Washington, DC, U.S.A.— (METERING.COM) — May 26, 2007 –In testimony before the U.S. Senate Finance Committee, Demand Response and Advanced Metering Coalition (DRAM) executive director Dan Delurey has called for greater commitment to deploying demand response, smart meter and smart grid technologies.
Briefing the Senate Committee on the need for demand response to be included in electricity policy, planning and operations, and on how demand response and its enabling technologies, such as smart meters, are necessary for the development of the smart grid, Delurey said that with a greater commitment by state and federal policy makers to deploying these technologies now, through changes to federal tax policy, the construction of the smart grid can begin now instead of in the future.
In developing the argument that demand response is important to national energy policy and an important element of a smart grid, Delurey noted that demand response and its enabling technologies offer “many different benefits in many different areas,” – from reliability to customer service, outage management, system planning, system operations and security maintenance, as well as to addressing climate change and other environmental issues.
However, Delurey said that as yet there is no policy in the U.S. Tax Code designed to foster the development of demand response and the deployment of smart technologies, and that if the policy goal for smart metering is to be realized – as adopted in the Energy Policy Act of 2005 – the Congress must turn its attention to use tax policy to support these.
Accordingly four recommendations are offered by the DRAM:
- Modify the depreciation period, currently of 20 to 30 years for electricity meters, to 5 years for new smart meter technologies, thereby bringing them in line with other modern technologies
- Provide appropriate tax incentives such as investment tax credits to support the acceleration of the necessary technology investments
- Put in place a reduction tax credit (RTC), similar to the production tax credit (PTC) for the renewable energy industry, which would be granted when reductions are measured and verified using demand response technologies and applications
- Institute a National Smart Grid Fund that is enabled via the introduction of an assessment on the transmission system, following the example of states that have implemented “wires” charges to collectively raise funds for expenditures on energy efficiency and renewable energy.
“It is easy to always see the smart grid as something that is out in the future somewhere, just out of reach … as something that requires substantial research and development and that can only be accomplished if new technologies, not necessarily yet invented, are developed and made available,” said Delurey. But the threshold to greater demand response and the smart grid is not increased R&D, he commented. “Demand response and smart technologies are available today which can deliver immediate benefits to utilities, customers, other stakeholders and the nation as a whole.”