[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
SMART GRID ARCHITECTURE AND STANDARDS:
ASSESSING COORDINATION AND PROGRESS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON TECHNOLOGY AND INNOVATION
COMMITTEE ON SCIENCE AND TECHNOLOGY
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
JULY 1, 2010
__________
Serial No. 111-104
__________
Printed for the use of the Committee on Science and Technology
Available via the World Wide Web: http://www.science.house.gov
______
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COMMITTEE ON SCIENCE AND TECHNOLOGY
HON. BART GORDON, Tennessee, Chair
JERRY F. COSTELLO, Illinois RALPH M. HALL, Texas
EDDIE BERNICE JOHNSON, Texas F. JAMES SENSENBRENNER JR.,
LYNN C. WOOLSEY, California Wisconsin
DAVID WU, Oregon LAMAR S. SMITH, Texas
BRIAN BAIRD, Washington DANA ROHRABACHER, California
BRAD MILLER, North Carolina ROSCOE G. BARTLETT, Maryland
DANIEL LIPINSKI, Illinois VERNON J. EHLERS, Michigan
GABRIELLE GIFFORDS, Arizona FRANK D. LUCAS, Oklahoma
DONNA F. EDWARDS, Maryland JUDY BIGGERT, Illinois
MARCIA L. FUDGE, Ohio W. TODD AKIN, Missouri
BEN R. LUJAN, New Mexico RANDY NEUGEBAUER, Texas
PAUL D. TONKO, New York BOB INGLIS, South Carolina
STEVEN R. ROTHMAN, New Jersey MICHAEL T. McCAUL, Texas
JIM MATHESON, Utah MARIO DIAZ-BALART, Florida
LINCOLN DAVIS, Tennessee BRIAN P. BILBRAY, California
BEN CHANDLER, Kentucky ADRIAN SMITH, Nebraska
RUSS CARNAHAN, Missouri PAUL C. BROUN, Georgia
BARON P. HILL, Indiana PETE OLSON, Texas
HARRY E. MITCHELL, Arizona
CHARLES A. WILSON, Ohio
KATHLEEN DAHLKEMPER, Pennsylvania
ALAN GRAYSON, Florida
SUZANNE M. KOSMAS, Florida
GARY C. PETERS, Michigan
JOHN GARAMENDI, California
VACANCY
------
Subcommittee on Technology and Innovation
HON. DAVID WU, Oregon, Chair
DONNA F. EDWARDS, Maryland ADRIAN SMITH, Nebraska
BEN R. LUJAN, New Mexico JUDY BIGGERT, Illinois
PAUL D. TONKO, New York W. TODD AKIN, Missouri
HARRY E. MITCHELL, Arizona PAUL C. BROUN, Georgia
GARY C. PETERS, Michigan
JOHN GARAMENDI, California
BART GORDON, Tennessee RALPH M. HALL, Texas
MIKE QUEAR Subcommittee Staff Director
MEGHAN HOUSEWRIGHT Democratic Professional Staff Member
TRAVIS HITE Democratic Professional Staff Member
HOLLY LOGUE Democratic Professional Staff Member
MELE WILLIAMS Republican Professional Staff Member
VICTORIA JOHNSTON Research Assistant
C O N T E N T S
July 1, 2010
Page
Witness List..................................................... 2
Hearing Charter.................................................. 3
Opening Statements
Statement by Representative David Wu, Chairman, Subcommittee on
Technology and Innovation, Committee on Science and Technology,
U.S. House of Representatives.................................. 9
Written Statement............................................ 10
Statement by Representative Adrian Smith, Ranking Minority
Member, Subcommittee on Technology and Innovation, Committee on
Science and Technology, U.S. House of Representatives.......... 11
Written Statement............................................ 12
Witnesses:
Dr. George W. Arnold, National Coordinator for Smart Grid,
National Institute of Standards and Technology
Oral Statement............................................... 13
Written Statement............................................ 15
Biography.................................................... 21
Mr. Mason W. Emnett, Associate Director of The Office of Energy
Policy and Innovation, Federal Energy Regulatory Commission
Oral Statement............................................... 22
Written Statement............................................ 23
Biography.................................................... 26
Mr. John D. McDonald, P.E., Director of Technical Strategy and
Policy Development, GE Energy
Oral Statement............................................... 27
Written Statement............................................ 28
Biography.................................................... 37
Mr. Conrad Eustis, Director of Retail Technology Development,
Portland General Electric
Oral Statement............................................... 38
Written Statement............................................ 39
Biography.................................................... 43
Ms. Lillie Coney, Associate Director, Electronic Privacy
Information Center
Oral Statement............................................... 43
Written Statement............................................ 45
Biography.................................................... 59
Appendix 1: Answers to Post-Hearing Questions
Dr. George W. Arnold, National Coordinator for Smart Grid,
National Institute of Standards and Technology................. 86
Mr. John D. McDonald, P.E., Director of Technical Strategy and
Policy Development, GE Energy.................................. 87
Mr. Conrad Eustis, Director of Retail Technology Development,
Portland General Electric...................................... 88
Appendix 2: Additional Material for the Record
Verbal Questions from Subcommittee by Chairman David Wu.......... 90
SMART GRID ARCHITECTURE AND STANDARDS: ASSESSING COORDINATION AND
PROGRESS
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THURSDAY, JULY 1, 2010
House of Representatives,
Subcommittee on Technology and Innovation,
Committee on Science and Technology,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:04 a.m., in
Room 2318 of the Rayburn House Office Building, Hon. David Wu
[Chairman of the Subcommittee] presiding.
hearing charter
U.S. HOUSE OF REPRESENTATIVES
COMMITTEE ON SCIENCE AND TECHNOLOGY
SUBCOMMITTEE ON TECHNOLOGY AND INNOVATION
Smart Grid Architecture and Standards:
Assessing Coordination and Progress
thursday, july 1, 2010
10:00 a.m.-12:00 p.m.
2318 rayburn house office building
Witnesses
Dr. George Arnold: National Coordinator for Smart
Grid, National Institute of Standards and Technology
Mr. Mason Emnett: Associate Director of the Office of
Energy Policy and Innovation, Federal Energy Regulatory
Commission
Mr. John McDonald: Director of Technical Strategy and
Policy Development, GE Energy
Mr. Conrad Eustis: Director of Retail Technology
Development, Portland General Electric
Ms. Lillie Coney: Associate Director, Electronic
Privacy Information Center
Purpose
As directed by the Energy Independence and Security Act (EISA) of
2007 (P.L. 110-140), the National Institute of Standards and Technology
(NIST) is coordinating an effort to develop a common framework and
interoperability standards for the smart grid. The purpose of this
hearing is to examine the progress of this effort and discuss how
standards affect the development of the smart grid and the deployment
of smart grid technologies. Additionally, witnesses will discuss
current and anticipated challenges associated with these standards and
offer their views on the ability of the current process to meet these
challenges and develop standards that will enable the growth of a
reliable, efficient, and secure smart grid.
Overview
The term ``smart grid'' refers to modernization of the electric
grid to incorporate digital computing, microprocessor-based measurement
and control, and communication technology. These technologies will
enable greater two-way communication between consumers and electricity
providers so that consumers can adjust their electricity usage in
response to real-time demand and price information. These technologies
will also enable two-way energy transfer, or the ability for consumers
to feed surplus energy into the grid, and will help accommodate
widespread use of different types of electricity generation and storage
options, from solar roofing shingles to electric vehicles. Other
anticipated benefits of the smart grid include: better regulation of
power quality (i.e., minimizing the fluctuations in voltage which can
damage more sensitive electronics and other equipment); more efficient
use of power generating infrastructure; greater resiliency of the
electric grid infrastructure in withstanding disasters; and economic
growth from the new products and services created for, and by, the
smart grid.
The smart grid is often referred to as a system of systems and a
network of networks. Given its highly interconnected nature, standards
are essential to ensuring that smart grid components will work together
effectively and efficiently. Section 1305 of EISA directed NIST to work
with Federal, State, and private-sector stakeholders to develop a smart
grid interoperability framework that is ``flexible, uniform, and
technology neutral.'' An interoperability framework creates a model of
a complex system, like the smart grid. It helps identify where
information exchange needs to take place between devices and networks
to meet the functional requirements of the system.
With $15 million in Recovery Act funding, NIST has brought together
over 1,500) interested parties, from power generators and utility
regulators, to high-tech companies and software developers, to develop
a conceptual architecture, or framework, for the smart grid and to
coordinate the development of standards. Through this effort, NIST has
already identified 75 existing standards, in varying stages of
development, that have smart grid applications. NIST also performed a
gap analysis to identify areas lacking necessary standards. This
analysis revealed 70 gaps.
NIST created 16 Priority Action Plans (PAPS) to engage the
appropriate experts and develop, or refine, the most urgently needed
standards on a fast-track timeline. The initial efforts will address
needs in eight priority areas, including energy storage and Advanced
Metering Infrastructure. Such standards are critical to creating viable
consumer technology and for enabling the envisioned environmental
benefits, such as distributed power generation and widespread adoption
of plug-in electric vehicles.
In conjunction with the development of interoperability standards,
NIST is coordinating the development of cyber security standards to
ensure the security and privacy of smart grid data and systems.
According to NIST, the initial 75 standards represent only a
``small subset of the totality of standards that will ultimately be
required to build a safer, secure smart grid that is interoperable, end
to end.'' Therefore, the agency has formed the Smart Grid
Interoperability Panel (SGIP) to continue to oversee this standards
coordination process. Nearly 600 stakeholder organizations are part of
the SGIP, which will help identify additional priority areas for
standards development and serve as a forum to resolve any issues that
emerge during the standards development process. NIST is also working
to develop a testing and evaluation framework for smart grid technology
to ensure that products that are sold perform as intended.
EISA requires that the Federal Energy Regulatory Commission (FERC)
adopt into rulemaking ``standards and protocols that ensure smart grid
functionality and interoperability in interstate transmission of
electric power, and regional, and wholesale electricity markets.'' From
the initial 75 existing standards with applicability to the smart grid,
FERC is preparing to initiate rulemaking on 14 of these standards.
Background
Overview of Smart Grid
The smart grid encompasses a wide array of technology that has the
potential to dramatically improve the reliability, security, and
efficiency of the electric grid, offering economic and environmental
benefits. As described in more detail below, the existing grid is a
patchwork of systems that pose reliability and security concerns, and
limit opportunities for energy efficiency and conservation.
Reliability. Congestion on the electric grid is a growing problem.
At its worst, congestion can damage transmission lines and lead to
major blackouts, like the one in 2003 that darkened large portions of
the Northeast and the Midwest. Since electricity cannot be stored and
must be used as soon as it is generated, the operators of the
transmission system must carefully coordinate the routing of power from
a number of sources through a limited number of pathways. Over the past
several decades, growing electricity demand has pushed the limits of
the transmission infrastructure, creating bottlenecks at major high-
voltage lines around the country, especially during peak demand
periods. Exceeding the capacity of these pathways can cause brownouts,
or worse, power outages and damage to infrastructure as lines and
equipment become overheated. Failure at these junctions can disrupt the
balance between electricity generation and usage, spreading disruption
to other parts of the grid. According to the Department of Energy,
outages affected 15 percent more customers from 1996 to 2000 than from
1991 to 1995.\1\
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\1\ The Smart Grid: An Introduction. The Department of Energy,
2008. p. 7.
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Modern smart grid technologies can improve reliability. With the
existing grid, the slow response time of mechanical switches, a lack of
automated analysis capabilities, and operators' low situational
awareness--or detailed visibility--of the grid make the task of routing
power more challenging and more prone to failure. Smart grid
technologies will seek to provide ``wide area situational awareness,''
which will integrate real-time sensor data, weather information, and
grid modeling with geographic information systems. This will enable
grid operators to instantly switch between views that show the status
of the grid for an entire region to views that show current conditions
of the grid in individual neighborhoods. In addition, smart grid
technologies are intended to allow operators to improve diagnosis of
grid disturbances, precisely locating problems and optimizing repairs.
Efficiency and Conservation. In addition to increasing the
reliability of electricity transmission and distribution, smart grid
technologies can enable greater energy efficiency and conservation and
reduce emissions. The Department of Energy estimates that if the grid
were just five percent more efficient, the emissions and fuel savings
would be the equivalent of removing 53 million cars from the road.\2\
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\2\ The Smart Grid: An Introduction. The Department of Energy,
2008. p. 7.
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As noted above, congestion in the transmission lines has a major
impact on grid operation. The most efficient power plants are larger
``baseload plants'' which operate continuously and generally meet the
average customer demand in their service areas. Although demand during
peak periods does not often exceed the generating capacity of these
plants, it can exceed the capacity of the transmission lines. At such
times, operators must bring additional, less efficient ``peaking
plants'' online, which are often closer to the service area. One of the
major anticipated benefits of the smart grid is technologies to help
reduce demand during peak periods, reducing the need to draw on less
efficient plants. A major component of the smart grid will be advanced
metering infrastructure that provides real-time information directly to
consumers, enabling them to see their own usage and react to higher
demand--and higher prices--by using less electricity. These
technologies, coupled with smart appliances, could also be used by
utilities to quickly stem demand when it exceeds transmission capacity.
In addition to demand-response pricing, the smart grid will also
enable increased use of renewable sources of energy and the use of
distributed energy storage devices. Advanced communication and
computational technologies will allow the grid to remain in balance
while drawing on intermittent renewable energy sources, such as wind
and solar. It will also enable the integration of solar roofing
shingles and other small-scale distributed renewable sources. The
technology exists to connect renewable resources like these to the
grid. However, they are far short of the ``plug and play'' capabilities
needed to promote widespread adoption. They also do not incorporate
technologies which would allow them to interact dynamically with the
grid. Smart grid technologies hold the possibility of using electric
vehicle batteries as energy storage devices that could feed energy back
onto the grid. Plug-in electric vehicles and plug-in hybrid electric
vehicles could help balance the large swings in demand over the course
of a day by charging at night when demand is lowest, and returning
power to the grid during the day when demand reaches its height (often
termed peak-shaving). Through demand-response pricing, which will be
enabled by smart grid, consumers will have an incentive to charge their
vehicles at night.
Security. The centralized control systems that manage and control
the generation, transmission. and distribution of electric power raise
significant cyber security concerns. These control systems monitor and
control sensitive processes and physical functions on the grid,
including opening and closing circuit breakers and setting thresholds
for preventative shutdowns. In 2007, the Government Accountability
Office (GAO) released a report highlighting the vulnerability of these
control systems to cyber security attacks or unintentionally caused
system disturbances.\3\ The report cited a number of factors, including
the interconnectivity of these systems, their connection to the
Internet, non-secure connections, and the availability of pertinent
technical information, that make supervisory control and data
acquisition systems susceptible to cyber threats and vulnerabilities.
There are dozens of examples from around the world of malicious
exploitation of vulnerabilities in control systems, or simple control
system malfunctions, that caused serious consequences in the
functioning of critical infrastructure.
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\3\ Critical infrastructure Protection: Multiple Efforts to Secure
Control Systems Are Under Way, but Challenges Remain. The Government
Accountability Office, 2007. pp. 3-18.
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With their increased reliance on networked communication systems,
smart grid technologies have the potential to pose additional cyber
security risks. Not only is there fear that non-secure systems could
open the door to widespread power disruption, there is also fear that
the storage and communication of real-time energy usage data could be a
risk to consumer privacy.
Standards
A common smart grid framework--or architecture--and technical
standards are recognized as essential to realizing the potential
benefits of the smart grid. This requires collaboration between
industry sectors that have never before had to work together toward a
common goal. Figure 1, which is the Conceptual Reference Model for
Smart Grid Information Networks developed by NIST and associated
stakeholders, illustrates this complex web of actors, grouped into
domains where similar functions take place (e.g., the home,
transmission systems, or power plants). Dozens of devices and systems
must communicate under the proposed smart grid architecture, requiring
common data sharing protocols and common methods of presenting
information. In addition, the architecture should be flexible to allow
the incorporation of evolving technologies, while still supporting
legacy systems and devices.
The NIST-led framework development and standards identification
process described in the Overview section culminated in the January
2010 release of the NIST Framework and Roadmap for Smart Grid
Interoperability Standards, Release 1.0. As discussed in the Overview
section above, this document identified a number of smart grid-related
standards and standards gaps. From these, NIST created 16 Priority
Action Plans (PAPs) to address standards needs that will be fundamental
to achieving smart grid benefits, such as greater consumer visibility
and control of electricity usage and greater use of distributed
renewable energy sources.
Three of the PAPs included in the NIST Framework are devoted to
smart grid communications. The standards addressed by these PAPs--
Guidelines for the Use of IP Protocol Suite in the Smart Grid,
Guidelines for Use of Wireless Communication, and Harmonization of
Power Line Carrier Standards for Appliance Communications in the Home--
will ensure that smart appliances and other home systems can
communicate with home area networks and advanced smart meters without
requiring technological expertise and configuration by consumers, and
without interfering with one another. For example, currently,
manufacturers are considering several power line-based communication
technologies for appliances, meters, and plug-in electric vehicle
communications. A number of technologies currently exist, but they are
not interoperable and some may actually interfere with one another.
Thus these standards are critical to widespread adoption of smart grid
technologies because consumers are unlikely to choose smart appliances
unless they are smart, interoperable, and compatible.
As discussed above, the smart grid holds the potential for electric
vehicles to act as demand-stabilizing power storage devices and also
for the penetration of renewables onto the grid. In response, work is
currently underway on two PAPs, Energy Storage Interconnection
Guidelines and Interoperability Standards to Support Plug-in Electric
Vehicles. The objective of this work is to develop standards and
guidelines for connecting these power sources and storage devices to
the grid in a way that addresses potential intermittency and
variability and is responsive to grid management requirements.
The cyber security vulnerabilities of the electric grid are not
new, but smart grid technologies will likely pose a more complex cyber
security challenge. For example, with advanced metering infrastructure,
third-party service providers (e.g., a web-based customer energy usage
interface), smart appliances, and other smart grid features, there will
be a greater number of entry points through which to stage cyber
attacks. Moreover, the increased complexity of the grid could introduce
vulnerabilities and increase exposure to potential attackers or
unintentional disruptions.
In addition to the more traditional risks of reliability, smart
grid technologies may also create vulnerabilities around customer
privacy. Real-time energy usage data can reveal personal habits, for
example, revealing how many occupants live in a home and when they
generally leave and return to the home. This information could even
reveal detailed aspects of daily and weekly routines, such as when
occupants of a home shower, and how often they run the washing machine.
NIST has made cyber security a priority, initiating a separate
cyber security process to complement the overall smart grid standards
development process. Through a 300 member Smart Grid Cyber Security
Coordination Task Group, NIST is ``coordinating the development of
measures to ensure the confidentiality, integrity and availability of
the electronic information communication systems and the control
systems necessary for the management, operation, and protection of the
grid.'' This task group released a draft version of the Cyber Security
Guidelines early this year. In this document, the developers identify
the risks associated with smart grid and the relevant security
requirements for the smart grid. The work generated from this effort is
intended to enable cyber security to be an integral part of the design
process as the smart grid architecture and standards evolve.
Regulation
In the U.S., the power industry is highly fragmented, with over
3,100 entities under various forms of private investor and public
ownership. By authority of the Federal Power Act, FERC has jurisdiction
to regulate the wholesale power market and electric system reliability
standards. However, a patchwork of state regulations govern electric
industry structure, generation adequacy, energy resource mix,
transmission siting, cost recovery, and retail electricity prices.
Power-related regulations have evolved over time as utilities
became increasingly interconnected. By the mid-part of the 20th
century, through ad-hoc growth, the power system in the U.S. had become
highly interconnected. A major power outage in 1965, which quickly
cascaded to cover the entire Northeast, illustrated the lack of high-
level planning to prevent and prepare for outages. It also revealed
that operators within the large interconnected zone did not have common
operating standards and procedures. Created by legislation in response
to the 1965 blackout, the North American Electric Reliability Council
began to develop regional standards of operation to ensure reliability
of the grid. After the major 2003 blackout which also blanketed the
Northeast, these standards were adopted into regulation by FERC.
The NIST framework notes that the transition to the smart grid
introduces new regulatory considerations, including security,
reliability, safety, privacy, and other policy considerations, which
``may transcend jurisdictional boundaries and require increased
coordination among Federal, state, and local lawmakers and
regulators.'' To that end, the common architecture developed through
the NIST process is intended to help facilitate and enable this
coordination.
Issues and Concerns
Even though the technologies are young, there has already been
significant investment in the smart grid. The American Recovery and
Reinvestment Act invested $9.2 billion ($4.5 billion in Federal funds;
$4.7 billion in matching funds from private companies, utilities,
cities, and other partners) in smart grid related technologies,
including smart meters, software to manage meter and grid data, and
distributed energy generation resources. The U.S. market for smart grid
related equipment, devices, information and communication technologies,
and other hardware, software, and services is expected to reach $47
billion per year by 2014. Globally, this market is projected to reach
$171 billion.\4\ Given the scale of investment, ensuring
interoperability is imperative.
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\4\ NIST Framework and Roadmap for Smart Grid Interoperability
Standards, Release 1.0, January 2010, p. 14.
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Standards development is typically a time intensive process,
reflecting the complexity and requirement for consensus. However, given
that modernizing the electric grid has been identified as a national
priority, NIST has called for aggressive timelines for a number of the
standards. An important challenge will be maintaining a pace of
standards development that will ensure interoperability and encourage
additional investment, but also maintain the quality of the standards
and ensuring that they are open, flexible, and meet reliability,
security, and efficiency needs.
The Cyber Security Coordination Task Group described above
performed a Privacy Impact Assessment for the customer interface
portion of the smart grid. This assessment found that a lack of
consistent and comprehensive privacy policies, standards, and
supporting procedures throughout the states, government agencies,
utility companies, and supporting entities that will be involved in
smart grid data collection and management created privacy risks that
would need to be addressed.
As noted above, there is a sizable global market for smart grid
technologies, and many countries are also planning to move to smart
grid technologies. U.S. manufacturers stand to lead in the market for
smart grid technologies, making international engagement an important
aspect of the Nation's own smart grid development. NIST has engaged
with smart grid stakeholders in other countries and is promoting a
common smart grid framework. In addition, of the 75 existing standards
listed in the NIST Framework, 13 percent came from domestic standards
development organizations (SDOs), 111 percent from the U.S. Government,
and 77 percent were from international SDOs.
As noted above, NIST intends to incorporate testing and evaluation
into the overall smart grid standards process to ensure that technology
will perform as intended. Although NIST has designated testing and
evaluation as the final phase in meeting the requirements of EISA, it
has been included in the work of the SGIP and the development of a
framework for testing and evaluation is currently underway. The fact
that there is not yet a formal testing and evaluation process for all
smart grid technologies raises important questions about the consistent
implementation of existing standards.
Chairman Wu. Good morning. Welcome to everyone. Thank you
for coming to this first in a--well, one in a series of
hearings on smart grid and smart grid-related issues. The
enterprise that we are embarking upon, the modernization of our
century-old electric power system, is a very, very important
step in moving toward a clean and independent energy future. It
is critical to developing a more reliable and secure, and as
private as possible, electrical grid. My understanding is that
about 40 percent of our national energy budget is allocated to
electricity, and unfortunately, two-thirds of the total
electrical energy that we generate does not arrive in useful
form for the end user. So building out a smart grid will enable
more efficient use, will enable the use of the addition of
renewable sources and allow for better management of electrical
transmission and distribution, and hopefully a more reliable
network also. It will help support the increasing demand for
electricity and our growing reliance on electrically based
technologies.
The grid, the smart grid, will incorporate two-way
communication for a flow of information throughout a vast
interconnected power transmission system. In fact, I think we
are going to hear testimony that--actually this is not
submitted testimony. This is, I think, in a letter to the
Committee that the requirements of this information system may
be 100 times what we currently invest in the Internet. In the
smart grid future, customers will have access to real-time data
on their energy use and on the market price of electricity, and
as the demand for electricity increases, consumers will be able
to make more-informed choices on how high to set the thermostat
and when to run the dishwasher or other appliances, and
consumers will also benefit when grid operators have more
detailed information on the status of the grid and respond to
disruptions more quickly to keep the lights on or prevent
brownouts.
The Nation's electrical grid has often been called the
biggest machine on earth. With the addition of smart
appliances, solar roofing and networks of communication
systems, the grid will become even bigger and more complex. The
scale and complexity makes it imperative that all of those
involved in developing and using the smart grid share a common
technical view, or framework, of the system. It is also crucial
that the technologies be based on open standards that
facilitate interoperability, security, and competition in the
marketplace and also that it be technology-neutral.
In addition, I believe that it is very, very important that
the standards we set be promulgated internationally so that we
do not have the problems that we have had in the past with
certain countries trying to develop islands of technology
whether it is to gain commercial advantage or otherwise
balkanize the international system.
The benefits of a smart grid will come from massive
participation and widespread adoption of smart appliances,
solar panels, electric vehicles and other technologies that
will provide distributed sources and distributed storage. We
need the entire system or the distributed system to be plug-
and-play. No consumer wants to find out that the smart
dishwasher they bought a year ago will not work and that the
home network they just purchased will not interoperate with
those appliances. Few consumers will install solar panels, wind
turbines and fuel cells for their homes if it is not easy to
see how much power they are creating and track the value of
their investment.
Utilities also want to avoid stranded costs. The Energy Act
of 2007 tasked the National Institute of Standard and
Technology, or NIST, with coordinating the standards process.
The 1,500 stakeholders or more NIST sought input from to
identify an initial set of 75 standards, and the 580
organizations that are represented on the Smart Grid
Interoperability Panel, ranging from regional utilities to
large technology companies, illustrate the size and complexity
of this process. From reports on the process, the National
Smart Grid Coordinator, George Arnold, has done an impressive
job of marshaling the private- and public-sector expertise and
input needed to perform this task and to do so on a very
expedited timeline.
Today we will delve into the standards process in more
detail, discuss the work that has been done, and see where
things are headed. I am particularly interested in the
witnesses' views on the strength of this process thus far and
when the witnesses think certification systems will be in place
to bring more assurances that the technologies will work
together as intended. I will also be interested in the progress
of addressing privacy and security challenges posed by the
smart grid and the level of international engagement that is
necessary for the United States to continue its leadership in
smart grid technologies and help the rest of the world in
achieving a more energy-independent future.
As we are dealing with the horrible aftermath of the BP
spill in the Gulf, moving quickly with technology that will
break our dependence on oil is imperative. The work that NIST
is facilitating right now is an important component of
achieving that goal, and I hope we will learn today how we can
continue to address this challenge moving forward.
Chairman Wu. With that, I would like to recognize the
Ranking Member of this Subcommittee, Mr. Smith, for his opening
statement.
[The prepared statement of Chairman Wu follows:]
Prepared Statement of Chairman David Wu
Good morning, and thanks to all of you for attending today's
hearing on smart grid standards.
The modernization of our 100-year-old electric power system is an
integral step in moving toward a clean, independent energy future, and
it is critical to developing a more reliable and more secure electrical
grid. Building out a smart grid will enable the addition of more
renewable sources and allow for better management of the electricity
transmission and distribution network. In addition, it will help
support the increasing demand for electricity and growing reliance on
technology.
The smart grid will incorporate two-way communication for a
constant flow of information throughout the vast interconnected power
transmission system. In the smart grid future, customers will have
access to real-time data on their energy usage and the market price of
electricity. As the demand for electricity increases, driving the price
up, consumers will be able to make more informed choices on how high to
set the thermostat and when to run the dishwasher. Consumers will also
benefit when grid operators have more detailed information on the
status of the grid and can respond to disruptions more quickly to keep
the lights on.
The nation's electrical grid has often been called the biggest
machine on earth. With the addition of smart appliances, solar roofing
shingles, and networks of communication systems, the grid will become
bigger and more complex. The scale and complexity makes it imperative
that all of those involved in developing and using the smart grid share
a common technical view--or framework--of the system. It is also
crucial that the technologies be based on open standards that
facilitate interoperability, security, and competition in the
marketplace. The benefits of a smart grid will come from massive
participation and widespread adoption of smart appliances, solar
panels, and electric vehicles, among other technologies, and for that,
we need it to be ``plug-and-play.'' No consumer wants to find out that
the smart dishwasher they bought a year ago will not work with the home
network they just purchased. And few consumers will install solar
panels, wind turbines, or fuel cells for their homes if it's not easy
to see how much power they're creating and track the value of their
investment.
The Energy Act of 2007 tasked the National Institute of Standards
and Technology with coordinating the standards process. The 1,500
stakeholders NIST sought input from to identify an initial set of seven
standards, and the 580 organizations that are represented on the Smart
Grid Interoperability Panel--ranging from regional utilities to large
tech companies--illustrate the size and scope of this process. And,
from reports on the process, the National Smart Grid Coordinator,
George Arnold, has done an impressive job marshalling the private- and
public-sector expertise and input needed to perform this task, and to
do so on an expedited timeline.
Today we will delve into the standards process in a little more
detail, discuss the work that has been done, and see where things are
headed. I am particularly interested in the witnesses' views on the
strength of this process thus far and when the witnesses think
certification systems will be in place to bring more assurances that
the technologies will work together as intended. I will also be
interested in the progress of addressing privacy and security
challenges posed by the smart grid and the level of international
engagement that is necessary for the U.S. to continue its leadership in
smart grid technologies.
As we are dealing with the horrible aftermath of the BP spill in
the Gulf, moving quickly with technology that will break our dependence
on oil is imperative. The work that NIST is facilitating right now is
an important component of achieving that goal, and I hope we will learn
today how we can continue to address this challenge moving forward.
Mr. Smith. Thank you, Chairman Wu, for calling today's
hearing to assess coordination and progress in the development
of smart grid architecture and standards.
The Energy Independence and Security Act of 2007 directed
NIST to coordinate efforts to develop a common framework and
interoperability standards for the implementation of smart grid
technologies. This direction was both appropriate and
necessary. Our electrical grid is an interconnected, cross-
border system, and NIST has proven expertise in developing such
standards. In my home State of Nebraska, proper implementation
of smart grid technologies would not only allow connected
consumers to better manage their consumption of energy but
could also encourage investment in small-scale technologies to
take advantage of available renewable energy resources for home
use and selling it onto the grid. Nebraska ranks sixth among
states in wind energy potential but lags behind in
implementation because of difficulties in getting electricity
onto the grid. Likewise, our many small streams and irrigation
canals are a potential resource for small-scale hydroelectric
power.
I hope we can also address outstanding concerns with
implementation, as well. One particular issue I am interested
to learn more about is the effect of smart grid implementation
on consumer privacy and even choice. On its face, using macro
and micro consumer data to optimize the generation and
distribution of electricity is a logical step we can take to
improve the efficiency of our system. However, we should also
know at what level of granularity this data will be gathered
and used, and who will be using it. We should also ensure this
data is used to enable smarter consumer decision-making, not to
force false choices on consumers or to cut off access to
electricity.
I also hope to learn what, if anything, is being done to
ensure stimulus dollars dedicated to the smart grid aren't
being wasted on infrastructure which won't meet the forthcoming
standards, since these standards have not yet been completed.
With that, thank you, Mr. Chairman, again, for calling this
hearing and to our witnesses for your efforts and your
expertise as we look at implementing these standards and for
your presence here today. I look forward to a fruitful session,
and I yield back the balance.
[The prepared statement of Mr. Smith follows:]
Prepared Statement of Representative Adrian Smith
Thank you, Chairman Wu, for calling today's hearing to assess
coordination and progress in the development of smart grid architecture
and standards.
The Energy Independence and Security Act of 2007 directed the
National Institute of Standards and Technology to coordinate efforts to
develop a common framework and interoperability standards for the
implementation of smart grid technologies. This direction was both
appropriate and necessary. Our electrical grid is an interconnected,
cross border system, and NIST has proven expertise in developing such
standards.
In my home state of Nebraska, proper implementation of smart grid
technologies would not only allow connected consumers to better manage
their consumption of energy, but could also encourage investment in
small scale technologies to take advantage of available renewable
energy resources for home use and selling it onto the grid. Nebraska
ranks sixth among states in wind energy potential but lags behind in
implementation because of difficulties in getting electricity onto the
grid. Likewise, our many small streams and irrigation canals are a
potential resource for small scale hydroelectric power.
I hope we can also address outstanding concerns with
implementation, as well. One particular issue I am interested to learn
more about is the effect of smart grid implementation on consumer
privacy and choice.
On its face, using macro and micro consumer data to optimize the
generation and distribution of electricity is a logical step we can
take to improve the efficiency of our system. However, we should also
know at what level of granularity this data will be gathered and used,
and who will be using it. We should also ensure this data is used to
enable smarter consumer decision-making, not to force false choices on
consumers or to cut off access to electricity.
