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The Federal Energy Regulatory Commission (FERC) has released the Smart Grid Policy Statement, which sets priorities for work on development of standards crucial to a reliable and smart grid.

Smart grid advancements will apply digital technologies to the grid, enabling two-way communications and real-time coordination of information from both generating plants and demand-side resources. This will improve the efficiency of the bulk-power system with the goal of achieving long-term savings for consumers, and it will help promote wider use of demand response and other activities that give consumers the tools they need to control electricity costs.

FERC'S Smart Grid Policy Statement closely tracks the proposed policy that was issued March 19. It sets priorities to guide the industry in the development of smart grid standards for achieving interoperability and functionality of smart grid systems and devices. It also sets out FERC policy for recovery of costs by utilities that act early to adopt smart grid technologies. More than 70 sets of comments from interested groups indicated broad support for the proposed policy.

The new policy adopts as a FERC priority the early development by the industry of smart grid standards to do the following:

- ensure the cybersecurity of the grid;

- provide two-way communications among regional market operators, utilities, service providers and consumers;

- ensure that power system operators have equipment that allows them to operate reliably by monitoring their own systems, as well as neighboring systems, that affect them; and

- coordinate the integration into the power system of emerging technologies such as renewable resources, demand-response resources, electricity-storage facilities and electric transportation systems.

The policy also provides for early adopters of smart grid technologies to recover smart grid costs if they demonstrate that those costs serve to protect cybersecurity and reliability of the electric system, and have the ability to be upgraded, among other requirements.

In addition, the policy statement also explains that by adopting these standards for smart grid technologies, FERC will not interfere with any state's ability to adopt whatever advanced metering or demand-response program it chooses.

In adopting this policy, FERC continues to abide by the Federal Power Act's jurisdictional boundaries between federal and state regulation of rates, terms and conditions of transmission service and sales of electricity.

The policy will take effect 60 days after publication in the Federal Register.

SOURCE: The Federal Energy Regulatory Commission

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