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Ky. regulators decide against adopting federal smart grid standards

Kentucky regulators have chosen not to implement uniformfederal standards that would regulate investments in smart grid infrastructureand the types of information given to customers through smart grid technology.

Following a review of smart grid-related issues andtechnology, the Kentucky Public Service Commission also said it will allowutilities considerable flexibility on how to deploy advanced smart grid systems.

In an orderissued April 13, the PSC found that neither the Energy Independence andSecurity Act of 2007's Smart Grid Investment Standard nor the act's Smart GridInformation Standard should be adopted. The EISA 2007 Smart GridInformation Standard requires electric suppliers to provide direct access totime-based wholesale and retail price information, information on sources ofgeneration, including associated greenhouse gas emissions, and other relatedinformation to electricity purchasers. It also requires utilities to giveconsumers access to their own usage information.

The PSC said despite not adopting the standard, utilitieswill be obligated to grant customers access to information on their energy useand tariff rate. "At a minimum, customers should be able to accesshistorical information regarding their electricity or natural gas usage,expressed in each utility's respective billing units, as well as the customers'current applicable tariff rate," the order said. "Additionally, theutilities should endeavor to provide customers this information in as close toreal time as practical."

Under the EISA 2007 Smart Grid Investment Standard, statescan require electric utilities to show they considered investing in smart gridtechnologies before investing in "non-advanced grid technologies,"according to the order. It also requires states to consider rate recoveryrelated to smart grid technology.

The PSC said in the order that it is not "practical foreach jurisdictional utility to be required to obtain a CPCN [certificate ofpublic convenience and necessity] for every Smart Grid or meter investmentdecision." But the utilities should develop internal procedures andpolicies pertaining to smart grid investments, the PSC said.

Electric utilities and major natural gas utilities in thestate will have 60 days to create internal cybersecurity procedures as well asprocedures to protect customer privacy and then submit those plans to the PSC.

Additionally, the PSC said in the order that within 60 days,jurisdictional electrical utilities, which include subsidiaryDuke Energy Kentucky Inc.,PPL Corp.subsidiaries Kentucky UtilitiesCo. and LouisvilleGas and Electric Co., and a handful of others, must developinternal procedures on smart grid investments and will be required to identifythe investments in future rate cases.

"Utility investments in Smart Grid and unrecovered bookvalue of replaced equipment shall be treated like any other investment orexpense, and afforded full rate recovery following a request for recovery,discovery, and Commission approval, if reasonable," the PSC said in theorder. Additionally, the PSC encouraged jurisdictional electricutilities to create dynamic pricing programs for customers but decided againstmaking the programs a requirement.

"Smart grid technologies are central to theimplementation of what is known as 'dynamic pricing,' which bases the cost ofelectricity on the time of usage and overall electric demand," the PSCsaid in a news release. "Pricing can be based on predetermined schedulesor can vary with demand in real time."

The order also said that provisions allowing customers toopt out of smart meter deployments would be considered as they are proposed byindividual utilities.