I also hope to learn what, if anything, is being done to ensure
stimulus dollars dedicated to smart grid aren't being wasted on
infrastructure which won't meet the forthcoming standards, since these
standards have not yet been completed.
With that, thank you again, Mr. Chairman, for calling this hearing,
and to our witnesses for your efforts to implement these standards and
your presence here today. I look forward to a fruitful session and I
yield back the balance of my time.
Chairman Wu. Thank you very much, Mr. Smith.
If there are any other Members who wish to submit opening
statements, those opening statements will be inserted into the
record at this point.
And now it is my pleasure to introduce our witnesses. Dr.
George Arnold is the National Coordinator for Smart Grid at the
National Institute of Standards and Technology. Welcome. Mr.
Mason Emnett is the Associate Director of the Office of Energy
Policy and Innovation at the Federal Energy Regulatory
Commission. We are going to rename Federal agencies like Dave
or Joe. Mr. John McDonald is the Director of Technical Strategy
and Policy Development at GE Energy. Mr. Conrad Eustis is the
Director of Retail Technology Development at Portland General
Electric. And our final witness is Ms. Lillie Coney, who is the
Associate Director of the Electronic Privacy Information
Center.
With that, you will each have five minutes for your spoken
testimony. Your written testimonies will be included in the
record in their entirety, and when you complete all of your
testimony, we will begin with questions. Each Member will have
five minutes to question the panel, and I have already spoken
with the witnesses about this, but for the information of
everyone in the room, we expect votes fairly soon, and what I
would like to do is, as much as possible, get through
everyone's testimony before votes, proceed with questioning as
far as we can, recess for the votes because there are going to
be three votes, and then we will, if necessary, come back after
those votes and complete the questions and the rest of the
hearing.
Dr. Arnold, please proceed.
STATEMENT OF DR. GEORGE W. ARNOLD, NATIONAL COORDINATOR FOR
SMART GRID, NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY
Dr. Arnold. Chairman Wu, thank you for the opportunity to--
--
Chairman Wu. Dr. Arnold, I believe that there is a switch
in front of you. It is not a smart microphone, so----
Dr. Arnold. Okay.
Chairman Wu. There we go.
Dr. Arnold. I will have to apply some intelligence here.
I would like to thank you for the opportunity to discuss
NIST's progress in accelerating the development of standards to
realize a secure and interoperable nationwide smart grid.
The smart grid is indeed central to the Nation's efforts to
increase the reliability, efficiency and security of the
electric delivery system and to increase America's use of
renewable and distributed clean energy. The smart grid is also
an important piece of the Administration's overall goal of
fostering innovation and creating millions of jobs in a green
energy economy.
As has been said, under the Energy Independence and
Security Act of 2007, Congress assigned NIST the primary
responsibility to coordinate development of standards for the
smart grid. This task represents an enormous challenge and a
tremendous opportunity. Several years ago, the National Academy
of Engineering described today's electric grid as the greatest
engineering achievement of the 20th century. Future generations
may well describe the smart grid as the first great engineering
achievement of the 21st century. NIST is providing strong
national and international leadership to drive the creation of
the standards needed to make the smart grid a reality. We are
engaging industry, government and consumer stakeholders in an
unprecedented open public process.
In April of 2009, NIST launched a three-phase plan to
expedite development and adoption of smart grid
interoperability standards. I am pleased to tell you that the
plan we laid out is on course and on schedule. Phase one of our
effort resulted in the January 2010 release of NIST Special
Publication 1108, Release 1.0, Framework and Roadmap for Smart
Grid Interoperability. It describes a high-level reference
model, identifies seven initial standards, specifies 16
priority action plans and the highest priority standards gaps
and describes a strategy to establish requirements and
standards for smart grid cybersecurity.
The NIST Release 1.0 Framework is also having influence
around the world and is being used as a reference by many other
countries that are beginning to work on their standards for
their smart grid.
Smart grid will ultimately require hundreds of standards,
specifications and requirements. Some are obviously needed more
urgently than others. To prioritize its work, NIST chose to
focus its initial effort on the priorities in FERC's Policy
Statement plus additional areas identified by NIST in
consultation with DOE [Department of Energy].
The Release 1.0 Framework lays a strong foundation but much
work lies ahead. Phase two of the NIST plan saw the
establishment of a more permanent public-private partnership,
the Smart Grid Interoperability Panel, to guide the development
and evolution of the standards. This body is also guiding the
establishment of a testing and certification framework for the
smart grid which is phase three of the NIST plan.
Cybersecurity is a paramount concern, and this has been the
major focus of our effort from the beginning. A NIST-led
cybersecurity working group is finalizing a major deliverable
that will be published later this month establishing
cybersecurity guidelines for the smart grid.
So where are we headed next? Our most immediate priority is
completion of the priority action plans we currently have
underway. We anticipate that these tasks will result in about
25 additional standards, guidelines and requirements documents
to fill the highest priority gaps in the standards post office,
and significant progress is being made in these action plans.
Another key priority for NIST is supporting future FERC
rulemaking to adopt smart grid standards, and NIST has been
working very closely with FERC and will continue to do so, and
we are also reaching out to state commissions.
I would like to conclude by mentioning some of the major
challenges that we are addressing. First is ensuring that our
standards are, wherever possible, harmonized internationally.
To achieve this, we are fully engaged in all the relevant
international standards bodies and in bilateral and
multilateral discussions with our governmental counterparts in
other countries. Second, we are working to accelerate
resolution of some key standards issues that could impede the
development of the market if not settled soon, such as
communication between consumer appliances in the grid and
electric vehicle to grid interconnection. Third, we are
continuously weighing the correct balance between speed and
deliberation in our work, because any fundamental mistakes made
at this stage may be difficult and costly to correct later.
NIST is proud to have been given such an important role and
is committed to achieving the Administration's vision. Thank
you for the opportunity to testify today. I would be happy to
answer any questions that you may have.
[The prepared statement of Dr. Arnold follows:]
Prepared Statement of George W. Arnold
Introduction
Chairman Wu, Ranking Member Smith, and Members of the Subcommittee,
I am George Arnold, the National Coordinator for Smart Grid
Interoperability at the Department of Commerce's National Institute of
Standards and Technology (NIST).
Thank you for the opportunity to appear before you today to discuss
NIST's progress in accelerating the development of standards needed to
realize a secure and interoperable nationwide Smart Grid. I last
testified about our progress and plans before the Subcommittee on
Environment and Energy on July 23, 2009. Today I would like to update
you on what we have accomplished since then, where we are going, and
some of the key issues on the horizon that we are addressing.
The Smart Grid, which will modernize the United States electric
power delivery system, is central to the Nation's efforts to increase
the reliability, efficiency and security of the electric delivery
system and also to help build the infrastructure that will facilitate
clean, energy sources to American homes and businesses: The Smart Grid
utilizes advanced information and communications technologies to
replace the one-way flow of electricity and information in the current
grid with a two-way flow of electricity and information. This marriage
of energy and information technologies will create capabilities to
integrate solar, wind, and other forms of renewable energy, enable
widespread use of distributed energy sources, provide consumers with
tools to reduce energy usage and potentially save money, make the grid
more efficient by reducing peak demand, and facilitate electrification
of vehicles.
The Smart Grid is an important piece of the Administration's
overall goal of fostering innovation and creating millions of jobs in a
green economy through the creation of whole new industries and green
entrepreneurs. NIST's mission to advance innovation and U.S. industrial
competitiveness fits perfectly with this goal and we're committed to
helping make that vision a reality.
Modernizing and digitizing the nation's electrical power grid--the
largest interconnected machine on Earth--is an enormous challenge and a
tremendous opportunity. Several years ago, the National Academy of
Engineering described the electric grid as the greatest engineering
achievement of the 20th century, and the largest industrial investment
in the history of humankind. The basic structure of the present grid
has changed little over its hundred-year history. The U.S. grid, which
is operated by over 3100 electric utilities using equipment and systems
from hundreds of suppliers, has historically not had much emphasis on
standardization and thus incorporates many proprietary interfaces and
technologies that result in the equivalents of stand-alone silos.
Transforming this infrastructure into an interoperable system
capable of supporting the nation's vision of extensive distributed and
renewable resources, energy efficiency, improved reliability and
electric transportation may well be described by future generations as
the first great engineering achievement of the 21st century.
NIST's Standards Role: A Framework for Interoperability
Moving towards nationwide North American, interoperable and secure
Smart Grid cannot be done without establishing standards that are,
preferably, harmonized with international standards. Under the Energy
Independence and Security Act of 2007 (EISA), Congress assigned the
National Institute of Standards and Technology (NIST) the ``primary
responsibility to coordinate development of a framework that includes
protocols and model standards for information management to achieve
interoperability of Smart Grid devices and systems . . .'' [EISA Title
XIII, Section 1305]. The act further specifies that the
interoperability framework should be ``flexible, uniform, and
technology neutral.'' The law also instructs that the framework should
accommodate ``traditional, centralized generation and distribution
resources'' while also facilitating incorporation of new, innovative
Smart Grid technologies, such as distributed and renewable energy
resources and energy storage.
There is an urgent need to establish protocols and standards for
the Smart Grid. Deployment of various Smart Grid elements, including
smart sensors on distribution lines, smart meters in homes, and widely
dispersed sources of renewable energy, is already underway and will be
accelerated as a result of Department of Energy (DOE) Smart Grid
Investment Grants and other incentives, such as loan guarantees for
renewable energy generation projects. Without standards, there is the
potential for technologies developed or implemented with sizable public
and private investments to become obsolete prematurely or to be
implemented without measures necessary to ensure security.
NIST is providing strong national and international leadership to
drive the creation of interoperability standards needed to make the
Smart Grid a reality. We are engaging industry, government, and
consumer stakeholders in an unprecedented, open, public process. As I
will detail shortly, in January of this year the NIST-led process
reached a major milestone with the publication of the Release 1.0
Framework and Roadmap for Smart Grid Interoperability (NIST Special
Publication 1108). This document provides the initial foundation for an
interoperable and secure Smart Grid and has been widely praised by the
Smart Grid stakeholder community. It has also provided direction for
Smart Grid efforts around the world.
Comparatively Speaking: Off to a Fast Start
We are calling this framework ``Release 1.0'' because, while it
provides a very comprehensive foundation for the Smart Grid, our work
to develop the standards is far from complete. A similar effort to
develop foundational standards for the Next Generation Networks (NGN)
in the telecom domain--the broadband networks we use today to provide
integrated telephone, television and internet services--took two years
to develop their ``Release 1.0'' and five years to develop ``Release
2.0''. With the Smart Grid we have accomplished in about a year what
took two years to do for the NGN. This is in spite of the fact that the
Smart Grid is a far more complex system. The fast pace reflects the
intensity and urgency with which we and our partners are working.
While we are driving this program with a strong sense of urgency,
we must also keep in mind that the foundation we lay with these
standards likely will establish the basic architecture of the grid for
the next 100 years. Any fundamental mistakes made at this stage may be
difficult and costly to correct later. We especially cannot afford to
make incorrect architectural choices or adopt weak standards that would
compromise the security, reliability or stability of the grid. We need
to work both quickly and carefully.
Accomplishments
In April 2009, NIST launched a three-phase plan to expedite
development and promote widespread adoption of Smart Grid
interoperability standards. This plan was developed after consulting
with numerous stakeholders in industry, the standards community, and
Federal and state government. The plan, which I described in my
testimony last July, reflects the need to rapidly establish an initial
set of standards, while providing a robust, well governed process for
the evolution of smart grid standards. I am pleased to tell you that
the plan we laid out is on course and on schedule.
In May 2009, U.S. Secretary of Commerce Gary Locke and U.S.
Secretary of Energy Steven Chu chaired a meeting of nearly 70
executives from the power, information technology, and other industries
at which the executives expressed their commitment to support NIST's
plan.
Initial Framework
In Phase one, we engaged over 1,500 stakeholders representing
hundreds of organizations in a series of public workshops over a six-
month period. In a recent letter, the U.S. Chamber of Commerce
commended NIST for its ``willingness to reach out to the private sector
on these issues.'' The Chamber described the NIST-led process as
``transparent and inclusive.''
Through this process, we and our collaborators created a high-level
architectural model for the Smart Grid, analyzed use cases, identified
applicable standards, determined gaps in currently available standards,
and agreed on priorities for new standardization activities. The result
of this phase, ``NIST Special Publication 1108--NIST Framework and
Roadmap for Smart Grid Interoperability Release 1.0,'' was published in
January 2010.
The Release 1.0 Framework describes a high-level conceptual
reference model for the Smart Grid, identifies 75 existing standards
that are applicable to the ongoing development of the Smart Grid,
specifies 16 high-priority gaps and harmonization issues for which new
or revised standards and requirements are needed, documents action
plans by which designated standards-setting organizations (SSOs) are
addressing these gaps, and describes the strategy to establish
requirements and standards to help ensure Smart Grid cyber security.
The Smart Grid is a complex system of systems for which a common
understanding of its major building blocks and how they interrelate
must be broadly shared. The reference model described in the Release
1.0 Framework provides a foundation to ensure alignment among the many
Standards Setting Organizations that are working with NIST on achieving
the Smart Grid vision.
The Smart Grid will ultimately require hundreds of standards,
specifications, and requirements. Some are needed more urgently than
others. To prioritize its work, NIST chose to focus initially on
standards needed to address the priorities identified in the Federal
Energy Regulatory Commission (FERC) Policy Statement, plus additional
areas identified by NIST. The eight priority areas are:
Demand Response and Consumer Energy Efficiency
Wide-Area Situational Awareness
Energy Storage
Electric Transportation
Advanced Metering Infrastructure
Distribution Grid Management
Cyber Security
Network Communications
Many of the standards identified by NIST are mature and already
widely used by industry, others require revisions to accommodate Smart
Grid applications and requirements, and still others are in the draft
stage and not yet publicly available. Collectively, these 75 standards
provide an extensive foundation for the Smart Grid. They address such
issues as standardizing the data captured by smart meters, common
information models for the grid, protocols for communicating price and
demand response signals between the grid and smart appliances, and the
interface between plug-in electric vehicles and the grid for charging
at 110 or 220 volts, to provide a few examples. However, there are many
gaps in the standards portfolio that must be filled in.
Through the NIST workshops, NIST determined that many potentially
useful standards will require revision or enhancement before they can
be implemented to address Smart Grid requirements. In addition,
stakeholders identified gaps requiring entirely new standards to be
developed. In all, a total of 70 such gaps or related issues were
initially identified. Of these, NIST selected 16 for which resolution
is most urgently needed to support one or more of the Smart Grid
priority areas. For each, an action plan involving relevant
stakeholders was launched. These Priority Action Plans specify
organizations that have agreed to accomplish defined tasks with
specified deliverables. One key action plan, to develop a standard to
ensure software upgradeability of the millions of smart meters that
will be deployed over the next several years, has already been
completed. Substantive progress has been made in meeting the milestones
of other action plans addressing gaps in the standards portfolio.
Establishing a New Partnership to Maintain Momentum
Phase two of the NIST plan saw the establishment of a more
permanent public-private partnership, the Smart Grid Interoperability
Panel (SGIP), to guide the development and evolution of the standards.
This body is also guiding the establishment of a testing and
certification framework for the Smart Grid, which is Phase three of the
NIST plan. The SGIP was formalized and launched in November 2009 and is
now in execution mode. During its eight months in existence, membership
in the SGIP has grown to over 580 organizations, representing private
companies, universities, research institutes, industry associations,
standards setting organizations, testing laboratories, and government
agencies at the Federal, state and local levels. Nearly 1600
individuals who participate in the committees, working groups, and
priority action plans working under the panel, represent these hundreds
of organizations. An elected 27-member governing board representing 22
different stakeholder groups ranging from electric utilities, electric
equipment manufacturers, building automation providers, information and
communications technology companies, state regulators, and even venture
capital firms oversees the SGIP. Membership in the SGIP is open to
international participants, and 52 organizations from other countries
around the world participate in its work. This is helping to ensure
that standards used for the Smart Grid in the U.S. are based wherever
possible on international standards that are harmonized globally. This
provides a double benefit to the U.S. It enables Smart Grid suppliers
to cost-effectively address the global market, and it promotes greater
supplier competition, which in turn reduces costs for utilities and
consumers.
Cyber Security: A Paramount Concern from the Very Beginning
Cyber security of the Smart Grid is a paramount concern, and this
has been a major focus of our effort. A NIST-led cyber security working
group, consisting of over 460 participants from the private and public
sectors, is leading the development of a cyber security strategy and
guidelines for the Smart Grid. The working group has developed an
overall cyber security strategy; selected and revised security
requirements for the Smart Grid; identified vulnerability classes and
specific cyber security issues applicable to the Smart Grid; performed
a privacy impact assessment; specified research and development topics;
and is assessing relevant standards and developing a security
architecture linked to the Smart Grid conceptual reference model.
Results of the group's work have been published in two drafts of NIST
Interagency Report 7628 (Smart Grid Cyber Security Strategy and
Requirements), issued in September 2009 and February 2010, which have
gone through public review. This draft is now being finalized
addressing all comments received and will be published as NIST IR 7628:
Guidelines for Smart Grid Cyber Security in July of this year.
Where Are We Headed
Our most immediate priority is completion of the Priority Action
Plans that are now tackling the highest-priority needs in the standards
portfolio. One action plan, the Smart Meter Upgradeability Standard,
has already been completed. The other Priority Action Plans currently
underway are:
Data standard for consumer energy usage information
Common specification for communicating electricity
price and product definition
Common scheduling mechanism for energy transactions
Common information model for distribution grid
management
Standard demand response signals
DNP3 Mapping to IEC 61850 Objects
Harmonization of IEEE C37.118 with IEC 61850 and
precision time synchronization
Transmission and distribution power systems models
mapping
Guidelines for use of the Internet Protocol suite in
the Smart Grid
Guidelines for use of wireless communications in the
Smart Grid
Energy storage interconnection guidelines
Interoperability standards to support plug-in
electric vehicles
Standard meter data profiles
Harmonize power line carrier standards for appliance
communications in the home
Standards for Wind Plant Communication
One action plan I wish to highlight is the work to create a
standard for consumer energy usage information. Today, the only
information available to most consumers about their electricity usage
is their monthly utility bill. Consumers need more timely and detailed
electronic access to their data in order to reduce energy usage. Under
the NIST action plan, the North American Energy Standards Board is
developing a standard that will define the data on energy usage that
smart meters and utility information systems must make available to
consumers. A draft of this standard will be available by the end of
2010. As these highest priority action plans are completed in 2010, new
action plans will be launched by the Smart Grid Interoperability Panel
to address additional gaps that still need to be filled, as well as new
requirements and technologies that emerge.
Another high priority for NIST is supporting the forthcoming FERC
rulemaking. EISA directs FERC to institute a rulemaking proceeding to
adopt such standards and protocols as may be necessary to ensure smart-
grid functionality and interoperability in interstate transmission of
electric power, and regional and wholesale electricity markets, at any
time after NIST's work has led to sufficient consensus in the
Commission's judgment. NIST has been working very closely with FERC
throughout the entire process.
The evolving nature of the Smart Grid implies that the regulatory
adoption of standards will be an ongoing process rather than a one-time
action. Therefore I anticipate that FERC's initial rulemaking will
focus on a subset of the standards identified by NIST that are the most
mature and the most critically needed for end-to-end Smart Grid
interoperability and security. NIST, working closely with FERC staff,
is preparing additional technical documentation and analysis of these
standards to inform FERC's decision about which standards to include in
its initial rulemaking. NIST is working to complete these documents by
the end of July.
It is important for Federal and state regulators to keep in mind,
when considering the adoption of standards, that while all of the
standards identified through the NIST process are needed for the Smart
Grid, it is not necessary or appropriate for all of them to be adopted
in regulations. Many consensus standards are already widely used by
industry on a strictly voluntary basis. In some cases their adoption in
regulations can be counterproductive. A careful balance must be struck
to ensure that the most critical standards needed to ensure end-to-end
interoperability and security are adopted in regulations, without
impeding continuing innovation and technology improvement.
Another major priority is the establishment of a testing and
certification framework for the Smart Grid. The standards
specifications are necessary but not sufficient to ensure
interoperability and security. A robust and well-defined testing and
certification program is needed.
A new Testing and Certification Committee that has been established
under the Smart Grid Interoperability Panel is guiding the development
of a testing and certification framework for the Smart Grid. This
committee is co-chaired by a leading expert from the private sector and
a manager in the NIST Office of the National Coordinator for Smart Grid
Interoperability. The committee includes representatives of leading
testing laboratories, industry associations, electric utilities, and
smart grid suppliers. The committee is working to prioritize the types
of interoperability testing needed, laboratory qualification criteria,
and requirements for Testing Organizations and Certification
Organizations to successfully facilitate conformity assessment to
product or system interoperability and cyber security standards.
There are few formalized test programs currently in existence
focused on the Smart Grid. One of the most urgent areas of need is a
formalized program to test the conformance of smart meters against
applicable Smart Grid cyber security requirements and standards. NIST
is using a portion of its Recovery Act funds to develop a smart meter
cyber security conformance program. A solicitation for a private sector
contractor to support NIST in developing this program closed on June
10, 2010, and our goal is to have the initial test methodology
developed and ready for deployment within 12 months from the contract
award date.
Challenges and Opportunities
The task of developing standards for an infrastructure like the
Smart Grid is a large and complex undertaking; however, it is eminently
doable. There have been several previous infrastructure standards
projects of similar magnitude that were accomplished successfully and
with which I have personal experience.
Thirty years ago, Bell Laboratories successfully put in place
architecture for the complete automation of maintenance and operations
in the nationwide telecommunications network, with an underlying
foundation of protocols and standards that utilized distributed
computing and data networking technology of that era. That job was
comparable in scale to the current challenge of the Smart Grid; however
the coordination challenge was a bit easier because the national
network at that time was owned and operated by a single entity with a
captive manufacturer rather than 3100 utilities and hundreds of
suppliers.
The evolution of the Internet provides another example of a global
infrastructure that has evolved over the course of decades, using open
standards to achieve interoperability in a flexible way to support new
applications and technologies that were never imagined at the outset.
Like the Internet, the Smart Grid will need to evolve over the 15-20
years in which its deployment will likely occur, and in that sense the
development of the standards will be an ongoing process.
One of the key challenges that we face is to ensure that our
standards are, wherever possible, harmonized internationally. This
provides a double benefit. It ensures the broadest possible market for
U.S. Smart Grid suppliers, helping U.S. companies export their smart
grid products, technologies, and services overseas, while creating high
technology and jobs within the United States. The Administration's
National Export Initiative (NEI) aims to double U.S. exports in five
years, with the goal of creating two million new jobs in the United
States. Smart Grid companies and technology providers based in the
United States will be instrumental in advancing Smart Grid deployment
in overseas markets while creating jobs at home. This will support
NEI's efforts on international standards, promote greater supplier
competition, and lower equipment prices for utilities and consumers.
Our policy has been to base our U.S. Smart Grid on international
standards wherever possible. Of the 75 standards identified in the NIST
Release 1.0 Framework, 77 percent are produced by international
standards organizations.
The U.S. is ahead of every other country in establishing a
standards framework for its Smart Grid. We have intentionally opened
our process to the international community and expressed a preference
for international standards to encourage harmonization. We have also
invested significant effort in establishing bilateral and multilateral
dialogs with other nations that are working on Smart Grids, including
Canada, Mexico, Brazil, the EU (and many of its member states), Japan,
Korea, Australia, India and China. It will not be possible to harmonize
all our standards, given the historical differences that exist between
electrical systems in different parts of the world, but we are making
harmonization a very high priority.
China in particular is making very large investments to create a
Smart Grid, with significant emphasis on transmission and distribution
infrastructure. By one estimate, China will spend $10 billion annually
on Smart Grid/smart infrastructure systems. There is great opportunity
for foreign investment. Companies that specialize in transmission and
transformation equipment, automation equipment, and information and
communications technology components are well-positioned to contribute
to China's grid development projects. I have read some reports that
predict that China's preference for indigenous innovation will extend
to the Smart Grid, and that China may seek to establish its own
standards for the Smart Grid in the belief that the size of its market
will lead to their adoption as de facto global standards. I hope that
this will not be the case, and that China will take action to
strengthen collaboration with the U.S. in creating harmonized
international standards.
Another challenge that we face is accelerating the resolution of
some key standards issues that could impede development of the market
if not settled soon.
Several major appliance manufacturers have announced their
intention to bring to market Smart Grid-enabled consumer appliances
beginning in late 2011, provided that standards for communication
between appliances and the grid for pricing and demand response signals
are resolved by the end of 2010. The existence of too many competing
standards has the potential to fragment the market and impede its
development. Recognizing the urgency, a task group of the SGIP
Governing Board including representatives from the appliance, consumer
electronics, electric utility, building automation, and IT industries,
and other stakeholders including state regulators, has been addressing
the issue. In conjunction with a related effort being undertaken by the
Association of Home Appliance Manufacturers, we are on target to
achieve a timely resolution of the standards for smart appliances to
communicate with the grid to meet the needs of the appliance industry.
Another issue that will be more difficult to resolve is the
interconnection standard between electric vehicles and the grid for
high-voltage, rapid charging. As I indicated earlier, the standards for
charging at 110 or 220 volts have been settled and this will support
the deployment of first generation electric vehicles. Charging stations
that support rapid charging in minutes rather than hours will be
needed, however, for widespread adoption of electric vehicles. There
are at least four different competing proposals advocated by auto
manufacturers headquartered in the U.S., Japan, Europe and China on
what this interface should be. Lack of clarity on what the standard
will be could impede development of a charging infrastructure in the
U.S. Our Priority Action Plan on electric vehicles includes the timely
resolution of this difficult issue as a key goal.
An overarching challenge that we face in setting standards for the
Smart Grid is ensuring that they are sufficiently flexible to preserve
options for the evolution of the grid as we gain experience with early
deployment. The fact is that there are still many unknowns in such
issues as the degree of centralized vs. distributed control of the
grid. For example as we move toward more distributed renewable
generation, with households and buildings not only consuming power but
also generating power and selling it back into the grid, and appliances
behaving in different ways in response to price signals, having
effective controls to ensure stability of the grid will become
increasingly important. New, more dynamic measurements and models of
grid performance will be needed. Measurements, characterization, and
models of storage devices, electric vehicles, and distribution system
loads have to be developed. These are areas in which NIST's expertise
in measurement science can contribute and we are addressing them in the
program planning for our research efforts related to the Smart Grid.
Cyber security will remain a significant challenge as threats continue
to evolve, and application of NIST's expertise in computer and network
security to the Smart Grid will continue to be a top priority.
Finally, I would like to mention an opportunity. Basing the Smart
Grid architecture on open standards, as we are doing, may facilitate
multi-use scenarios, in much the same way as the Internet has evolved
over time to provide a common set of protocols and standards supporting
voice, video and data applications. Japan, which is following what we
are doing very closely, is moving in this direction. Japan has recently
unveiled their national Smart Grid program, which they have called the
``Smart Community''. Their roadmap envisions a common architecture
supporting automation in their electric grid, water and gas networks,
energy efficient buildings, and intelligent transportation. I believe
that the architecture and standards for the U.S. Smart Grid should
consider this broader concept and not limit our future direction.
The knowledge gained by rigorous analysis of the performance of the
Smart Grid under the Department of Energy's (DOE) ARRA programs will
give us valuable information to determine whether or not benefits could
be gained by applying the standards based intelligence infrastructure
to other domains important to our society.
Conclusion
The Smart Grid, with the unique investment opportunity afforded by
the American Recovery and Reinvestment Act, represents a once in a
lifetime opportunity to renew and modernize one of the Nation's most
important infrastructures. NIST is proud to have been given such an
important role and is committed to achieving the Administration's
vision of a cleaner, more reliable, more efficient and effective
electricity grid that creates jobs and reduces our dependence on
others.
Thank you for the opportunity to testify today on NIST's work on
Smart Grid interoperability. I would be happy to answer any questions
you may have.
Biography for George W. Arnold
George Arnold was appointed National Coordinator for Smart Grid
Interoperability at the National Institute of Standards and Technology
(NIST) in April 2009. He is responsible for leading the development of
standards underpinning the nation's Smart Grid. Dr. Arnold joined NIST
in September 2006 as Deputy Director, Technology Services, after a 33-
year career in the telecommunications and information technology
industry.
Dr. Arnold served as Chairman of the Board of the American National
Standards Institute (ANSI), a private, non-profit organization that
coordinates the U.S. voluntary standardization and conformity
assessment system, from 2003 to 2005. He served as President of the
IEEE National Coordinator for Smart Grid Standards Association in 2007-
08 and is currently Vice Interoperability Office of the Director
President-Policy for the International Organization for Standardization
(ISO) where he is responsible for guiding ISO's strategic plan.
Dr. Arnold previously served as a Vice-President at Lucent
Technologies Bell Laboratories where he directed the company's global
standards efforts. His organization played a leading role in the
development of international standards for Intelligent Networks and IP-
based Next Generation Networks. In previous assignments at AT&T Bell
Laboratories he had responsibilities in network planning, systems
engineering, and application of information technology to automate
operations and maintenance of the I nationwide telecommunications
network.
Dr. Arnold received a Doctor of Engineering Science degree in
Electrical Engineering and Computer Science from Columbia University in
1978. He is a Senior Member of the IEEE.
Chairman Wu. Thank you very much, Dr. Arnold.
Mr. Emnett, please proceed.
STATEMENT OF MR. MASON W. EMNETT, ASSOCIATE DIRECTOR OF THE
OFFICE OF ENERGY POLICY AND INNOVATION, FEDERAL ENERGY
REGULATORY COMMISSION
Mr. Emnett. Thank you, Mr. Chairman and Members of the
Subcommittee. My name is Mason Emnett and I am the Associate
Director of the Office of Energy Policy and Innovation at the
Federal Energy Regulatory Commission. Yes, that is a mouthful.
I appear today before you as a staff witness. My testimony does
not necessarily represent the views of the Commission or any
individual commissioner.
As Dr. Arnold explained, the Commission shares statutory
responsibility regarding the development of smart grid
interoperability standards with the National Institute of
Standards and Technology. The Energy Independence and Security
Act of 2007 directs NIST to coordinate the development of a
framework to achieve interoperability of smart grid systems and
devices. Once the Commission is satisfied that NIST's work has
led to sufficient consensus, the Commission is directed to
institute a rulemaking proceeding to adopt such standards and
protocols as may be necessary to ensure smart grid
functionality and interoperability in the interstate
transmission of electricity and in regional and wholesale
electric markets.
In order to provide input to NIST in the development of its
interoperability framework, the Commission in July 2009 issued
a smart grid policy statement that identified areas that
deserved high priorities in the smart grid standards
development process. The Commission explained that addressing
these issues would help expedite the development of functions
that are important to Federal energy policy. NIST embraced the
Commission's priority in preparing its framework, which was
released by NIST in January 2010 and included additional
priorities identified by NIST. The NIST framework identifies an
initial set of 75 interoperability standards that are
applicable or are likely applicable to the ongoing development
of smart grid technologies and applications. The framework also
outlines a number of action plans providing for further
standards development to address the priorities identified by
NIST and the Commission.
As Dr. Arnold mentioned, to provide continuing stakeholder
input in the smart grid standards development process, NIST has
formed the Smart Grid Interoperability Panel, a public-private
partnership of stakeholder groups supporting NIST in the
ongoing coordination, acceleration and harmonization of
standards development for the smart grid. Although the
Commission is not a formal member of the interoperability panel
or its governing board, our staff has attended meetings of both
as well as many meetings regarding work on the priority action
plans and working group meetings focusing on such issues as
cybersecurity.
With regard to the adoption of smart grid standards by the
Commission, the commission explained in the Policy statement
that its statutory mandate under EISA [Energy Independence and
Security Act] requires it to consider standards that will be
applicable to all electric power facilities with smart grid
features. This could include facilities at the local
distribution level and those used directly by retail customers
as long as the related standard is necessary for the purpose
identified in EISA. The Commission stated, however, that it
would not adopt a smart grid standard without a demonstration
of sufficient cybersecurity protection. The Commission noted in
the policy statement that adoption by the Commission of a
standard under EISA does not make the standard mandatory. To
the extent the Commission might wish to make any particular
smart grid standard mandatory, its authority to do so must
derive under other statutory authority such as the Federal
Power Act. The Commission also explained that adoption of a
smart grid standard by the Commission under EISA does not alter
any state jurisdiction that may exist with regard to compliance
with the smart grid standard.
To support an active dialog with states regarding the
interest in smart grid development, the Commission has formed a
Federal-state collaborative with the National Association of
Regulatory Utility Commissioners and encouraged states to
actively participate in the smart grid standards development
process.
