Troutman Sanders LLP: FERC Finds Insufficient Consensus to Issue Rulemaking on Smart Grid

On July 19, 2011, FERC issued an order on Smart Grid Interoperability Standards, and found insufficient consensus to institute a rulemaking proceeding to adopt the five families of standards identified by the National Institute of Standards and Technology ("NIST") as ready for review by the Commission.  Section 1305(d) of the Energy Independence and Security Act ("EISA") of 2007 directed the Commission to institute a rulemaking proceeding to implement standards and protocols to ensure smart grid functionality and interoperability in transmission of electric power and in electricity markets.  The EISA directed the NIST to coordinate smart-grid development and to develop a framework of standards.  After the completion of this process, when the Commission has found NIST's work has provided "sufficient consensus" on smart grid interoperability standards, the Commission is supposed to institute a rulemaking proceeding. 

In August 2009, NIST presented a plan to accelerate the development of smart grid interoperability standards.  By January 2010, NIST released it framework titled: Framework and Roadmap for Smart Grid Interoperability Standards, Release 1.0.  This plan identified several applicable standards for the ongoing development of the smart grid.  On October 6, 2010, NIST wrote a letter to the commission explaining they had concluded their process and had identified five families of standards that were ready for the Commission to consider. 

In response to NIST's October 6, 2010 letter, the Commission held a joint technical conference on November 14, 2010, in Atlanta, Georgia, at the National Association of Regulatory Utility Commissioners.  At this technical conference, panelists raised various concerns about whether there was sufficient consensus to adopt NIST's five families of standards.  In response, FERC held an additional technical conference on January 31, 2011, in Washington, D.C.  In response to the discussion at the January technical conference, FERC issued a Supplemental Notice on February 16, 2011, asking for comments on additional questions concerning the impact of adopting the standards under the EISA and how FERC could be able to judge whether sufficient consensus had been reached.  The July 19, 2011 Order represents the culmination of the Commission's efforts and indicates there is not sufficient consensus to adopt the five families of standards.  The Commission encouraged utilities, smart grid product manufacturers, regulators, and other smart grid stakeholder to actively participate in the NIST interoperability framework process to work on the development of the smart grid and interoperability standards. 

A copy of FERC's order is available here

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