Lawmakers, regulators and industry officials have declared that a "smart grid" is necessary for the nation's energy security and clean energy future, but the technology has yet to be adopted nationwide.

The Senate Energy and Natural Resources Committee will examine the smart grid dilemma in a hearing tomorrow with discussion on what exactly a smart grid is made up of, the benefits -- including jobs -- it creates and what barriers restrict its implementation.

"Clearly, everyone agrees we should do more," Chairman Jeff Bingaman (D-N.M.) said in an interview. "But we know we have to get down to the details of what does that mean." Bingaman said there is likely to be a smart grid component in upcoming energy legislation that he hopes to introduce and mark up in the next four to five weeks.

Despite including $11 billion for smart grid initiatives in the economic stimulus bill, lawmakers, businesses and the public alike are still absorbing what a digitized, intelligent grid could do for renewable energy, consumption behavior and information, and grid operation and efficiency.

Advocates for smart grid technology have been trying to get their voice heard for more than seven years and have welcomed the recent exposure and attention it has received as an enabler of renewable energy. But there is some worry about more near-term applications of smart grid technology getting lost within the transmission and renewable energy discussion.

"Smart grid is much more down on the distribution level that is much easier and cheaper to get to," said Steve Hauser, head of market development at GridPoint, an intelligent energy management company, and a president emeritus at the GridWise Alliance.

In a smart grid hearing last week in the House Select Committee on Energy Independence and Global Warming, Tom Casey, CEO of Current Group LLC -- a smart grid software and analysis company -- took more than five minutes to explain to lawmakers that the smart grid is more than meters seen in residences or devices in appliances.

"A smart grid, in many ways is like an Internet for electricity, a network of devices that are monitored and managed with real-time communications and computer intelligence," Casey said.

Frederick Butler, who is president of the National Association of Regulatory Utility Commissioners and will testify at tomorrow's hearing, is a strong advocate for the smart grid, especially for improving the communication system and other components on the distribution system before pushing smart meters into houses and buildings.

Within the $11 billion allotted for smart grid technology in the stimulus package is $4.5 billion for smart-technology matching grants. A majority of the grants, however, will likely go to smart metering programs since many of those projects are already before public utility commissions and can put the stimulus money to work and create jobs faster.

Barriers

Regulators and utilities have been hesitant to adopt smart grid technology since it is evolving and, like any computer software, can often require costly upgrades. It also currently lacks standards and industry-wide consistency -- all of which could be quite costly to consumers if companies choose technology that becomes obsolete.

Energy Secretary Steven Chu recently told a Center for American Progress clean energy forum that it is policies and standards, and not technology, that is holding up wider implementation of smart grid technology.

Bingaman is likely to ask representatives of the Federal Energy Regulatory Commission and the National Institute of Standards and Technology the status of creating smart grid standards for protocols and information management to achieve integration of different smart grid devices and systems as mandated in the 2007 energy bill.

NARUC and FERC also formed a "smart grid collaborative" one year ago to facilitate the implementation of the smart grid. The collaborative -- led by Butler and FERC Commissioner Suedeen Kelly -- aims to inform federal and state regulators about technological developments and other issues regarding the smart grid and what impacts there could be on consumers.

Smart grid technology also carries significant upfront costs that may end up saving companies and consumers in the long run but can create some barriers at the beginning of the project. Advocates of smart grid technology say Congress should consider more incentives for smart grid investment, including accelerated depreciation.

Copyright 2009 E&E Publishing. All Rights Reserved.