Finally, the Commission also has sought to encourage the
development of smart grid applications by providing rate
incentives to early adopters of smart grid technologies. The
Commission expressed concern that waiting for all technical
issues to be resolved before beginning investment in smart grid
deployment would frustrate the development of smart grid
standards. The Commission will therefore allow recovery of a
jurisdictional smart grid cost prior to finalization of related
smart grid standards if certain specific demonstrations are
made.
In conclusion, the Commission remains committed to
supporting development of smart grid standards and investments
in smart grid technologies where appropriate. Continued
cooperation among NIST, other Federal agencies, state
regulators and industry representatives as well as consumer
representatives and other interested entities will enable the
successful deployment of innovative, effective and secure smart
grid technologies.
Thank you again for the opportunity to appear before you
today. I would be happy to answer any questions you may have.
[The prepared statement of Mr. Emnett follows:]
Prepared Statement of Mason W. Emnett
Mr. Chairman and members of the Subcommittee:
My name is Mason Emnett, and I am the Associate Director of the
Office of Energy Policy and Innovation at the Federal Energy Regulatory
Commission (Commission). I appear before you as a staff witness; my
testimony does not necessarily represent the views of the Commission or
any individual Commissioner. Thank you for the opportunity to appear
before you today to discuss the progress of standards development
towards smart grid interoperability and modernization of the nation's
electricity transmission and distribution system.
The Chairman of the Commission, Jon Wellinghoff, most recently
testified about the benefits of smart grid technologies and the status
of the agency's work on smart grid standards on March 23, 2010, before
the Energy and Environment Subcommittee of the House Committee on
Energy and Commerce. Today, I will focus on the Commission's efforts to
support the development of smart grid standards, its role in adopting
standards, and its work to incentivize investment in smart grid
technologies.
Development of Smart Grid Standards
In the Energy Independence and Security Act of 2007 (EISA),
Congress enacted several requirements related to development of a smart
grid. Among other things, EISA directs the National Institute of
Standards and Technology (NIST) to coordinate the development of a
framework to achieve interoperability of smart grid devices and
systems. In furtherance of this responsibility, NIST has engaged in
significant outreach to identify standards for potential inclusion in a
smart grid interoperability framework, leading to the publication in
January 2010 of the Framework Roadmap for Smart Grid Interoperability
Standards, Release 1.0 (Framework).
To provide input into the development of the NIST Framework, the
Commission in July 2009 issued a Smart Grid Policy Statement that,
among other things, discussed smart grid functions and characteristics
that could help address challenges to the reliable operation of the
transmission system. In response to the need for action on these
challenges, the Commission identified areas that deserved high priority
in the smart grid standards development process. These areas include
two cross-cutting issues, system security and inter-system
communication, and four key grid functionalities: wide-area situational
awareness, demand response, electric storage and electric vehicles.
The Commission explained that addressing these priorities would
help to expedite the development of functions that are important to
Federal energy policy. For example, wide-area situational awareness
will provide tools that can improve reliability. Demand response and
electric storage will support initiatives that have emerged in many
states such as integrating renewable generation to permit utilities to
meet state-mandated renewable portfolio standard requirements. Electric
vehicles will help reduce our dependence on foreign oil, and will also
have favorable environmental impacts. NIST embraced these priorities in
drafting its Framework, and added two additional priorities for
standards: advanced metering and distribution system automation.
In order to ensure broad support for these priorities, staff from
NIST and the Commission have engaged in individual and coordinated
outreach with standards development organizations from the
telecommunications, internet, and power industries to discuss framework
development and the respective roles of each agency in the standards
development process. NIST also released a draft of its Framework in
September 2009 to provide an opportunity for public comment and
collaboration with the Commission prior to finalizing the document.
Based on this feedback, NIST's Framework identified 75 interoperability
standards that are applicable, or are likely applicable, to the ongoing
development of smart grid technologies and applications. The NIST
Framework also outlines the priority areas identified by both the
Commission and NIST in the smart grid standards development process. In
particular, sixteen Priority Action Plan areas were created to address
gaps in standards that are critical for the interoperability of the
smart grid.
In addition, NIST has provided for continuing stakeholder input
into the smart grid standards development process through formation of
the Smart Grid Interoperability Panel (SGIP), a public-private
partnership of 22 stakeholder groups supporting NIST in the ongoing
coordination, acceleration and harmonization of standards development
for the smart grid. The Governing Board of this Panel was elected and
tasked with maintaining a broad perspective regarding the NIST
interoperability framework and providing recommendations to NIST.
Within the SGIP are two standing committees and one permanent working
group to support NIST on particular issues. One standing committee has
responsibility for outlining the architecture needed to realize the
smart grid vision. The second committee addresses testing and
certification of vendor products and systems for conformance with smart
grid standards and for interoperability.
The working group within the SGIP addresses matters related to the
security of the smart grid, including reviewing standards to determine
the level of cyber security present and determining whether each
identified standard meets appropriate security requirements. This
working group has released two drafts of an Interagency Report on Smart
Grid Cyber Security Strategy and Requirements in September 2009 and
February 2010, and is currently reviewing comments on the latest draft.
The report addresses risks, vulnerabilities, threats, and impacts, and
provides guidance related to smart grid cyber security.
Although the Commission is not a formal member of the SGIP or its
Governing Board, Commission staff has attended meetings of both, as
well as many meetings regarding work on the Priority Action Plans.
Commission staff is also actively involved in the work of the cyber
security working group, as the Commission recognizes that inadequate
cyber security could threaten the health of the bulk power system.
Adoption of Standards by the Commission
As defined by EISA, the Commission's responsibility to review a
smart grid interoperability standard is triggered once the Commission
is satisfied that NIST's work has led to sufficient consensus. At such
time, the Commission is directed to institute a rulemaking proceeding
to adopt such standards and protocols as may be necessary to ensure
smart grid functionality and interoperability in interstate
transmission of electric power and regional and wholesale electric
markets.
The Commission explained in the Policy Statement that it understood
this mandate to give it authority to adopt a standard that will be
applicable to all electric power facilities and devices with smart grid
features, including those at the local distribution level and those
used directly by retail customers, as long as the standard is necessary
for the purpose identified in EISA. The Commission noted, for example,
that two-way communications are a distinguishing characteristic of
smart grid devices on both the transmission and distribution systems.
Such two-way communication capability is essential to the smart grid
vision of interoperability, allowing the transmission and distribution
systems to communicate with each other and affecting the security and
functionality of each other. Consequently, the Commission found that
EISA grants it the authority to adopt standards that relate to
distribution facilities and devices deployed at the distribution level,
if the Commission finds that such standards are necessary for smart
grid functionality and interoperability in interstate transmission of
electric power, or in regional and wholesale electric markets.
In addition, the Commission stated in the Policy Statement that it
will require a demonstration of sufficient cyber security protection
for a standard to be adopted. This consideration is consistent with
EISA's inclusion of cyber security as a characteristic of a smart
grid,\1\ EISA's identification of cyber security as a ``smart grid
function,'' \2\ and EISA's requirement for the Department of Energy (in
consultation with the Commission, the Department of Homeland Security,
and the Electric Reliability Organization certified by the Commission)
to study and report on the potential impact of deployment of Smart Grid
systems on the security of the Nation's electricity infrastructure.\3\
---------------------------------------------------------------------------
\1\ EISA section 1301(2).
\2\ EISA section 1306(d)(5).
\3\ EISA section 1309(b).
---------------------------------------------------------------------------
The Commission noted in the Policy Statement, however, that
adoption by the Commission of a standard under EISA does not make the
standard mandatory, nor does EISA give the Commission authority to
require the development of a smart grid standard. To the extent the
Commission might wish to make any smart grid standards mandatory, its
authority to do so must derive from other statutory authority, such as
the Federal Power Act. For example, the Commission has the authority
under section 215 of the Federal Power Act to approve and enforce
reliability standards developed by the North American Electric
Reliability Corporation. The Commission also has the authority under
sections 205 and 206 of the Federal Power Act to establish the rates,
terms and conditions of wholesale sales and interstate transmission of
electricity, including the incorporation into Federal regulations of
business practice standards developed by the North American Energy
Standards Board. Although there is the potential for some overlap in
the adoption of smart grid standards under EISA and review of
reliability or business practice standards under the Federal Power Act,
these sources of jurisdiction are distinct and the Commission has
interpreted EISA as not changing the scope of its jurisdiction.
The Commission also explained in the Policy Statement that adoption
of a smart grid standard by the Commission under EISA does not alter
any state jurisdiction that may exist to require compliance with smart
grid standards. To that end, the Commission has recognized that states
have an interest in the functionalities of smart grid technologies and
encouraged states to actively participate in the standards development
process to ensure that their perspectives are represented. The
Commission expressed in the Policy Statement an expectation that its
adoption of national standards should enhance, not limit, the policy
choices available to each state.
To support an active dialogue with the states on these issues, the
Commission has formed a Federal-state collaborative with the National
Association of Regulatory Utility Commissioners to address issues
related to smart grid and demand response. This body has received
substantial input from a variety of smart grid stakeholders on a range
of issues, including smart grid interoperability standards, consumer
access to and privacy of data, potential smart grid benefits, and
potential new business models and regulatory approaches. By
coordinating consideration of these issues, the Collaborative provides
a forum to identify how smart grid development can benefit consumers
and to address the concerns of regulators regarding grid security and
functionality.
Incentivizing Smart Grid Investment
The Commission also has sought to encourage the development of
smart grid applications by providing rate incentives to early-adopters
of smart grid technologies. In its Policy Statement, the Commission
established an interim rate policy to apply during the period prior to
adoption of interoperability standards by the Commission. The
Commission expressed concern that waiting for all technical issues to
be resolved before beginning investment in smart grid deployment would
frustrate the development of smart grid standards. The Commission
concluded that smart grid resources deployed with appropriate
protections during the interim period prior to the Commission's
adoption of interoperability standards could instead increase our body
of knowledge and ultimately assist the standards development process.
During this period, the Commission will allow recovery of
Commission-jurisdictional smart grid-related costs if four
demonstrations are made. These four demonstrations are (1) the smart
grid facilities will advance the policy and goals of section 1301 of
EISA, (2) the smart grid facilities will not adversely affect the
reliability and cybersecurity of the bulk-power system, (3) the
applicant has minimized the possibility of stranded investment in smart
grid equipment, and (4) the applicant agrees to provide certain
information to the Department of Energy Smart Grid Information
Clearinghouse.
With regard to the fourth demonstration, the Commission recognizes
the benefit of DOE implementing a Smart Grid Information Clearinghouse
to collect information about the results of the smart grid grant and
demonstration programs that have been funded by the American Recovery
and Reinvestment Act of 2009. This information can help Federal and
state regulators as they make decisions on smart grid filings from
electric utilities, providing knowledge gained from pilot projects,
lessons learned about the impact of investments, and best practices.
Commission staff has worked with DOE and other stakeholders to help
define the precise data that should be collected, and the Commission
has sought to supplement that data by requiring applicants for rate
recovery of smart grid costs to provide relevant information to the
Clearinghouse.
Conclusion
In conclusion, the smart grid effort has benefited from the active
participation of many industry segments in NIST's standards development
process. The Commission remains committed to continued cooperation
among NIST, other Federal agencies, state regulators, industry
representatives, consumer representatives, and other interested
entities in order to realize the successful deployment of innovative,
efficient and secure smart grid technologies.
Thank you again for the opportunity to appear before you today. I
would be happy to answer any questions you may have.
Biography for Mason W. Emnett
Mason Emnett is Associate Director of the Office of Energy Policy
and Innovation at the Federal Energy Regulatory Commission. The Office
provides leadership in the development and formulation of policies and
regulations to address emerging issues affecting wholesale and
interstate energy markets.
Mr. Emnett joined the Commission in 2006, serving as Senior Legal
Advisor in the Commission's Office of General Counsel. There he advised
the Commission on legal and policy matters related to electric
transmission service, wholesale power sales, electric system
reliability, corporate regulation of public utilities, and enforcement
proceedings. Prior to joining the Commission, Mr. Emnett was in private
practice with the law firm of Skadden, Arps, Slate, Meagher and Flom
LLP in Washington, DC. where he represented public utilities appearing
before the Commission on matters related to market design, wholesale
rates, mergers and acquisitions, and regulatory compliance.
Mr. Emnett is a graduate of the Georgetown University Law Center
and of the University of Texas at Arlington.
Chairman Wu. Thank you very much.
Mr. McDonald, please proceed.
STATEMENT OF MR. JOHN D. McDONALD, P.E., DIRECTOR OF TECHNICAL
STRATEGY AND POLICY DEVELOPMENT, GE ENERGY
Mr. McDonald. Good morning, Mr. Chairman and Members of the
Subcommittee, I am John McDonald, Director of Technical
Strategy and Policy Development with GE's Digital Energy
business. Digital Energy provides technology solutions enabling
grid management and optimization for electric utilities
worldwide. And in my role, I set and drive the vision
integrating standards, policy, regulatory and industry
participation with customer solutions development.
My comments today are based on over three decades of
experience in the electric industry including past President of
the Institute of Electrical and Electronics Engineers, or IEEE,
Power and Energy Society, current member of DOE's Smart Grid
Electricity Advisory Committee, Board Member of the Gridwise
Alliance and the IEEE Standards Association, and Governing
Board Chair of the NIST Smart Grid Interoperability Panel, or
the SGIP.
I welcome this opportunity to update you on the SGIP's
efforts to support smart grid architecture and standards and
offer GE's perspectives on principles to guide standards
development.
The smart grid is essential to addressing our energy
demand, security and environmental challenges. We commend our
Nation's leadership for embracing the smart grid in the Energy
Independence and Security Act of 2007 and the American Recovery
and Reinvestment Act [ARRA] of 2009. This legislation and
direction from Federal and state regulatory agencies gives our
industry a tremendous opportunity to begin transforming our
grid into a more automated, interactive, and intuitive power
delivery system.
Crucial to this undertaking are system architecture and
standards, testing and certification and cybersecurity. These
are the foundation for bringing together the electrical and
communications infrastructure and for evolving technology to
meet many and disparate needs. They also provide a framework
for development, a roadmap for progress, and a catalyst for
continued industry investment.
Given the importance and complexity of these areas, there
is a need for the government to play a coordinating role. The
National Institute of Standards and Technology, or NIST, under
Dr. George Arnold's leadership as National Coordinator for
Smart Grid Interoperability, has embraced this role and is
working diligently to ensure we create a foundation that is
built to last and a modern grid that is more robust, responsive
and resilient.
The SGIP is lead by three core teams--NIST, Plenary
officers, and a Governing Board--and is fully supported by an
administrator. Our membership is large and diverse by design,
as it is free and open to all who share the smart grid vision.
To date, it consists of some 1,700 individuals from 590 member
organizations representing 22 stakeholder categories.
Furthermore, the membership is organized into three standing
committees, six domain expert working groups and 16 priority
action plan teams, and now supported by a Program Management
Office.
Since the beginning of the year, NIST and the SGIP have
gained interest and traction worldwide on their Smart Grid
Conceptual Reference Model. The identification and
prioritization of the 75 existing standards of greatest impact
to smart grid interoperability and our priority action plans to
address gaps and inconsistencies are driving much-needed focus
while the SGIP structure and operating rhythm are driving much-
needed collaboration and consensus. Timelines are being adhered
to, even accelerated, in light of related policy discussions
and actions. Meetings are being co-located with other
stakeholders and industry influencers to further harmonize our
respective work.
I would also like to share that GE believes the following
principles should guide the government's engagement in private-
sector standards activities: number one, encourage consensus-
based adoption of technical standards; two, balance Federal
leadership with private-sector innovation; three, promote
international standards development; four, utilize Federal R&D
to support standards development; and five, educate
stakeholders to accelerate deployment of standards.
In closing, let me say thank you for your interest in and
evaluation of how smart grid architecture and standards are
progressing. As these represent the foundation we build upon,
that will guide our technology development and innovation for
years to come, it is essential that we continue to move forward
in a deliberate, disciplined fashion that represents and
respects all industry stakeholders. While the work of NIST and
the SGIP is extremely challenging, it is always rewarding given
we are charting the course for a truly 21st century grid,
steady, sustainable and truly smart. Thank you.
[The prepared statement of Mr. McDonald follows:]
Prepared Statement of John D. McDonald
Good morning Mr. Chairman and members of the Committee, I am John
McDonald, Director, Technical Strategy and Policy Development, with GE
Energy's Digital Energy business. In this role, I set and drive the
vision that integrates standards, policy, regulatory and industry
participation with customer solutions development at Digital Energy.
My comments today are based upon my more than three decades of
experience working in the electric power industry, my position at GE
and my numerous industry leadership roles. These include Past President
of the Institute of Electrical and Electronics Engineers (IEEE) Power &
Energy Society, current member of the Department of Energy (DOE) Smart
Grid Electricity Advisory Committee, current Board Member of The
GridWise Alliance and the IEEE--SA (Standards Association), and current
Chair of the Governing Board of the NIST Smart Grid Interoperability
Panel (SGIP).
I welcome this opportunity to provide an update on the SGIP's
efforts in support of Smart Grid architecture and standards, and also
to offer perspectives on behalf of GE on principles to guide standards
development.
Introduction
The Smart Grid is essential to addressing the energy demand,
security and environmental challenges we face. We commend our nation's
leadership for embracing the Smart Grid in the Energy Independence and
Security Act (EISA) of 2007 and the American Recovery and Reinvestment
Act (ARRA) of 2009.
This legislation, and the direction being provided by various
Federal and state regulatory agencies, gives the industry a tremendous
opportunity to noticeably begin transforming our grid into a more
automated, interactive and intuitive power delivery system.
Crucial to this undertaking are system architecture and standards,
the foundation for bringing together the electrical and communications
infrastructure and for evolving technology to meet many and disparate
needs. System architecture and standards that foster interoperability
provide a framework for development, a roadmap for progress and a
catalyst for continued industry investment.
In this area, and the areas of testing and certification and cyber
security, there is a need for the government to play a coordinating
role. The National Institute of Standards and Technology (NIST), under
Dr. George Arnold's leadership as National Coordinator for Smart Grid
Interoperability, has embraced this role and is working diligently to
ensure we create a foundation that is built to last and a modern grid
that will remain one of mankind's greatest achievements.
And, while all stakeholders want to move fast and get it right from
the start, the reality is that we need to move with purpose and be able
to adapt to a dynamic environment. Flexibility, uniformity and
technology neutrality are key considerations for the decisions we make
around systems architecture and standards. Furthermore, we need to make
those decisions in an open, inclusive, transparent manner, where
thoughtful debate, technology innovation and market forces help guide
us. So balance--in terms of participation, perspective and direction--
is essential to advancing both national and international Smart Grid
efforts. To be effective, to realize our vision and produce the
outcomes we intend to, the private and public sectors must continue to
successfully partner with one another. We are working well today in
this new paradigm and we will continue to improve with time.
GE Energy
GE Energy is one of the world's leading suppliers of power
generation and energy delivery technologies with businesses focused on
fossil power, gasification, nuclear, renewable energy--including wind,
solar and biomass, oil and gas, water, as well as transmission and
distribution. We have more than 100 years of industry experience, and
our team of 65,000 employees operates in more than 140 countries.
GE Digital Energy
GE Digital Energy provides technology solutions that enable grid
management and optimization for electric utilities worldwide. These
solutions encompass hardware, software and services supporting the
entire electricity delivery value chain, from power transformers at the
generation switchyard to smart meters at the customer premises. They
help utilities boost their productivity and reliability, while at the
same time reducing their environmental footprint, and they empower
consumers to monitor and control their electricity usage.
We have a strong North American presence, with headquarters in
Atlanta, Georgia, and facilities across the United States, as well as
in Mexico, Canada, the United Kingdom, Spain, Switzerland and India.
The business has experienced significant growth over the past few
years, and we expect this trend to continue as electric utilities
worldwide prepare for a more secure, low carbon energy future.
The NIST Roadmap \1\
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\1\ NIST Framework and Roadmap for Smart Grid Interoperability
Standards, Release 1.0, January 2010.
The NIST Roadmap is phase one of a three-phase plan to establish
standards, priorities and a framework to achieve Smart Grid
interoperability. The second phase of the plan, in which I am pleased
to participate, is the SGIP. The SGIP is an ongoing, public-private
organization that provides an open process through which stakeholders
can participate in coordinating, harmonizing and accelerating Smart
Grid standards development. The third phase of the plan is the
establishment of a framework for testing conformity with Smart Grid
standards and certifying the compliance of Smart Grid devices and
systems.
To help guide the industry, NIST defines interoperability as
follows:
The capability of two or more networks, systems, devices,
applications, or components to exchange and readily use
information--securely, effectively, and with little or no
inconvenience to the user.\2\ The Smart Grid will be a system
of interoperable systems. That is, different systems will be
able to exchange meaningful, actionable information. The
systems will share a common meaning of the exchanged
information, and this information will elicit agreed-upon types
of response. The reliability, fidelity, and security of
information exchanges between and among Smart Grid systems must
achieve requisite performance levels.\3\
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\2\ Recovery Act Financial Assistance, Funding Opportunity
Announcement. U.S. Department of Energy, Office of Electricity Delivery
and Energy Reliability, Smart Grid Investment Grant Program Funding
Opportunity Number: DE-FOA-0000058.
\3\ GridWise Architecture Council, interoperability Path Forward
Whitepaper, November 30, 2005 (v1.0).
The NIST Roadmap contains several important items that shape the
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work of the SGIP.
- A conceptual reference model . . . to present a shared view
of Smart Grid's complex system of systems and to facilitate
design of Smart Grid architecture (See Figure 1)
- An initial set of 75 Smart Grid standards for implementation
. . . to address issues identified by NIST and priorities
identified in the Federal Energy Regulatory Commission (FERC)
Smart Grid Policy Statement\4\--demand response and consumer
energy efficiency, wide-area situational awareness, energy
storage, electric transportation, advanced metering
infrastructure, distribution grid management, network
communications and cyber security
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\4\ FERC Smart Grid Policy Statement, July 16, 2009.
- Priorities for developing additional standards and making
revisions to existing standards, with supporting action plans .
. . to resolve major gaps affecting interoperability and
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security of Smart Grid components
- Initial steps toward a Smart Grid cyber security strategy .
. . to assess risks and to identify requirements to address
those risks
Smart Grid Interoperability Panel \5\
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\5\ SGIPGB and SGIP Charter, Version 1.2, June 10, 2010; SGIP
brochure created for the 2010 IEEE/PES Transmission & Distribution
Conference & Exposition; www.sgipweb.org.
Initiated by NIST and established in November 2009, the SGIP is
dedicated to the interoperability of Smart Grid devices and systems.
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According to the SGIP charter:
The Smart Grid Interoperability Panel is a membership-based
organization created by an Administrator under a contract from
NIST to provide an open process for stakeholders to participate
in providing input and cooperating with NIST in the ongoing
coordination, acceleration and harmonization of standards
development for the Smart Grid. The SGIP also reviews use
cases, identifies requirements and architectural reference
models, coordinates and accelerates Smart Grid testing and
certification, and proposes action plans for achieving these
goals. The SGIP does not write standards, but serves as a forum
to coordinate the development of standards and specifications
by many standards development organizations.
Thus, the SGIP not only identifies and addresses standardization
priorities, but also plays a leadership role in facilitating and
developing an information architecture, a cyber security strategy and a
framework for testing and certification. It focuses on analysis and
coordination of effort in helping NIST fulfill its responsibilities
under EISA. The NIST Roadmap is the starting point for this activity.
The structure depicted in Figure 2 enables the SGIP to accomplish
its complex and urgent work. The SGIP membership is led by three core
teams--NIST, Plenary Officers and a Governing Board--and it is fully
supported by an administrator. The Governing Board that I now chair
maintains a broad community based perspective by having a breadth of
experience, knowledge and involvement. It also holds consensus as a
core value, ensuring that all legitimate views and proposals are
considered. Key responsibilities include approving and prioritizing
work programs, facilitating dialogue with standards development
organizations and arranging for necessary resources for the SGIP.
Our membership is large and diverse by design, as it is free and
open to all who share the Smart Grid vision. To date, it consists of
some 1,700 individuals from 590 member organizations (90% U.S., 5%
Canada, 5% Other International) representing 22 stakeholder categories.
Furthermore, the membership is organized into the following standing
committees, working groups and teams, and is now supported by a Program
Management Office.
- Standing Committees & Working Groups
Architecture (SGAC)
Cyber Security (CSWG)
Test & Certification (SGTCC)
- Domain Expert Working Groups
Transmission & Distribution (TnD)
Industry to Grid (I2G)
Building to Grid (B2G)
Home to Grid (H2G)
Vehicle to Grid (V2G)
Business & Policy (BnP)
- Priority Action Plan (PAP) Teams
Meter Upgradeability Standard
Role of IP in the Smart Grid
Wireless Communications for the Smart Grid
Common Price Communication Model
Common Scheduling Mechanism
Standard Meter Date Profiles
Common Semantic Model for Meter Data Tables
Electric Storage Interconnection Guidelines
CIM for Distribution Grid Management
Standard DR and DER Signals
Standard Energy Usage Information
Common Object Models for Electric
Transportation
IEC 61850 Objects/DNP3 Mapping
Time Synchronization, IEC 61850 Objects/IEEE
C37.118 Harmonization
Transmission and Distribution Power Systems
Model Mapping
Harmonize PLC Standards for Appliance
Communications in the Home
Wind Plant Communications
SGIP Status Report
To fully convey the effectiveness and progress of the SGIP to date,
we need to address the following:
- What makes a standard? Why do standards not necessarily
deliver interoperability? How can this be overcome?
- To what extent are currently available standards being
implemented?
- How do we further advance the development of new standards?
- What ensures stakeholder buy-in and adoption of standards
emerging from the SGIP process?
- How effective have we been in coordinating tasks and
gathering stakeholder input in the SGIP process?
- What progress have our working groups and teams made since
inception?
Relating Standards and Interoperability
With respect to a technical standard, conformance, interoperability
and performance are critical. Technology may be developed in accordance
with the standard, and it may even fully perform in a formal stress
test state of heightened activity. However, there remains room for
interpretation in how the technology is implemented, how it ultimately
operates in conjunction with other technology. This differential
between compliance in design and ease of use in system operation speaks
to the technology's interoperability.
As we strive for interoperability across Smart Grid's system of
systems, we strive for compatibility, even interchangeability, which
goes beyond the everyday talk of plug and play. Getting all the devices
and infrastructure to speak a common language, use common interfaces
and really work in unison is a new reality for both suppliers and
customers that have traditionally operated in silos, built around
specific functionality and/or areas of expertise. From the utility's
perspective today, a supplier needs to ensure interoperability of
technology not only within its own portfolio, but also with the
technology portfolio from competing suppliers. This provides confidence
in the technology investment and, ideally, a better return on the
investment due to fewer, more easily managed implementations and/or
integrations. The creation of the SGIP, with its knowledge and focus on
all the building blocks of Smart Grid and the networked domains they
reside in, reinforces the need and provides a forum for more
coordinated and further structured implementation of standards.
Encouraging Implementation
With all technical standards, we must also address the issue of
application and use. The industry should be leveraging standards
already developed and tested, even if the implementation of these
standards needs to be further refined to promote interoperability. The
major barriers to overcome in this area are awareness and risk
aversion.
In the U.S.A., the transition from DNP 3.0 to IEC 61850 for
substation automation and communications is an excellent example of the
challenge we have before us. IEC 61850 calls for sending protection
messages over Ethernet local area networks (vs. dedicated copper wires)
and accessing measurements via a central process bus (vs. wired to the
individual relays). These relatively small technology changes, but
large process and cultural changes, have resulted in continued
performance with substantial savings for those deploying this new
technology worldwide. But there is enough concern and resistance to
these changes here in the USA that IEC 61850 is not yet widely accepted
or deployed.
Currently, standards development organizations and suppliers do
little to educate utilities about standards, their features, benefits
and overall value. The education required is comprehensive and constant
in nature, to address awareness, trial/usage, acceptance and adoption,
even recommendation. In addition, there is apprehension on the part of
some utilities and regulators that needs to be addressed. Is the
technology proven, at scale, in a real-life operating environment? Is
it hardened to withstand changes in that environment? Does the
technology adhere to standards? If so, which standards? And will those
standards stand the test of time?
To address awareness and risk aversion, we need engagement, active
participation and collaboration among a fully representative set of
stakeholders. Being part of the process is paramount to trusting the
process and its outcomes. The SGIP embodies and promotes these
principles. The charter, membership profile and structure of the
organization clearly demonstrate the desire to be open and inclusive in
composition, transparent in operations and in consensus with work
product and deliverables. The Governing Board is constantly evaluating
balance among stakeholders, particularly, suppliers and utilities. This
is required for the SGIP to drive standards that are technically strong
and able to be successfully implemented--affordably and without
adversely affecting performance.
Addressing the Speed of Standards Development
The SGIP desires to create both a sense of stability and a sense of
urgency with standards development. Suppliers may resist implementing
technology that is not yet anchored to a standard. Utilities may also
resist, and further require independent third party assurance of
conformance once the technology is anchored to a standard. Timely
development and implementation of standards are a priority, as delay
may be a bigger risk for Smart Grid than balkanization. Our goal is to
provide direction and a rapid path forward in that direction. To that
end, the SGIP now has the ability to encourage standards development
organizations to fast track a standard. This essentially means that
NIST and the SGIP facilitate requirements capture, communicate a sense
of urgency and push for expedited timetables with standards development
organizations that still retain control of the actual development. The
SGIP can also create additional PAPs as they are needed.
With respect to fast track, we should look to IEEE 1613, a standard
for environmental requirements for networking equipment in the
substation. The use of off the shelf retail networking equipment was a
growing concern, creating an immediate need for hardened commercial
equipment. The IEEE accomplished their task in just 18 months versus
the usual four or more years and, this was back in 2003, well before
the Smart Grid, NIST and the SGIP altered the landscape.
Additionally, when the SGIP--just three months in existence--
recognized the growing importance of bringing and then managing wind on
the grid, it quickly added PAP 16 around wind plant communications.
I also want to point out that, given the scope and pace of the SGIP
agenda, we have recently established a Program Management Office to
further coordinate and expedite the work of the various PAP teams. We
have to ensure that we do not duplicate effort within the SGIP, and
that technologies that are needed by multiple PAPs have consistency.
Achieving Stakeholder Buy-In and Adoption
As NIST and the SGIP continue their efforts, we have every reason
to believe that we have created the right environment for private
sector buy-in and support of Smart Grid standards. In addition to
policies and procedures around membership, committee participation,
work planning, project management, conflict resolution and the
nomination and election of the SGIP leadership, we have influential
parties including the DOE, FERC and the Office of Management and Budget
(OMB), along with state regulatory and international agencies, who are
shaping our initiatives.
The DOE funding announcements for the Smart Grid Investment Grant
Program and Smart Grid Demonstration Program emphasize the importance
of addressing interoperability and providing a summary of how a project
will support compatibility with NIST's emerging Smart Grid standards
framework and roadmap. As the grants are currently driving the majority
of Smart Grid deployments, this tie to NIST and the work of the SGIP is
important.
In addition, NIST expects that standards be produced and maintained
by recognized standards development organizations as described in OMB
Circular A-119 and the National Technology Transfer and Advancement
Act. This ensures that standards and conformity assessment activities
are acceptable for reference by Federal and state regulators. Some
regulators further assert that the American National Standards
Institute (ANSI) or an ANSI-accredited organization be involved so that
there is greater assurance of openness and consensus. Given the
regulatory construct for our largest investor owned utilities and the
significant business they generate for suppliers, the private sector
will buy-in and adopt what the public sector will authorize and
approve.
Guiding Development and Adoption Internationally
For global suppliers like GE, working closely with any and all
standards development organizations that have ANSI type processes and a
culture of openness and consensus is essential for both speed of
development and stakeholder buy-in. The adoption of open, international
standards means that the technology investments we make and solutions
we provide can be most cost effectively developed and produced to serve
the largest possible population.
Thus, while NIST and the SGIP have influence with national
organizations, they must continue to gain traction and favor with
international organizations such as the International Electrotechnical
Commission (IEC) and the Internet Engineering Task Force (IETF).
Outreach to and involvement with the IEC and IETF are required for the
NIST model of coordination and collaboration to be adopted rather than
merely replicated region by region. Standards that become regionalized
and fragmented create difficulties for suppliers and unnecessary risks
for the future of Smart Grid.
