FERC Order 676-H adopts NAESB standards

Last week the Federal Energy Regulatory Commission issued Order No. 676-H, adopting and incorporating into its regulations most of the latest version of a set public utility business practice standards and communications protocols developed by the North American Energy Standards Board (NAESB).  While most of the NAESB standards will now become mandatory and enforceable, to enable smart grid innovation the Commission posted NAESB's five Smart Grid standards as non-binding guidance.

Industry standards enable cooperation and communication, and can lead to more efficient and competitive markets.  Formally known as Version 003 of the Standards for Business Practices and Communication Protocols for Public Utilities adopted by NAESB's Wholesale Electric Quadrant (WEQ), the newly adopted standards represent the latest evolution of NAESB's consensus-based standards for public utilities.  NAESB is an ANSI-accredited non-profit standards development organization formed to develop and promote business practice standards that promote a seamless marketplace for wholesale and retail natural gas and electricity. Since issuing Order No. 676 in 2006, the FERC has incorporated elements of NAESB's standards into its regulations.

While the FERC made most of the NAESB standards mandatory, it decided to include NAESB's smart grid standards only "informationally, as guidance."  While FERC noted that the smart grid standards have value and should be adopted by public utilities, it ultimately agreed with utility trade group Edison Electric Institute and the ISO/RTO Council that NAESB's five Smart Grid standards should neither be incorporated into formal federal regulation nor be enforceable and mandatory.  Notably, as prepared by NAESB the Smart Grid standards are meant to be optional and informative, not prescriptive or restrictive, and could prove difficult to enforce.

Thus to "encourage further developments in interoperability, technological innovation and standardization", the FERC chose to include NAESB's five smart grid standards in Order No. 676-H as guidance, but not to incorporate them into its formal, enforceable regulations.

Through Order No. 676-H, the FERC hopes to improve business practices and interoperability among public utilities.  The order also shows an intent to foster smart grid technologies, without stifling their development through overly prescriptive or unenforceable regulations.  Will Order 676-H usher in a new era of smart grid and utility cooperation?

July 22, 2010 - Senate energy bill uncertain; FERC moves forward with smart grid standards; Maine dam removal

The U.S. Senate's summer session is almost over, and we don't have an energy bill yet. With just 13 business days left before a month-long recess, Senate Majority Leader Harry Reid is reported to be considering an energy bill that doesn't address emissions from electric utilities. (Utility issues may be split off into a separate bill to be introduced this week -- though time is short and consensus is lacking.) Critics of this proposal worry that the utility issues are the most important, and thus should not be glossed over. Still, passing something could help improve energy markets, and could certainly show Congressional confidence in, for example, renewable energy (or, for that matter, in coal).

The Federal Energy Regulatory Commission recently received a staff update on the process of selecting smart grid standards (PDF). Laws including the Energy Independence and Security Act of 2007 have given FERC the duty of developing and adopting interoperability standards and protocols necessary to ensure smart-grid functionality and interoperability with the nation's electric grids.

In plain language, FERC wants to ensure that your utility's infrastructure can have two-way communication both upstream (with the regional grid) and downstream (with your home/business/appliances). Ultimately smart grid adoption may overturn even this "upstream/downstream" paradigm, as end-use consumers take on more characteristics of distributed generation or demand response.

To that end, FERC's staff has been working with the National Institute of Standards and Technology to develop proposed standards. FERC anticipates a proceeding to review the standards later this summer.

Do you want to play in the smart grid market? Have a technology that you want to make sure is interoperable with what the other players are developing? Now is your chance to weigh in. Keep an eye on FERC Docket No. AD10-15-000...




The Maine Department of Environmental Protection has approved the final round of state permits required for a major Penobscot River dam removal project. A coalition led by the Penobscot River Restoration Trust will now implement the $50 million project. Three dams will be removed -- Howland, Veazie, and Great Works -- restoring access for sea-run fish to almost 1,000 river miles. All FERC and state approvals have been secured; the next step is finalizing U.S. Army Corps of Engineers permits, which are expected to be issued later this summer. Interestingly, fish passage at Howland was not universally supported, due to concerns that invasive northern pike could swim upstream and destroy Maine's blue-ribbon brook trout and salmon fisheries upstream.