Galvin Electricity Initiative Announces New White Paper that Examines Policy Barriers and Enablers to Smart Grid Development

FOR IMMEDIATE RELEASE
October 19, 2010

CONTACT:
Maria Enie, (202) 248-5460, menie@vancomm.com

***PRESS RELEASE***

GALVIN ELECTRICITY INITIATIVE ANNOUNCES NEW WHITE PAPER THAT EXAMINES POLICY BARRIERS AND ENABLERS TO SMART GRID DEVELOPMENT
Authors put forth policy recommendations for state and federal policymakers

WASHINGTON — Today, during the annual GridWeek conference in Washington, D.C., the Galvin Electricity Initiative announced the release of a new white paper, "Smart Grid Issues in State Law and Regulation," co-developed by executive director of the Harvard Electricity Policy Group Ashley Brown, Esq. and Raya Salter, Esq., and sponsored by the Initiative.

"This white paper examines electricity laws and regulations to identify both barriers and areas of opportunity for grid modernization," said Brown.  "Through a detailed analysis of past electricity reform efforts, the paper discusses the lessons learned from the restructuring experience and ultimately provides recommendations to assist policymakers, regulators and other stakeholders as they make smart grid technology deployment and investment decisions."

Brown focuses on 11 states – California, Colorado, Connecticut, Florida, Illinois, Pennsylvania, Massachusetts, New Mexico, New York, Ohio and Texas – for the basis of his analysis. He uses the restructuring experience as a lens through which the best regulatory practices can be viewed and, hopefully, pitfalls avoided.  In hindsight, Brown concludes, restructured states, or perhaps a subset of them, relied too heavily on the theoretical promise of free markets and often neglected to make that promise a reality. States need to do far more to educate customers and lower the barriers of entry to competitive suppliers.

"We must learn from our past in order move confidently and without error into the future of electricity service," said executive director of the Galvin Electricity Initiative Kurt Yeager. "The twentieth century electricity service model where customers are mere passive recipients with little control over their electricity consumption must change. The Initiative supports Brown’s policy recommendations – on both the federal and state levels – which will enable consumer engagement and pave the way for real electricity system transformation."

The recommendations put forth by Brown for policymakers, regulators and other stakeholders are as follows:

1. Customer price signals should reflect real-time costs at the time of actual energy use. Utility incentives should be neutralized between demand- and supply-side resource options by tying profits to energy services provided, not simply kWh sales.
2. Smart grid investments before the meter should be recovered as fixed costs. The costs of meters and load-control equipment for customer-specific load control should be recovered on a variable basis, either as a variable cost or as part of an energy charge.
3. The risks associated with the deployment of smart grid assets should be symmetrically allocated so that those best positioned to manage assets and with the most at stake financially have the greatest potential for gain or loss.
4. All customer-specific data must belong to the customer for use as he/she determines. Aggregate system data should be considered public information.
5. Smart meters should be installed on a universal basis in order to capture their optimal benefits.
6. National standards are critical, and it is particularly important that meters and data systems are capable of bi-directional communication with customers and suppliers and can be transferred between suppliers.
7. Customers must have a specifically enumerated set of rights, including (but not limited to) the right to: (1) confidentiality of personal information; (2) ownership of information; (3) choice of supplier and/or portfolio of supply options; (4) real-time price information; (5) appliance control; (6) install equipment to improve service quality; (7) net metering; (8) subscribe to aggregation of demand; (9) select meter and post-meter devices; (10) avoid asymmetric allocation of risk and reward; and (11) choose level of service quality.
8. New smart grid products and programs must be evaluated to identify best and worst practices and cut losses for consumers when something has gone wrong.
9. Utilities should receive appropriate incentives that link earnings to performance and ultimate value to customers, rather than to sales of kWh. These incentives will also induce utilities to innovate.

Today's release of Brown's white paper coincides with the GridWeek series Smart Grid and Consumer Buy-In, hosted by the Galvin Electricity Initiative along with Itron – a three-panel track full of forward-thinking, consumer-centric strategies for achieving the smart grid promise.

The Galvin Electricity Initiative was launched by former Motorola CEO Robert W. Galvin to transform our electric power system into one that is reliable, efficient, secure and clean, and meets the needs of 21st century consumers. In 2010, the Initiative is accelerating its campaign to spark a migration toward a consumer-driven electric power system in select states. The campaign goal is to promote grid modernization through policy reform to pave the way for Perfect Power smart microgrids that place top priority on serving consumers and businesses with reliable, high-quality, clean power. For more information about smart microgrids and the Galvin Electricity Initiative, visit www.galvinpower.org/microgrids, become a fan of the Initiative on Facebook (www.facebook.com/galvinpower) and follow http://twitter.com/perfectpower.