Ensuring Effectiveness of the SGIP Process
In all of the areas previously discussed in this SGIP status
report, it is evident that the SGIP has been effective in coordinating
tasks and gathering stakeholder input. Since the beginning of the year,
NIST and the SGIP have gained interest and traction worldwide on their
Smart Grid Conceptual Reference Model. The identification and
prioritization of the 75 existing standards of greatest impact to Smart
Grid interoperability and the 16 Priority Action Plans to address gaps
and inconsistencies are driving much needed focus, while the SGIP
structure and operating rhythm are driving much needed collaboration
and consensus. Timelines are being adhered to, even accelerated, in
light of related policy discussions and actions. Meetings are being co-
located with other stakeholders and industry influencers to further
harmonize our respective work. Examples of this include Connectivity
Week with IEEE in May and the National Association of Regulatory
Utility Commissioners Summer Committee Meetings in July. Just as the
Smart Grid is new, expansive and virtually all encompassing, so is the
work of the SGIP. Yet, we are being nimble and reacting quickly to meet
our goals, exceed industry expectations and encourage the international
community and other regional standards organizations to join in our
efforts.
Reporting Progress Made by the SGIP
The overall PAP process is shown in Figure 3. Supporting
accomplishments and timelines for each PAP, as presented in the May
24th Governing Board meeting, follow.\6\ We are fortunate to be moving
forward on all fronts, made possible by the commitment and
contributions of our valued members.
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\6\ SGIP Governing Board Meeting, May 24, 2010, presentation
materials.
PAP 0--Meter Upgradeability Standard:
Complete. This effort resulted in the NEMA standard SG-AMl 1-2009 in
September, 2009. The PAP was officially closed March 1, 2010.
PAP 1--Role of IP in the Smart Grid:
Quantified requirements for networking of Metering Systems and Initial
Distribution Automation functions were completed.
PAP 2--Wireless Communications for the Smart Grid:
The wireless capability matrix for Smart Grid applications was
completed. Final deliverables are expected in May and June, 2010.
PAP 3--Common Price Communication Model:
Use cases and requirements were completed. Combined PAP 3, 4, 9, 10
summit held in September, 2009. Draft specifications are in public
comment period May 2010.
PAP 4--Common Scheduling Mechanism:
Standard XML serialization for bi-directional translation, use cases
and requirements to test the standard, and web services Application
Programming interfaces were completed. Combined PAP 3, 4, 9, 10 summit
held in September, 2009. This PAP is expected to be closed in June,
2010.
PAP 5--Standard Meter Data Profiles:
AEIC guidelines with revisions were completed along with white paper
descriptions and presentation materials. This effort is expected to be
closed mid-summer, 2010.
PAP 6--Common Semantic Model for Meter Data Tables:
This PAP was dependent on PAP five and is now fully operational. Tasks
and deliverables have been defined and use case analysis is currently
underway.
PAP 7--Electric Storage Interconnection Guidelines:
A scoping study and key use cases and requirements were completed.
These deliverables have directly affected an accelerated pace of
activity on IEEE 1547 and IEC 61850-7-420 standards.
PAP 8--CIM for Distribution Grid Management:
Interoperability testing of CIM Wires Model and first set of key use
cases and requirements are complete. Combined PAP 3, 4, 9, 10 summit
held in September, 2009. Draft specifications are in public comment
period May 2010.
PAP 9--Standard DR and DER Signals:
NAESB has collected, analyzed, and consolidate use cases and delivered
requirements to PAP team.
PAP 10--Standard Energy Usage Information:
Contributions for supporting the requirements have been received from
OpenADE, OpenHAN, EIS Alliance, and Zigbee. Requirements are being
aggregated and a requirements review is imminent.
PAP 11--Interoperability Standards to Support Plug-in Electric
Vehicles:
Existing use cases and requirements identified and assembled.
Coordination between SAE and IEC, alignment of vehicle information
models, analysis of related standards, and connector alignment are
ongoing.
PAP 12--IEC 61850 Objects/DNP3 Mapping:
Use cases and requirements completed. Mapping is ongoing.
PAP 13--Time Synchronization, IEC 61850 Objects/IEEE C37.118
Harmonization:
Harmonization use cases and requirements are complete. Gap analysis and
mapping document are being completed in early summer, 2010.
PAP 14--Transmission and Distribution Power Systems Model Mapping:
Developing use cases.
PAP 15--Harmonize PLC Standards for Appliance Communications in the
Home:
Completed requirements for wide band coexistence. Developing
requirements for narrow band coexistence. IEEE and ITU modifying
coexistence standards.
PAP 16--Wind Plant Communications:
PAP approved. Charter completed. Team assembled. Tasks and deliverables
identified. Use cases and requirements being developed.
As previously noted, the meter upgradeability standard (PAP 0) that
gives guidance to utilities, regulators and others wanting to
immediately deploy advanced metering infrastructure was completed last
year. Other highlights since that May 24th Governing Board meeting
follow:
- The team working on the development of energy usage
information standards (PAP 10) recently reached a significant
milestone. On June 23rd, the North American Energy Standards
Board (NAESB) agreed to develop a basic energy usage data model
standard, which the American Society of Heating, Refrigerating
and Air-Conditioning Engineers (ASHRAE) will extend for
exchanging facility energy usage data with energy providers.
NAESB has committed to complete the standard, which defines
both the information used to communicate between utilities--and
other sources--and the customer and how that information is
organized, before the end of 2010.
- The team working on broadband and narrowband coexistence
standards to provide for common communications mechanisms for
appliance manufacturers (PAP 15) is nearing final selection of
a supporting standards development organization.
- The SGIP just released a working draft of requirements for
the essential application program interfaces for electronic
calendars and schedules (PAP 4) and guidelines for ``ANSI
C12.19 End Device Communications and Supporting Enterprise
Devices, Networks and Related Accessories'' (PAP 5).
GE Position on Standards
Technical standards can accelerate innovation and investment in
emerging technologies, provided those standards are developed and
adopted in an open, consensus based fashion.
GE believes that the following principles should guide the Federal
Government's engagement in private sector standards activities:
1. Encourage consensus based adoption of technical standards
2. Balance Federal leadership with private sector innovation
3. Promote development of international standards
4. Utilize Federal R&D to support standards development
5. Educate stakeholders to accelerate deployment of standards
We shared these same principles with ANSI with respect to the
recently announced National Science and Technology Council (NSTC)
Subcommittee on Standards, and we would welcome further discussion if
so desired.
Concluding Remarks
In closing, let me reiterate what Robert Gilligan, Vice President,
GE Digital Energy shared in his testimony before the House Select
Committee on Energy Independence and Global Warming in February 2009.
This is an unprecedented time in the energy industry. And, with respect
to Smart Grid, this is definitely the time to be innovative, agile and
willing to make bold moves. We are energized by the focus and momentum
now surrounding Smart Grid and the solutions that enable energy
efficiency, consumer empowerment and the integration of more renewable
energy . . . solutions that in turn provide economic, environmental and
energy security benefits to our nation.
We thank you, in advance, for your interest in and evaluation of
how Smart Grid architecture and standards are progressing. As these
represent the foundation we build upon, that will guide our technology
development and innovation for years to come, it is essential we
continue to move forward in a deliberate, disciplined fashion that
represents and respects all industry stakeholders. While the work of
NIST and the SGIP is extremely challenging, it is always rewarding
given we are charting the course for a truly 21st century grid . . .
steady, sustainable and truly smart.
Once again, we commend Chairman Wu for your leadership on these
issues, and we appreciate the Committee's time and look forward to your
questions.
Biography for John D. McDonald
John D. McDonald, P.E., is Director, Technical Strategy and Policy
Development for GE Digital Energy. In his 36 years of experience in the
electric utility industry, John has developed power application
software for both Supervisory Control and Data Acquisition (SCADA)/
Energy Management System (EMS) and SCADA/Distribution Management System
(DMS) applications, developed distribution automation and load
management systems, managed SCADA/EMS and SCADA/DMS projects, and
assisted Intelligent Electronic Device (IED) suppliers in the
automation of their IEDs.
John received his B.S.E.E. and M.S.E.E. (Power Engineering) degrees
from Purdue University, and an M.B.A. (Finance) degree from the
University of California-Berkeley. John is a member of Eta Kappa Nu
(Electrical Engineering Honorary) and Tau Beta Pi (Engineering
Honorary), is a Fellow of IEEE, and was awarded the IEEE Millennium
Medal in 2000, the IEEE PES Excellence in Power Distribution
Engineering Award in 2002, and the IEEE PES Substations Committee
DistinguishedServiceAward in 2003.
In his twenty-three years of Working Group and Subcommittee
leadership with the IEEE Power & Energy Society (PES) Substations
Committee, John led seven Working Groups and Task Forces who published
Standards/Tutorials in the areas of distribution SCADA, master/remote
terminal unit (RTU) and RTU/IED communications protocols. John was
elected to the Board of Governors of the IEEE-SA (Standards
Association) for 2010-2011, focusing on long term IEEE Smart Grid
standards strategy. John was elected to Chair the NIST Smart Grid
Interoperability Panel (SGIP) Governing Board for 2010.
John is Past President of the IEEE PES, is a Member of IEC
Technical Committee (TC) 57 Working Groups (WGs) 3 and 10, is the VP
for Technical Activities for the U.S. National Committee (USNC) of
CIGRE, and is the Past Chair of the IEEE PES Substations Committee.
John was the IEEE Division VII Director in 2008-2009. John is a member
of the Advisory Committee for the annual DistribuTECH Conference, is a
member of DOE's Smart Grid Electricity Advisory Committee (EAC), is a
member of NEMA's Smart Grid Council, and is on the Board of Directors
of the GridWise Alliance. John received the 2009 Outstanding Electrical
and Computer Engineer Award from Purdue University.
John teaches a SCADA/EMS course at the Georgia Institute of
Technology, a Smart Grid course for GE, and substation automation,
distribution SCADA and communications courses for various IEEE PES
local chapters as an IEEE PES Distinguished Lecturer. John has
published thirty-four papers and articles in the areas of SCADA, SCADA/
EMS, SCADA/DMS and communications, and is a registered Professional
Engineer (Electrical) in California, Pennsylvania and Georgia.
John is co-author of the book Automating a Distribution
Cooperative, from A to Z, published by the National Rural Electric
Cooperative Association Cooperative Research Network (CRN) in 1999.
John was Editor of the Substations Chapter, and a co-author, for the
book The Electric Power Engineering Handbook, co-sponsored by the IEEE
PES and published by the CRC Press in 2000. John is Editor-in-Chief,
and Substation Integration and Automation Chapter author, for the book
Electric Power Substations Engineering, Second Edition, published by
Taylor & Francis/CRC Press in 2007.
Chairman Wu. Thank you, Mr. McDonald.
Mr. Eustis, please proceed.
STATEMENT OF MR. CONRAD EUSTIS, DIRECTOR OF RETAIL TECHNOLOGY
DEVELOPMENT, PORTLAND GENERAL ELECTRIC
Mr. Eustis. Good morning Chairman Wu, Ranking Member Smith
and other Members of the Subcommittee. My name is Conrad
Eustis. I am the Director of Retail Technology Development of
Portland General Electric. I have 35 years of experience in the
power industry and 17 years implementing smart grid-related
projects. Thank you for holding this important hearing on the
development of standards for smart grid-related technologies.
Portland General Electric is Oregon's largest utility. We
are an investor-owned utility serving approximately 820,000
customers in metro Portland and the Willamette Valley. We focus
on providing reliable electricity at reasonable prices while
continuing to be good stewards of Oregon's environment. PGE
consistently ranks nationally near the top for renewable power
sales customers. Long before the term ``smart grid'' arrived,
PGE was implementing projects now labeled as smart grid. A few
examples. We lead in our ability to operate our customers'
standby generation during times of peak demand. We lead with
innovative net metering programs to encourage solar
development. We have had a residential time-of-use program
available since 2001. And this August we will complete a
systemwide installation of smart meters.
We are strong supporters of the NIST effort to achieve
interoperability. I participate on NIST's Smart Grid
Interoperability Panel and with other efforts. We feel that
NIST leadership has implemented a number of useful policies to
ensure industry buy-in; we highlight them in our testimony.
The NIST roadmap includes a testing phase to prove
interoperability of selected standards among different
manufacturers and devices. This is the most important part of
the NIST plan and it is also the most important to ensure
industry adoption. But it will probably be the most expensive
and difficult. The testing process is also the best time to
clarify, and prove, required cybersecurity methods.
Our written testimony elaborates on two suggestions to
improve utility adoption of standards. We recommend efforts to
understand, and then mitigate, the institutional barriers that
our suppliers and our information technology departments face
to adopt standards.
With regard to the availability of existing standards, it
is important to understand that while there are many useful
standards, interoperability requires multiple standards to
achieve a specific end-to-end solution. While most systems
purchased today implement one or more standards,
interoperability still falls short because some standards are
not developed. For example, where a communication device from
one vendor is placed in the meter of another vendor, a meter
data standard under ANSI [American National Standards
Institute] helps reduce development time. However, because the
physical method to pass data and the physical form factor have
not been standardized, the integration of components still
takes six to twelve months.
In establishing standards-related priorities, I think about
criteria first. The first principle is that interoperability is
most important when you talk about interconnecting low cost,
mass-consumption products. For example, without
interoperability, most home appliances can't be controlled
economically. Second, standards adoption will likely be
stronger by demonstrating an end-to-end solution that is
visible to both customers and utilities. This means testing a
set of standards to show an effective plug-and-play solution.
Third, early successes will be more probable if we focus on
very simple transactions. Additional, or more feature-rich
modifications can be added to a standard later.
Guided by the principles above, I elaborate on three
priorities in the written testimony. First, for home
appliances, we need a standardized, USB-like socket together
with a very simple transaction set to enable demand response
programs. This is the lowest-hanging fruit on the smart grid
tree and it would create interest for, and time for, consumers
to learn about demand response. Second, we need a basic
standard that allows electric vehicles to charge at the most
opportune time. Electric vehicles represent a greenfield
development process. They will have high visibility, and a
standard will have wide adoption because it will not undergo
undo an existing process. Finally, we need a standard for the
format and process to send and receive usage data.
NIST is working on these last two suggestions but I want to
reiterate that more than the standards themselves, testing them
with a practical, end-to-end application is what will further
adoption.
Thank you again, Chairman Wu, for your leadership and
interest in this issue. I would be pleased to answer any
questions the Committee may have.
[The prepared statement of Mr. Eustis follows:]
Prepared Statement of Conrad Eustis
Good morning Chairman Wu, Ranking Member Smith and other members of
the subcommittee. My name is Conrad Eustis--I serve as Director of
retail technology development at Portland General Electric. I have 35
years of experience in the energy business and 17 years of experience
implementing successful smart grid related projects. In my role at PGE
I participate on the utility's behalf in a number of regulatory and
technical forums related to smart grid development, including the NIST
standards process. Thank you for holding this important hearing on the
development of standards for smart grid related technologies.
Portland General Electric is Oregon's largest electric utility. We
are a vertically oriented investor-owned utility serving more than
817,000 customers in the Portland area and the Willamette Valley. We're
focused on providing reliable electricity supplies at reasonable prices
while continuing to be good stewards of Oregon's environment. In part,
that means we're leading the charge on clean energy in Oregon.
I am sure it is no surprise to you, Mr. Chairman, that the U.S.
Department of Energy has consistently ranked PGE as one of the top
utilities for renewable power sales to residential customers. In fact,
this year PGE earned DOE's top spot in the Nation for having more
renewable power customers than any other utility in the nation.
We are also a recognized leader in the development of electric
vehicle infrastructure. As a partner in the DOE's historic $100 million
ECOtality grant, we expect to see more than 2,000 residential and
public charging stations deployed in Oregon by 2013.
Long before the term ``smart grid'' became commonplace, PGE was
investing in smart grid-related innovations--such as our Dispatchable
Standby Generation (DSG) program in which we can remotely start and
monitor our business customers' standby generation during times of peak
demand. In exchange the utility installs telemetry equipment and
contributes to its maintenance. We have worked with our regulators to
support net metering for solar and other renewables. We've had a
residential time-of-use program available since 2001. Today, we are
actively deploying smart meters to all 817,000 customers throughout our
service territory. We are 90 percent deployed and expect to complete
deployment by the end of August. Ultimately, our goal is to be a leader
in bringing the benefits of a smarter grid to our customers--providing
them with more energy management options while increasing system
reliability and efficiency.
Portland General Electric is also pleased to be a partner in the
Pacific Northwest Smart Grid Demonstration Project, which will involve
more than 60,000 metered customers in Idaho, Montana, Oregon,
Washington and Wyoming. Using smart grid technologies, the study will
test new combinations of devices, software and advanced analytical
tools that enhance the power grid's reliability and performance.
As part of the study, PGE will implement a demonstration project on
a distribution feeder in Salem serving residential and business
customers. There are three primary objectives for this project: 1) to
demonstrate how batteries together with demand response can be used to
create a reliable micro-grid; 2) to determine how the batteries/
inverter systems can be operated to provide peak-load following and
frequency regulation; and 3) to determine how to position the
batteries'storage to accept off-peak wind generation.
At the national level, we greatly appreciate the bipartisan support
that passed the Energy Independence and Security Act (EISA) in 2007.
That Act sets the course for the current standards making process at
NIST and launched some of the most important policy changes for the
utility sector in decades. With limited funding, NIST began
implementing its responsibilities under EISA in 2008, establishing
teams to collect stakeholder input, organizing meetings to create
awareness of their effort to gain additional stakeholders and so forth.
The passage of the American Recovery and Reinvestment Act provided the
funds necessary to really launch this standards process and to create
awareness across the 22 stakeholder groups that are required to
implement a successful smart grid.
This effort is none too soon for the electric utility sector. Real
challenges exist with the transition to lower carbon resources and the
large-scale installation of intermittent renewable resources. This will
force changes to system operation where smart grid transactions will be
the most appropriate solution. However, I think many people have
unrealistic expectations of how fast this change will come--even if a
full set of standards were available today.
PGE learned that successful implementation of smart grid projects
requires careful planning by a small team of cross-functional
professionals working nearly full time for two or more years before
launching the project implementation team. Successful implementation
requires understanding the specific business processes that will need
to change and identification of the legacy information systems that
must be enhanced to support the new processes. Management must commit
subject matter experts and provide training to support new departments
while eliminating others. For most utilities, high public expectations
for low-cost, reliable power means the vertical organization structure
is lean and focused on existing processes. Since our industry has had,
historically, levels of research and development expenditures below 0.2
percent of revenues, there are scarce funds and scarce resources
available to staff the large project teams required to implement a
smart grid project. This leads most utilities to seek regulatory
support for a new smart grid project from their governance
stakeholders. Regulatory buy-in involves more than just the regulators.
All, or at least most, stakeholders to the regulatory process must
understand the value and benefits that smart grid will bring. This is
not any easy task, and requires considerable time for education and
due-diligence.
We are active participants in the NIST standards making process. I
am PGE's participating member on NIST's Smart Grid Interoperability
Panel, which had its first meeting in November of 2009. This panel
includes 600 plus members from 22 stakeholder groups. To date, we have
had only a small role coordinating tasks and gathering input. However,
we serve a major role in keeping the more than 600 businesses we
represent informed about the many parallel efforts taking place. The
coordinating tasks have been managed by NIST directly or through the
SGIPGB, and the Priority Action Plan team leaders.
One of the challenges with a standards making process is ensuring
that you have industry support and a high level of adoption of the
standards that eventually emerge from the process. We feel that NIST
has implemented a number of policies to help ensure the utility
industry buy-in. These include encouragement for all utilities to
participate in the process, the recognition that there are multiple
types of utility organizations, a fair governance process, and the
beginnings of a public knowledge base to document support for
implementing standards. NIST has also put together conferences that
disseminate information, issue progress reports, and encourage face-to-
face stakeholder input.
Looking ahead, NIST's plans for interoperability testing of
standards will also be critical to ensuring industry adoption. Testing
is critical with immature standards to determine where additional
specifications are required to ensure interoperability. Because of the
cost of testing, it also helps prioritize the initial requirements. It
is not uncommon to overstate mandatory requirements to reach consensus
in the definition stage; testing ensures the most important
requirements are interoperable, and that different vendors interpret
the written specification in the same way.
The NIST roadmap includes a testing phase to prove interoperability
of selected standards from different manufacturers and devices. My
understanding is that this phase has not started, or if it has, only
recently so. This is the most important part of the NIST plan and will
probably be the most expensive and difficult.
There are two additional activities that NIST could implement that
we believe would likely improve utility buy-in and adoption.
The first has to do with the fact that the vendors--the suppliers
of systems and equipment to utilities--enjoy a ``seller's advantage.''
For a given type of electric utility equipment there are usually about
five major international suppliers. It is not uncommon for utilities to
keep a relationship with one primary vendor and a second relationship
with a back-up vendor. Part of the reason for this approach is because
maintenance and operation of each vendor's equipment is somewhat unique
to each vendor. While some aspects may be interoperable, the more
complex features are often not. This is subtle example of non-
inoperability and it allows vendors the opportunity to extract a larger
profit margin because of a utility's reluctance to switch vendors. This
is a gross simplification to make a point; there have been successes
too--particularly in the area of interoperability for substation
equipment. But the point remains that the higher margins created by
partial interoperability is a potential barrier to higher levels of
interoperability. NIST might consider as part of the early testing
process, interviewing vendors separately and together to learn the
needs of vendors to make standards adoption a higher priority.
Second, a focus on utility IT managers may be valuable. Among
utilities, the responsibilities of VPs or general managers of the IT
department vary greatly. For many of these managers, most of their time
is spent keeping existing systems running smoothly; they have minimal
time to focus on evolving and emerging standards. I would not be
surprised to find that the average IT manager is minimally informed
about the NIST process. NIST might consider engaging a diverse group of
these managers, together with purchasing personnel that support them,
to help keep them informed and to provide tools for them to require
vendors to adopt specific standards. Some of the outcomes might be as
easy as the publication of a quarterly update targeted to the utility
IT manager.
NIST also needs to focus on developing standards and processes that
make sense for consumers and addresses consumer behavior. For example,
one complex and low priority transaction involves providing ``real-
time'' time usage data from the meter to the home display. While
desirable for some customers, most of the value in the usage data is
available from non-real-time sources like a web page with perhaps a day
of delay. PGE implemented a home display pilot in 2003. While half the
customers found them interesting, most stopped accessing the displays
after about a week. Energy is a low involvement product; effective
smart grid implementations in the home will need to emphasize set and
forget controls, and not depend entirely on real-time involvement for
their success. Spending time and money on programs consumers do not
want should be avoided.
Now let me return to the issue of interoperability and its
importance in the overall smart grid standards process. Fundamentally,
the smart grid is about moving data from one system or device to
another. This requires not one standard, but at least three to move one
byte of data between two separate devices. If security is needed, this
adds a fourth standard. In many systems purchased by utilities today,
vendors focus on data transactions among devices in their product line.
Generally, they design the transactions to minimize their cost to the
customer utility--this is especially true of advanced metering
infrastructure (AMI) systems. Where a communication device from one
vendor is placed in the meter of another vendor, a meter data standard
called ANSI C12.19 helps reduce development time. However, because the
physical method to pass data and the physical form factor have not yet
been standardized, the actual integration of the components still
usually takes 6 to 12 months. For new two-way applications between the
utility and the home, only immature standards exist. Between major
utility enterprise systems--such as an outage management system--the
use of a common information model at the application level is
unfortunately rare. Small electric cooperatives, municipal utilities
and PUDs that use a common application called MultiSpeak are probably
further along than the larger utilities who generally decide that
custom applications serve their needs better.
The value in interoperability comes into play when you talk about
the future for low-cost mass consumption products. Avoiding $200,000 of
custom engineering in a $10 million substation because interoperability
is available is still desirable, but the lack of interoperability
doesn't prevent an economic implementation. But chasing after a peak
demand savings of 50 watts in a common consumer item like a
refrigerator would be impossible unless the total incremental cost is
less than $40. This cost can only be met via interoperability.
In thinking about what should be the top priorities for the NIST
standards making process going forward, I believe the focus should be
to create visible successes that can be implemented with end-to-end
demonstrations. Early successes are possible if NIST focuses on very
simple transactions; additional or more feature-rich modifications can
be added to a standard later. These early successes will build upon
themselves and create more utility interest and adherence to the NIST
process. My top three suggestions along these lines are:
1)We need a standardized USB-like socket, together with a very
simple transaction set, to enable demand response programs with home
appliances. If appliance manufactures were to incorporate these sockets
on their major appliances over approximately five years, including the
value-based appliances, utilities would gain the potential of 15,000 MW
of demand response every year. Adding the socket without embedded
communication hardware minimizes obsolesce and security issues. Since
appliances last 10 to 30 years, making them demand response ready is
important to prevent a lost opportunity in five to ten years as
customer awareness increases. This is the lowest hanging fruit on the
smart grid tree, and it would create interest for, and time for,
customers to learn about demand response.
Some organizations advocate embedding a specific wireless \1\
communication device in the appliance. While the free market should to
some extent determine the best approach to creating ``smart''
appliances, security and interoperability are much more difficult to
ensure with embedded communication devices. Consumer adoption of smart
gird technologies could be threatened if even one or two bad
experiences occur using embedded communication devices.
---------------------------------------------------------------------------
\1\ Wireless includes radio and power-line communication
techniques.
---------------------------------------------------------------------------
2) My second suggestion is for standardized smart charging for
plug-in-vehicles (PIVs). This is not the same as the vehicle-to-grid
concept, which will take more time and requires PIV manufactures to
gain more experience with the life of their batteries. This would be
the basic standard for allowing PIVs to charge at the most opportune
time. While the number of total PIVs in the near term will be small,
the visibility of these vehicles as smart-grid friendly will be
significant in the popular media. PIVs represent a ``green field''
development process and represent a great opportunity to gain wide
adoption. This would counter the natural resistance that might occur
from utilities and vendors to modify their existing systems to adopt a
specific standard. Standards are easier to accept when you don't have
to throw away something you already developed.
3) Finally, we need a standardized application for the format and
process to send and receive usage data. This format would be used in
multiple applications, for example: in meter-to-home applications,
among back-office enterprise systems, utility-to-third parties, etc. In
a year or two smart meters will be generating multiple petabytes of
usage data per year; we need a standard way to move meter usage
information around.
Thank you, again, Chairman Wu for your leadership and interest in
this issue. I would be pleased to answer any questions the committee
may have.
Biography for Conrad Eustis
Conrad Eustis has 35 years of experience in the energy industry
including five years as a Naval officer in nuclear submarines, five
years studying energy economics, technology and policy at Carnegie
Mellon department's of Engineering and Public Policy, and 25 years at
PGE leading new activities for the Company. He has technical degrees
from both Carnegie-Mellon and Brown Universities.
The last 17 years of professional work have included the
implementation of more than 20 ``Smart Grid'' projects in metering,
demand response, home displays, smart appliances, web portals, utility
enterprise systems development, and at least a dozen customer research
projects. Conrad personally developed the design specifications for
original hardware and software in many of these projects.
Career Highlights include:
D Engineer directing initial criticality on the refueled
reactor of the USS Skate SSN 578 ('79)
D Ph.D. Thesis on policy to improve efficiency of cogeneration
systems ('85)
D PGE's first demand--side resource plan; labeled as
``innovate'' by PUC ('90)
D Design and implementation of a critical peak pricing pilot
(rate design and enabling hardware) '94
D Personal national award for an innovate electric vehicle
infrastructure design ('95)
D Provided leadership for transactions to create
interoperability in California's unregulated meter services
market ('97)
D 10+ business cases for new smart grid platforms to deploy
assets of > $400 million, all reached executive approval for
initial action steps, five reached operational status ('99 to
'07)
D Provided technical and financial input to about ten fed-
funded grant proposals leading to six successful awards ('93 to
'09)
D Created Business Case, RFP, and Contract for current PGE
smart meters project ('04 to '07)
D My influence helped earn PGE national awards for best smart
meter implementation preparation (``Best Practices Award for
Advanced Metering and Data Management'', Chartwell, 2008), and
meter data management leadership (``10 Years of Excellence
Award'', Metering America, 2009)
D Adjunct Professor at PSU teaching Designing Smart Grid for
Sustainable Communities, '09 & '10
D Personal ``Applied Award'' for contributions to
Interoperability from Gridwise Architecture Council ('10)
Chairman Wu. Thank you, Mr. Eustis.
The votes have been called. There are about 10 minutes, 45
seconds left, and it is the intention of the Chair to proceed
with Ms. Coney's testimony. Then I will ask one quick question
and turn it over to Mr. Smith. We hope that he will get his
questions in and then we will recess.
Ms. Coney, please proceed.
STATEMENT OF MS. LILLIE CONEY, ASSOCIATE DIRECTOR, ELECTRONIC
PRIVACY INFORMATION CENTER
Ms. Coney. Thank you. EPIC would like to thank the
Subcommittee Chair and Ranking Member for this opportunity to
speak with you on a matter that has emerged as one of the
leading privacy challenges for our generation. Members of
Congress, committees and their staffs from both sides of the
aisle routinely approach EPIC on matters related to privacy and
consumer rights.
Today, electricity usage generates 12 data points a year,
the monthly bills that customers receive. The smart grid will
raise that number to over 3,000 data points annually. As a
result, the ability to assess consumer electricity usage
information will pose significant privacy threats. These
threats can include surveillance by government, businesses, and
criminals.
Privacy is about the establishment and enforcement of fair
information practices, or FIPs. The privacy impact assessment
is an effective tool for evaluating whether fair information
practices are enforced. The model many privacy advocates look
to for real-world examples of what is possible to incorporate
each of these components of privacy protection is the OECD
Guidelines. The smart grid presents an extraordinary
opportunity to establish a new approach where privacy is part
of the architecture and R&D mindset of applications as they are
developed. There can be security without privacy but there
cannot be privacy without security. Smart grid customer data
can pose physical dangers such as assaults, vandalism, home
invasion, stalking, domestic abuse, targeting of homes for
burglary or civil threats such as identity theft. Further,
misuse of data by authorized parties such as data mining for
resale or sharing of customer energy usage information or
profiling of customers to further monetize their energy use
presents privacy challenges to the smart grid adoption.
As EPIC looked to the participation in the standards
process, we learned of the NIST smart grid recommendation
drafting effort through two announcements published in the
Federal Register on October 9, 2009. Later that month, we
became aware of the working group effort to develop
recommendations and sought out a NIST subject matter expert to
get more information. EPIC encouraged the Electronic Frontier
Foundation, the ACLU, the Privacy Rights Clearinghouse and
others to join this effort. It is doubtful EPIC would have
learned of the NIST effort on smart grid without the Federal
Register notice process. The work on the NISTIR [NIST
Interagency Report] on smart grid was far from smooth sailing,
but overall it was productive and instructive for advocacy
groups and utilities who value consumer privacy and potential
partners from the online economy where consumer privacy is not
as highly valued.
The NISTIR privacy subgroup for the project included those
unfamiliar with privacy issues as well as privacy experts. The
challenge was learning to speak the same language and
understanding the core values of privacy as they relate to
smart grid. The field of privacy is just like other
disciplines: We learn from the mistakes and successes of
others, improving our knowledge and understanding about what
works and why. At present, the draft text incorporates a good
statement on privacy and includes clearly supported language
for fair information practices, recognizes the importance of
privacy by design and other privacy-enhancing technology
approaches, acknowledges the serious problem of
reidentification first noted by Professor Latanya Sweeney at
Carnegie Mellon University and by Professor Alessandro Acquisti
at the same institution, and finally, details smart grid
threats that include insecure smart meters, Internet access to
smart grid data and third-party use of customer smart grid
information.
However, as the document is merged with the remainder of
the NIST Smart Grid Interoperability Standards Project, it will
continue to be edited. The first draft will go to the
Department of Commerce where it may further be edited prior to
public release. The final document may bear little resemblance
to the results of the privacy groups' hours of effort to
address the unique privacy challenges of the smart grid. For
this reason, EPIC reserves judgment on the success of including
advocacy groups in the process until the final document is
published.
Privacy protection is essential to the successful
implementation of the smart grid and failure to develop robust
standards that incorporate FIPS for protecting PII will likely
hinder adoption of applications and services. Only by
developing standards that ensure end-to-end privacy and
security protection can NIST contribute to innovation and
technology of the smart grid. NIST could fill an important role
in establishing comprehensive privacy practices.
EPIC appreciates the Subcommittee's interest in smart grid
privacy issues, is eager to contribute to the further
development of smart grid privacy policy, and looks forward to
the Committee's questions. Thank you.
[The prepared statement of Ms. Coney follows:]
Prepared Statement of Lillie Coney
EPIC would like to thank the Subcommittee Chair and Ranking Member
for this opportunity to speak with you on a matter that has emerged as
one of the leading privacy challenges for our generation.
