On May 18, 2009, the Department of Energy ("DOE"), in conjunction with the Department of Commerce, reported that significant progress has been made to expedite the development of a nationwide Smart Grid using funding under the American Recovery and Reinvestment Act of 2009[1] ("Stimulus Package Act"). The DOE announced that it plans to increase the maximum award size available under the Stimulus Package Act Smart Grid funding programs. The DOE initially allocated funds to these Smart Grid programs on April 15, earmarking $3.375 billion for a Smart Grid Investment Grant Program and an additional $615 million for Smart Grid Demonstration Projects. The DOE's latest announcement increases the size of grants the DOE will award under the two Smart Grid investment programs.
Additionally, the initial set of National Institute of Standards and Technology ("NIST")-recognized Smart Grid interoperability standards have been developed. The DOE plans to allocate the $10 million it received to support the development of interoperability standards under the Stimulus Package Act to NIST to help accelerate its efforts to coordinate these critical standards.
Stimulus Package Act Smart Grid Programs
The DOE announced that, based on feedback from the public and Smart Grid stakeholders, it will increase the maximum award available from $20 million to $200 million under the Stimulus Package Act's Smart Grid Investment Grant Program, and from $40 million to $100 million for Smart Grid Demonstration Projects.
The DOE still anticipates issuing the Funding Opportunity Announcement ("FOA") for the Smart Grid Investment Grant Program on June 17, 2009. The DOE will permit applicants to submit applications on or before three separate due dates with the complete obligation of funds to awards accomplished by September 30, 2010. The three anticipated application due dates are: July 29, 2009; December 2, 2009; and March 31, 2010. For Smart Grid Demonstration Projects, the DOE initially issued a draft FOA that was open for public comment through May 6. The DOE will consider the comments submitted and plans to issue a final FOA shortly.
The increase in award size for Smart Grid investment programs will amplify the new sources of funding provided by the Stimulus Package Act to help implement technologies aimed at transforming how electricity providers operate their systems, offer options for increased energy storage and accelerate the integration of renewable energy sources with the electrical grid. These investments will help implement necessary digital upgrades on the electric grid, making it more efficient, resilient and secure. They should also help make the grid capable of integrating renewable supplies effectively, fostering and supporting the plug in electric and hybrid vehicles industries, and promoting energy management technologies, with the ultimate goal of reducing U.S. dependence on foreign oil. As such, the recent increase in this program funding is of significant import to every sector of the U.S. electric power industry.
Initial Smart Grid Interoperability Standards Framework
The DOE also announced that an initial batch of 16 NIST-recognized Smart Grid interoperability standards have been developed under Phase I of NIST's three-phase plan to achieve Smart Grid interoperability. These standards are summarized below: see table
These standards were developed at a May 18, 2009 meeting, designed to encourage industry executives to work to expedite the adoption of Smart Grid standards. This initial set of standards represents Phase I of NIST's three-phase Smart Grid plan, and will help ensure that software and hardware components from different vendors will work together seamlessly, while securing the Smart Grid against disruptions. The three phases of NIST's plan are as follows:
- Engage utilities, equipment suppliers, consumers, standards developers and other stakeholders to achieve consensus on Smart Grid standards, to deliver the following by early fall 2009:
- the Smart Grid architecture;
- priorities for interoperability and cyber security standards, and an initial set of standards to support implementation; and
- plans to meet remaining standards;
- Launch a formal partnership to facilitate the development of additional standards to address remaining gaps and integrate new technologies;
- Develop a plan for testing and certification to ensure that Smart Grid equipment and systems conform to standards for security and interoperability.
The DOE also announced plans to allocate the $10 million it received to support the development of interoperability standards under the Stimulus Package Act to NIST to help accelerate its Smart Grid plan.
Public comments will be accepted for 30 days following the upcoming publication of the Phase I standards in the Federal Register.
Additional details regarding implementation of Smart Grid funding in the Stimulus Package Act will be forthcoming in future guidance to be posted by the DOE to www.recovery.gov and www.energy.gov/recovery.
The increased Smart Grid funding via the Stimulus Package Act that will be made available to electric utilities and manufacturers of batteries and other Smart Grid components, and the Smart Grid interoperability standards framework that is currently under development, can create critical opportunities for your company. Increased Smart Grid funding can also enhance your operations and provide excellent joint venture opportunities between power providers and distributors and Smart Grid development and load balancing and energy storage companies. For further information on the program and for assistance in applying for these grants, please contact any of the attorneys listed in the sidebar.
