The smart grid: a smart solution to a complicated problem.

• Author: Graab, Alison C.

TABLE OF CONTENTS INTRODUCTION I. SMART GRID A. What Is the Smart Grid? 1. Reliability 2. Oil Dependence B. Delegation of Authority To Implement the Smart Grid II. INTERPRETING THE PURPOSE OF THE ENERGY INDEPENDENCE AND SECURITY ACT OF 2007 A. Reliability B. Oil Dependence 1. Statutory Interpretation of the EISA 2. Evolution of the Nation's Energy Policy 3. Congressional Records for the EPAct of 2005 and the EISA of 2007 a. Competition b. Political Instability 4. Controversy Surrounding the EISA of 2007 III. IMPLEMENTING THE SMART GRID A. Current Implementation of the Smart Grid B. The Smart Grid System Report CONCLUSION INTRODUCTION

On August 14, 2003, several power lines in northern Ohio shut down, causing the "largest power loss in North American history." (1) Normally, the loss of several lines would not be disastrous because operators at local utilities would be notified and would reroute the electricity. (2) This time, however, the local utility company was not notified of the failure and the functioning power lines became overtaxed. (3) Eventually, multiple power plants shut down and "[w]ithin eight minutes 50 million people across eight states and two Canadian provinces had been blacked out." (4)

Unfortunately, the Midwest's 2003 blackout (Midwestern Blackout) is indicative of a nationwide problem that continues to worsen. (5) The United States delivers electricity to consumers over a transmission system (6) that has not been updated since the 1970s. (7) In addition, present "electricity flows ... are greater in size and in different directions than those that were anticipated when the transmission system was first designed, causing added strain on an outdated system." (8)

In response, Congress has authorized federal agencies to improve the electricity grid's reliability by modernizing the transmission system. (9) This modernization is referred to as the Smart Grid. (10) The Smart Grid utilizes computer technology to prevent blackouts and provide more reliable electricity. (11) Congress delegated authority to federal agencies to implement the Smart Grid in the Energy Independence and Security Act of 2007 (EISA). (12)

This Note argues that, based on the language of the EISA, the history of U.S. energy policy, and statements made by testifiers before Congress and the Chairman of the Committee on Foreign Relations, Congress did not intend for the Smart Grid to address solely the reliability of the grid. Rather, Congress intended for the Smart Grid to provide a solution to the nation's growing energy concerns, particularly regarding oil consumption. (13) In effect, Congress had dual goals for the Smart Grid: create a more reliable, efficient transmission system and assist with decreasing the nation's oil consumption. (14) So far, the grid's reliability has significantly improved and considerable attention has been given to addressing the nation's oil dependence. (15) This Note argues that the Smart Grid's ability to reduce U.S. oil consumption should continue to be a key priority of federal policymaking because decreasing the nation's dependence on oil was one of Congress's principal goals in enacting the EISA.

Part I of this Note defines the Smart Grid and explains its development. Part II discusses the history of the EISA, as well as Congress's intent in passing the Act. Part III describes the current status of the Smart Grid's implementation. This Note concludes by reiterating the importance of using the Smart Grid to decrease U.S. dependence on oil and suggests that encouraging greater investment in Smart Grid technologies that accommodate renewable energy sources and electric vehicles would further the dual goals of Title XIII--the section of the EISA that defines the Smart Grid and sets forth guidelines for modernization of the electricity grid.

1. SMART GRID

   1. What Is the Smart Grid?

      In Title XIII of the EISA, Congress called for modernization of the electricity grid to address some of the grid's systemic problems. (16) This modernization of the transmission system is referred to as the Smart Grid. (17) The Smart Grid is a transmission grid that integrates sophisticated sensing and monitoring technology and "cutting-edge power engineering," (18) essentially superimposing the Internet on the grid. (19) As a result of these technological changes, the Smart Grid differs in several ways from the current transmission grid. The Smart Grid wastes less electricity because it quickly alleviates problems like congestion and other disturbances, which prevents electricity loss. (20) The Smart Grid also is capable of connecting new generators to the transmission system, which allows greater incorporation of renewable energy sources. (21) In fact, the Smart Grid even has the potential to accommodate homeowners who want to sell energy that they produce from renewable energy sources to utilities. (22)