EPIC is a public interest research center, based in Washington, DC,
established in 1994 to focus public attention on emerging civil
liberties issues and to protect privacy, the First Amendment, and other
constitutional values. EPIC has a long-standing interest and
specialization in privacy and technology issues.\1\ EPIC has a
particular interest in the privacy implications of the Smart Grid
standards, as we anticipate that this change in the energy
infrastructure will have significant privacy implications for American
consumers.\2\ In other similar areas, EPIC has consistently urged
Federal agencies to minimize the collection of personally identifiable
information (PII) and to establish privacy obligations when PII is
gathered.
---------------------------------------------------------------------------
\1\ EPIC, Electronic Privacy Information Center, http://
www.epic.org (last visited June 29, 2010); EPIC, Privacy, http://
www.epic.org/privacy/default.html (last visited June 29, 2010).
\2\ EPIC, The Smart Grid and Privacy, http://epic.org/privacy/
smartgridlsmartgrid.html (last visited June 29, 2010).
---------------------------------------------------------------------------
It is rare today to discover an industry that collects, retains,
and uses vast amounts of personal information that is also transparent,
accountable, and operates collaboratively under state regulations.
Utilities ``do what they are told,'' adhering to rules established by
public utility commissions and business models based upon fair
information practices. The electric utility industry has done this for
over one hundred years. It is EPIC's hope that they will adhere to this
model of conduct as they move toward full deployment of the Smart Grid.
However, there will be great temptation to monetize the information
about consumer electricity consumption in ways that may threaten
consumer privacy, competitiveness of businesses, both small and large,
and the security of Smart Grid infrastructure should it become a ``plug
and play'' environment.
I. Privacy and the Smart Grid
A. Defining Privacy and the Smart Grid
Privacy is one of the most fundamental and basic of human rights.
Without it, many other rights, such as the freedoms of speech,
assembly, religion and the sanctity of the home, would be jeopardized.
Although most countries around the world include explicit protection of
a right to privacy in their constitutions, it remains one of the more
difficult rights to define.
The focus for protecting privacy of information stored on computers
or exchanged on computing networks is determining whether data is or is
not PII. This type of information can locate or identify a person, or
it can be used in conjunction with other information to uniquely
identify an individual. Historically, PII includes name, social
security number, address, phone number, or date of birth. In the
Internet Age, the list of PII has grown to include other data,
including e-mail addresses, Internet Protocol (IP) addresses, social
networking pages, search engine requests, log records, and passwords.
Our legal system has long recognized and protected an individual's
right to personal privacy in PII. The drafters of the Constitution
``conferred, as against the Government, the right to be let alone--the
most comprehensive of rights and the right most valued by civilized
man. To protect that right, every unjustifiable intrusion by the
Government upon the privacy of the individual, whatever the means
employed, must be deemed a violation'' of constitutional principles.\3\
Moreover, public opinion polls consistently find strong support among
Americans for legally cognizable privacy rights in law to protect their
personal information from government and commercial entities.\4\
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\3\ Olmstead v. United States, 277 U.S. 438, 478 (1928) (Brandeis,
J., dissenting).
\4\ See generally EPIC, Public Opinion on Privacy, http://epic.org/
privacy/survey (last visited June 29, 2010).
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More recently, the Supreme Court, in Kyllo v. United States,\5\
addressed the privacy implications of monitoring electrical use in the
home. After reviewing precedent, the Court found that a search warrant
must be obtained before the government may use new technology to
monitor the use of devices that generate heat in the home:
---------------------------------------------------------------------------
\5\ 533 U.S. 27 (2001).
[I]n the case of the search of the interior of homes--the
prototypical and hence most commonly litigated area of
protected privacy--there is a ready criterion, with roots deep
in the common law, of the minimal expectation of privacy that
exists, and that is acknowledged to be reasonable. To withdraw
protection of this minimum expectation would be to permit
police technology to erode the privacy guaranteed by the Fourth
Amendment.\6\
---------------------------------------------------------------------------
\6\ Id. at 34.
The Court found that even the most minute details of a home are
intimate: ``[i]n the home, our cases show, all details are intimate
details, because the entire area is held safe from prying government
eyes.'' \7\ Thus, the Court held that the police could not use thermal
imaging equipment, which was not in general public use, ``to explore
details of the home that would previously have been unknowable without
physical intrusion,'' without first obtaining a search warrants.\8\
---------------------------------------------------------------------------
\7\ Id. at 37.
\8\ Id. at 40.
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B. Assessing Smart Grids and Privacy
The Smart Grid implicates privacy at a fundamental level, as it can
best be understood as a powerful digital communication network. Indeed,
communications giant Cisco predicts the Smart Grid network will be
``100 or 1,000 times larger than the Internet.'' \9\ The Smart Grid
would allow the unprecedented flow of information between power
providers and power consumers. Its potential benefits to energy
efficiency, granular control over power usage, and the environment are
immense. However, like any analogous communications network, such as
the Internet, the Smart Grid also admits the possibility of new and
problematic threats to privacy in the form of increased data
collection, retention, sharing and use.\10\ As the National Institute
of Standards and Technology (NIST) acknowledges, ``[t]he major benefit
provided by the Smart Grid, i.e. the ability to get richer data to and
from customer meters and other electric devices, is also its Achilles'
heel from a privacy viewpoint.'' \11\
---------------------------------------------------------------------------
\9\ Martin LaMonica, Cisco: Smart Grid Will Eclipse Size of
Internet, CNET, May 18, 2009, http://news.cnet.com/8301-
11128-3-10241102-54.html.
\10\ See Ann Cavoukian, Jules Polonetsky & Christopher Wolf,
Privacy by Design, SmartPrivacy for the Smart Grid: Embedding Privacy
into the Design of Electricity Conservation 8 (Nov. 2009), http://
www.ipc.on.ca/images/Resources/pbd-smartpriv-smartgrid.pdf
(``Modernization of the current electrical grid will involve end-user
components and activities that will tend to increase the collection,
use and disclosure of personal information by utility providers, as
well as, perhaps, third parties.'') [hereinafter Privacy by Design].
\11\ National Institute for Standards and Technology, NIST
Framework and Roadmap for Smart Grid Interoperability Standards Release
1.0 (Draft) 84 (2009) [hereinafter Draft Framework].
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The basic architecture of the Smart Grid presents several thorny
privacy issues. The first widely distributed smart grid application is
the smart meter.\12\ Smart meters monitor and can report customer
electricity consumption to the utility service provider. Experts
estimate that U.S. investment in smart meters could total $40 to $50
billion, and that roughly one hundred million smart meters could be
installed over the next five years.\13\ Smart meters, like traditional
meters, will be associated with a unique physical address, which makes
it PII.\14\ Along with the meter serial number and the electronic
information associated with the meter address, this information is PII.
---------------------------------------------------------------------------
\12\ See Stan Mark Kaplan, Congressional Research Service, Electric
Power Transmission: Background and Policy Issues 23 (2009), available
at http://opencrs.com/document/R40511/2009-04-14/download/1013
(discussing basic functions of smart meters); U.S. Dep't of Energy,
Smart Grid System Report 38 (July 2009) [hereinafter ``Smart Grid
System Report] (``The use of smart meters, a driving force behind being
able to evaluate grid load and support pricing conditions, has been
increasing significantly, almost tripling between 2006 and 2008 to 19
million meters . . .'').
\13\ Draft Framework, supra note 11, at 21-22.
\14\ See National Institute for Standards and Technology, Draft
NISTIR 7628: Smart Grid Cyber Security Strategy and Requirements (2nd
public draft) 33 (2010) [hereinafter Cyber Security Strategy],
available at http://csrc.nist.gov/publications/drafts/nistir-7628/
draft-nistir-7628-
2nd-public-draft.pdf (flow chart detailing Smart Grid communication
links between consumers and providers).
---------------------------------------------------------------------------
Smart meters will increase the frequency of communication from the
home to the utility service provider or the third party application
user. Traditional meter reading takes place once a month, by a visit
from a person affiliated with the electricity service provider or
billing company. In contrast, proposals for smart meters discuss
``real-time'' reporting of usage data.\15\ Currently, the design
specification is not for electricity consumption information to remain
in the home or meter location, which could only be accessed easily by
the utility user. Rather, the plan, as suggested in the Cyber Security
Strategy, is to instead share the information with the utility company
or others. If, as the document suggests, the information will allow
customers to make better energy consumption decisions, then only the
customer should have access to that information. This is one of many
instances in which the design of a Smart Grid application can either
favor privacy or ignore it.
---------------------------------------------------------------------------
\15\ See, e.g., Draft Framework, supra note 11, at 56.
---------------------------------------------------------------------------
Another architectural point which raises privacy implications is
the use of wireless communications to transmit Smart Grid data.\16\ The
Draft Framework proposed to assess ``the capabilities and weaknesses of
specific wireless technologies.'' \17\ Although it mentions security as
a characteristic of wireless technology that may be relevant to that
assessment, privacy is not mentioned. Any wireless technology that
would be used to transmit user data must protect personal privacy.
Wireless sensors and networks are susceptible to security breaches
unless properly secured,\18\ and breaches of wireless technology could
expose users' personal data.\19\ Similarly, the potential transmission
of Smart Grid data through ``broadband over power line'' (BPL)
implicates users' privacy:
---------------------------------------------------------------------------
\16\ See Draft Framework, supra note 11, at 65.
\17\ Id.
\18\ See, e.g., Mark F. Foley, Data Privacy and Security Issues for
Advanced Metering Systems (Part 2), http://www.smartgridnews.com/
artman/publish/industry/Data-Privacyand-Security
-Issues-for-Advanced-Meterin
g-Systems-Part-2.html (``Wireless
sensor networks, for example, are subject to the general security
problems of computer networks, ordinary wireless networks, and ad-hoc
networks).
\19\ See id. (breaches could ``result in denial of service to
customers or utilities (e.g., access to billing information or energy
usage), payment avoidance, system overload, reduced quality of service,
and violation of power control protocols'').
A BPL node could communicate with any device plugged into an
electrical socket. Capture of a substation node would provide
control over messages going to smart appliances or computing
systems in homes and offices. A utility may also offer
customers BPL as a separate revenue stream. This creates risks
that [advanced meter] data could be read or modified over the
internet or that common internet attacks could be brought
against the electrical grid or individual customers.\20\
---------------------------------------------------------------------------
\20\ Id.
Moreover, wireless communication is especially problematic in light
of how easily signals from wireless devices are detectable by bad
actors to pick-up valuable information on systems using wireless
technology, and the past exploitation of wireless systems by thieves
who use techniques known as ``wardriving'' to seek out unprotected or
insufficiently protected wireless communication portals.\21\
---------------------------------------------------------------------------
\21\ See, e.g., Patrick S. Ryan, War, Peace, or Stalemate:
Wargames, Wardialing, Wardirving, and the Emerging Market for Hacker
Ethics, 9 VA. J.L. & TECH. 7 (2004).
---------------------------------------------------------------------------
Wireless communications to transmitting Smart Grid data would not
only provide a significant challenge to privacy of users, but may also
pose economic and security threats. Identity theft, third party
monitoring of utility use, home invasions, domestic abuse and predatory
use of home electricity consumption information strips home owners of
the protection from prying eyes provided by the walls of their home.
A final architectural problem with the proposed Smart Grid is the
interaction between the Smart Grid and plug-in electric vehicles (PEV).
It is possible that the Smart Grid would permit utility companies to
use PEVs and other sources of stored energy ``as a grid-integrated
operational asset,'' \22\ i.e., to drain the energy stored in the PEVs
when the energy is needed to supply other users. This application of
the Smart Grid is particularly troubling. If privacy is, as the Supreme
Court has said, the ``interest in independence in making certain kinds
of important decisions,'' \23\ then this proposed application could
severely damages both privacy interests and consumer rights.
---------------------------------------------------------------------------
\22\ Draft Framework, supra note 11, at 67.
\23\ Whalen v. Roe, 429 U.S. 589, 599-600 (1977).
---------------------------------------------------------------------------
C. Privacy Threats
In addition to the architectural weaknesses of the proposed Smart
Grid, the application and use of the Smart Grid threatens privacy
interests in many other ways.
i. Misuse Of Data
The massive amounts of data produced by the Smart Grid can
potentially be misused by a number of parties--the power utilities
themselves, authorized third parties such as marketing firms, or
unauthorized third-parties such as identity thieves.
ii. Power Utilities
Power utilities themselves will likely be interested in conducting
complex data mining analysis of Smart Grid data in order to make power
distribution decisions. For instance, at the Tennessee Valley Authority
(TVA), administrators estimate that they will have 40 terabytes of data
by the end of 2010, and that five years of data will amount to roughly
half a petabyte.\24\ The TVA administrators are actively working to
improve their ability to analyze the data, including through ``complex
data mining techniques.'' \25\ Moreover, the TVA has explored using
cloud computing resources to analyze and data mine the data, which
raises a separate set of privacy concerns.\26\
---------------------------------------------------------------------------
\24\ Josh Patterson, Cloudera, The Smart Grid and Big Data: Hadoop
at the Tennessee Valley Authority (TVA), June 2, 2009, http://
www.cloudera.com/blog/2009/06/02/smart-grid-bib-data-hadoop-tennessee-
valley-authority-tva.
\25\ Id.
\26\ See EPIC, Cloud Computing, http://epic.org/privacy/
cloudcomputing (last visited June 29, 2010).
---------------------------------------------------------------------------
iii. Data Mining and Authorized Third-Parties
Data mining of sensitive personal information raises serious
privacy concerns.\27\ For example, Total Information Awareness (TIA),
developed by the Defense Advanced Research Projects Agency (DARPA),
proposed to data mine wide swaths of information in order to detect
terrorists.\28\ However, privacy concerns led the Congress to eliminate
funding for the project, and the Technology and Privacy Advisory
Committee of the Department of Defense issued a report recommending
that Congress pass laws to protect civil liberties when the government
sifts through computer databases containing personal information.\29\
The data mining of sensitive personal information transmitted through
the Smart Grid raises similar privacy concerns.
---------------------------------------------------------------------------
\27\ See EPIC, Terrorism (Total) Information Awareness, http://
epic.org/privacy/profiling/tia (discussing government data mining of
citizens' personal information) (last visited June 29, 2010).
\28\ See id.
\29\ Department of Defense, Safeguarding Privacy in the Fight
Against Terrorism (2004), available at http://www.epic.org/privacy/
profiling/tia/tapac-report.pdf.
---------------------------------------------------------------------------
Authorized third-parties may also be interested in using data
collected through the Smart Grid. The real-time data streaming
capabilities of the Smart Grid, in particular, implicate a separate
group of privacy risks. Just as appliance manufacturers and insurance
companies may want access to appliance usage data, marketing and
advertising firms may want access to the data--particularly real-time
data--in order to target marketing more precisely.\30\ However, power
usage data can reveal intimate behavioral information; providing that
information to third-party marketing and advertising firms
surreptitiously would be a repugnant invasion of privacy.
---------------------------------------------------------------------------
\30\ See Privacy and the New Energy Infrastructure, supra note 46,
at 46; Rebecca Herold, SmartGrid Privacy Concerns, available at http://
www.privacyguidance.com/files/Smart
GridPrivacyConcernsTableHeroldSept-2009.pdf [hereinafter
Privacy Concerns]; Mark F. Foley, The Dangers of Meter Data (Part 1),
available at http://www.smartgridnews.com/artman/publish/industry/
The-Dangers-of-Meter-Data-
Part-1.html [hereinafter ``Dangers (Part I)''].
---------------------------------------------------------------------------
iv. Identity Theft and Data Breaches
Further, without privacy standards that protect privacy there will
be unauthorized third-parties who will likely also be interested in
misusing Smart Grid data, for many of reasons such as identity theft or
burglary. Identity theft victimizes millions of people each year.\31\
The Federal Trade Commission (FTC) estimated that 8.3 million people
discovered that they were victims of identity theft in 2005, with total
reported losses exceeding $15 billion.\32\ According to the Privacy
Rights Clearinghouse, more than 340 million records containing
sensitive personal information have been involved in security breaches
since January 2005.\33\
---------------------------------------------------------------------------
\31\ See generally EPIC, Identity Theft, http://epic.org/privacy/
idtheft (last visited June 29, 2010).
\32\ Fed. Trade Comm'n, 2006 Identity Theft Survey Report 4, 9
(2007) [hereinafter ``FTC Survey Report''].
\33\ Privacy Rights Clearinghouse, Chronology of Data Breaches,
June 25, 2010, http://www.privacyrights.org/ar/ChronDataBreaches.htm.
---------------------------------------------------------------------------
The faith placed in the capacity of the Smart Grid to safeguard
sensitive personal information is unfounded. As an employee for Itron,
a manufacturer of automated meters, admitted, ``Any network can be
hacked.'' \34\ Similarly, some experts argue that ``an attacker with
$500 of equipment and materials and a background in electronics and
software engineering could `take command and control of the [advanced
meter infrastructure] allowing for the en masse manipulation of service
to homes and businesses.'' \35\ Thus, it is possible that ``just as
identities, credit and debit card numbers, and other financial
information are routinely harvested and put up for sale on the
Internet, so can Smart Grid identifiers and related information.'' \36\
Alternatively, identity thieves could use PII obtained elsewhere to
impersonate utility customers, which poses the risk of fraudulent
utility use and potential impact on credit reports.\37\
---------------------------------------------------------------------------
\34\ Jeanne Meserve, `Smart Grid' May Be Vulnerable To Hackers,
CNN, March 21, 2009, http://www.cnn.com/2009/TECH/03/20/
smartgrid.vulnerability.
\35\ Id.
\36\ Eric Breisach & H. Russell Frisby, Energy Identity Theft:
We're Way Beyond Plugging in the Meter Upside Down, Smartgridnews.com,
April 9, 2008, http://www.smartgridnews.com/artman/publish/
article-425.html.
\37\ See Rebecca Herold, SmartGrid Privacy Concerns, available at
http://www.privacyguidance.com/files/
SmartGridPrivacyConcemsTableHeroldSept-2009.pdf [hereinafter
Privacy Concerns].
---------------------------------------------------------------------------
Peter Neumann, an expert on privacy and security who testified to
the House Committee On Ways and Means Subcommittee On Social Security
in 2007, concluded that the design of information systems are subject
to many pitfalls, and that there is ``[a] common tendency to place
excessive faith in the infallibility of identification, authentication,
and access controls to ensure security and privacy.'' \38\ As such, the
dangers of identity theft and data breaches are a threat that must be
addressed during the implementation of the Smart Grid.
---------------------------------------------------------------------------
\38\ Security and Privacy in the Employment Eligibility
Verification System (EEVS) and Related Systems: Hearing Before the H.
Comm. On Ways and Means Subcomm. On Social Security, 110th Gong. 9
(2007) (statement of Peter G. Neumann, Principal Scientist, Computer
Science Lab, SRI International).
---------------------------------------------------------------------------
v. Unauthorized Access
The misuse of Smart Grid data is further exacerbated by the
possibility of combining Smart Grid data with other data sources or
scanning of open Home Area Networks that transmit Smart Grid energy
usage data. For example, Google PowerMeter collects data on home energy
consumption.\39\ This technology raises the obvious possibility that
Google will combine consumer information about power consumption with
Google's preexisting ability to record, analyze, track and profile the
activities of Internet users.\40\ Such new business models also raise
significant antitrust concerns.\41\
---------------------------------------------------------------------------
\39\ Google PowerMeter, http://www.google.org/powermeter (last
visited June 29, 2010).
\40\ See generally EPIC, Privacy? Proposed GoogIe/DoubleClick
Merger, http://epic.org/privacy/ftc/google (last visited June 29,
2010).
\41\ Cf. Statement of Interest of the United States of America
Regarding Proposed Class Settlement, The Author's Guild, Inc., et al.
v. Google, Inc., No. 05 Civ. 8136 (DC), at 16-26 (S.D.N.Y. Sept. 28,
2009) (Department of Justice arguing that the proposed settlement
regarding Google Books ``may be inconsistent with antitrust law '').
See generally EPIC, Google Books Settlement and Privacy, http://
epic.org/privacy/googlebooks (last visited June 29, 2010).
---------------------------------------------------------------------------
The recent admission by Google that it secretly collected
electronic PII from wireless networks around the world is particularly
telling. For years, Google used its Street View data collection project
to access and download data from unsecured wireless computer devices in
homes and businesses without providing notice to or acquiring consent
from government bodies or individuals.\42\ Google's failure to provide
notice was especially troubling because it precluded governments from
enforcing local laws and protecting the security, welfare, and values
of their own citizens. Google's massive misuse of emerging technology
highlights the potentially devastating consequences of newly deployed
technologies, and the need for effective oversight. In another example
of the dangers presented by unanticipated negative effects of new
technology, microwave ovens were first made available to consumers
before their safety was comprehensively evaluated. The spectrum range
of these appliances had a disruptive effect on heart pacemakers.
However, contrary to many recently developed technologies, microwave
technology was transparent and therefore accessible for independent
review and study, so the problem was easily identified and quickly
remedied.
---------------------------------------------------------------------------
\42\ EPIC, Google Street View and Privacy, http://epic.org/privacy/
streetview (last visited June 29, 2010).
---------------------------------------------------------------------------
Indeed, these risks remain if even residual data is stored on Smart
Grid meters. If data on Smart Grid meters are not properly removed,
residual data could reveal information regarding the activities of the
previous users of the meter.\43\ Thus, the Smart Grid should be
designed to avoid the unnecessary retention of PII. Moreover, the
prospect of remote access to Smart Grid data could lead to unauthorized
access and misuse of the data. Many companies and government agencies
provide employees and contractors with remote access to their networks
through organization-issued computing devices. Remote access to Smart
Grid customer information or utility usage data should be prohibited
except for service provision and maintenance. The misuse of Smart Grid
data could also harm consumers' reputations in many different ways. The
collection and sharing of Smart Grid data could cause unwanted
publicity and/or embarrassment. Moreover, public aggregated searches of
Smart Grid data could reveal individual behaviors. Finally, the
aforementioned data aggregation and data mining activity could permit
publicized privacy invasions.
---------------------------------------------------------------------------
\43\ See Privacy Concerns, supra note 37.
---------------------------------------------------------------------------
vi. Personal Surveillance
The Smart Grid could also reveal sensitive personal behavior
patterns. The proposed Smart Grid will be able to coordinate power
supply in real time, based on the power needs of users and the
availability of power.\44\ For instance, ``[e]nergy use in buildings
can be reduced if building-system operations are coordinated with the
schedules of the occupants.'' \45\ However, coordinating schedules in
this manner poses serious privacy risks to consumers. Information about
a power consumer's schedule can reveal intimate, personal details about
their lives, such as their medical needs, interactions with others, and
personal habits making ``highly detailed information about activities
carried on within the four walls of the home will soon be readily
available for millions of households nationwide.'' \46\ ``[R]esearch
has delineated the differences in availability at home for various
social types of electricity consumers including working adults, senior
citizens, housewives and children of school age.'' \47\ Similarly, the
data could reveal the type of activity that the consumer is engaging
in, differentiating between, for example, housework and entertainment,
or even a consumer's lifestyle by revealing that a consumer has a
serious medical condition and uses medical equipment every night, or
that he lives alone and leaves the house vacant all day.\48\
---------------------------------------------------------------------------
\44\ Draft Framework, supra note 11, at 51.
\45\ Id. at 52.
\46\ Elias Leake Quinn, Privacy and the New Energy Infrastructure
28 (2009), available at http://ssrn.corm/abstract=1370731 [hereinafter
Privacy and the New Energy Infrastructure]; see Privacy Concerns, supra
note 37.
\47\ Privacy and the New Energy Infrastructure at 26-27; see A.
Capasso et al., Probabilistic Processing of Survey Collected Data in a
Residential Load Area for Hourly Demand Profile Estimation, 2 Athens
Power Tech 866, 868 (1993).
\48\ Privacy and the New Energy Infrastructure, supra note 46, at
27 (``differences in consumption vary with the type of activity, and
profiles of energy uses that differentiate between activities can be
constructed for things like leisure time, housework, cooking, personal
hygiene''); see Capasso, supra note 47, at 869.
vii. Energy Use Surveillance
Smart Grid meter data may also be able to track the use of specific
appliances within users' homes.\49\ These ``smart appliances'' would be
able to communicate with the Smart Grid, transmitting detailed energy-
use information and responding dynamically to price fluctuations and
power availability. A smart water heater, for example, could engage in
``dynamic pricing'' by using ``a device that coordinates with a
facility's energy-management system to adjust temperature controls,
within specified limits, based on energy prices.'' \50\
---------------------------------------------------------------------------
\49\ See, e.g., Privacy by Design, supra note 10, at 8-9.
\50\ Smart Grid System Report, supra note 12, at 34.
---------------------------------------------------------------------------
As other devices become commercially available that are designed to
send consumption data over the Smart Grid, the collection of personal
data could increase. For example, the monitoring of electricity
consumption may require the registration of items within a home for
monitoring by the utility company or a third party service provider.
Smart Grid enabled appliances such as washers, dryers, air
conditioners, central heating systems, water heaters, stoves,
refrigerator, freezers, swimming pools and Jacuzzis consume large
amounts of electricity, and may be associated with a fixed address such
as a home. Each of these items may have a unique product manufacturer
designation (e.g. Whirlpool, General Electric, etc.), product serial
number, and the purchase history of the item which would include the
purchaser's name. Monitoring the function and operation of these items
would be physically associated with an address, which is PII for those
occupying the residence.
Further, it can be anticipated that the Smart Grid could track even
smaller electricity usage. Smart plugs or outlets might report in real-
time when a lighting fixture, lamp, computer, television, gaming
system, music device, or exercise machine is operating and the duration
of use. One scholar forcefully argues that the ability to monitor
electricity use at such a granular level poses a serious threat to
privacy:
This, more than any other part of the smart meter story,
parallels Shelley's fable of Frankenstein: while researchers do
not currently have the ability to identify every appliance
event from within an individual's electricity profile, the
direction of the research as a whole and the surrounding
context and motivations for such research point directly to
developing more and more sophisticated tools for resolving the
picture of home life that can be gleaned from an individual's
electricity profile. Before the switch is thrown and the
information unleashed upon the world for whatever uses willed,
it may be prudent to look into data protections lest the
unforeseen consequences come back to haunt us.\51\
---------------------------------------------------------------------------
\51\ Privacy and the New Energy Infrastructure, supra note 46, at
28.
Indeed, the potential amount of personal information that could be
---------------------------------------------------------------------------
gleaned from smart appliances is colossal:
For example, it is suggested that the following information
could be gleaned with the introduction of end-user components .
. .: Whether individuals tend to cook microwavable meals or
meals on the stove; whether they have breakfast; the time at
which individuals are at home; whether a house has an alarm
system and how often it is activated; when occupants usually
shower; when the TV and/or computer is on; whether appliances
are in good condition; the number of gadgets in the home; if
the home has a washer and dryer and how often they are used;
whether lights and appliances are used at odd hours, such as in
the middle of the night; whether and how often exercise
equipment such as a treadmill is used.\52\
---------------------------------------------------------------------------
\52\ Privacy by Design, supra note 10, at 11.
Perhaps even more problematic, much of the personal information
which could be gleaned from smart appliances would not otherwise be
available to outsider observers: ``With the whole of a person's home
activities laid to bare, [appliance-usage tracking] provides a better
look into home activities than would peering through the blinds at that
house.'' \53\
---------------------------------------------------------------------------
\53\ Id. at 25.
---------------------------------------------------------------------------
Not only could that information be used to extract even more
intimate information from the usage data, but that information could
also be used in ways that impact the user in tangential areas of their
lives.\54\ For instance, appliance usage data could be transferred to
appliance manufacturers to respond to warranty claims. Or, the data
could be transferred to insurance companies that may want the
information as part of an investigation into an insurance claim.\55\
Landlords could track the energy use and behavior patterns of renters/
leasers. The data could even be used to impinge on civil liberties by
facilitating censorship or limitation of activities based on energy
consumption patterns.\56\ For instance, ``meter data could reveal
resident activities or uses that utility companies may then
subsequently decide are inappropriate or should not be allowed.'' \57\
Or more generally, energy service providers in possession of consumer
data may simply choose to use the data for marketing purposes or to
sell it on the open market for a multitude of applications such as
behavioral advertising.
---------------------------------------------------------------------------
\54\ See Privacy Concerns, supra note 37; Dangers (Part I), supra
note 30.
\55\ See Dangers (Part I), supra note 30.
\56\ See Privacy Concerns, supra note 37.
\57\ Id.
---------------------------------------------------------------------------
The possibility that the appliances could interface with the Smart
Grid through IP-based networks further exacerbates these privacy
issues. The Draft Framework raises indirectly the privacy risk that
would arise in an IP-based power network: ``An analysis needs to be
perforated for each set of Smart Grid requirements to determine whether
IP is appropriate and whether cyber security can be assured.'' \58\ The
effect of IP-based networks on privacy must be part of that analysis,
as IPv6 and the ``Internet of Things'' raise new privacy
considerations. For instance, the IP addresses associated with
appliances or other devices ``could be used to track activities of a
device (and an associated individual),'' thereby revealing an
individual's health condition, daily activities, and other sensitive
and private information.\59\
---------------------------------------------------------------------------
\58\ Draft Framework, supra note 11, at 29.
\59\ SANS Institute, The Next Internet Privacy in Internet Protocol
5 (2004); see Commission To the European Parliament, the Council, the
European Economic and Social Committee and the Committee of the
Regions, Internet of Things--An Action Plan for Europe 5-6 (2009)
(``Social acceptance of [Internet of Things] will be strongly
intertwined with respect for privacy and the protection of personal
data, two fundamental rights of the EU.'').
---------------------------------------------------------------------------
Moreover, allowing the devices access to the Internet will make
them more vulnerable, increasing the likelihood of security breaches
and loss of personal privacy: ``All of these [Smart Grid] communication
links introduce vulnerabilities, especially if they can be accessed
over the Internet.'' \60\ The invasiveness of extracting appliance
usage data from Smart Grid data, particularly from IP-enabled
appliances, cannot be overstated as IP addressing in an IPv6
environment will make possible the unique identification of every
single device in the home that receives electric power. This combined
with collected creates a bundle of vulnerable PII.
---------------------------------------------------------------------------
\60\ See M. Granger Morgan, et al., Carnegie Mellon University
Department of Engineering and Public Policy, The Many Meanings of
``Smart Grid'' 5 (2009), available at http://www.epp.cmu.edu/
Publications/Policy-Brief
Smart-Grid-July 09.pdf.
viii. Physical Dangers
Data collected by the Smart Gird could be used by criminals, such
as burglars or vandals, to monitor real-time data in order to determine
when the house is vacant.\61\ As one Carnegie Mellon University
researcher argued, ``[w]e should not build a power system in which a
hacker working for a burglar can tell when you are home by monitoring
your control systems . . .'' \62\
---------------------------------------------------------------------------
\61\ See Privacy and the New Energy Infrastructure, supra note 46,
at 30; Privacy Concerns, supra note 37; Dangers (Part I), supra note
30.
\62\ Morgan, et al., supra note 60, at 5.
---------------------------------------------------------------------------
Similarly, the Smart Grid affects the interaction between privacy
and domestic violence/stalkers.\63\ Stalking, domestic violence and
intimate partner abuse are also the targets of evolving state and
Federal policy.\64\ Over the years this area has grown to include the
protection of the privacy of stalking and domestic violence
survivors.\65\ As EPIC has repeatedly argued, domestic violence victims
often have urgent needs for privacy, as they may need to keep personal
data from their abusers. This type of abuse can also involve privacy
violations such as surveillance, monitoring, or other stalking methods.
For a domestic violence victim, the need for privacy is a need for
physical safety. However, the Smart Grid could provide abusers with
another method for tracking and monitoring their victims. For instance,
an abuser could track a victim's daily activities in order to exercise
greater control over her ability to contact the authorities or other
aid. Similarly, the capabilities of the Smart Grid could affect even
emancipated domestic abuse victims, as their former abusers may be able
to relocate the victims using personal information transmitted through
the Smart Grid.
---------------------------------------------------------------------------
\63\ See generally EPIC, Domestic Violence and Privacy, http://
epic.org/privacy/dv (last visited June 29, 2010).
\64\ See. e.g., Violence Against Women and Department of Justice
Reauthorization Act of 2005, Pub. L. No. 109-162, 119 Stat. 2960
(2005).
\65\ See EPIC, Violence Against Women Act and Privacy, http://
epic.org/privacy/div/vawa.html (last visited June 29, 2010).
---------------------------------------------------------------------------
II. Recommended Privacy Standards
A. Adopt Fair Information Practices
PII activity should, as mentioned, be limited to a permitted and
specified purpose. EPIC agrees that ``only the minimum amount of data
necessary for the utility companies to use for energy management and
billing should be collected.'' \66\ EPIC also agrees that treatment of
information must conform to fair information practices. However, NIST
should specify that those practices match the practices identified in
the HEW Report \67\ and the OECD Privacy Guidelines.\68\ As discussed,
the HEW Report established fair information practices, based on five
principles:
---------------------------------------------------------------------------
\66\ Id. at 12.
