Patron of federal ‘smart grid’ laws sees no more room for Congress

Source: Gabriel Nelson, E&E reporter • Posted: Friday, October 12, 2012

Lawmakers on Capitol Hill should stand to the side and let states lead the way toward a smarter electric grid, says the author of the legislation that Congress passed in 2005 to promote the concept nationally for the first time.

Former Rep. Rick Boucher, a Virginia Democrat who chaired the House Energy and Commerce Committee’s former Subcommittee on Energy and Air Quality for several years before losing a re-election bid in 2010, said during an interview this week that state utility commissions are doing plenty to advance the technology under current federal laws.

“Viewed from Washington, it’s kind of hard to keep up with all of it, but that’s where the real decisions today are being made,” he said. “I don’t see another role for Congress in this.”

Boucher, now the head of the government strategies shop at Sidley Austin LLP, wrote the provisions of the Energy Policy Act of 2005 that deal with the “smart grid,” a term that is shorthand for the digital equipment that electric utilities have started using to manage the flow of electricity, to restore power more quickly after outages and to help customers trim electricity use.

Since being voted out of office, Boucher has mainly worked on telecommunications issues. He has also started to counsel the Edison Electric Institute (EEI), the main lobbying group for publicly traded utilities.

Congress has had little appetite for smart grid legislation this session, and utilities haven’t pushed members too hard about that. In the past, some power providers have asked for more incentives to roll out digital meters and fix up power lines, such as the ability to recover the cost of doing that work nationwide, but now they’re simply getting to work on the projects.

According to a report released last week by the Institute for Energy Efficiency, which is affiliated with EEI, utilities should be able to install about 65 million smart meters by 2016, equivalent to half the homes in the country.

“We are laying the groundwork that likely will spur the same kind of advances in electric technologies that we have seen in information and telecommunication technologies,” said Thomas Kuhn, the president of the utility group, during a speech last week at the GridWeek conference in Washington, D.C.

Even without new legislation, the federal government is set to play a big role in the growth of the smart grid.

Taking the lead are the National Institute of Standards and Technology, which has written “interoperability” standards to make the electric grid a more cohesive system like the Internet, and the White House, which has actively tried to get more software developers to focus on energy through its Green Button data platform.

But some lawmakers on Capitol Hill still see more opportunities to hasten new smart grid technology to market.

Seven bills introduced this Congress contain the phrase “smart grid.” None of the House bills has gotten so much as a hearing, though the Senate Energy and Natural Resources Committee has reported broad energy efficiency legislation (S. 398) from Chairman Jeff Bingaman (D-N.M.) that would allow U.S. EPA to offer Energy Star credits to appliances such as refrigerators, air conditioners and washing machines that follow signals from utilities and run when electricity’s cheapest.

Another bill (H.R. 2208) introduced last year by Rep. Jerry McNerney (D-Calif.) would explicitly require all states or large electric utilities to set targets for reducing peak electricity demand. Keeping power plants available to meet those needs for brief periods of time causes power prices to soar to many times their normal levels and drives up retail prices for the rest of the year.

Boucher said he’s convinced that’s where utilities are already headed.

“The next step is going to be real-time pricing, and the price signal that customers will get to realize tremendous cost savings by purchasing their power at the time when the wholesale prices are cheaper,” Boucher said. “Until that happens, the full benefits of the smart grid will not be realized, but step by step, those benefits are now coming to consumers around the country.”