2. Procedural History
The Commission initiated this rulemaking to "consider setting policies, standards and protocols to guide the development of a Smart Grid system and facilitate integration of new technologies such as distributed generation, storage, demand-side technologies and electric vehicles."6
The Order Instituting Rulemaking (OIR) that initiated this proceeding further noted that as a consequence of amendments to the Public Utilities Regulatory Policies Act (PURPA) contained in the EISA, PURPA § 111(d)(16) now requires states "to consider imposing certain requirements and authorizing certain expenditures"7 pertaining to the Smart Grid.8
After the issuance of the OIR, the Recovery Act appropriated $4.5 billion "to modernize the electric grid" through activities including the Smart Grid programs authorized by EISA.9 The Recovery Act also amended several EISA provisions pertaining to the Smart Grid.10 For example, the Recovery Act increased the percentage of federal support for the EISA § 1306 program from 20% to up to 50%. The amendments broadened the potential recipients of EISA § 1304 funding to include electric utilities and "other parties." The Recovery Act also added a requirement that funded projects must use "open protocols and standards (including Internet-based protocols and standards) if available and appropriate."11
Pursuant to the OIR, parties filed opening comments on February 9, 2009,12 with reply comments filed on March 9, 2009.13
On March 3, 2009, the Administrative Law Judge (ALJ) issued a ruling scheduling a prehearing conference (PHC) and a workshop to address the Smart Grid funding available through the Recovery Act.
On March 19, 2009, the Federal Energy Regulatory Commission (FERC) issued a Proposed Policy Statement and Action Plan.14 FERC stated that:
The purpose of the policy statement [that FERC] ultimately adopts will be to prioritize the development of key interoperability standards, provide guidance to the electric industry regarding the need for full cybersecurity for Smart Grid projects, and provide an interim rate policy under which jurisdictional public utilities may seek to recover the costs of Smart Grid deployments before relevant standards are adopted through a [FERC] rulemaking.15
On March 27, 2009, a PHC took place at the Commission offices in San Francisco to take appearances in the proceeding, to refine the scope of the proceeding, and to develop a procedural timetable for the management of this proceeding. At the PHC, the assigned Commissioner indicated her preferences for the management of the proceeding via two decisions, one addressing the issues raised by the Recovery Act, and one addressing the many other issues set forth in the OIR and by EISA.
On May 1, 2009, a Scoping Memo and Ruling of Assigned Commissioner (Scoping Memo) set the scope and procedural schedule for resolving the issues set out in the OIR. In addition, the Scoping Memo stated:
The scope of this proceeding shall also include those issues pertaining to Smart Grid affected by the Recovery Act legislation. A separate ruling will propose a reporting process and will address how this Commission will fulfill its responsibilities concerning an investor-owned utility's contributions of ratepayer-backed funds to Recovery Act activities.16
On May 29, 2009, the assigned Commissioner issued an Assigned Commissioner's Ruling (ACR) amending the scope of the proceeding.17 The ACR noted that "[t]he Smart Grid funding provided by the Recovery Act creates a unique opportunity for California to expand and accelerate its activities to modernize the state's electric infrastructure, using some federal dollars."18 To take advantage of this opportunity, the ACR amended the scope of the rulemaking and solicited comments pertaining to Recovery Act issues.
On June 8, 2009, the DRA filed an Appeal of Categorization, arguing that because of the amended scope, the proceeding should be recategorized as "ratemaking." Responses to DRA's appeal were submitted by CFC, PG&E, CAISO and SCE by June 12, 2009. On June 18, 2009, the Commission adopted Decision (D.) 09-06-043, which denied the appeal of categorization.
On June 25, 2009, United States Department of Energy (DOE) issued a final Funding Opportunity Announcement (FOA) pertaining to the Smart Grid Investment Grant Program and a final FOA pertaining to the Smart Grid Demonstrations Program. On June 26, 2009, DOE issued "Frequently Asked Questions" documents pertaining to the two programs.19 On July 8, 2009, an ALJ Ruling took official notice of the DOE documents and attached them as reference for the parties in this proceeding.20 On July 16, 2009 FERC adopted a Smart Grid Policy Statement.21
On July 21, 2009, a proposed decision (PD) to create a review process for projects submitted to DOE for funding was mailed. On September 10, 2009, the Commission adopted D.09-09-029, which created a process for reviewing the projects developed by Investor Owned Utilities (IOUs) to seek Recovery Act funds.
Concerning the Smart Grid issues identified in EISA and in the OIR in this proceeding, the Commission held a Symposium with invited experts on April 21, 2009.
