standards adopted without implementation and lab testing are merely “words on paper.” Experts, he noted, “are just like everyone else. They can word provisions vaguely as a compromise to cover up disagreements. However, you can’t be vague with a computer. The program will run precisely as written and translated into the internal bits and bytes of the machine, regardless of what the programmer intended.”
Stacking the Deck
At the January conference, longtime FERC staffer Kevin Kelly, a self-professed “movie buff,” admitted that when he wanted to replace his DVD player, he agonized over which technology to choose—HD or Blu-Ray—knowing that if he bought the wrong one he’d be stuck with an outdated player no one would want. And so, in musing about how the commission should go about adopting standards, he asked the witnesses whether FERC should go with a long-established and proven technology (but also likely out of date), or whether it should pick an up-and-coming technology known to be flawed, but on the assumption that “we will rally all the relevant industries around correcting those flaws.”
So far, the overwhelming industry majority seems to favor the collaboration-with-flaws approach. However, owing to what Ingersoll Rand termed the “unfortunate level of ambiguity in FERC’s EISA-created statutory obligations,” the vendor community appears to harbor an undercurrent of fear that the review process could lead to a rulemaking mandate that stifles innovation.
Or, as Cimetrics President Lee put it, “squelch” the voice of consumers and “marginalize the NIST process”—a process Lee said has so far “kept entrenched interests stacking the deck.”
Even National Coordinator George Arnold conceded such fears in his April 7 comment letter to FERC Chairman Wellinghoff.
In reality, evidence emerged at the January conference that stakeholder representation in the NIST process was perhaps skewed against the regulated community, with Highfill noting that in the NIST process,