House Weighs Federal "Smart Grid" and Other Efficiency Enhancements

Among energy initiatives that Congress is considering this summer, one would highlight smart grid technology on the national stage.  In hopes of not only making the U.S. grid more reliable and efficient, but also more secure and independent"”often-used phrases in Congressional energy circles"”the Energy and Commerce Committee approved one measure that would establish a federal Grid Modernization Commission to implement smart grid technologies.


The proposed nine-member Commission would monitor smart grid developments, develop common standards and protocols for smart grid technologies, identify barriers to implementation and propose solutions, coordinate federal and state agencies to implement smart grid efforts, and report to Congress biennially on the progress made in modernizing the electric grid system.


The measure would also create a federal matching grant program, funded with $250 million for 2008 and $500 million for each of the years 2009-2012, to reimburse one quarter of the costs of certain smart grid investments.  The measure would amend section 111(d) of the Public Utility Regulatory Policies Act of 1978 to require states to consider regulatory standards that would allow utilities to include smart grid investments in rates, "decouple" utility profits from the volume of electricity sold, and require utilities to make time-sensitive supply, cost, price, and other information available to consumers to inform their use of smart grid technologies and demand response.


Finally, the measure also would amend the National Energy Conservation Policy Act to require federal agencies to reduce their peak electricity consumption by 2 percent each year for 10 years, or make that percentage available as demand response, and report to Congress on the results.  The Grid Modernization Commission would also be tasked with developing a national action plan to achieve demand response potential in the U.S.