[Federal Register Volume 74, Number 97 (Thursday, May 21, 2009)]
[Proposed Rules]
[Pages 23810-23811]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-12029]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Chapter I
[Docket No. PL09-4-000]
Smart Grid Policy; Notice Requesting Supplemental Comments
Issued May 19, 2009.
AGENCY: Federal Energy Regulatory Commission.
ACTION: Request for supplemental comments.
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SUMMARY: On March 19, 2009, the Federal Energy Regulatory Commission
(Commission) issued a Proposed Policy Statement and Action Plan
(Proposed Policy Statement) that, among other things, proposed an
interim rate policy to encourage the development of smart grid systems.
In this notice, the Commission seeks supplemental comments regarding
rate recovery for certain smart grid investments.
DATES: Comments are due May 28, 2009.
FOR FURTHER INFORMATION CONTACT:
Ray Palmer (Technical Information), Office of Energy Policy and
Innovation, Federal Energy Regulatory Commission, 888 First Street,
NE., Washington, DC 20426, (202) 502-6569.
Elizabeth Arnold (Legal Information), Office of the General Counsel,
Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426, (202) 502-8818.
SUPPLEMENTARY INFORMATION:
1. On March 19, 2009, the Federal Energy Regulatory Commission
(Commission) issued a Proposed Policy Statement and Action Plan
(Proposed Policy Statement) that, among other things, proposed an
interim rate policy to encourage the development of Smart Grid
systems.\1\ Subsequent to the Commission's issuance of the Proposed
Policy Statement, the U.S. Department of Energy (Department) announced
two Smart Grid funding opportunities to be offered by the Department
that may supply up to 50 percent of the funding for certain Smart Grid
projects. In addition, the Department plans to require applicants to
identify the source of non-Department funds, along with some evidence
as to the certainty of these funds. Given that applicants for these
programs might include jurisdictional public utilities that seek rate
recovery through FERC-jurisdictional rates for the non-Department
portion of funds for transmission-related projects, the Commission
seeks supplemental comments on this matter.
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\1\ Smart Grid Policy, 126 FERC ] 61,253 (2009). As the Proposed
Policy Statement described, Smart Grid advancements will apply
digital technologies to the electric transmission system and enable
real-time coordination of information from various resources to
bring new efficiencies to the grid. Id. P 1.
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I. Background
2. In the Energy Independence and Security Act of 2007 (EISA),\2\
Congress enacted a number of provisions related to Smart Grid. Section
1301 of the EISA states that it is the policy of the United States to
support the modernization of the Nation's electricity transmission and
distribution system to maintain a reliable and secure electricity
infrastructure that can meet future demand growth and to achieve each
of several goals and characteristics, which together characterize a
Smart Grid.\3\ EISA authorizes the Department to carry out two separate
funding programs for Smart Grid projects: (1) Providing up to 50
percent of the cost of certain demonstration projects, as described in
section 1304; \4\ and (2) providing federal matching funds for Smart
Grid investment costs, as described in section 1306.\5\ EISA also
directed the development of a framework of protocols and standards to
achieve interoperability of Smart Grid devices and systems, which was
described in detail in the Proposed Policy Statement, and in which the
Commission plays a role.\6\
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\2\ Public Law No. 110-140, 121 Stat. 1492 (2007).
\3\ EISA sec. 1301, to be codified at 15 U.S.C. 17381.
\4\ To be codified at 42 U.S.C. 17384, as amended by the
American Recovery and Reinvestment Act of 2009, Public Law No. 111-
5, Title IV, Subpart A (ARRA).
\5\ To be codified at 42 U.S.C. 17386, as amended by the ARRA.
\6\ See Proposed Policy Statement, 126 FERC ] 61,253 at P 7-8.