      1. Reliability

         The EISA called for the Smart Grid to improve the transmission system's reliability. (23) Increased reliability refers to preventing blackouts and transmission failures like those that initiated the Midwestern Blackout. (24) There are two main causes of blackouts--disruptions in the grid and congestion (25)--and the Smart Grid incorporates technology that mitigates both. (26) First, the Smart Grid decreases the negative effects of disruptions in the grid by instantaneously identifying problems and rerouting electricity until the problems are resolved. (27) This feature of the Smart Grid is referred to as "self healing." (28) To identify disruptions more quickly, the Smart Grid utilizes technology that allows generators, consumers, and grid controllers to communicate with one another. (29) With improved communication, grid controllers are able to monitor the flow of electricity in real time, spot disturbances in the transmission of electricity, isolate problem areas, and prevent problem areas from disabling the entire grid. (30)

         The Smart Grid also alleviates congestion by "allow[ing] customers and the utility to better manage electricity demand." (31) With the Smart Grid, consumers can monitor their electricity consumption using a "smart meter." (32) Smart meters are similar to meters currently used by electric companies to track consumers' electricity use, and are installed on the outside of a home or apartment complex. (33) Smart meters are more advanced than traditional meters, however, because they "can track energy use daily, hourly, monthly and even instantaneously, and send that data to power companies." (34) When demand is particularly high, smart meters allow utility companies to communicate with consumers--likely via e-mail or another form of electronic notification--so that customers can reduce their electricity use and help decrease overall congestion. (35) To benefit their customers, some utilities even offer consumers online access to their power consumption, allowing them to view their electricity use instantaneously. (36)

         Reducing congestion and conserving energy may provide additional benefits to consumers. General Electric estimates that increased consumer awareness of electricity costs could result in savings of 10 to 20 percent for consumers, simply due to decreases in consumption. (37) Some officials, however, hope to reinforce this behavior by allowing "the utility to automatically reduce the customer's electricity consumption when power is expensive or scarce." (38) More likely, the structure of electricity rates will change, and the fixed electricity prices that most consumers currently pay will be replaced by rates that vary depending on consumer demand. (39) As a result, as electricity demand increases, consumer rates will also increase. (40) Ideally, consumers would respond to increased prices by decreasing their electricity use, which would lower demand and consequently lower prices. (41)

      2. Oil Dependence

         In addition to improving the transmission system's reliability, this Note argues that Congress also intended for the Smart Grid to decrease the country's oil consumption. (42) The Smart Grid is capable of reducing U.S. dependence on oil in two ways. First, the Smart Grid can provide infrastructure for electric vehicles so that the transportation sector can transition away from using oil as its primary source of fuel. (43) In 2008, the Energy Information Administration found that "71 percent of all petroleum consumed in the United States was used to meet transportation requirements," (44) and another study showed that "passenger cars and light trucks" constituted 60 percent of the transportation sector's oil consumption. (45) Thus, powering passenger cars and light trucks with batteries charged by the grid instead of petroleum could significantly decrease U.S. oil consumption.

         Second, the Smart Grid has the ability to decrease oil consumption by replacing electricity generated from oil with electricity generated from alternative energy sources. (46) Even though only 1 percent of all petroleum consumed by the United States in 2008 was used to generate electricity, (47) the Smart Grid can replace this 1 percent with other generation methods such as wind or solar energy. (48) The Smart Grid might even replace the 1 percent of petroleum used to generate electricity with electric vehicles: "[E]lectric cars will not only be able to draw on electricity to run their motors, they will also be able to do the reverse: send electricity stored in their batteries back into the grid when it is needed." (49) A professor at the University of Delaware estimated that by returning stored energy from car batteries to the grid, "[e]lectrifying the entire vehicle fleet would provide more than three times the U.S.'s power generation." (50)

   2. Delegation of Authority To Implement the Smart Grid

      Significant coordination and leadership is essential to increase the reliability of the transmission system and decrease oil dependence. Therefore, to implement the Smart Grid and manage its...