Panel: Government & Industry Role in Smart Grid Development
Garry Brown
Chair, New York State Public Service Commission
April 22, 2009
The electric transmission and distribution grid will soon be integrated with two-way
communications systems and sensors. This will enable utilities to optimize grid performance in
real-time. It will provide incentives to consumers for reducing energy consumption through
demand response and it will help integrate renewable energy resources into grid operations.
America’s global competitiveness and quality of life depend upon plentiful, reliable electric
power. Our nation is increasingly held back by an outdated power delivery infrastructure. We
rely on old technology to maintain our electric grid. Consider some of the economic
consequences of power losses:
Power interruptions and disturbances cost the U.S. electricity consumer at least $79 billion per
year, a recent rolling blackout caused an estimated $75 million in losses in Silicon Valley alone;
When the Chicago Board of Trade lost power for an hour during the summer of 2000, trades
worth $20 trillion could not be executed.
The Federal government is playing a key role in stimulating the development of the Smart Grid;
and states, including New York, are turning the concept into a reality.
New York Governor David Paterson is very supportive of the development of a Smart Grid. He
wants to accelerate the implementation of advanced metering policies, which will allow
consumers to remotely control their electric use, provide time sensitive monitoring of electricity
use, and use price signals to increase consumer awareness of electricity use and reduce peak
electricity consumption.
One aspect of Smart Grid, Advance Metering Infrastructure, or AMI is becoming of increasing
interest to many stakeholders, including utilities, regulators, energy markets, and a society
concerned about conserving energy and responding to global warming.
AMI technologies, rapidly overtaking the earlier Automated Meter Reading or AMR
technologies, are being developed by many companies, with portions being developed by
metering manufacturers, communications providers, and back-office IT providers.
There are several AMI initiatives and Smart Grid initiatives underway in New York as a result of
recent Commission decisions.
On April 17, the large electric utilities filed requests with the PSC as part of the utilities' effort to
potentially receive federal stimulus money related to advanced metering and Smart Grid
development. The utilities need PSC-approval to meet matching requirements to receive the
federal money. The projects that are proposed are valued in the hundreds of millions of dollars.
Regulators are keenly interested in ensuring that expected investments in the Smart Grid over the
next decade — estimated in the billions of dollars — will not lead to a decrease in the safety and
reliability of our transmission and distribution system.
The Smart Grid will have a tremendous potential. It will allow utilities to regulate supply and
better control demand. Utilities will be able to reallocate electricity during times of crisis or peak
demand or prevent outages though proactive diagnosis of the entire grid and just a few individual
components. It will significantly improve system reliability. No longer will the utility have to roll
a truck to disconnect service at a residence or business. That could be done automatically.
There is understandable concern that a Smart Grid system be made safe from outside
interference, or hacking. Industry and government are working together to ensure this becomes a
reality.
For example, how can we be sure we can prevent unauthorized people from buying or otherwise
having access to AMI data? Marketing firms or competitors may wish to know how much energy
a consumer is using, or what a customer’s pattern of energy usage is, or other energy related
information.
Can we be sure that AMI communications networks will not allow unauthorized access to
information between customers on the same network? Customer interfaces such as through a
customer’s computer must also be protected against undetected changes, because they are often
conduits to critical customer equipment and systems.
How can we address the vulnerability of customer systems and “gateways” to incoming
tampering efforts? Smart meters will be located in very insecure locations since they can easily
be reached by the public. Therefore physical security or “walls” around the meter are
impractical. Since meters are on customer premises, attempts to tamper or vandalize cannot be
100 percent prevented. Will there be technology to detect such attempts – in real time?
How can we move forward in the development of Smart AMI Systems as part of Smart Grid
without compromising our security requirements? If we wait for security to be “built in” and not
“added on” how much will that slow us down?
Who will (or should be) be the final arbiter of what security is sufficient security? Cyber security
issues will continue to be an important consideration in the years ahead.
The North American Electric Reliability Corporation Critical Infrastructure Protection Standards
have specific things that electricity producers, system and transmission operators and other
system users must do to ensure the security of their systems and infrastructure, and this will
likely serve as a model for other industries.
Meanwhile, the National Institute of Standards and Technology is considering pushing ahead
with its Guide to Industrial Control Systems Security. Although it is only a guide, it could have
significant influence on security directions for industries that rely on industrial control systems.
Private sector software and hardware companies are also keenly involved in Smart Grid industry.
Electric grid stakeholders representing utilities, technology providers, researchers, policymakers,
and consumers are working together to define the functions of a smart grid.
Through regional meetings convened under the Modern Grid Strategy project of the National
Energy Technology Laboratory (NETL), these stakeholders have identified characteristics or
performance features of a smart grid, including self-healing from power disturbance events;
enabling active participation by consumers in demand response; operating resiliently against
physical and cyber attack; accommodating all generation and storage options; enabling new
products, services, and markets; and optimizing assets and operating efficiently.
The Department of Energy has brought together a Smart Grid stakeholder group that represents a
who’s who in industry and government.
Members include the Advanced Grid Applications Consortium, the Consortium for Electric
Reliability Technology Solutions, the Energy Future Coalition, New York State Energy Research
and Development Authority, Power Systems Engineering Research Center, the Rocky Mountain
Institute, and a host of others.
Moving toward creating a Smart Grid is warranted because of the benefits in reducing energy
consumption and reducing the environmental impact of energy production.
One top priority is to ensure a uniformity of protocols. Because there are hundreds of utilities
and dozens of control agencies we face the potential danger of piecemeal solutions. That is not
acceptable.
And of course, there are those people who say the technology is too dangerous and not worth the
risk. But that is not the answer. We have to ensure that our billions of dollars in investment will
be done soundly.
The Smart Grid will be a reality; therefore we must work to make sure it attains its lofty promise.