\67\ Dep't. of Health, Educ. and Welfare, Secretary's Advisory
Comm. on Automated Personal Data Systems, Records, Computers, and the
Rights of Citizens (Government Printing Office 1973) [hereinafter ``HEW
Report''].
\68\ OECD, Guidelines on the Protection of Privacy and Transborder
Flows of Personal Data (1980), http://www.oecd.org/document/l8/
0,3343,en-2649-34255-1815186-
1-1-1-1,00.html
[hereinafter OECD Privacy Guidelines], reprinted in The Privacy Law
Sourcebook 395-423 (Marc Rotenberg ed., 2004).
(1) There must be no personal data record-keeping systems
whose very existence is secret. (2) There must be a way for a
person to find out what information about the person is in a
record and how it is used. (3) There must be a way for a person
to prevent information about the person that was obtained for
one purpose from being used or made available for other
purposes without the person's consent. (4) There must be a way
for a person to correct or amend a record of identifiable
information about the person. (5) Any organization creating,
maintaining, using, or disseminating records of identifiable
personal data must assure the reliability of the data for their
intended use and must take precautions to prevent misuses of
the data.\69\
---------------------------------------------------------------------------
\69\ HEW Report, supra note 67, at xx-xxiii.
Similarly, the OECD Privacy Guidelines established eight principles
for data protection that are widely used as the benchmark for assessing
privacy policies and legislation: Collection Limitation; Data Quality;
Purpose Specification; Use Limitation; Security Safeguards; Openness;
Individual Participation; and Accountability.\70\ The treatment of
Smart Grid information should conform to those practices in the
following manner:
---------------------------------------------------------------------------
\70\ OECD Privacy Guidelines, supra note 68.
Moreover, NIST should require enforcement of the guidelines in
accordance with the HEW Report.\72\ NIST should recommend enforcement
mechanisms, such as civil and criminal penalties, injunctions and
private rights of action. By specifying the parameters and enforcement
of the fair information practices, NIST can require actual conformance,
rather than loosely requiring treatment to ``conform.''
---------------------------------------------------------------------------
\71\ ``Consent'' is widely understood as ``any freely given
specific and informed indication of a data subject's wishes by which
the data subject signifies his agreement to personal data relating to
him being processed.'' European Union Data Protection Directive,
reprinted in The Privacy Law Sourcebook 450 (Marc Rotenberg ed., 2004).
\72\ HEW Report, supra note 67, at xxiii.
---------------------------------------------------------------------------
Several of the principles proposed by NIST reflect the FIPs
contained in the HEW Report and the OECD Privacy Guidelines, which is
commendable. However, the NIST guidelines also propose other principles
that could be strengthened or improved upon.
B. Establish Independent Privacy Oversight
The Cyber Security Strategy proposes that ``[a]n organization
should formally appoint personnel to ensure that information security
and privacy policies and practices exist and are followed. Documented
requirements for regular training and ongoing awareness activities
should exist and be followed. Audit functions should be present to
monitor all data accesses and modifications.'' \73\
---------------------------------------------------------------------------
\73\ Cyber Security Strategy, supra note 14, at 9.
---------------------------------------------------------------------------
It is essential to ensure that information security and privacy
policies and practices exist and are followed. NIST proposes that
``[d]ocumented requirements for regular privacy training and ongoing
awareness activities for all utilities, vendors and other entities with
management responsibilities throughout the Smart Grid should be created
implemented, and compliance enforced.'' However, it may be insufficient
for organizations to simply provide privacy training to their employees
or even to appoint dedicated privacy officers with audit functions.
For example, in an analogous situation, despite the training and
audit authority conferred to the Chief Privacy Office of the Department
of Homeland Security, that office has proven to be impotent, powerless
to effectively protect privacy. On a range of issues, from whole body
imaging to suspicionless electronic border searches, the Chief Privacy
Officer for DHS has failed to fulfill her statutory obligations.\74\
Accordingly, EPIC and other privacy and civil liberties groups have
called for Congress to consider the establishment of alternative
oversight mechanisms, including the creation of an independent
office.\75\ Without such an independent office,\76\ it would be
impossible to ensure the proper protection of privacy rights, because
the decisions of the Chief Privacy Officer would continue to be subject
to the oversight of the Secretary and the rest of the Executive branch.
---------------------------------------------------------------------------
\74\ See EPIC, Department of Homeland Security Chief Privacy Office
and Privacy, http://epic.org/privacy/dhs-cpo.html (last visited June
29, 2010).
\75\ Letter from EPIC, et al., to Representatives Bennie G.
Thompson and Peter T. King (Oct. 23, 2009), available at http://
epic.org/security/
DHS-CPO-Priv-Coal-Letter.pdf.
\76\ See, e.g., European Commission, Data Protection--National
Commissioners,http://ec.europa.eu/justice-home/fsj/privacy/
nationalcomm/index-en.htm (last visited June 29, 2010);
Office of the Privacy Commissioner of Canada, http://www.priv.gc.ca/
index-e.cfm (last visited June 29, 2010); Office of the
Privacy Commissioner for Personal Data, Hong Kong, http://
www.pcpd.org.hk (last visited June 29, 2010).
---------------------------------------------------------------------------
Similarly, for Smart Grid organizations to appoint privacy
personnel or simply train existing personnel would be an ineffective
solution that would only serve to preclude the possibility of creating
an independent position with actual authority to protect privacy. The
better solution is simple--NIST should recommend that an independent
Privacy Office, with completely independent authority be established,
with power over all entities associated with the Smart Grid.
C. Abandon the Notice and Consent Model
The NIST principles rely heavily on the notice and consent model:
A clearly-specified notice should exist and be shared in
advance of the collection, use, retention, and sharing of PII.
Data subjects should be told this information at or before the
time of collection . . .. The organization should describe the
choices available to individuals and obtain explicit consent if
possible, or implied consent when this is not feasible, with
respect to the collection, use, and disclosure of their
PII.\77\
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\77\ Cyber Security Strategy, supra note 14, at 105.
As a threshold matter, the purposes for which PII can be collected,
used, retained, or shared should be severely restricted. The purposes
for which PII can be collected, used, retained, or shared should be
severely restricted. It is insufficient to simply require authorities
or organizations to have a nebulous ``purpose,'' as anything from
``improved marketing'' to ``government surveillance'' could qualify.
NIST should recommend that a formal rulemaking be established so that
service providers establish a concrete set of approved purposes for
which PII activity is permitted. That list of approved purposes should
be very limited, and only purposes essential to the functioning of the
Smart Grid should be permitted.
Once permissible purposes are established, data subjects should
always be informed of the purpose of any collection, use, retention, or
sharing of any PII. However, the ``notice and consent'' model is
fundamentally flawed and should not be relied upon to excuse or justify
any PII activity. As David Vladeck, Director of the Bureau of Consumer
Protection at the Federal Trade Commission, recently acknowledged, the
model simply does not function as intended:
[The notice and consent model] may have made sense in the past
where it was clear to consumers what they were consenting to,
that consent was timely, and where there would be a single use
or a clear use of the data. That's not the case today.
Disclosures are now as long as treatises, they are written by
lawyers--trained in detail and precision, not clarity--so they
even sound like treatises, and like some treatises, they are
difficult to comprehend, if they are read at all. It is not
clear that consent today actually reflects a conscious choice
by consumers.\78\
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\78\ David Vladeck, Privacy: Where do we go from here?, Speech to
the International Conference of Data Protection and Privacy
Commissioners, Nov. 6, 2009, available at http://www.ftc.gov/speeches/
vladeck/091106dataprotection.pdf.
Indeed, in EPIC's testimony before the United States Senate
Committee on Commerce, Science and Transportation, Marc Rotenberg
argued that ``[slolutions which rely on simple notice and consent will
not adequately protect users.'' \79\ In an analogous context--notice
and consent in online agreements--the failures of the model become more
obvious. A recent survey of California consumers showed that they
fundamentally misunderstand their online privacy rights.\80\ In two
separate surveys almost 60% of consumers incorrectly believed that the
presence of ``privacy policy'' meant that their privacy was
protected.\81\ In a different survey, 55% of participants incorrectly
believed that the presence of a privacy policy meant that websites
could not sell their address and purchase information.
---------------------------------------------------------------------------
\79\ Impact and Policy Implications of Spyware on Consumers and
Businesses: Hearing Before the S. Comm. on Commerce, Science, and
Transportation, 110th Cong. (2008) (statement of Marc Rotenberg,
President, EPIC).
\80\ 80 Joseph Turow, et al., Consumers Fundamentally Misunderstand
the Online Advertising Marketplace (Oct. 2007), available at http://
groups.ischool.berkeley.edu/samuelsonclinic/files/
annenberg-samuelson-advertising.pdf.
\81\ Id. at 1.
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Users also routinely click through notices. The Pew Internet and
American Life Project found that 73% of users do not always read
agreements, privacy statements or other disclaimers before downloading
or installing programs.\82\ In such an environment, merely giving
notice to users before collecting their sensitive information fails to
adequately protect privacy in the way consumers expect.
---------------------------------------------------------------------------
\82\ Pew Internet & American Life Project, Spyware: The Threat of
Unwanted Software Programs isChanging the way People use the Internet,
6 (July 2005), available at http://pewinternet.org/pdfs/
PIP-Spyware-Report-July-05.p
df.
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Consumer data should instead receive substantive and ongoing
protection. Especially because of the pervasiveness of the proposed
nation-wide Smart Grid, choice and consent of individuals' is severely
restricted. In all likelihood, individuals who wish to receive
electricity will have little or no choice but to comply with policies
that require the disclosure of PII. For authorities or organizations to
obtain the consent of individuals would be nearly meaningless, as the
power dynamic is fatally skewed. Information should be kept securely,
and users should have the ability to know what data about them is being
kept, to understand with whom it has been shared and to withdraw
consent for the holding of this data. Further, data should only be
collected and kept for specified purposes. Authorities and
organizations must limit the collection, use, retention and sharing of
PII in the first instance, rather than relying on hollow consents to
justify more data collecting activity.
D. Impose Mandatory Restrictions on Use and Retention of
Data
NIST must ensure that restrictions on the use and retention of data
is mandatory, not aspirational. The NIST guidelines propose that:
``Information should only be used or disclosed for the purpose for
which it was collected, and should only be divulged to those parties
authorized to receive it . . .. PII should only be kept as long as is
necessary to fulfill the purposes for which it was collected.'' \83\
---------------------------------------------------------------------------
\83\ Cyber Security Strategy, supra note 14, at 106.
---------------------------------------------------------------------------
It is insufficient to simply say that information should be used or
disclosed only for a permitted purpose. Instead, NIST must require
organizations to follow those policies, and must provide the
authorities with the power to enforce them.
Furthermore, it is inadequate to permit PII to be retained ``as
long as is necessary to fulfill the purposes for which it was
collected.'' That standard is entirely too lenient, and it would permit
organizations too much leeway to retain information whenever they deem
it necessary. Instead, NIST should set expiration dates on PII so that
PII can be retained only for a certain period of time.\84\ The length
of time could vary based on the type of PII and the purpose for which
it was collected. A concrete expiration date would make the system more
transparent for consumers, as they would be more aware of the lifespan
of their data.
---------------------------------------------------------------------------
\84\ See Viktor Mayer-Schonberger, Delete: The Virtue of Forgetting
in the Digital Age (2009) (arguing that digital information should have
expiration dates, which will enable people to both control the sharing
of information with others, as well as be more aware of the
``finiteness of information).
---------------------------------------------------------------------------
NIST should also implement role-based access control to Smart Grid
data. NIST has done significant work on the topic of role-based access
control to computer records and systems. In this context, role-based
access control protocols should strictly manage when, where, who and
how PII in Smart Grid data is accessed. Access to PII, including
electricity usage, should be limited to the function of the position an
individual fills within the Smart Grid service delivery and billing
relationship. Graduated levels of access should be based on
responsibilities for providing Smart Grid FIPs and service provision
purposes. Access should be monitored by log files and auditing of
access use and resolution of issues related to customer service and
proper operation of the Smart Grid.
Finally, NIST should explicitly address law enforcement access to
Smart Grid data and should ensure that their access complies with the
strictures of the Fourth Amendment. As discussed,\85\ the Supreme Court
in Kyllo v. United States addressed the interaction between the Fourth
Amendment and the monitoring of electrical use, holding that the police
could not use thermal imaging equipment not in general public use ``to
explore details of the home that would previously have been unknowable
without physical intrusion,'' without first obtaining a search
warrant.\86\ As the Court recognized, ```At the very core' of the
Fourth Amendment `stands the right of a man to retreat into his own
home and there be free from unreasonable governmental intrusion.'''
\87\ Similarly, in the Smart Grid context, NIST should make clear that
the Fourth Amendment protects the information of Smart Grid consumers,
and that law enforcement must first obtain a search warrant before
gaining access to the information.
---------------------------------------------------------------------------
\85\ See supra notes 5-8 and accompanying text.
\86\ 533 U.S. 27, 40 (2001).
\87\ Id. at 31 (quoting Silverman v. United States, 365 U.S. 505,
511 (1961)).
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E. Verify Techniques for Anonymization of Data
The privacy risks associated with the use and retention of
``anonymized data'' are significant because such data may not be truly
anonymous. Quasi-identifiers can be used for re-identification because
they can be linked to external databases that contain identifying
variables. This method, record linkage, occurs when two or more
databases are joined. Such information can be obtained through public
records, such as birth and death certificates.\88\ Using record
linkage, de-identified data can also be easily re-identified. For
example, by utilizing date of birth, gender and zip code information
for members of the public, a researcher was able to uniquely identify
87% of the U.S. population.\89\
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\88\ See Salvador Ochoa et al., Re-identification of Individuals in
Chicago's Homicide Database: A Technical and Legal Study, Massachusetts
Institute of Technology (2001) (utilizing the Social Security Death
Index and de-identified information about Chicago homicide victims, the
researchers were able to re-identify 35% of the victims).
\89\ Latanya Sweeney, Weaving Technology and Policy Together to
Maintain Confidentiality, 25 J. Law, MED., & ETHICS 98, 98-99 (1997).
---------------------------------------------------------------------------
Similarly, according to the GAO, complete SSNs may be reconstructed
from truncated digits by simply comparing truncated SSNs in federally
generated public records, which provide only the final four digits, to
truncated SSNs provided by many information resellers, which provide
only the first five digits.\90\ Thus, by simply comparing the two
records, a complete SSN can be reconstructed.\91\
---------------------------------------------------------------------------
\90\ U.S. Gen. Accounting Office, Identity Fraud Survey Report:
Consumer Version 2-3 (2009).
\91\ Id. at 3.
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Moreover, in a study published in July 2009, two researchers at
Carnegie Mellon University found that an individual's entire SSN often
could be predicted from publicly available birth information.\92\ The
first five digits of an individual's SSN could be predicted with a
greater degree of accuracy. The accuracy of the researchers'
predictions was even greater when predicting the numbers of individuals
born in sparsely-populated states like Montana, and the researchers
anticipate that their predictions will become increasingly accurate
over time. This research demonstrates the ineffectiveness of attempting
to protect privacy by ``anonymyzing'' or ``de-identifying'' data.
---------------------------------------------------------------------------
\92\ See Alessandro Acquisiti & Ralph Gross, Predicting Social
Security Numbers from Public Data, 106 Proceedings of the National
Academy of Sciences 10975.
---------------------------------------------------------------------------
Techniques for anonymizing data should be pursued, but it is
vitally important to ensure that such methods are robust, provable and
transparent. Any technique proposed to anonymize data should be made
public and available to researchers to examine and evaluate. Under no
circumstance should a company be able to represent, without independent
verification, that it had anonymized data. Until such techniques are
established and safeguards are put in place, the primary objective
should be to minimize the collection of PII in the first instance.
F. Establish Robust Cryptographic Standards
Strong cryptography should be applied to secure all electronic
communications from a Smart Grid application or device. Threats to
address include injection of false information; deletion of
information, denial of service attacks, billing identity theft, service
identity theft, malicious software, cyber attacks, pranks and various
types of surveillance.\93\
---------------------------------------------------------------------------
\93\ Patrick McDaniel & Stephen McLaughlin, Security and Privacy
Challenges in the Smart Grid, IEEE SECURITY AND PRIVACY, May/June 2009,
75-77.
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The Billion-Dollar Bug Smart meters are extremely attractive
targets for malicious hackers, largely because vulnerabilities can
easily be monetized. Hackers who compromise a meter can immediately
manipulate their energy costs or fabricate generated energy meter
readings.
For this reason, there should be an open call for designs that seek
to maximize both data security and privacy of the home as well as of
enterprises. It is well known in the cryptographic community, for
instance, that so-called ``blind signatures'' can allow ultra-secure
reporting of energy usage statistics without revealing the precise
appliance and timings involved.\94\
---------------------------------------------------------------------------
\94\ David Chaum, Achieving Electronic Privacy, SCIENTIFIC AMERICA,
Aug. 1992, at 96-101, available at http://chaum.com/articles/
Achieving-Electronic-Privacy.htm.
---------------------------------------------------------------------------
Sound cryptographic techniques do not rely upon hiding the
cryptographic process, often referred to as an algorithm, from public
review. Sound cryptographic processes are made so by the rigors imposed
by public disclosure and testing of algorithms, and perhaps even more
significantly, by the environment in which the cryptography is
implemented.\95\ Placing the strongest cryptography in an operating
system or application that can easily be subverted by insiders, or
compromised externally by penetration and malware can render the
cryptography ineffective.\96\ For this reason, it is imperative that
all cryptographic algorithms used to secure Smart Grid technology and
electronic technology used to facilitate Smart Grid optimization and
operations be open for public inspection and testing and that the
findings be made public, including the entire systems in which the
cryptography is used. Further, encryption and decryption keys that are
used to secure information stored or transmitted on the Smart Grid
should be of sufficient complexity that they cannot be easily deduced
or broken.
---------------------------------------------------------------------------
\95\ Bruce Schneier, Applied Cryptography 21-46 (2d ed. 1996).
\96\ Peter Neumann, Computer Related Risks 132-180 (1995).
---------------------------------------------------------------------------
It is disconcerting that a document prepared by NIST on what will
be the most significant leap forward in digital communication
capability in thirty years had so little to say about cryptography. The
document mentioned ``cryptography'' and ``encryption'' only twice, and
both times were in a table on standards and applications.
III. The Effectiveness of NIST-Coordinated Standards Process in
Gathering and Incorporating the Input From Consumer
Advocacy Organizations
EPIC first became aware of the development of Smart Grid
recommendations through two announcements published in the Federal
Register on October 9, 2009. We later became aware of the working group
effort to develop recommendations in mid-October 2009 and sought out a
NIST subject matter expert to get more information on that effort.
Tanya Brewer, with NIST Computer Security Division, and computer
scientist Annabelle Lee were leading the effort on the NIST Smart Grid
Interoperability Standards Project.
EPIC was made welcome to join the effort and I asked if it would be
possible to include additional privacy organizations into the process.
The response was that all would be welcome to participate in the
privacy group. I coordinated the work of EPIC's Privacy Coalition and
invited members to participate in the effort. The Electronic Frontier
Foundation, ACLU, and Privacy Rights Clearinghouse accepted the
invitation. We joined the Future of Privacy Forum and the Samuelson Law
Clinic at Berkley (which represented the Center for Digital Technology)
in providing input on the privacy components to the Smart Grid
document.
The meetings I attended with NIST staff were punctuated by an
invitation to join the NIST Smart Grid Interoperability Standards
Project drafting effort.
Whether EPIC would have known about the NIST Smart Grid
Interoperability Standards Project without a vital link to our Advisory
Board is doubtful. Consumer advocacy organizations and NIST do not
normally travel in the same circles. A chance confluence of events made
the participation in the NIST Smart Grid Interoperability Standards
Project possible. The process was far from ``smooth sailing,'' but
overall it was productive and instructive for groups that value
consumer privacy and potential partners from the online economy, where
consumer privacy is not as highly valued.\97\
---------------------------------------------------------------------------
\97\ EPIC, Social Networking Privacy, http://epic.org/privacy/
socialnet/ (last visited June 30, 2010).
---------------------------------------------------------------------------
The Privacy Group for the project included those unfamiliar with
privacy issues as well as privacy experts. The challenge was learning
to speak the same language and understanding the core values of privacy
as they relate to Smart Grid. The field of privacy is just like other
disciplines: we learn from the mistakes and successes of others,
improving our knowledge and understanding about what works and why.
Critical to the Privacy Group's ability to work together was NIST's
hosting two face-to-face meetings with participants. This helped to
communicate the necessary breadth of privacy protection, which is
neither a zero sum decision-making process nor a series of trade-offs.
Rather, protecting privacy consists of a series of steps to assure that
users retain the rights to control who, when, why, and how others may
access information about themselves.
There were some rough spots as NIST computer security experts
grappled with the language of privacy protection. There were
discussions about whether Smart Grid data collection would introduce
anything new about consumers or only make available information that
was already public. There were discussions around common concepts like
de-identification and re-identification, widely recognized terms within
the field of privacy policy.
The conversations continued with a healthy exchange of ideas, until
equilibrium was reached. The Privacy Group divided its work among
legal, privacy, and technical experts to complete the draft of the
privacy chapter. This is one of the most interesting aspects of the
project; the people who worked on it were primarily volunteers, giving
their time and talent freely.
The draft of the privacy chapter I received last week is a good
document because it covers the basics of privacy and offers solid
recommendations on how to address privacy in the Smart Grid. However,
as the document is merged with the remainder of the NIST Smart Grid
Interoperability Standards Project, it will continue to be edited. The
final draft will go to the Department of Commerce, where it may further
be edited prior to public release. The final document may bare little
resemblance to the result of the Privacy Group's hours of effort to
address the unique privacy challenges of the Smart Grid.
For this reason, EPIC will reserve judgment on the success of
including advocacy groups in the process until the final document is
published. To the degree that NIST remains free of politics and can
remain rooted in science, it can serve the nation's best interest. The
Smart Grid for some presents a grand opportunity to create energy
independence for our nation, while for others it is an opportunity to
open new markets and reap profits. Unfortunately, third-party energy
management service providers may be more focused on the data they can
access and monetize than the benefits to the consumer or energy
independence.
IV. Conclusion
Privacy protection is essential to the successful implementation of
the Smart Grid and failure to develop robust and implement privacy
policy will hinder adoption of applications and services. Only by
building privacy protection into the Smart Grid from the outset can the
NIST defend the privacy interests long protected by our legal system.
Thus, NIST should establish comprehensive privacy regulations that
limit the collection and use of consumer data. EPIC appreciates the
Subcommittee's interest in Smart Grid privacy issues, is eager to
contribute the further development of Smart Grid privacy policy, and
looks forward to the Subcommittee taking action in this area.
Biography for Lillie Coney
In 2009, House Speaker Nancy Pelosi appointed Ms. Lillie Coney to
the Election Assistance Commission (EAC) Board of Advisors. Ms. Coney's
work at EPIC encompasses original research and writing on topics that
impact privacy rights and civic participation. In 2004, she contributed
the chapter ``Mobilize Underrepresented Voters,'' to the New York Times
Bestseller, 50 Ways to Love Your Country. In 2005, she co-authored,
along with computing technologists and researchers, the paper, Toward a
Privacy Measurement Criterion for Voting Systems. In 2006, Ms. Coney
was the organizing force behind the first research conducted in a
polling location to measure the usability of optical-scan and touch
screen voting systems resulted in the report, Voting Technology,
Election Administration, and Voter Performance, published by Stein,
Vonnahme, Byrne, and Wallach (2008). In October 2008, EPIC's voting
project published E-Deceptive Campaign Practices Report: Internet
Technology and Democracy 2.0, the first report to review technology as
a tool for online deceptive campaign practices. The report reviewed the
potential for abuse of Internet technology in an election context, and
made recommendations for steps that could be taken by Election
Protection, Election Administrators, and voters to protect the
integrity of the upcoming election. In 2009, she coordinated and lead
the audit review of the Punchscan Voting Systems use in the November
2009, Takoma Park Municipal election. She has written and spoken
extensively on the subject of voting technology and privacy. She has
published several law and policy journal articles on elections and
voting systems.
Ms. Coney serves in an advisory capacity to Verified Voting,
ACCURATE, Voting System Performance Rating, and Open Voting Consortium.
She is also a member of the Association for Computing Machinery's
Public Policy Committee.
Ms. Coney's work at EPIC includes coalition development and civil
rights in the digital information age. She serves as the Coordinator
for the Privacy Coalition, an EPIC project. The Privacy Coalition has
over 40 organizations and affiliates, representing a broad political
spectrum, committed to freedom and privacy rights. She manages monthly
meetings of the Privacy Coalition as well as one annual conference held
in January of each year. Guest speakers from previous administrations
included: Chairs of the Federal Trade Commission, the Civil Liberties
Protection Officer for the Office of National Intelligence, and the
former Executive Director and Vice Chair of the Privacy & Civil
Liberties Oversight Board. Ms. Coney has coordinated several major
Internet Privacy advocacy campaigns; most notable are the ``Stop REAL
ID Campaign'' and the ``Stop Digital Strip Searches'' efforts.
She has testified before the House Judiciary Committee on Privacy
and Cybercrime Enforcement and the House Committee on Homeland Security
on the topic of Watchlists. She also testified several times before the
Department of Homeland Security's Data Privacy and Integrity Advisory
Committee on domestic surveillance, CCTV Surveillance, and ``Fusion
Centers''. Ms. Coney has testified before the Election Assistance
Commission on the subject of voter registration database privacy,
electronic voting system standards development, and developing reliable
measures for voting administration and equipment management.
She also provides advice and input on privacy issues related to
Cloud Computing and Smart Grid implementation.
Ms. Coney was the former Public Policy Coordinator for the
Association of Computing Machinery (ACM). The ACM is the largest and
oldest organization of computing professionals in the world. Prior to
that, Ms. Coney served as special assistant to Rep. Sheila Jackson Lee
(D-TX) on a variety of issues ranging from energy and information
technology policy, election reform, to education policy. Her background
includes extensive work in computer systems and technology policy. She
has over 18 years of experience working on science and technology
issues. She also has worked with civil rights and grassroots
organizations on issues of voting and civil rights.
Ms. Coney received a B.A. in Political Science and a Masters in
Public Administration from Lamar University in Beaumont, Texas. She is
a former Systems Administrator who has designed and developed web sites
for Congressional offices.
Chairman Wu. Thank you very much, Ms. Coney, and thank you
for your very, very interesting written testimony also.
I am going to ask one question to start and then turn it
over to Mr. Smith. The utility business or the electric grid is
dominated by very large players, by utilities. General Electric
is not a small player. We have seen some of the research and
development, particular technology development, benefits of
having small high-tech startups, whether it is in the
electronic hardware business or in software or in
biotechnology. Think through for me, anyone who wants to
address this, what the standard-setting process and what other
things we can do to harness the small-business capacity and
particularly the high-tech startup folks so that they can
contribute as they have contributed with great success to other
technologic development fields, anyone who wants to address
that. Mr. Eustis.
Mr. Eustis. Yes. I work with a number of entrepreneurial
groups back in Portland, and they do very much need standards
as a way to get access, for example, to meter data as a way to
implement energy management systems in the home versus right
now it is a custom implementation with every utility. Standards
are essential to creating innovation.
Chairman Wu. A wider playing field for any startup.
Mr. Eustis. Yes, sir.
Chairman Wu. Thank you very much.
Dr. Arnold?
Dr. Arnold. Well, we have certainly gotten a lot of
startups and small companies involved in the Smart Grid
Interoperability Panel, and one indicator of that is that we
have about a dozen venture capital firms who are members of the
panel and so clearly there is great interest in startups and
innovation.
Chairman Wu. Mr. McDonald.
Mr. McDonald. One of the things with smart grid as shown by
the reference model that NIST prepared was it is very
expansive. It covers--the domain is from the generation plant
all the way down to the home. We find no matter how big of a
company, even GE, we need small startups. We need other
companies to partner with us to be able to provide the
technology for smart grid. So we formed a strategic partner
organization. We are constantly talking with startups and new
companies to fill the gaps that we don't provide ourselves, and
in doing that we bring them in to the standards arena because
standards is very important to us, and if the startup company
that we are going to partner with doesn't embrace standards, we
make sure that that happens and we work closely with them in
that regard. Thank you.
Chairman Wu. Thank you very much, Mr. McDonald. I just want
to add that whether U.S. General Electric or Intel, IBM,
Westinghouse, the example from other industries has been that
when the startups are permitted to play, they frequently
contribute to the ecosystem and further development of the
field and occasionally there are acquisitions also that add to
larger companies.
We have 327 not voted, and I think we can push it down
another 100. Ms. Coney, you wanted----
Ms. Coney. Yes, I wanted to add that the utility industry
for over 100 years has managed the personal information of
their customers pretty well. They practice fair information
practices without maybe articulating that is what they were
doing. As they bring new players into this environment,
standards can set an appropriate benchmark for managing data.
From the privacy community's perspective, we look at the smart
grid as not just an energy delivery system but a huge
communication network that will allow two-way flow of data
between the home to the grid as well as communication among
electrical appliances devices. So as they look to bring players
in, how data might be used in ways that will enhance consumer
trust and broader adoption of smart grid will have a lot to do
with how consumer personal information or their energy usage
data is managed in that system.
Chairman Wu. Thank you for that point. It is that it is a
communication system as well as a power delivery system that
makes it a privacy as well as security concern and the fact
that it is also not just energy storage but data storage
ultimately for the smart grid that drives the privacy concern
even further.
Mr. Smith, please proceed.
Mr. Smith. Thank you, Mr. Chairman.
I appreciate all the testimony here, and I think that there
are a lot of great points to be talked about. As I am meeting
with constituents here, back in my district and so forth,
certainly I think it is fair to say that consumers are paying
more attention relating to energy, electricity distribution and
other things probably than in the history of our country. They
are also paying more attention to what is happening here in
Washington and they are concerned. The various trends that we
see have them concerned. I mean, I point to a bill that we took
up here not long ago relating to the social behavior of energy
consumers. I would argue that any worthwhile economic study
involves consumer behavior that should touch on some of those
things as it relates to the economics and so forth. So I think
we need to be mindful of that and make sure that anything we do
is consumer-driven because that is I think that is more
sustainable and more effective long term.
But that being said, we have a situation with the $4
billion for smart grid technologies from the stimulus bill and
I am not sure if there is a sign that says this is credited to
the ARRA like so many of the projects around America do at a
great expense to taxpayers, by the way, but I am concerned that
we might have the cart ahead of the horse without the standards
in place. Dr. Arnold, can you speak to how that money can be
effectively spent in terms of utilizing and upholding standards
that may not exist yet?
Dr. Arnold. Yes. Thank you, Congressman. This is indeed an
issue that we have been paying very careful attention to for
precisely the reasons that you have stated. One of the major
areas of investment with these grants has been in smart meters
and we recognized early on that some of the standards for the
smart meters would have to be revised to accommodate certain
requirements. So we tasked the National Electrical
Manufacturers Association, which is responsible for developing
the standards for the smart meters, to get the industry
together and develop a smart meter upgradability standard and
gave them a timeframe of 90 days to get that done and indeed
that standard was developed and published last September with
the full participation of the metering industry. So that is one
example where we have thought about this and put in place a
solution. Many of the other standards that we are talking about
here on interoperability are based on software. They deal with
information management and the ability to update software over
time is well understood and part of the process.
Chairman Wu. If anyone else wishes to answer, we will take
your comments after we come back from votes. We are a little
short on time now, and after Mr. Smith--after that answer,
Chairman Gordon, Chairman of the Full Committee, will be the
next to ask questions. The panel is now recessed until the
completion of these three votes.
[Recess.]
Chairman Wu. Thank you for your patience and forbearance on
these three, four votes. Next will be the Chairman of the Full
Committee, Mr. Gordon. Please proceed.
Chairman Gordon. Thank you, Chairman Wu, and thanks for
having this very interesting hearing, and I want to thank our
witnesses. You have been very helpful for us to better
understand what is going on in the state of play now. I think
we all recognize that a smart grid can help us become more--
have more energy security, become more technically efficient,
which hopefully then means new markets for our new technology
and jobs in those markets both globally as well as
domestically.
But I want to follow up on a couple of things. Mr.
McDonald, you had mentioned, and obviously you have a big stake
in this in terms of products, that there needed to be
international cooperation with the standards, and Dr. Arnold,
you had mentioned that there were some collaboratives at
different agencies, or not agencies but rather groups, as well
as working countries. But I want to go back to a statement that
you made in your written testimony and I would like to flesh it
out a little bit more. I have read some reports that predict
that China's preference for indigenous innovation will extend
to the smart grid and that China may seek to establish its own
standards for the smart grid in the belief that the size of its
market will lead to their adoption as a de facto global
standard. So with that sort of context, I assume this would not
be a good thing for you, Mr. McDonald, as well as other
domestic and global companies here.