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3. In the Proposed Policy Statement, the Commission proposed an
interim rate policy for Smart Grid investments, intended to encourage
investment in technologies that advance efficiency, security,
reliability and interoperability. Specifically, the Commission proposed
to accept single-issue rate filings submitted by public utilities under
section 205 of the Federal Power Act \7\ to recover the costs of Smart
Grid projects involving jurisdictional facilities, provided that
certain showings are made.\8\ The Commission specifically noted that,
``[w]e would also consider applying these rate treatments to the
portion of a smart grid pilot or demonstration project's cost that is
not already paid for by Department of Energy funds, such as those
authorized by EISA sections 1304 and 1306.'' \9\
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\7\ 16 U.S.C. 824d.
\8\ Proposed Policy Statement, 126 FERC ] 61,253 at P 46. The
Commission also discussed other rate treatments. Id. P 51-52.
\9\ Id. P 52 (footnote omitted).
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4. Subsequent to the Commission's issuance of the Proposed Policy
Statement, the Department released two documents relative to
forthcoming solicitations for applications for Smart Grid funding; one
of these solicitations was authorized by EISA section 1304, and one
authorized by EISA section 1306.\10\
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\10\ For the section 1304 program, the Department's National
Energy Technology Laboratory issued a Draft Funding Opportunity
Announcement numbered DE-FOA-0000036 on April 16, 2009 (Draft
Funding Opportunity Announcement). For the section 1306 program, the
Department's Office of Energy Delivery and Electric Reliability
issued a Notice of Intent to Issue a Funding Opportunity
Announcement numbered DE-FOA-0000058A on April 16, 2009 (Notice of
Intent).
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5. In the Notice of Intent, electric utilities are specifically
identified as a category of eligible bidders. While the Notice of
Intent does not specifically require that an applying electric utility
get approval from a regulatory commission for non-Federal funds, the
document could be read as indicating a preference for such
approval.\11\
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\11\ The Notice of Intent states that the evaluation of
proposals will include ``* * * the likelihood that the proposed work
can be accomplished * * * with additional merit given to
applications that * * * [o]ffer the greatest extent of institutional
and organizational commitment with consideration given to: * * *
[r]equired approvals from regulatory organizations.'' Notice of
Intent at 12-13.
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6. The Draft Funding Opportunity Announcement does not explicitly
address regulatory approvals, but does instruct applicants to submit a
funding plan that identifies all sources of project funds, and directs
applicants to include a commitment letter from third parties providing
a specific minimum dollar amount of cost sharing.\12\ For public
utilities that plan to match the Federal funds with charges to
ratepayers, it is possible that public utilities may seek to obtain an
order addressing rate recovery from this Commission for charges subject
to this Commission's jurisdiction.
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\12\ Draft Funding Opportunity Announcement at 32-33.
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II. Request for Comments
7. Given the requirements for potential applications by public
utilities
[[Page 23811]]
to the two Department programs referenced above, the Commission seeks
comments on how it should address requests for rate recovery that may
be necessary for public utilities to qualify for awards under these
programs. We also seek comment on whether some form of conditional
approval could be useful to public utility applicants with respect to
jurisdictional Smart Grid facilities. The Commission invites comments
on whether the Commission, consistent with its obligations to ensure
just and reasonable rates under the Federal Power Act (FPA), should
adopt processes for public utilities that may apply for funding for
jurisdictional Smart Grid facilities through the Department's Smart
Grid funding opportunities.
III. Document Availability
8. In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
Internet through FERC's Home Page (http://www.ferc.gov) and in FERC's
Public Reference Room during normal business hours (8:30 a.m. to 5 p.m.
Eastern time) at 888 First Street, NE., Room 2A, Washington, DC 20426.
9. From FERC's Home Page on the Internet, this information is
available on eLibrary. The full text of this document is available on
eLibrary in PDF and Microsoft Word format for viewing, printing, and/or
downloading. To access this document in eLibrary, type the docket
number excluding the last three digits of this document in the docket
number field.
10. User assistance is available for eLibrary and the FERC's Web
site during normal business hours from FERC Online Support at 202-502-
6652 (toll free at 1-866-208-3676) or e-mail at
[email protected], or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. E-mail the Public Reference Room at
[email protected].
By the Commission.
Kimberly D. Bose,
Secretary.
[FR Doc. E9-12029 Filed 5-20-09; 8:45 am]
BILLING CODE 6717-01-P