Monday, March 29, 2010

Post # 7 - Smart Meters and the National Broadband Plan: a Federal Mandate to the States?

Following up on earlier posts, we should note the importance of the National Broadband Plan, issued by the Federal Communication Commission (FCC) to Congress this past March 16th.

In last year’s stimulus legislation – the American Recovery and Reinvestment Act of 2009 – Congress (among many other things) mandated that the FCC develop a plan for improving broadband Internet access throughout the United States. The goal is to provide 100 million American households with access to 100 Mbit/s (megabits per second) connections (as much as 20 times faster than what is generally available in 2010) by 2020.

This of course goes well beyond the Smart Grid, but the Smart Grid is part of the mix. As the Plan notes, “[r]ealizing the promise of the Smart Grid will require the addition of two-way communications, sensors and software to the electrical system, both in the grid and in the home. Communications are fundamental to all aspects of the Smart Grid, including generation, transmission, distribution and consumption.” National Broadband Plan, p. 249 (emphasis supplied).

Moreover, the Plan directly addresses access to and control of smart meter data. The Plan explicitly calls for Congressional action if the state regulatory agencies that oversee electric distribution fail to act:

“States should require electric utilities to provide consumers access to, and control of, their own digital energy information, including real-time information from smart meters and historical consumption, price and bill data over the Internet. If states fail to develop reasonable policies over the next 18 months, Congress should consider national legislation to cover consumer privacy and the accessibility of energy data.” National Broadband Plan, Recommendation 12.7 (p. 256).

Such legislative action (or its threat) would explicitly “nationalize” this issue. As previously discussed, retail electric distribution historically has been an area that Congress has left to the States. Thus, the Federal Power Act, which establishes the Federal Energy Regulatory Commission as the “federal PUC” for the wholesale electric power industry, explicitly reserves regulation of electric retail distribution to the states. Electric meters, in turn, are the link between electric distribution companies and their retail customers, and there already are smart meter data proposals pending before State legislatures and PUCs (for example, the California Public Utilities Commission proceeding discussed in Post # 5).

But the FCC asserts that smart meter data ownership and access are of national importance. In effect, the National Broadband Plan asks Congress to issue the States with an ultimatum: develop “reasonable” policies or face Federal legislation.

Of course, the Plan’s publication does not ensure Congressional action, and States can be expected to jealously fight for their traditional regulatory authorities. But the National Broadband Plan is another reminder that the Smart Grid regulation, like the Smart Grid itself, does not fall into tidy State-Federal jurisdictional boxes.

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