This posted to smartgrid@ostp.gov by Jay Morrison, NRECA
The National Rural Electric Cooperative Association (NRECA) understands the Administration’s sense of urgency with respect to Smart Grid. Smart grid technologies have the potential to provide consumers with significant energy and financial savings with concomitant benefits to the environment. Yet, many companies are waiting to implement valuable advances in technology because the lack of standards reduces the number and quality of technology options, raises the cost of integrating those technologies with existing systems and creates a risk that investments made today could be stranded if the standards ultimately adopted by the industry are inconsistent with the products installed in the meantime.
Nevertheless, NRECA’s experience developing MultiSpeak demonstrates that the standards development process cannot be unduly rushed. As Congress clearly recognized in the structure of section 1307 of the Energy Independence and Security Act of 2007 (“EISA”) , standards have to be the product of an industry consensus-building process in which the utilities that will install and use the technologies, and the vendors that manufacture them, must work together to achieve an understanding of how best to move forward.
At this time the industry still cannot even agree on a single definition of “Smart Grid.” Many of the technology, software, and communications tools that will eventually comprise elements of the Smart Grid are not yet commercially available or have not yet been tested on a large scale. The industry lacks experience integrating these elements with one another on large scale. If rushed, many aspects of the interoperability standard required by section 1307, including customer interfaces, would have to be created out of whole cloth, rather through final consensus on a standard percolated and developed organically within the industry for a period of time.
Moreover, the list of potential functions for the Smart Grid is extremely broad, and it can be expected that different utilities and stakeholders will select differently amongst them, pursue them to different degrees, and use drastically different portfolios of technology, software, and communications media in order to achieve them. For interoperability and customer interface standards to work well for the industry, they must not inappropriately force adoption of one approach or foreclose the ability to adopt another approach. That means that the stakeholders must all understand the potential use cases for the technology and data. That is, they must understand: the range of potential data collection equipment; the business, financial, and operational purposes for which data will be employed; the kinds of software in which data will be manipulated; the variety of different telecommunications media by which it will be transmitted; and, the forms in which it can best be stored and accessed. Once armed with that knowledge, they must then develop standards and protocols that are as likely as possible to meet those known requirements and any future, unknown requirements.
Given the early state of the industry’s understanding of “Smart Grid” it will take time for the industry to reach a good understanding of the use cases for which an interoperability standard must work. While the lack of a standard does slow the maturation of the Smart Grid, a bad standard – developed with insufficient understanding of the manner in which the Smart Grid might be implemented – will do more long-term harm. Patience, although difficult, is critical.
Response to Q1 -- The state of technology and the nature of services that utilities and others will provide to consumers continue to evolve. At this time, consumers are receiving price data and demand response signals over a broad range of communication paths. While the meter will serve as the gateway for some consumers and some services, others will use the internet, wireless communications, radio communications, pager signals, WiMax signals, or other technologies that have not yet been determined.
Within some cooperative service territories, a combination of available communications media and economic factors have forced the cooperatives to adopt 2, 3, or even more different metering systems and different mechanisms for communicating with the meters. The lack of broadband access, rough terrain that blocks communication signals, low customer density, and low customer incomes combine to make use of a single technology impossible.
The factors that will determine the appropriate gateway for communicating with consumers will include the available communications technologies, the cost of different options, the level of functionality desired by consumers, and the level of functionality required to best provide consumers with safe, reliable, and affordable electric service. Those factors are unlikely to change over time, but the results of the analysis could and is likely to change significantly over time as the cost and availability of communications technologies, consumer’s expectations, and the tools available for taking advantage of the data all evolve. Many cooperatives today find it most cost effective to use power-line carrier technologies to haul meter data from the customer to the cooperative, the internet to provide price and cost information back to the consumer, and radio signal technologies to communicate demand response signals to consumer equipment. In ten years, when meter technologies, communications technologies, and customer equipment have all changed significantly, an entirely different portfolio of tools may present itself that can provide the same or more functionality at lower cost. We have no way of knowing today what that portfolio will be.
Response to Q2 -- Yes. As discussed above, the meter will be used as a gateway for some data under some circumstances. The Administration’s approach to smart grid, interoperability standards, and standards for consumer interfaces must be flexible enough to recognize both that utilities will use a wide range of technologies for communicating data depending on their local circumstances and that the technologies utilities select will change over time as the technology and value propositions they offer evolve.
Response to Q3 -- The question above assumes that real-time or near-real-time-prices are necessary to support home energy services. We disagree. Time varying and dynamic pricing may be a valuable tool in some circumstances but is unnecessary and undesirable in many circumstances. As discussed above, cooperatives have used non-price-based demand response programs very successfully for over 30 years to improve service, enhance reliability and lower energy costs for their members. The Administration should recognize the tremendous value available to consumers from non-price-based home energy services.
Jay Morrison
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