Subsequently, the Commission held a series of workshops addressing topics by issue area. On May 27, 2009, a workshop addressed consumer issues, including privacy, that are raised by the deployment of a Smart Grid. On June 5, 2009, a workshop addressed technical and policy issues concerning the Smart Grid and its affects on the distribution networks of electric utilities. On June 28, a workshop addressed the technical and policy issues concerning the Smart Grid and its affects on the transmission network for electric power and energy storage within California. On July 15, 2009, a Smart Grid workshop addressed technical and policy issues that the deployment of plug-in electric vehicles will pose for California electric networks. On July 31, 2009, a workshop addressed the best regulatory approach for conducting regulatory reviews of Smart Grid infrastructure investments that will permit a thorough yet timely review.
On September 28, 2009, a Joint Ruling of the assigned Commissioner and ALJ (Joint Ruling) sought formal comments and replies on policies and findings pertaining to EISA.
During the period of this proceeding, Smart Grid policies have also been the subject of California legislation. Governor Schwarzenegger, on October 11, 2009, signed Senate Bill (SB) 17 (Padilla) into law.22
On October 26, 2009, DRA, Californians for Renewable Energy (CARE), CFC, TURN, CFC and TURN (filing jointly), Google, CEERT, CLECA, SCE, PG&E, SDG&E, Mountain Utilities, CASMU, Wal-Mart, Pacificorp, and Tendril Networks (Tendril) filed opening comments. Tendril also filed a motion to become a party to this proceeding.23
On November 2, 2009, TURN, DRA, CFC, PG&E, SCE and North American Power Partners (NAPP) filed reply comments. NAPP also filed a motion to become a party to this proceeding.24
6 OIR at 2.
7 OIR at 8.
8 The American Recovery and Reinvestment Act of 2009 (Recovery Act), Pub. L. 111-5 (H.R. 1), 123 Stat. 115 at Division A, Title IV, Sec. 408 redesignated PURPA § 111(d)(16) as § 111(d)(18).
9 The Recovery Act, Section 2, Division A, Title IV, Energy and Water Development states: "For an additional amount for `Electricity Delivery and Energy Reliability,' $4,500,000,000: Provided, That funds shall be available for expenses necessary for electricity delivery and energy reliability activities to modernize the electric grid, to include demand responsive equipment, enhance security and reliability of the energy infrastructure, energy storage research, development, demonstration and deployment, and facilitate recovery from disruptions to the energy supply, and for implementation of programs authorized under title XIII of the Energy Independence and Security Act of 2007 (EISA) (42 U.S.C. 17381 et seq.) ... "
10 The Recovery Act at Division A, Title IV.
11 The Recovery Act § 405.
12 Comments were filed by Current Group, LLC (Current), California Energy Storage Alliance (CESA), the California Independent System Operator Corporation (CAISO), NRG Energy Inc. and Padoma Wind Power LLC (filing jointly), the Division of Ratepayer Advocates (DRA), the Consumer Federation of California (CFC), Sierra Pacific, SDG&E, Technology Network (TechNet), CPower, Inc., the California Association of Small and Multi-Jurisdictional Utilities (CASMU), Enspiria Solutions, Inc. (Enspiria), The Utility Reform Network (TURN), Western Power Trading Forum (WPTF), Center for Energy Efficiency and Renewable Technologies (CEERT), SCE, Sam's West, Inc. and Wal-Mart Stores, Inc., (filing jointly) (Wal-Mart), PG&E, PacifiCorp, Google Inc. (Google), and California Large Energy Consumers Association (CLECA).
13 Reply Comments were filed by SCE, PG&E, CAISO, TURN, Current, Community Environmental Council, CFC, SDG&E, Green Power Institute, CEERT, and DRA.
14 Smart Grid Policy, 126 FERC ¶ 61, 253, Proposed Policy Statement & Action Plan (March 19, 2009).
15 Id. at 3.
16 Scoping Memo at 7-8.
17 Assigned Commissioner's Ruling Amending the Scope and Schedule of Proceeding to Address Policy Issues Pertaining to Smart Grid Funding Appropriated in the American Recovery and Reinvestment Act of 2009 (ACR), May 29, 2009.
18 Id. at 2.
19 U.S. Department of Energy, Financial Assistance Funding Opportunity Announcement: Smart Grid Investment Grant Program (DE-FOA-0000058) Frequently Asked Questions, June 26, 2009; and U.S. Department of Energy, Financial Assistance Funding Opportunity Announcement: Smart Grid Demonstration Program (DE-FOA-0000036), Frequently Asked Questions, June 26, 2009.
20 Administrative Law Judge's Ruling Taking Official Notice of Certain Department of Energy Publications Associated with the Recovery Act, July 8, 2009.
21 Smart Grid Policy, 128 FERC ¶ 61, 060, July 16, 2009.
22 SB 17 (Padilla) (Chapter 327, Statutes of 2009).
23 The Tendril motion is granted below.
24 The NAPP motion is granted below.
