The Next 10 Years: What we can (and can't) expect from regulators and policymakers

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By: SGN Staff

Editor's note: This is the fifth installment of our The Next 10 Years series where industry insiders offer insights on smart grid issues and trends they expect to see in the coming decade. (The previous segments are linked at the end of today's story.) As always, we welcome your comments; please use the Talk Back form at the bottom of the page.

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By Doug Peeples

SGN News Editor

 

Lionel Chocron, general manager for Connected Energy Networks Business Unit at Cisco, sees in the years to come a recognition by regulators and policymakers (and utilities) that "intelligent, secure and connected energy networks are key to enabling the lower-carbon, energy independent economy we envision for ourselves."

 

And because of that optimism, he expects those stakeholders to find and implement the right regulatory changes needed to pave the way for cost-effective smart grid investment, encourage innovation in the electricity sector, bring consumers into the fold so they can make informed decisions about their energy use – and protect critical infrastructure.

 

While other insiders drew similar conclusions, the opposite view also was expressed: There will be a lot of talk but little action in terms of a significant change in regulatory focus.

Where will future regulatory changes come from? The states? The feds?

Echoing comments from others who addressed the issue, S&C Electric VP for Strategic Solutions Mike Edmonds sees regulatory change coming from both the state and federal levels – it's just that those changes will affect different areas. "Changes will occur at the state level and those changes will have the biggest impact on smart grid investments. Federal-level policy and regulations  will impact all types of generation – renewable, nuclear, coal and natural gas fired plants – and changes in the generation mix will drive the need for corresponding smart grid technologies that will improve grid efficiency, shave peak loads and integrate intermittent energy sources."

 

Others noted that neither the states nor the federal government can accomplish the needed changes on their own, and that it will take an intensively collaborative effort between them and other major stakeholders.

 

The costs of regulatory compliance

We asked our execs if they see changes coming in the amount of time and money they invest in compliance, and what shape those changes would take. It wasn't intended as a trick question but in hindsight, it does sound like one. Most of the responses to questions about regulatory issues were from vendors and in many instances strikingly similar.

 

Don Rickey, SVP for Infrastructure Business at Schneider Electric, expressed the view of many: "As a vendor, we would expect to invest as appropriate to see that our products and services are compatible with the regulatory requirements of our customers. As the industry moves toward more open standards support and greater interactivity, this necessarily would increase investments made in this area." Others specified that further development of cybersecurity standards in particular would drive compliance investments.

 

And overall...

We certainly didn't expect unanimity in their responses to questions about the future of regulation, and we didn't get it. But we did get a range of informed insights on what to expect. Sensus CEO and President Peter Mainz provided an overview. While he said he expects the U.S. regulatory focus to remain much the same as it is now, he does not anticipate the federal government to have a lot of impact on smart grid.

 

"On the federal level in the United States there will be a continued focus on the need to deploy smart grid technology driven in part by events such as the Hurricane Sandy disaster and the associated impact of widespread and prolonged power interruptions. However, while there will be a continued focus we don't anticipate the federal government to have a meaningful impact on smart grid deployment as another round of stimulus funding is likely not in the cards given the current emphasis on deficit reduction.

 

"We believe regulatory bodies in countries outside North America will play a pivotal role in dictating the pace of smart grid deployment in their respective countries. Brazil is an example of a market where this is already evident."

 

More from SGN's The Next 10 Years series…

The Next 10 Years: Maybe customer engagement isn't so dang important

Empowered "digital natives" become a force to reckon with

Silver Spring exec insists we need to go faster

Where we've come from (and how it shapes where we'll go next)