So Dr. Arnold, you had mentioned that there is some
collaboration going on. Can you tell me what is going on there
and how your fears are now?
Dr. Arnold. Thank you, Chairman Gordon. I would be happy to
elaborate on that. We are actively reaching out to our
counterparts in China. NIST has hosted a number of visits by
representatives from Chinese agencies including the state grid
of China to discuss our standardization efforts. Several weeks
ago a NIST delegation visited the Chinese National Institute of
Metrology and the smart grid was one of the topics discussed. I
have had meetings with the Chinese national committee to the
IEC [International Electrotechnical Commission]. My deputy met
a couple weeks ago with a Chinese representative to a new ITU-T
[International Telecommunications Union-Telecommunications
Standardization Sector] focus group on smart grid, and I and
several members of my team at NIST have been invited to give
talks at smart grid conferences in China and so we will
certainly continue to engage in outreach.
What I can tell you is that China has publicly said that
they intend to use international standards and for them, that
primarily means IEC standards. One of the concerns that I have
is that as we have learned through our process, there are about
27 different standards organizations that develop standards
needed for the smart grid, so it is not possible to point to
just one. Also, there are many instances in which countries
will bring proposals into a group like the IEC and what is
eventually adopted at the international level is not the same
as the starting point and so there is a question as to whether
if China does wish to pursue a different path on some of these
standards whether they will indeed be harmonized with the
United States and other countries. So we are going to continue
to be very proactive in engaging in outreaching and
establishing a dialog, and China obviously is a very big
country with many players and I also believe that it is not
entirely clear who has the lead within China on the development
of the standards. So we are going to continue to work this
intensively.
Chairman Gordon. Well, let us put China over to the side
just a moment now. With the 27 different agencies, is there
something that we need to do in this country either
legislatively, administratively to bring more continuity to
that? And how is the rest of the world outside of China, how
does that seem to be coming along with harmonizing?
Dr. Arnold. Well, with regard to the 27 different agencies,
I think Congress has already in brilliant fashion dealt with
that by enacting the Energy Independence and Security Act which
gave NIST the role of coordinating, and that coordination I
believe is going very, very well.
Chairman Gordon. But that is coordinating all of our
efforts, but then you are having to coordinate in with all 27?
Dr. Arnold. Yes, coordination among the 27, and by the way,
many of the 27 are international standards bodies. They include
the IEC, the ITU-T. IEEE is really an international
organization, and I would say the United States is really
leading the way in terms of figuring out the architecture, what
standards are needed, and getting the right discussions among
all these players to produce the specifications that we need
both in the United States and that other countries will need.
Chairman Gordon. So again, with China on the side, you are
comfortable that the rest of the world is moving in a similar
direction?
Dr. Arnold. I believe that we are. Clearly there are
differences in the electrical systems around the world that
have been around for 100 years and are probably never going to
change, so it is not going to be possible to harmonize 100
percent in the electric grid, but a lot of the issues we are
dealing with regard to information management don't differ,
don't change whether you are operating at 110 volts or 230
volts and so I believe that harmonization is indeed possible--I
am very optimistic about it.
Chairman Gordon. Any of the other witnesses want to bring
any caveats or any thoughts to this issue? Okay.
And finally, is there any type of a WTO [World Trade
Organization] or any type of a way to appeal if China were to
go a completely different way for a proprietary reason?
Dr. Arnold. Well, if the result creates a technical barrier
to trade that doesn't have some justification, I would assume
that might be possible, but I don't know. We will have to see.
I don't think China is far enough along yet. We are really
leading the way in this standardization effort.
Chairman Gordon. Thank you.
Chairman Wu. Thank you very much, Mr. Chairman.
Next, Mr. Broun, please proceed.
Mr. Broun. Thank you, Mr. Chairman.
Dr. Arnold, is NIST ensuring that all smart grid standards
are developed using a process that ensures a consensus that is
consistent with the requirements of the National Technology
Transfer and Advancement Act as well as the OMB [Office of
Management and Budget] circular number A-119 that encourage
Federal agencies to use standards developed by private
consensus organizations?
Dr. Arnold. Thank you, Congressman. That is an excellent
question, and, in fact, one that we discuss extensively in the
SGIP, and because we are directed in EISA to use a consensus
process and FERC is directed to ensure that there is consensus,
we have had to reach out for a definition of consensus, and the
one that we have used is the definition incorporated in the
NTTAA [National Technology Transfer and Advancement Act] and
circular A-119. So that is sort of a foundation that we are
using.
Mr. Broun. So that is yes?
Dr. Arnold. Yes.
Mr. Broun. Okay. Very good. Dr. Arnold, in light of the
accelerated time frame and the numerous and varied
organizations upon which NIST is relying to develop the smart
grid standards, how specifically is NIST ensuring that all
smart grid standards are being developed in a process that
satisfies these strict requirements?
Dr. Arnold. Well, when proposals come up to include certain
standards that are being worked in organizations that are, let
me say--if you have an organization that is accredited by ANSI,
it is pretty clear that it complies with the NTTAA and OMB.
There are other organizations like the IEC or the ITU which
operate at an international level which are deemed to be
compliant with those principles because they are basically in
their charter, but there is in some cases extensive discussions
about the need to move some of the work that is going on in
certain forums in the smart grid into more open processes and I
can point to an example where the Zigbee Alliance has actually
changed their process for public review and addressing public
comments specifically because we insisted that it had to follow
the principles in NTTAA and circular A-119.
Mr. Broun. Very good.
Mr. Emnett, EISA provides that FERC initiate a rulemaking
once it determines that what is described as a ``sufficient
consensus'' on standards exists. What criteria will FERC use to
determine that sufficient consensus has been achieved and how
will FERC independently confirm that such criteria have been
satisfied?
Mr. Emnett. Thanks for that question. It is a good question
because we haven't yet gotten the first set of standards so the
Commission hasn't spoken. It hasn't had to process the
standards and identify the criteria that is going to apply in
light of the processes that exist within the NIST standards
development process. That said, on a staff level, we regularly
engage with the NIST staff to monitor the development of the
standards development process, the setting up of the
Interoperability Panel and the working groups, and the
discussion around the NTTAA and the OMB circular to make sure
that we can advise the Commission of the progress that has been
made within the NIST standards development process in terms of
building that consensus and then ultimately have the record to
present to the Commission once we get the standards.
Mr. Broun. That is a big job and I trust that you all will
fulfill it. How will FERC determine in its rulemaking process
what smart grid standards will become mandatory and which will
remain voluntary?
Mr. Emnett. The statute directs FERC to adopt standards
developed by NIST for which there is consensus in the NIST
process provided that they relate to the interoperability and
functionality of interstate transmission and regional and
wholesale electric markets. The Commission in a Policy
Statement last year interpreted that directive to apply to the
breadth of electric facilities that involve smart grid
interoperability. So that could include distribution-level
equipment which would not traditionally be subject to the
Commission's ratemaking jurisdiction and yet that is implicated
in its smart grid jurisdiction through the approval of
standards under EISA. The Commission also looked to the
language of EISA to understand not only the scope but also the
applicability and noted that the statutory language does not
grant the Commission authority to manage or enforce standards
under EISA. That said, the Commission does adopt and enforce
standards developed by the North American Electrical
Reliability Corporation, the North American Energy Standards
Board, other standards development organizations that do
present standards to the Commission for adoption under other
statutes such as the FPA, the Federal Power Act. And so there
will be an analysis that is required of each standard that is
provided to determine whether regardless of the adoption under
EISA there needs to be an incorporation of the standard into
the mandatory regulations of the Commission.
Mr. Broun. Thank you very much.
Mr. Chairman, my time is expired, and I have one more
question for Mr. Emnett. I assume that we can submit written
questions to be answered----
Chairman Wu. We will do that, and also a second round.
Mr. Broun. Well, unfortunately, I won't be able to be here
to attend that, and I would ask unanimous consent to----
Chairman Wu. Why don't we give you--why don't we ask
unanimous consent for you to complete your questions?
Mr. Broun. Well, thank you, Mr. Chairman, I appreciate
that.
Well, then, Mr. Emnett, how will FERC deal with the
standards that are applicable to facilities and entities that
are outside its your jurisdiction?
Mr. Emnett. FERC has interpreted the statutory language for
those entities outside of jurisdiction or the activities that
are outside of the Commission's jurisdiction, to mean that the
adoption of a smart grid standard would not be mandatory or
enforceable by the Commission. So there would be a distinction
between the sources of jurisdiction for reliability matters or
ratemaking matters under the Federal Power Act and the
jurisdiction that EISA grants us in terms of responsibility to
adopt the smart grid standards.
Mr. Broun. Very good. Thank you, Mr. Chairman.
Ms. Coney. I was wondering if I could add one point? The
standards that are being developed, you are focusing a great
deal on what is happening in the United States, but we also
purchase power from Canada. There are concerns between Canadian
and U.S. transfer of data and information so any standards that
address the issue of stripping information from the electricity
or power that actually flows across the border may present some
additional challenges to international standards. I am not sure
if that is part of any of the discussions that are happening
with international standards organizations but there is concern
about the data that is wrapped up in the energy that is
actually moving back and forth across borders.
Mr. Broun. That is a great point. I hope that Mr. Emnett
heard your concerns, and I certainly share the privacy concerns
that you do, Ms. Coney.
Thank you so much, Mr. Chairman.
Chairman Wu. Thank you very much, Mr. Broun, and perhaps
the panel when it is my turn to ask questions again could
address the issue of how closely the Canadians and we are
cooperating on the privacy side.
Mr. Lujan, please proceed.
Mr. Lujan. Mr. Chairman, thank you very much. I appreciate
the attention to the last mile, if you will, and it sounds like
that is what we have been focusing on. The last mile I am
referring to demand-side management. I want to make sure that
we also don't depart too far from the importance of
understanding what smart grid means to our distribution
systems, our transmission systems, reliability, along those
lines, and how it integrates fully as we talk about this.
How far off are we from establishing standards for the last
mile, if you will, for the demand-side portion that it seems
that we have been focusing on here? Dr. Arnold.
Dr. Arnold. Yes. Well, the customer domain which deals with
the demand-side management is one of the major domains in the
smart grid and our Release 1 Framework has a lot of standards
that apply in that area, some of which are under development
but will provide a rich set of tools for customers to get real-
time access on their energy usage and be able to reduce energy
usage both in residential, commercial and industry
environments. So that is clearly a major focus of our standards
effort.
Mr. Lujan. And Mr. Chairman, the reason I ask that question
is, we have been engaged in installing rooftop PV
[Photovoltaics] for some time, small wind systems for people
with distributed generation, and we still don't have national
interconnection standards. Here we are. It seems to me that had
we had national interconnection standards, states that have
adopted them have fully accelerated their installation of PV,
securing the grid. Had we had a stronger, more robust system in
New York when we experienced the blackouts and the brownouts,
we could have prevented that if we would have had adequate
distributed generation and some integration when we talk about
large scale and small scale. It seems to me, Mr. Chairman, that
we do need to fully accelerate when we talk about
interconnection standards or standards associated with any
application whether it is big or small with smart grid so that
industry, which is driving this and making these investments,
they can focus in and hone in on where these critical
investments need to be, and so that is something that I am very
interested in, Mr. Chairman, not only on the net metering side,
which I think has an important component when we are talking
about smart grid with bringing on and off, especially as you
are going to be using the demand-side focus to maybe even firm
up peak with what you may be generating on some small DG
[Digital Generation] systems and be able to control that demand
side in the home on a commercial application and then ramp up
where you need to, which could prevent a peaking system from
coming on. And so----
Chairman Wu. If the gentleman would yield just briefly?
Mr. Lujan. Yes.
Chairman Wu. I completely agree with the gentleman about
the need for standards to connect distributed power sources,
and with the assistance of former Chairman Boehlert, I drafted
a small provision in an energy bill passed under Chairman
Boehlert's leadership to make sure that some wind sources and
other distributed sources could connect well to the grid. There
was some question about NIST jurisdiction then and there was
also some question about this Committee's jurisdiction but that
is now well established. I yield back to the gentleman.
Mr. Lujan. I appreciate that very much, Mr. Chairman, and
that is going to be an important item for us to solve and work
with industry as well to make sure that we are able to come to
this.
The reason I asked that question, Mr. Chairman, as well, is
recently it was announced in New Mexico where there is a large
effort, a partnership with Japan and the United States with a
few of our national laboratories, with the city of Albuquerque,
with commercial application with bringing in their smart grid
technology as well. Japan as well, over the 1990s, have
invested $100 billion into this area, into this testing. They
have been making significant investments into their distributed
systems and transmission systems and have been concentrating on
their last mile recently, which I am happy that they are coming
with here, but as we look to see the companies that are coming
in, companies like GE, companies like Portland General Electric
to see what we can do with learning from the expertise that
lies therein, to make sure we are including and we are
collaborating with companies that have a strong presence in the
United States as well with the integration into some of these
test areas.
And so I certainly hope, Mr. Chairman, as we go forward
that those are the kinds of ideas that we can definitely look
to and that we don't forget about our brothers and sisters who
are serving on the public utility commissions across the
country. They have a lot to add, and I will tell you, Mr.
Chairman, as a former regulator, that is a voice that we need
to make sure that we are reaching out to, especially when we
talk about these areas with the leadership over at NARUC
[National Association of Regulatory Utility Commissioners] as
well. So with that, I yield back, Mr. Chairman. Thank you.
Chairman Wu. Thank you very much, Mr. Lujan, and I just
want to add that your energetic and intelligent participation
in this Subcommittee is very, very impressive. Ms. Biggert and
I were just chatting that the New Mexicans that we know, you
and Mr. Heinrich and your predecessor, Mr. Udall, a lot of
smarts there and maybe it is leakage from the two national labs
that you have in New Mexico.
The Ranking Member----
Mr. Lujan. Mr. Chairman, if I may, we will take it for what
we get it, sir, because it is hard to come by. Thank you for
that.
Chairman Wu. Ms. Biggert.
Ms. Biggert. Yes. Thank you, Mr. Chairman.
With regard to the smart grid, I really do appreciate the
Administration's vision of a cleaner, more reliable, more
efficient and effective electricity grid that creates jobs and
reduces our dependence on others. I have a couple of questions
based on that. Let us start with the job issue.
It seems like there is going to be a lot of short-term jobs
to do the installation but what happens to the meter readers?
Are we going to lose more jobs than we will gain with this
installation? Dr. Arnold?
Dr. Arnold. Sure. Well, I can tell you from the studies I
have read, there was a study done by KEMA, a consulting
company, about a year ago that estimated over the first several
years of the smart grid deployment net gain of about 280,000
jobs in the United States, and in the long term they predicted
140,000, if my memory is correct, and what is interesting is
that they actually analyzed the effect of the meter readers'
jobs going away. There are about 42,000 of those jobs. So even
after you subtract that out, their estimate was 280,000 net
increase in the early years.
Ms. Biggert. But besides the installation, what jobs would
be new jobs?
Dr. Arnold. Well, there are certainly jobs to do the
engineering of these new grids, bringing in new technologies,
the information technology and communications. These are new
skills for most of the electric utilities and so they also
represent opportunities to train a new generation of young
people to pursue careers in the ongoing evolution of the smart
grid.
Ms. Biggert. I have an article from Maine where they are
concerned because those might be short-term versus the long-
term a meter readers. They are concerned because of the
stimulus was, you know, to create jobs, and it will, but will
it be enough to overcome the long-term jobs?
Dr. Arnold. Well, the nature of the, you know, jobs to put
in place the automation in the grid are long-term. I come from
the telecommunications industry and a whole industry grew up
through the automation that was done in the telecom industry in
the 1970s and 1980s. Companies like Telcordia and many others
found new businesses, and I think technology transformation is
a wonderful way of creating new skills and new jobs that have a
long-term nature.
Ms. Biggert. And then my district is home to the only
Illinois recipient of stimulus funding. It is the city of
Naperville in Illinois and it has about 145,000 residents, and
it operates an independent municipal utility and they are just
starting with using only wind power and biomass to create the
electricity, so they are really moving ahead. But as the plans
for their smart meter deployment move forward, a number of
residents have expressed concern about privacy. So Dr. Arnold,
can you tell us how feedback from the stimulus funding
recipients will be incorporated into future standards
development and would you really want to hear from all of these
cities or whoever has the stimulus money and is creating these
smart grids about standards? They probably--I think the
discussion was before--that a lot of places are doing this but
they really don't have the standards yet.
Dr. Arnold. Absolutely, so the privacy issues we regard as
a key issue. We have a working group that is underneath our
cybersecurity working group that is specifically focused on
privacy, and I would like to thank Ms. Coney for being an
active participant along with many others in that. There is
about 50 pages in the forthcoming NISTIR that deals with
cybersecurity specifically on privacy and recommendations.
Ms. Biggert. Then Mr. Eustis, could you respond to the jobs
question?
Mr. Eustis. Yes, ma'am. I grew up in Illinois, so I
appreciate the Illinois connection. The jobs on meter readers,
for example, we have been aware of this problem in our smart
meter deployment. We have had two full-time people working to
reposition the meter readers and we have now relocated 70
percent of the meter readers in other jobs within the company,
so a focused effort there can, you know, put these people back
to work.
But to the point of new jobs, there is an analogy if you
look back to about 1986 to 1990 when we started putting
computers on business desktops, and people were worried about
getting rid of word processing groups, and yes, a lot of jobs
were lost in admin assistants and libraries but I can tell you
that the amount of IT support that now takes place to support
all the utilities is like double or triple the number of jobs,
and for example, the line workers today don't need any
information skills. They are all going to need information
skills in the future. We are going to need support tools. We
need to maintain the databases. Customers as we get into the
home are going to have questions and there are going to be
support centers for people that answer questions. So while IT
is supposed to make things simpler and makes it richer, it does
require care and feeding.
Ms. Biggert. Thank you.
My time is expired. I yield back.
Chairman Wu. Thank you very much, Ms. Biggert. The Chair
recognizes himself for five minutes.
Ms. Coney, you referred in your written testimony a number
of really unprecedented privacy concerns presented by smart
grid development and its penetration right into the kitchen or
other rooms in our home. How are smart grid technology
developers and operators currently addressing privacy? Is this
reflected in the standards that are being developed? And also,
it is my recollection that you mentioned that you reached out
to NIST and the standards process rather than vice versa, and I
would like to ask Dr. Arnold to address whether NIST had
reached out to other groups or whether in reaching out to other
groups there was an oversight with the privacy groups. Ms.
Coney, why don't you go first and then anyone else who wants to
address this issue?
Ms. Coney. Thank you. Privacy is basically on a fundamental
level the ability of an individual to control who, when, why
and how access to personal information is managed. So in the
development of standards, we look specifically at the data that
is being collected, as I mentioned earlier. Now, the
incorporation of the knowledge of privacy experts into this
process began with privacy organizations learning about the
ability to participate in the cybersecurity subgroup on
privacy. We brought to that discussion some perspectives that
were not resonant inside of the process initially, but through
the participation of privacy cyber there is knowledge at NIST
about privacy issues and the smart grid. They produced a
document actually in April of this year that is titled ``Guide
to Protecting the Confidentiality of PII,'' which speaks to a
lot of the key components of privacy. In standards development,
we should focus on how do you give consumers control over the
information about their electric utility usage. Control can be
as simple as an interface device for existing appliances that
smart adaptors that connect appliances to electric outlets
customers plug the appliance into that interface device that
allows the micro management of energy consumption on the
consumer level, Giving the consumer access to information about
the peak cost hours versus the low-cost hours to run very
energy-intense devices; and as customers purchase new
appliances and technology to replace worn--out or broken
equipment that the same level of control of energy consumption
data confers to these new purchases.
As far as the participation in the NIST process is
concerned, advocacy groups and NIST just don't swim in the same
waters. I happen to be more aware of NIST because I work on
technology issues regarding voting systems and its standard
development process. But I must say that NIST has been open-
minded about privacy advocates' our participation, while still
not quite sure how it is hard science. We have worked very hard
to make sure that NIST, utilities, and others understand that
the principles of privacy are grounded in fair information
practices and that those practices can be conferred into
architecture designed software applications that give consumers
control over their personal information.
Chairman Wu. Well, Ms. Coney, as technology develops
further and further and has further implications for our
privacy and personal behavior patterns, perhaps this
Subcommittee or this Committee can provide the encouragement to
NIST to swim further in other ponds, and I also want to
underscore that in this new arena, it is not just when devices
are coupled with communication or wireless technology. I think
there are several competing technologies currently
incompatible, I understand, to send information back out over
the power wire. So, you know, there is a lot of chatter that is
going to go on.
Dr. Arnold, would you care to toss in just a little bit on
this question?
Dr. Arnold. Sure. Well, we are well aware that the smart
grid touches everyone and many constituencies that haven't been
thought about in the electric system and we are not omniscient
so we can't possibly know everyone who we should be reaching
out to but we have really tried to make our process as open as
possible. We have made use of the Federal Register. Our website
provides collaboration opportunities. We have tried to get as
much word out through the process, through industry
associations.
In terms of your question as to whether we specifically
reached out to the privacy community or whether they reached
out to us, I will have to reach that and----
Chairman Wu. No, the question is whether the privacy groups
were an outlier and you reached out to a bunch of other folks
and not them.
Dr. Arnold. I will have to--I want to give you a precise
answer so I will have to get back to you with what outreach we
may or may not have done in that particular case.
Chairman Wu. Terrific. I look forward to it, Dr. Arnold.
And Mr. Emnett, I just want to comment that as important as
voluntary standards are, in the privacy area, there are always
some outliers, so I think that FERC will have an important role
once the appropriate standards for policy and other purposes
are developed.
Mr. Emnett. If I may, Mr. Chairman, the Commission did
recognize the importance of cybersecurity in our Policy
Statement where we identified the criteria that we would apply
to standards when they come in, and in light of the emphasis on
cybersecurity in the Energy Independence and Security Act, we
did state that we would require a showing of adequate
cybersecurity protection prior to adopting any standard under
EISA.
Chairman Wu. Terrific. I just want to add that there is the
cybersecurity issue. There is a concern about privacy and
perhaps there is a related but different concern about
anonymity, and anyone who has purchased, for cash, stuff at the
grocery store understands the separate nature, that third
component, not that any of us have concerns about that. We just
may not want Safeway to know what we are buying.
Ms. Biggert, back to you.
Ms. Biggert. Thank you, Mr. Chairman.
Dr. Arnold, the decisions that NIST makes with respect to
the numerous standards will probably and most likely be picking
winners and losers among competing standards with the companies
that own the intellectual property that support the standards,
and so they are set to make or lose millions of dollars based
on the outcome of your process. How are you working to ensure
that the standards finalization process is open and fair and
transparent?
Dr. Arnold. Well, NIST does not want to be in the position,
nor should we, of picking winners and losers. No, I view our
role as accelerating a process that primarily involves industry
with government as an important stakeholder to accelerate the
normal industry process of winnowing out the winners in the
marketplace. So some of these standards might have taken five
or ten years before it became clear and in the meantime there
is confusion and people are afraid to invest. We are trying
through our process, to get all the stakeholders together to
more rapidly reach consensus and not be in a position where
NIST is picking winners and losers.
Ms. Biggert. But it does come into the intellectual
property, doesn't it, or what their proprietary----
Dr. Arnold. Yes, indeed. So the earlier discussion on the
NTTAA and OMB circular A-119 is very important because that
does include requirements that intellectual property that is
needed to utilize the standards be available on reasonable and
nondiscriminatory terms to anyone who has a need to practice
the standards, so that is one of the fundamental principles
that we are following.
Ms. Biggert. Thank you. I yield back.
Chairman Wu. Thank you very much, Ms. Biggert.
Mr. Lujan.
Mr. Lujan. Thank you, Mr. Chairman, and the reason for the
line of questioning around net metering and interconnection
standards that we could establish nationally based on IEEE
standards would ultimately lower cost, and I appreciate the
line of questioning from our Ranking Member as well looking to
see what the role is with NIST and how we can work with private
industry to drive the standards on the plug-and-play, if you
will, nature of what we are talking about here, the interface.
With that being said, hopefully, Mr. Chairman, maybe one day we
can tackle a hearing on how we can have a set of chargers for
our mobile phones that are all the same and we don't have to
keep buying them every time we get a new phone, but I think
that is a conversation for another day.
Looking to see what we can do, and Mr. McDonald, I think I
will start with you here, sir, what can we do to be working
with our national laboratories as we talk about intellectual
property, tech transfer, commercialization, maturation, maybe
refining the technologies that you have where we can take
advantage of supercomputers or simulation and modeling
capabilities that no one else has, which is truly a competitive
advantage that United States companies have? What more can we
do along those lines to open up opportunities, for example,
with GE for you to work with our scientists and physicists
along those lines?
Mr. McDonald. Well, that is a very good question. I think
we--you know, we have to make sure that in addition to the
standards process that we continue to spur innovation. Some
people think that standardization squashes innovation from the
point of view of everything looks the same, and it is very
different than that. When we--you know, when we implement
standards and products, it is true that a family of products
will have the same functionality, core functionality, but it is
the differentiating features that each supplier has that
extends the standards model basically. So we can have a win-win
situation of having standards but still have innovation. I
really think with smart grid, you know, the emphasis on smart
grid is not to implement technology that we have been
implementing in the past. We really have an opportunity to
innovate, and what we say really is that what we have been in
the past is device level and system level, and with smart grid
we have a whole new level of innovation which is solution
level. How do we put together devices and systems that we
haven't done before to provide solutions for customers, and
this is where the innovation takes place, and we need to--you
know, the national labs are very much involved with the NIST
process, and we need to continue to spur that innovation and
have that input. So, you know, once we have the innovation and
the technology, then the next step is the commercialization
step so that what we have from the labs or from research is
usable by electric utilities, the end-use customer, and there
is a commercialization step that needs to take place there.
Mr. Lujan. I appreciate that very much.
Mr. Chairman, and I know that both yourself and Ms. Biggert
are big supporters of our national labs and with tech transfer
and innovation to see what we can do to truly engage in that
dialog to have that push and pull effect of the technology.
Along those lines, Mr. Emnett, with FERC looking at this
and along the lines of what we may be able to do, and Mr.--is
it Eustis?
Mr. Eustis. Yes.
Mr. Lujan. I would like to hear from you if we get a chance
as well. With the integration of what we are talking about with
broadband and they have been testing broadband over power lines
for some time, looking to see what we can do with some of our
superconductors now with new transmission, paths that are going
to be built in a country and DG lines that are going to be
built out as well, what can we do for the integration of fiber
or whatever other means are necessary to increase our capacity
for communication or is it truly integrating with our telecom
companies or cable companies, whoever it may be supplying that
last mile of fiber? Because of the infrastructure associated
with electric companies specifically, it seems to me that we
have many of the easements needed that are going right to the
home where we could provide that more robust deployment of
broadband application. Any thoughts along the lines of what
FERC is looking at there with the inclusion of the cyber
application and cybersecurity needs?
Mr. Emnett. Yes, I think it could be possible that under
the particular state regulatory structure that there are
mechanisms in place to allow companies to essentially leverage
the existing investment and access the home. And in terms of
FERC'S interaction in the standards development process and the
facilitation of the technology development to make that happen,
we have tried to identify our priorities within the standards
development process, one of which did include demand response,
other electric storage, plug-in vehicles--priorities that from
the Commission's perspective development of standards to
address those applications would facilitate and support
national energy policy, and then once we identified the
priorities we essentially handed it off to NIST which did we
think just a great job of addressing the priorities in their
standards development process, adding their own priorities and
driving towards the creation of the priority action plans to
address the gaps in existing standards so that there can be
standardization, not necessarily in the results or the products
but in the processes, as Mr. McDonald was saying, so that the
technological innovation is essentially facilitated.
Mr. Lujan. I appreciate that. I know my time is expired,
sir, so Terry or someone from my team, Mr. Eustis, will get in
touch and we will talk about that later.
And then Ms. Biggert, with the line of questioning around
the number of meter readers that may be impacted, that is an
important aspect of this, because one thing that we do know
with utility companies across the country is the workforce is
aging as well and we are not replenishing, so I think a whole
conversation around what we need to do to be making sure that
we have adequate recruitment around making sure that our
utility companies are going to be in a strong position in the
near term and long term is something that is critically
important, so I appreciate that perspective very much.
Ms. Biggert. Would the gentleman yield?
Mr. Lujan. Yes.
Ms. Biggert. Don't you think, too, that there is going to
have to be a lot of training for much more skilled workers? And
I think that is good. I think technology demands that.
Mr. Lujan. Ms. Biggert, I could not agree more. I
appreciate that.
And with that, Mr. Chairman, I yield back my time.
Chairman Wu. I want to ask unanimous consent to insert in
the record a statement from Vinton Cerf, the Vice President and
Internet Evangelist for Google. These high-tech folks are very
creative. Without objection, so ordered.
[The submitted statement of Dr. Cerf follows:]
Submitted Statement of Vinton Cerf
Dear Mr. Chairman,
This letter is in response to a recent informal discussion I had
with Committee staffer Meghan Housewright about the challenges and
opportunities implicit in the Smart Grid standards facilitation effort
now under way in the United States under the auspices of the National
Institutes of Standards and Technology.
For the benefit of possible readers of this letter, I thought a
little capsule summary of my interests in this matter would be
appropriate. My name is Vinton G. Cerf and I serve as Google's vice
president and chief Internet evangelist. I am the co-inventor of the
TCP/IP protocols and architecture of the Internet. I also serve as the
chairman of the Visiting Committee on Advanced Technology for the
National Institute of Standards and Technology (NIST) and as a member
of the Smart Grid Interoperability Panel Governing Board. Google is an
interested party as well through its development of the Google Power
Meter (hardware and software system).
The lead U.S. Government program manager for the Smart Grid program
is Dr. George Arnold who is the National Coordinator for Smart Grid
Interoperability and reports to the Director of NIST, Dr. Patrick
Gallagher. I have had the opportunity to work and interact with Dr.
Arnold over the course of some years in connection with my
responsibilities at NIST and, more recently, in connection with the
Smart Grid Interoperability Panel (SGIP). I want to go on record to say
that Dr. Arnold has undertaken an extremely difficult and complex task:
facilitating the development of standards needed to assure that the
vision of a smart grid can in fact be realized. Moreover, the level of
interest in the program is easily illustrated by noting that the SGIP
activity now involves on the order of 600 companies and 1600
representatives. The organizational structure and governance mechanisms
of the SGIP were created quickly and formulated for maximum flexibility
as a non-profit, private sector organization. Dr. Arnold deserves great
credit for his successful efforts thus far.
Perhaps even more important than the institutional aspects of the
work is the vision and motivation for the development of a ``smart
grid.'' I do not propose to outline this vision in its entirety in this
brief contribution, but plainly there are many reasons for pursuing
this course. If we can make more efficient use of electricity and avoid
excessive use during peak load periods, we can avoid unnecessary
capital investment and operating costs. To do this, we need appliances
and mechanisms that will allow consumers to adjust their use of
electricity in accordance with their preferences in more or less
automatic ways. This means that our energy consuming appliances need to
be able to communicate with the power grid management system and with
each other. To achieve this goal, standards are needed, as has been
admirably articulated by Secretary of Energy Steven Chu and Secretary
of Commerce Gary Locke.
The Smart Grid program is also partly motivated by the potential
for job creation since new appliances will be needed as well as new
monitoring systems, power meters and the like. Their production in
quantity will lead to job growth in the appliance, power generation and
monitoring sector. There is tension between the need for standards and
the opportunity for job creation, however, because establishing
standards for such a massive and complex undertaking needs time while
job creation is a matter of urgency. Investing huge sums in the
production of appliances using inappropriate standards could lead to
serious vulnerabilities and fragility in the evolving 21st Century
power grid. This tension makes the results of the SGIP initiative all
the more important to get right.
In forming the Smart Grid Interoperability Panel and its Governing
Board, Dr. Arnold has drawn upon a diverse, motivated and well-
qualified cohort of participants. The structure of the standards effort
involves nearly two score Priority Action Panels, several Working
Groups (especially on Security and Architecture), and a number of ad
hoc review groups. I cannot over emphasize the importance of the
Architecture and Security working groups. If the effort is successful,
the new power grid will allow appliances to reduce demand at the
discretion of the consumers. Until now, the power grid has had to meet
demand or be forced into rolling ``brownouts''. It is a tribute to the
power industry that it has managed in large measure to meet the growing
demand for electricity in the United States. However, a poorly designed
software architecture or inadequate attention to security could create
an unstable and unreliable system. Such an outcome would surely
represent an unacceptable national security risk. One of my colleagues
in the Smart Grid Interoperability Panel has also reminded me that the
grid is not only vulnerable to potential software hazards but also to a
range of physical frailties, exacerbating concerns for reliability and
robust operation.
