FERC adopts policy on development of smart grid standards


Jon Wellinghoff,
Chairman, FERC
Washington, DC, U.S.A. — (METERING.COM) — July 20, 2009 – The Federal Energy Regulatory Commission (FERC) has adopted a Smart Grid Policy Statement setting out priorities for work on the development of standards to achieve interoperability and functionality of smart grid systems and devices.

The statement also sets out an interim rate policy for the period until interoperability standards are adopted by the Commission, which will encourage investment in smart grid systems.

The policy statement closely tracks a proposed policy issued on March 19, seeking public comment on standards for priority issues identified as critical to the smooth functioning and operation of the smart grid. These included cyber security, inter-system communications, wide area situational awareness, and coordination of the bulk power systems with new and emerging technologies.

More than 70 sets of comments from interested groups indicated broad support for this proposed policy, according to a FERC statement.

“Changes in how we produce, deliver and consume electricity will require ‘smarter’ bulk power systems with secure, reliable communications capabilities to deliver long-term savings for consumers,” said FERC chairman Jon Wellinghoff. “Our new smart grid policy looks at the big picture by establishing priorities for development of smart grid standards, while giving utilities that take the crucial early steps to invest in smart grid technologies needed assurance about cost recovery.”

The new policy adopts as a Commission priority the early development by industry of smart grid standards to ensure the cyber security of the grid; to provide two-way communications among regional market operators, utilities, service providers and consumers; to ensure that power system operators have equipment that allows them to operate reliably by monitoring their own systems as well as neighboring systems that affect them; and to coordinate the integration into the power system of emerging technologies such as renewable resources, demand response resources, electricity storage facilities and electric transportation systems.

Under the policy early adopters of smart grid technologies are enabled to recover smart grid costs if they demonstrate that those costs serve to protect cyber security and reliability of the electric system, and have the ability to be upgraded, among other requirements.

Importantly, the policy statement also notes that in adopting these standards for smart grid technologies, the FERC will not interfere with any state’s ability to adopt whatever advanced metering or demand response program it chooses. The FERC continues to abide by the Federal Power Act’s jurisdictional boundaries between federal and state regulation of rates, terms and conditions of transmission service and sales of electricity.

Responsibility for coordination of the development of smart grid standards in the U.S. is with the National Institute of Standards and Technology (NIST).