The smart grid of the future will require new rivers of data flowing between utilities and customers. But who will carry the data, and how will it be channeled?
The Obama administration's release of its National Broadband Plan in March has framed a debate over the issue between two strong, politically wired industries -- the telecommunications/Internet sector and electric utilities.
Smart grid data traffic will grow steadily over the next decade, displaying households' hourly power usage and prices, transmitting control signals from utilities to smart appliances, enabling plug-in hybrid electric vehicles to recharge or return electricity to the grid, and all of it surrounded by a cyber-security envelope, experts agree.
But will the network for this information flow be the open Internet or the traditional private communications networks designed and run by utilities? Will the new information consumers receive about their electricity consumption be handled by utilities, following a century-plus of tradition, or by information companies using the Internet to create new products and services about energy uses?
The Federal Communications Commission's Broadband Plan does not prescribe an answer. Much of the grid's evolution is beyond its direct control, industry officials note.
But the plan does champion a vision of the smart grid in which the rising flow of data helps anchor an expanded Internet reaching nearly all U.S. households, with vastly enlarged broadband capacity to handle "national purposes" missions. These include digital educational instruction, remote medical diagnosis, a nationwide public safety wireless network, and utility devices in the home that help consumers reduce their energy consumption. The FCC seeks to use its handle on the nation's wireless spectrum to speed up the smart grid's rollout.
Industry officials say the FCC is not trying to capture new regulatory turf. Its smart grid initiative has grown out of an unprecedented partnership with the Energy Department and the Federal Energy Regulatory Commission, administration officials say.
Clean energy a common goal
To mark that linkage, Energy Secretary Steven Chu and FERC Chairman Jon Wellinghoff joined FCC Chairman Julius Genachowski at an FCC open house for smart grid vendors last week. Their common goal, Genachowski said, was to provide consumers with vital data about their energy uses so that they join a clean energy movement.
"Never before in my experience in Washington have the FCC chairman and the Energy secretary formed an alliance of any kind," said former FCC Chairman Reed Hundt, who heads a green energy lobbying group. "It seems to me they have gotten off to a good partnership." FERC's involvement on this issue with FCC is also unprecedented.
The Internet powers clearly see the smart grid as a target of opportunity. "The smart grid is a function of two big industries. One is telecom; the other, electrical utilities," said Dan Reicher, director of climate change and energy initiatives at Google.
"Smart Grid policy should promote the development of hardware and software tools and programs as part of an open ecosystem to empower consumers to make informed choices about their energy use," said Google in a filing with the FCC. "Access to the Internet is an important component of the Smart Grid because it can support the transmission and exchange of consumer energy usage information, which will engage and empower consumers."
The communications piece of nationwide smart grid installation is huge. "Everybody is looking at ways to get a piece of the pie," said Michael Oldak, vice president and general counsel of the Utilities Telecom Council, a trade organization.
2 'very different' ways to get there
"You have two very different worlds," Reicher added. One is the open Internet, with broad federal oversight; the other, the electric utility industry, where state regulation has historically led. "Those two worlds have to be reconciled. How they work with each other is vital to the ultimate success of the smart grid," he said.
The administration has made national smart grid expansion a top technology and economic priority and is asking how state and federal laws and regulations must change to make it happen. The approach has support from many of the top telecom, appliance and information technology companies.
Following the release of the broadband plan, AT&T, Comcast, General Electric Co., Honeywell, Intel and Itron headed a long list of companies publicly endorsing the goal of giving consumers real-time feedback on their energy consumption.
But the public Internet solution wasn't the chosen path for utilities and their representatives that sent comments to the FCC's Broadband Plan. They want to operate their own data systems, while getting more wireless space that they would control.
Vermont Electric Power Co. and Vermont Electric Cooperative said their smart grid needs are satisfied by regional grid reliability policies. Commercial communications companies aren't up to the task. "A private communication network will better serve the requirements of the power grid and smart grid applications," they said.