Without reprising all of the many discussions that have taken place
in connection with the frequent SGIP meetings, perhaps a few points are
worth mentioning:
1. Standards will permit power meters and energy monitoring
systems to interwork with appliances and with the power grid's
management systems.
2. Open, non-proprietary standards promote competition because
multiple parties can make equipment that will interwork without
having to make pairwise agreements or be limited by licensing
requirements.
3. Properly testing standards and their implementation can
reinforce the security of the Smart Grid systems.
4. Standards suitable for international use can increase
markets for American-made appliances.
5. Information from energy usage monitoring can reinforce
consumer awareness of the consequences of their energy
consumption. Consumers should have full access to this
information and be empowered to provide it to third parties for
analysis.
Among the most significant challenges in this Smart Grid enterprise
is the introduction of power generation in residential and industrial
settings. While co-generation has been around for some time in the
latter, the introduction of photovoltaic or wind or fuel cell power
generation in residential settings is relatively new. As the economics
of such distributed generation improves, there is increasing interest
in local power generation and consumption. For the first time,
consumers have the potential to become producers. Plug-in electric cars
add to this picture as potential sources and sinks of electrical power.
This phenomenon has both benefits and risks. On the beneficial side,
use of renewable energy resources can reduce our dependence on non-
renewable fossil fuels and potentially reduce the production of
atmospheric carbon dioxide, a greenhouse gas. In addition, reduced use
of fossil fuels can also reduce our need to import energy sources,
improving our trade balances. On the risk side, for most of the history
of power generation in the United States, the power grid has used
large-scale, centralized power generation facilities and an extensive
power grid to deliver electrical energy to consumers. As power
generation becomes more distributed and its sources more variable (wind
power and photovoltaics operate episodically and not continuously, for
example), the stability of the power generation and distribution
systems becomes an even larger challenge than before. When we add to
this mix the use of smart appliances that moderate their demands, we
have a very complex, dynamic control system problem to solve to assure
that the system stays stable.
From the national security standpoint, the nightmare scenarios
include the potential for a large number of appliances to
simultaneously turn on or off, either because of common algorithmic
decisions (think: programmed trading in the stock markets) or because
someone has penetrated the power control system or somehow induced a
large number of appliances to act in concert. Of course, there is also
the ever-present possibility of human error or bugs in software that
lead to the same effects. These concerns only reinforce the importance
of care in the development of the standards and in careful analysis of
the security provisions in their design. That the system must be
resilient in the face of natural disasters is also apparent. Software
alone will not prevent an ice storm from breaking power lines or
prevent a hurricane or tornado from damaging a power plant or
substation.
Another of my fellow SGIP Governing Board members has pointed out
that the decisions and choices we make in the design of the Smart Grid
standards may look arbitrary at the outset but may prove to be utterly
crucial in the long run. Since we cannot be certain which choices have
this property, he strongly recommended that we devote the necessary
time and resources to make use of testing, modeling and analytical
methods, including prototyping, to assure that we have identified the
not-so-arbitrary choices early on in this process. The Governing Board
has strong advocates for a testing and certification program that would
assure consumers that standards are met in the devices and appliances
placed on the market. I support that view and extend it to include
early testing and prototyping to avoid making large investments in
dead-end designs.
In the course of the many discussions about the Smart Grid idea,
the question of fine-grained information as to usage and pricing has
arisen. Fine-grained time information about pricing and usage can be
used to moderate consumption and reduce peak load demand. Just how
beneficial this may prove to be is still an unknown, at least as I
comprehend the idea. Real data is needed to inform any credible
opinions and this motivates once again the need for prototyping and
pilot programs of use. I am told that fine-grained pricing information
is not uniformly available at the retail level although it may be
provided to wholesale customers who may be trying to minimize their
costs by drawing on different suppliers at different times.
While on the subject of fine-grained usage information, I think it
is useful to remember that much can be inferred from such profiles. One
could likely know whether someone is at home, possibly even who might
be at home if one knows which appliances are in use. Diurnal patterns
of usage, accumulated over time, could be used to identify periods when
a home is unoccupied. Plainly there are privacy, safety and security
issues associated with access to this information. With regard to
access, it seems important that consumers have access to and some
control over who may have access to this kind of information. Consumers
may want third parties to have access for analytical purposes but at
the same time assure that the information does not fall into the wrong
hands.
As should be obvious from this brief letter, the development of the
Smart Grid is by no means a trivial enterprise and has many facets of
interest to a wide range of policy-making bodies, private sector actors
and, of course, the general public.
I commend the Committee for its continuing interest in improving
and evolving the American response to the need for more efficient
production and use of electrical power. I hope that this same attentive
perspective will be given to other resources of importance. If we
design the standards for the Smart Grid well, they can be extended to
monitor our use of water, oil, gas, and other resources, giving all of
us a better sense of the consequences of our life style and resource
consumption choices.
Vinton G. Cerf
VP and Chief Internet Evangelist
Google
Chairman Wu. The chairman recognizes himself for another
five minutes and I understand that Ms. Biggert has a
conflicting obligation. Thank you for taking the additional
time.
Mr. Emnett, you mentioned in your testimony that FERC
intends to allow utilities certain smart grid-related costs if
certain factors can be shown, and one of them is that the
applicant is to show that it minimized the possibility of
stranded investment in smart grid equipment. We are in the
process of developing the applicable interoperability standards
so how is FERC going to proceed in making this determination?
And Mr. Eustis, I guess I would like to hear from PGE's,
Portland General Electric's perspective how you feel about
stranded investment recovery versus not?
Mr. Emnett, you first.
Mr. Emnett. Sure. In the Policy Statement that FERC issued
last year, FERC stressed that it would look towards applicants
seeking to recover the costs of smart grid development prior to
the adoption of related standards. It would expect the
applicants to make a demonstration that, to the extent
possible, they are relying on whatever existing open standards
may be out there--so not necessarily those that have been
adopted by FERC but those that are generally followed by the
industry--as well as a demonstration that the equipment and
technologies that are being invested in can be readily and
securely upgraded. The Commission has had one instance of a
utility seeking confirmation, affirmation of cost recovery
under the Policy Statement, Pacific Gas and Electric,
incorporating costs associated with development partially
funded by the Recovery Act, the other PGE, PG&E [Pacific Gas
and Electric Company], not PGE. So Pacific Gas and Electric did
in fact make the demonstration that they were being careful in
the selection of the technologies, that they tested different
product vendors, component testing for ease of integration,
implementation of open modular architecture for the facilities.
So there was a demonstration that the applicant was able to
make that the technologies would be flexible in the event that
standards were developed in a different direction.
Chairman Wu. Mr. Eustis, you bear the burden of
representing all utilities, so from the utility perspective,
how is it going in terms of the risk-reward on proceeding and
the risk of stranded costs?
Mr. Eustis. So, as we planned our business case for smart
meters, for example, we definitely considered future
applications and making sure it wouldn't be obsolete but first
and foremost the business case has to be cost-effective that we
implement and so the functions that we built the technology for
are implemented and will be functional for the economic life of
the project, so the first thing is make sure what you are
investing actually serves an economic purpose.
As far as interoperability over time, we look to things,
technical hardware like communication bridges to bridge one
protocol to another for those customers that need it, or the
upgradeable firmware in a meter or in a distribution switch
allows us to add additional functionality when the time comes.
So the most important factor to prevent stranded assets is
making sure that is there is an upgradeable path to the
hardware that you install.
Chairman Wu. Ms. Coney?
Ms. Coney. I would like to add for the benefit of consumers
that their stranded costs should be considered as well as they
purchase new appliances, whether there will be additional costs
incurred as new software, new hardware, new applications are
placed onto the grid, will it push consumers to have to make
additional expenditures. Human user interfaces for consumer
devices and appliances should allow users to control or manage
energy usage within their home. Energy consumers must have a
full range of options for how their energy consumption will be
managed. Control should not be pushed out of their control
because of the design of devices and appliances based on the
standards which are developed. Consumers should have a range of
options for how to manage energy consumption.
Chairman Wu. Ms. Coney, I will view this as the request to
give hope to those who still have eight-track tape players and
beta video machines.
Ms. Coney. Privacy advocates typically like technology or
those who like to be first adopters and like to tinker. Vint
Cerf happens to be on EPIC's advisory board. He is one of the
people who could appreciate having the ability to have the
option for managing or not managing their own electric utility
usage. Thank you.
Chairman Wu. Thank you, Ms. Coney, and that makes me feel
better because the young people around me always make me feel
like a Luddite in adopting new technology, but I think that is
just commendable caution for those who have seen many things
come around.
A further money question. The NIST budget includes $10
million for standards and conformity assessment. This
initiative will cover some smart grid activities as well as
other technologies, and Mr. Arnold, this is the one you can go
to town on. What resources do you think NIST will need to
appropriately develop standards at a pace which I think the
industry and our Nation needs? And if additional resources were
appropriated by this Congress, what additional activities or
what delta and speed could you achieve?
Dr. Arnold. Well, if there were additional resources, my
view is that the testing and certification program is the area
that is in greatest need. As I think someone observed earlier,
the standards in terms of the descriptions are necessary but
they are not sufficient. Where the rubber meets the road is
where you formalize the conformance requirements and the
testing. There are hundreds of standards. There are many test
programs that will be needed. We have efforts underway to
develop a framework for that but getting these programs
instantiated and in operation is going to be a big task, so I
think that is the area in which there is the greatest need.
Chairman Wu. Additional resources, additional activities,
additional speed? I know you are trying to be a good foot
soldier for the Administration but the question is asked.
Dr. Arnold. If there were additional funds available, they
would be well utilized. Most of the testing programs will be
done by the private sector but the development of these
programs today is done largely on a voluntary basis, and to the
extent that funds can be utilized to apply more full-time
dedicated resources, the availability of these programs would
be accelerated.
Chairman Wu. Mr. Arnold, we will apparently take this up
offline, but if any of the other panelists would care to take a
poke at this question, your comments are welcome.
Ms. Coney. I would offer that if we look at projects and
their implication for being done well, I look to the Panama
Canal as the last major engineering effort that continues in
use today. The United States delved into the project and took
the lead on following the French effort. It was an engineering
marvel. It cost to do it right. And if we plan to do a smart
grid, and with the consequences to cybersecurity, individual
privacy, reliability, energy independence and all of the best
wishes for the smart grid, it will need to have appropriate
investments made in critical areas regarding standards
development, the time and energy of the legislative branch in
developing policy that assures that all of our best hopes of
privacy and security regarding the smart grid are realized.
Chairman Wu. Well, let the record show that it was the NGO
advocacy organization that jumped in with both feet on this
one.
Mr. Tonko.
Mr. Tonko. Thank you, Mr. Chair, and thank you to our
panelists. Obviously one of the big changes out there that I
think we need to incorporate and focus on are electric
vehicles, and Dr. Arnold, in your testimony you discussed the
fact that there are at least four competing proposals for the
fast charging of electric vehicles, and my question is about
the uncertainty that this might foster, that if we slow down
that development, I think it is to the detriment of our
comprehensive energy plan if we indeed have one, but I think
our Nation should build that sort of plan. How do you think
this issue is being addressed and how it is best addressed?
Dr. Arnold. Well, this is a complicated issue. I was in
Japan a couple weeks ago and saw a demonstration of a system
that is deployed on a pilot basis there, and I also had spent
some time with the deputy CEO of the electric utility in
Singapore, which is going to be piloting a similar system and
they are actually requiring changes to the Japanese system for
deployment in Singapore. So this is an area in which I think
there is still some technical debate that needs to be engaged
and we do have to balance speed versus doing this right. But at
the end of the day we do need to make a decision on a single
charging infrastructure standard for the United States because
otherwise it is not going to be practical to develop the market
for electric vehicles.
We are actively engaged with the key standards bodies in
which these areas are being debated including SAE [Society of
Automotive Engineers] International and the International
Electric Technical Commission. One of our priority action plans
is on electric vehicles and this issue is part of that. One of
the debates that is occurring among these competing proposal
are the safety aspects, and when it gets to safety, we want to
make sure that we are doing this right. So we are working with
these bodies to convene a workshop to get the experts together
to discuss the safety issues and inform what I hope will be a
decision by the end of next year on a standard for use in the
United States.
Mr. Tonko. Is there anything you envision the Congress
doing in the interim? Is there an incentive that needs to be
developed? Is there some sort of effort that can be toward the
single charging infrastructure?
Dr. Arnold. I mean, the only thing that I think would help
would be sort of clear direction that there has got to be one.
This is not an area in which you can have cars that have
different sockets and charging levels going around the country.
We need one standard. My guess is that internationally there
won't be a single standard in much the way that we haven't
standardized left-hand drive versus right-hand drive in
different countries, so there will probably be two or three as
we look around the world and they will be embraced in some sort
of umbrella international standard. But for the United States,
we have to pick one, and just making clear that we can't have a
proliferation of different competing approaches in the
marketplace would be helpful.
Mr. Tonko. And in your review of those areas around the
world where you have witnessed their progress, anything gleaned
from that that you would suggest to us as maybe an essential?
Dr. Arnold. I think that we need a lot of real-world
experience on how consumers are going to react to these
vehicles, the issue of driving range, how to deal with this. We
are into an exciting new area here but one in which we really
need some real-world experience to see the right way for this
to evolve.
Mr. Tonko. Thank you very much. Mr. Eustis.
Mr. Eustis. Portland General Electric is lucky enough to
have one of the early implementations of electric vehicles in
its service territory with the Nissan and state partnership,
and we got that opportunity because we put infrastructure out
initially. It didn't need a standard but we designed the
charging infrastructure in a way that could be upgraded later
on, you know, the right conduits, the right information support
to that, and in much the same way the fast charging can be
upgraded if a standard should change. I agree with Dr. Arnold
absolutely, you know, one socket is what is required, but in
the short run, the 240-volt standard, which is SAE 1772, I
believe, does standardize, I think it is worldwide even, a
method for the most predominant method of charging, and so the
first order of business is to make sure we successfully get
customers to adopt electric vehicles and the 240-volt standard
will go a long way to get the early adoption and it gives us a
little time to perfect fast charging.
Mr. Tonko. And Ms. Coney?
Ms. Coney. The one thing I would add is that there have
been discussions about whether the identification information
for a unique electric vehicle should convey when that vehicle
is being re-charged. The privacy perspective, especially as it
weighs on the fast adoption of these vehicles, would be to make
sure that re-charging is anonymous as paying with cash. Where
you charge a vehicle should not identify that you in fact were
in a particular place. There are privacy issues with
architecture that supports transferring that kind of
information in the process of charging an electric vehicle.
Thank you.
Mr. Tonko. Thank you.
Thank you, Mr. Chair.
Chairman Wu. Thank you, Mr. Tonko, very thorough, as
always.
Mr. Eustis, you commented on the implementation in Portland
for charging electric cars, and I asked a couple of questions
of the company that is building out a charging field, if you
will, or, you know, reaching from Portland to Salem or beyond,
and their statement was that their charging format for the
Nissan Leaf is not necessarily compatible with the Tesla that
is sold more in California, or at least I have seen it in
Silicon Valley a lot, and my comment back to them is that they
are going to get a whole lot more enthusiastic support from
Elon Musk and others if there is a compatible plug, and I just
wanted to flag that because there apparently is a disagreement
or not complete agreement about whether it is compatible or
not. And you don't have to comment right now if you----
Mr. Eustis. Yeah, I am not familiar with that technical
difference. I don't doubt that there is. But it would be at the
fast charging level.
Chairman Wu. Well, it may be just like really, I mean for a
guy like me, really basic like three prongs versus two and
those adaptor plugs that we fiddle with all the time.
On international standards, and again, if you all want to
consider this and answer on the record later, or if you want to
answer this, take a stab at it right now, I am concerned as
Chairman Gordon pointed out about certain countries, particular
China, in this field as in others developing their own standard
to create an island of technology, whether that is for very
legitimate national reasons or whether it is for trade and
competitive reasons. Is there anything that we can do at the
international standards-setting level or with other mechanisms
available to us to provide both carrots and sticks for
international cooperation and harmonization of standards?
Dr. Arnold. Chairman Wu, that is a very thought-provoking
question and I would prefer to respond to that on the record
later after giving it some consideration, but I think that this
is a difficult issue. Where we have partners that recognize
that the market grows. If you have common standards and you can
create new industries and applications, it is easier. Where you
have partners that view this as a win-lose game, then it is
more difficult and it takes two to tango, as they say.
Chairman Wu. Well, Dr. Arnold, I very much appreciate you
taking the time and energy to answer in a thorough and careful
way. It is NIST's mission to cooperate internationally, and
this is what this Subcommittee has pressed for repeatedly, and
if NIST or any other governmental agency needs carrots or
sticks, I think that this Committee will seek to give you those
tools.
If no one else wants to comment on that, you all have
come--many of you have come from a long distance and it is the
tradition of this Subcommittee when time permits to ask of the
entire panel individually, are there things that we have not
asked or that you have not had an opportunity to address live
that you would like to address before we adjourn? Mr. McDonald.
Mr. McDonald. I wanted to--there were two points that I
wanted to cover. One was that Mr. Lujan brought up about the
importance of state regulators, and the fact that standards are
really tightly tied to policy and vice versa. There is a lot of
interdependencies. We realize that at NIST, and we made a
conscious decision for our next Governing Board meeting next
month, or actually this month--today is July 1st--in a couple
weeks to be co-located with the National Association of
Regulatory Utility Commissioners Summer Meeting in Sacramento,
California, so all of the NIST Governing Board will be meeting
together with the NARUC Commissioners, and our meeting will be
open. All the commissioners can attend our Governing Board, and
likewise the next two days, the NIST Governing Board will be
involved in the regulators' meetings also. So we see that as
important and we have reached out to NARUC and decided to have
our meeting co-located with theirs.
That was one point. The second point was the permanence of
jobs I think really boils down to standards. You know, if the
technology is anchored in standards, it has permanence to it,
and as a supplier, when we commit funds to incorporate new
technology, if that technology is not anchored in a standard,
there is a question from the supplier point of view is if we
implement, commit resources and implement, that technology may
go away the next year because there is not the stability to it
that a standard provides. So I think, you know, with respect to
technology, with respect to smart grid, with respect to jobs,
it puts even more importance on standards. The more we have
standards, the more we can interoperate, the jobs that we
create with respect to smart grid will be permanent jobs. Thank
you.
Ms. Coney. I just wanted to close----
Chairman Wu. Let me just respond to one thing that Mr.
McDonald said about the permanence of jobs. We have a
competitive society and also those of us who sit on this side
of the dais completely understand that the functions of society
may last for a long time but no job is permanent. Certainly no
job is permanent.
Ms. Coney, please proceed.
Ms. Coney. Thank you. I wanted to thank the minority for
the invitation to participate in today's hearing. I think this
is a very topical discussion but we didn't touch much on the
topic of cybersecurity which from our perspective has a lot to
do with data collection, retention and use but that the
standards process can greatly benefit from the collaboration
with privacy experts, civil liberties experts as well as legal
experts on the consequences of the data collection and use
related to smart grid. We hope that the consumer as the end
user is taken into consideration when standards are developed
to be sure that their interests are served as well. Thank you.
Chairman Wu. Any other comments for the good of the order?
Well, thank you all very much. Ms. Coney, I am really glad you
mentioned the Panama Canal as the last great engineering
project of this Nation. Perhaps that is true, but it certainly
permits me equal latitude in using something dramatic. To
borrow a Churchillian phrase, this is a really, really
important project and yet it is very, very complex and
abstruse, so a lot of the general public, and in fact, a lot of
this legislative body, is not going to understand the process
as it goes forward, but it is absolutely vital to our energy
security going forward, and to borrow a Churchill structure, if
not his words, never have so many depended on so few to take on
a topic so important and to get it right, and I thank you for
your efforts to date and offer this Committee's support,
continuing support to get it right going forward.
And with that, the record will remain open for two weeks
for additional statements from Members for answers to any
follow-up questions the Committee may ask.
Thank you all very, very much for your participation. The
witnesses are excused and the hearing is now adjourned.
[Whereupon, at 12:27 p.m., the Subcommittee was adjourned.]
Appendix 1:
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Answers to Post-Hearing Questions
Responses by Dr. George W. Arnold, National Coordinator for Smart Grid,
National Institute of Standards and Technology
Questions submitted by Chairman David Wu
Q1. In your testimony you mention that NIST is initiating a contract
to develop cyber-security testing requirements for smart meters, and
that the testing protocols should be available about a year after the
contract is awarded. When will this contract be awarded? What concerns
are there with deploying smart meters that have not undergone this
testing and evaluation?
A1. The proposals are currently under review by NIST and follow our
Federal acquisition process to award based on contractor capability and
best value. NIST anticipates awarding this contract before the end of
this Fiscal Year.
Q1,1a. There have been stories in the media from California and other
places around the country about smart meters that do not function
properly. Would a testing and evaluation program have identified
problems with the meters before they were deployed?
A1,1a. It is unclear whether the problems reported in California, Texas
and other places are due to technical problems with the meters.
At this time the main concern with deploying smart meters that have
not undergone interoperability and cyber-security testing is the
potential for lack of interoperability and potential for security
vulnerabilities that could compromise the meter. NIST is aware that a
number of major utilities have labs that are testing vendor products
prior to their selection and deployment and are providing feedback to
the vendors on problems uncovered during their testing. Unfortunately,
we understand that the results of these tests cannot be shared with
other utilities, NIST, or other parties due to non-disclosure
provisions in vendor contracts; therefore, NIST cannot comment on what
problems have been uncovered through testing. The work that NIST is
contracting for will result in a well-defined and consistent test
methodology that can be broadly applied by accredited test labs to
support the industry. NEMA Standard SG1 for Smart Meter Upgradeability,
published in September 2009, was one of the first Smart Grid standards
to be developed through the NIST coordinated program. Meters that
conform to this standard have firmware that can be securely upgraded,
providing an ability to deploy changes to meter firmware to address
issues uncovered by testing or expected revisions to the metering
standards.
Q1,1b. What is the timeline for initiating a testing and evaluation
program for all smart grid technologies for which standards are
available?
A1,1b. The identification and development of standards for the Smart
Grid is an ongoing process. New use cases and applications for the
Smart Grid will continue to grow and evolve over time. As such, the
standards supporting these use cases and applications will continue to
grow in number and evolve along with test programs supporting these
standards. In the Smart Grid environment today very few standards which
have been identified up to this point have test programs associated
with them. The SGIP Testing and Certification Committee (SGIP TCC) is
in the process of creating a Testing and Certification Framework which
will identify new required test programs, identify gaps in existing
programs and provide best practices to accelerate development of test
programs which will help ensure interoperable smart grid products. We
expect the SGIP TCC Framework to be completed by the end of the year.
In addition, the SGIP TCC will concurrently use this Framework to
identify at least two test programs meeting SGIP interoperability
requirements. After the validation of this testing Framework, NIST will
be in a better position to project the timeline for completion of the
development of test programs associated with completed Smart Grid
standards. At the beginning of FY 2011 the SGIP TCC will be evaluating
the remainder of completed standards on the NIST catalogue of
identified standards during FY 2011 to ensure test programs are being
developed to ensure Smart Grid interoperability. In our experience with
the telecom industry, once a standard is completed, it can take from to
1-3 years to develop a test program to support it depending on the
complexity. Our goal is to reduce the test program development cycle
time by leveraging the SGIP TCC and its Testing Framework.
Answers to Post-Hearing Questions
Responses by Mr. John D. McDonald, P.E., Director of Technical Strategy
and Policy Development, GE Energy
Questions submitted by Chairman David Wu
Q1. The NIST FY 2011 budget request includes $10 million for Standards
and Conformity Assessment for Interoperability in Emerging
Technologies. This initiative will cover smart grid standards
activities, as well as other technologies. What amount of support is
sufficient to allow the NIST smart grid standards process to continue
at the level needed to develop the standards and the testing
requirements? If additional resources were available, what more should
be done?
A1. The NIST standards effort is vitally important to the successful
development and deployment of the smart grid in the U.S. and to ensure
harmonized international standards that open global market
opportunities for U.S. companies. Much of the funding for the NIST
effort was provided through the Recovery Act and those funds will be
exhausted in 2011. My understanding is that, apart from the Recovery
Act funding, the FY 2011 budget request would, if approved, result in
an ongoing NIST smart grid program of $10 million per year. I would say
that $20-$25 million per year is the minimum baseline for an effective
smart grid standards and measurement program at NIST. The additional
funding will be needed to 1) sustain operation of the Smart Grid
Interoperability Panel beyond 2011 to carry out the essential work of
coordinated standards development; 2) continue development of a
comprehensive testing and certification program; and 3) develop new
measurement capabilities to ensure robust characterization and control
of smart grids.
Answers to Post-Hearing Questions
Responses by Mr. Conrad Eustis, Director of Retail Technology
Development, Portland General Electric
Questions submitted by Chairman David Wu
Q1. The NIST FY 2011 budget request includes $10 million for Standards
and Conformity Assessment for Interoperability in Emerging
Technologies. This initiative will cover smart grid standards
activities, as well as other technologies. What amount of support is
sufficient to allow the NIST smart grid standards process to continue
at the level needed to develop the standards and the testing
requirements? If additional resources were available, what more should
be done?
A1. Portland General Electric believes that the NIST budget should be
at a maintained at a minimum of $10 million per year, and if possible
increased for the next two years. The work of standards development and
testing consists of three primary activities.
1. Initiative Management, Governance and Communications
2. Standards Development where gaps exist, the work of the
Priority Action Plan (PAP) groups
3. Interoperability Testing including development tools,
testing and audits
The current $10 million budget is being consumed on mostly the
first two items; these efforts have established processes but it should
be noted that these processes rely heavily on volunteers to complete
important work. The testing process is being developed according to a
roadmap under the Smart Grid Testing and Certification Committee.
Testing is the most difficult of the processes to be established and
implementation will require seed money to create testing tools and set
up test labs if required, hence the desire for an increased budget for
2011 and 2012. Unlike the volunteers that write standards documents as
time permits, testing requires full time professionals to manage
whatever process is established. These resources will be considerably
more expensive than the administrative support services that now
consume a large part of NIST's budget.
I am not familiar with details of staffing for the PAP groups, but
my impression is that the resources are heavily weighted by volunteers;
this should be confirmed by NIST. As this new, relatively exciting
process wears on, the technical resources required to write competent
standards may need to be supplemented by NIST-hired contractors:
project managers, systems architects, hardware engineers, software
engineers, communication engineers, utility process specialists, etc.
These resources would aid the PAP process to drive consensus input to
completed quality specifications.
If additional resources are available they should be used to
proactively seek input from utilities and their vendors with a focus on
what should be done to aid standards adoption by these groups.
Collecting input from each group is an independent effort. Portland
General Electric's written testimony elaborates on why this is such an
important task.
Appendix 2:
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Additional Material for the Record
Responses by Dr. George W. Arnold, National Coordinator for Smart Grid,
National Institute of Standards and Technology
Verbal Questions from Subcommittee by Chairman David Wu
(Verbal questions within the unedited written transcript)
Q1. No, the question is whether the privacy groups were an outlier and
you reached out to a bunch of other folks and not them?
A1. NIST has recognized the importance of privacy issues for the Smart
Grid from the beginning of NIST's efforts under EISA 2007. In 2009,
NIST proactively included a working group focused on privacy as part of
the initial establishment of its Cyber Security Coordination Task
Group, which has since become the privacy subgroup of the Cyber
Security Working Group of the Smart Grid Interoperability Panel. NIST
has primarily relied on weekly teleconferences, regular conferences,
face-to-face meetings and additional peer-to-peer outreach within the
cyber security and privacy communities to inform and learn from
interested parties about its Cyber Security Working Group and task
groups. In addition, NIST initiated outreach efforts to inform a
broader community about NIST Smart Grid activities through multiple
Federal Register Notices asking for public review and comments on the
NIST Framework and Roadmap for Smart Grid Interoperability Standards,
Release 1.0, and two drafts of NIST Interagency Report 7628 (Smart Grid
Cyber Security Strategy and Requirements, now titled Guidelines for
Smart Grid Cyber Security). This outreach, particularly outreach
through the Federal Register Notices, has been successful in
encouraging privacy advocates and others to participate in the NIST
process. For example, there are several privacy advocacy groups that
participate in our privacy subgroup, including EPIC, Center for
Democracy and Technology (CDT), Future of Privacy Forum, and the
Electronic Frontier Foundation (EFF). The NIST Smart Grid
Interoperability Panel is also working to identify and engage
additional groups for outreach, including for example venture capital
firms, state and local regulators, consumer groups and other sections
of the broad Smart Grid community.
Q2. What resources do you think NIST will need to appropriately
develop standards at a pace which I think the industry and our Nation
needs? And if additional resources were appropriated by this Congress,
what additional activities or what delta and speed could you achieve?
A2. NIST is fortunate to have received ARRA funding ($17 million,
consisting of $12 million from DOE and $5 million from NIST's own ARRA
appropriation) to start the external NIST Smart Grid program by
contracting with an administrator to support NIST in establishing the
Smart Grid Interoperability Panel. This funding has also permitted
additional contracted technical support to help NIST address a selected
set of high priority action plans to fill identified standards gaps. In
addition, NIST has received $5 million in the FY 2010 enacted
appropriation to support a new Smart Grid Interoperability initiative.
Collectively, these resources have enabled NIST to effectively carry
out its program to date with successes as noted in George Arnold's
written testimonyCurrent ARRA funding will be expended in FY 2011. An
additional initiative to support Smart Grid Interoperability is
proposed as part of the President's Budget for FY 2011 in order to
sustain the NIST program. Any additional resources would be used to
accelerate the development and implementation of a testing and
certification framework to support Smart Grid interoperability and
cyber security, to accelerate standards development to fill gaps that
have been identified, and to develop a comprehensive measurements
research program to better characterize and monitor the system-level
performance and stability of the Smart Grid. This work would be
conducted through NIST's internal efforts and the efforts of external
contracted organizations including standards and testing/certification
groups.
Q3. Is there anything we can do at the international standards-setting
level or with other mechanisms available to us to provide both carrots
and sticks for international cooperation and harmonization or
standards?
A3. NIST is actively engaged in and is providing leadership in all the
international standards bodies relevant to the Smart Grid. In addition,
NIST has bilateral engagements with counterparts in many other
countries, including Canada, Mexico, Brazil, Japan, Korea, China,
India, Singapore, Australia, the EU and member states, and Israel. NIST
is also working closely with DOE in partnering with other major
economies to establish a the International Smart Grid Action Network to
provide a multilateral forum for coordination. As indicated in the
written testimony, China's standardization activities in the Smart Grid
present a concern because of China's preference for indigenous
innovation and the fact that we have limited visibility into China's
domestic standardization activities relating to the Smart Grid. NIST
has initiated a dialog with State Grid Corporation of China to explore
opportunities for collaboration through participation in standards
development organizations such as the International Electrotechnical
Commission and through the NIST coordinated Smart Grid Interoperability
Panel. Specifically, NIST is supporting the work of several working
groups within the International Electrotechnical Commission (IEC),
especially Technical Committee 57, that are harmonizing the IEC
standards with others. These working groups, which include
representatives from China as participating members, are revising
standards to be harmonized with others, such as IEEE standards, as
identified by NIST in Priority Action Plans as part of the NIST
Framework and Roadmap for Smart Grid Interoperability Standards.
NIST is also exploring means to build upon its existing
collaborations with key Chinese entities such as the Standardization
Administration of China (SAC), the Certification and Accreditation
Administration of China (CNCA), the China National Institute for
Standardization (CNIS) and the China Electronics Standardization
Institute (CESI) for engagement in the international standards
development for Smart Grid standardization. In specific areas such as
standards to support fast charging for electric vehicles, NIST has
taken a more active role (in coordination with others in the Federal
Government, including the Department of Energy) in outreach to Chinese
entities to address specific issues.
The most effective way for Congress to provide ``carrots and
sticks'' to encourage international cooperation and harmonization of
standards is by continuing to provide clear policy that standards for
the Smart Grid in the U.S. will be based on the standards identified by
NIST. This policy was enacted through the provisions in EISA directing
FERC to adopt standards based on NIST-identified standards, and
establishing use of NIST-identified standards a criteria for DOE Smart
Grid grants. Since NIST is basing its framework upon international
standards wherever possible--nearly 80% of the standards included in
the Release 1.0 framework are produced by international SDOs--this is
encouraging other countries to cooperate with NIST in creating global
standards so that they can access the U.S. market and U.S. companies
can access international markets.