Societal Actors and Dominant Smart Grid Visions - Smart Grid (R) Evolution: Electric Power Struggles - page 89

other, the states, which have traditionally regulated the electric system (Eisen 2013 ). State
legislatures pass legislation outlining broad policy directions, state PUCs approve utility
plans and projects, and state energy and environmental offices often develop, evaluate, and
enforce programs and regulations. State and provincial legislatures also pass renewable
portfolio standards, energy efficiency legislation, and other programs to incentivize smart
grid developments. State or provincial energy offices often oversee resource production,
environmental compliance and energy efficiency programs. As discussed earlier, PUCs
regulate IOU investments and approve utility resource plans and smart grid investments.
In Ontario and Texas, the province or state has required utilities to install smart meters and
enabled them to recover the costs from these investments. However, other states have not
approved utility investments in smart grid and differences across jurisdictions are large.
While federal policies have been important for standard development and funding initial
smart grid activities in the United States, the locus of electricity system planning, control,
and regulation remains at the state level. In the U.S., several state governmental agencies
play a key role in smart grid development. About half of all states have specific legislation
or PUC action on smart grid development, mostly focused on meter installations (National
Conference of State Legislatures 2013 ) . In some states, such as Ohio, Vermont, West
Virginia, and Washington, state legislators have passed laws encouraging smart meter
and smart grid installation by requiring utilities to file plans including smart meters or
by authorizing PUCs to explore and investigate smart grid technology use (National
Conference of State Legislatures 2013 ). Public backlash against smart meter installation
from groups like “Stop Smart Meters!” has led some state legislatures or county boards to
pass legislation allowing customers to opt out of smart grid installation (more details on
public opposition to smart meters are provided in Chapter 5 ) .
In traditionally structured states, Public Utilities Commissioners play a crucial role
for smart grid development. Commissioners and their staff of lawyers, economists, and
engineers evaluate if an IOU's smart grid project provides enough consumer benefits to
qualify for rate-of-return cost recovery. They also determine rate structures like dynamic
pricing incentives, which affect project developers, utilities, and consumers. In addition to
seekingindividualprojectapproval,inmanystatesutilitiesalsosubmitlong-rangeresource
plans to PUCs. At public hearings, Commissioners solicit input from other state agencies,
nonprofits and the public, and approve or deny cost recovery for IOU smart grid projects.
Smart grid innovation also requires an evolution of the traditional PUC role. Historically,
the PUC mission has been to ensure adequate and reliable service and reasonable rates.
Now PUCs also ensure that utilities are following state legislative mandates (for renewable
power, energy efficiency, or smart grid initiatives) and other environmental regulations.