CenterPoint Energy Houston Electric agreed. "We believe that a private exclusive licensed broadband wireless system meets the needs for reliable Smart Grid applications," wrote Donato Cortez, CenterPoint division vice president. Commercial wireless networks for smart grid data are not an option for the company, which is in the process of installing 2.2 million smart electric meters in its territory.
Commercial Internet channels are too vulnerable and weak to serve as backbones for mission-critical utility communications, some utility officials told the FCC.
The Utilities Telecom Council pointedly noted that the utility communications network, built to withstand hurricanes and equipped with backup power, fared far better the commercial wireless networks during and after Hurricane Katrina in 2005. Following Katrina, the FCC directed commercial carriers to add battery backup capability, "and tellingly the industry appealed those rules, rather than complying with them," UTC said to the FCC.
Battle lines not drawn -- yet
But the two industries are not in pitched battle at this point, some industry officials say. "There is a very positive response to bringing greater connectivity and IT to the grid," said one senior administration official. "At a high level, there is that agreement. The devil is in the details."
The smart grid movement is still too new to have triggered all-out competition between the industries, officials say.
"The new applications for the smart grid are going to continue to be developed. The demands on bandwidth continue to increase," said David Wollman, manager for electrical metrology groups at the National Institute of Standards and Technology (NIST). It's too early to see the endpoint in the evolution.
"To have a large smart grid deployment may take 30 years," said Ron Melton, director of the Pacific Northwest National Laboratory's smart grid project. "A lot may change in a time frame like that." The utility industry includes some 3,000 power suppliers serving the country's largest metropolitan areas and smallest hamlets, and there is no unified position among them, industry executives say.
"I don't think there is a divergence," said Bora Akyol, a member of Melton's team. "There are a lot of traditional telecoms working with utilities" on smart grid issues, he said.
The FCC plan "was quite a shock," according to one utility industry trade group official not authorized to speak for the organization. "There was concern across the board." Power companies are comfortable with state regulators, and their Washington attorneys know their way around the Federal Energy Regulatory Commission. However, the FCC and the telecom industry have something they need -- broadband space.
Utilities "desperately" require access to a dedicated wireless communications spectrum for the smart grid, the Utilities Telecom Council, says. The FCC heard the plea, proposing as one option in the Broadband Plan that utilities could use part of the public safety wireless network for critical smart grid transmissions. But the FCC's accommodation still stirs some anxiety. The UTC insists FCC should not mandate the use of this spectrum. That decision should be left up to the nation's utilities, which come in too many different shapes and sizes for one approach to fit all, the council said.
Will sticks replace carrots?
One industry official said, "It's not going to just happen. Policy is key. We need to develop regulatory models that will reassure state regulators" to adopt smart grid programs.
Hundt said the pivotal question is how access to the data on consumer electricity consumption and conservation is managed, whether it remains in the utilities' domain or is opened up on the Internet so that private companies could compete with utilities on energy services.
"The issue is access to information, which in some ways is the FCC's business," Hundt said.
An administration official involved in smart grid policy said the Energy Department has used "carrots" -- the smart grid grants awarded last year -- and the administration may seek more grant authority to keep the process going.
But the official said that incentives don't appear to be enough to spark a rapid, nationwide evolution of the smart grid. "I do think the utility industry needs sticks, as well, as motivation. They aren't incentivized to innovate."
If administration officials were looking for a stick, Rep. Ed Markey (D-Mass.) has offered one. Markey, chairman of the House Select Committee on Energy Independence and Global Warming, introduced the "Electricity Consumers' Right to Know Act" just the FCC Broadband Plan was released. It declares that consumers have a right to access information about their electricity usage and prices from their utilities in a "free, timely and convenient" manner that ensures privacy and data security.
Within six months of enactment, FERC would identify minimum standards that utilities and states could adopt to achieve this goal. If a utility had not met the minimum national standards within a year after the standards were issued, states could bring a civil suit to require compliance.
If state authorities did not act, any electricity consumer could bring a civil suit for the same purpose, although FERC could determine that a utility's policies met its standards. Although the bill has far to go to become law, it has stirred anxiety among some utility companies, officials said.
There are many more anxious and uncertain moments ahead for the smart grid, company and government officials agree.
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