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Illinois Collaborative Releases Smart Grid Report; Court Strikes ComEd Recovery of Certain Smart Grid Charges

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October 4, 2010

The Illinois Statewide Smart Grid Collaborative has filed a report with the Illinois Commerce Commission providing a detailed analysis of the issues surrounding the development of a smart grid in Illinois.

Separately, an Illinois appeals court overturned an ICC decision which had allowed Commonwealth Edison to recover certain costs associated with distribution enhancements and the smart grid. ComEd said that the ruling jeopardizes future smart grid investment.

Of note to the retail market, the Collaborative report addresses customer and third-party access to meter data, and the provision and marketing of in-home devices.

Additionally, the report notes that the smart grid implicates potential changes to the default service rate structure (e.g. time of use or real-time pricing), but makes no recommendation with respect to the pricing of default service, or optional default service pricing tariffs.

The Collaborative's recommendations with respect to in-home devices and other customer-side smart grid products are as follows:

1. AMI systems deployed by utilities in Illinois should allow consumers to easily connect in-home devices and networks, providing a full range of opportunities for customers to employ tools to optimize cost effective demand response and achieve energy management objectives. Collaborative participants have not reached consensus as to whether any costs of Post-Meter Devices (PMD) should be considered for recovery through utility rates. Any proposal to subsidize or fund the purchase of PMD for customers should, at a minimum, reflect a cost benefit analysis that includes the costs associated with installing and maintaining such devices, the projected demand response or usage reduction benefits that will occur over the estimated life of the device, and the cost of educating customers about the use of the device.

2. To the extent that PMDs are found by the Commission to be necessary to capture AMI customer benefits, and that a demonstrable business case is made for utility involvement in their provision to consumers, policies to facilitate access to PMDs may be warranted. In assessing how utilities could aid customers in obtaining PMDs without impeding PMD market development, the Commission should compare the projected effects of direct utility provision of PMDs with the projected effects of using non-utility distribution channels.

3. Any provision of PMD by a utility is subject to IDC [Integrated Distribution Company] rules and should not require the customer to purchase utility supply in order to receive and make use of the PMD. To the extent practicable, PMD should be capable of presenting billing and pricing information from either a utility or an ARES [alternative retail electric supplier].

4. Any PMD subsidies that may be deemed by the Commission to be appropriate in order to achieve smart grid objectives should be competitively neutral with respect to electricity supplier.

5. Smart grid policies should be consistent with but not dependent upon the state's policy to foster the development of retail electric competition. In the evaluation of proposed utility rate offerings and demand response programs, the Commission should be guided by actual experience concerning the interplay between such programs and the development of retail competition. In determining smart grid policy, the Commission should consider the effect of such policies on the development of retail competition and the effect of retail competition on achievement of the goals of smart grid deployment.

6. In order to protect consumers and allow the nascent market in smart grid-enabled products and services to develop, the Commission and other consumer protection authorities should closely monitor consumer complaints in order to quickly address problems and issues that may need formal regulatory attention. Where preventive regulation is needed, appropriate consumer protections should be ordered or enacted.

Recommendations regarding customer and third-party access to data are as follows:

1. AMI systems should be designed so that customers can securely retrieve usage data directly and in near real time from the meter securely through in-premises devices.

2. Customers should have access to collected historical usage and billing data for a reasonable period of time, via a utility-provided web portal.

3. Customer authorization should continue to be required for access to any customer-specific meter data by a third party, and its use should be disclosed by the third party to the customer.

4. Third parties should fully disclose in plain language the scope, duration, and purpose(s) of the requested access to customer-specific meter data. In addition, customer complaints regarding access to or use of data should be subject to the Commission complaint process.

5. The utility should provide electronic access to billing and usage data to customer-authorized third parties within a reasonable period of time from receipt of authorization; any fees to provide this service should be outlined in the tariff and reflected in regulated revenue.

6. A service and supply agreement with a customer should explicitly authorize an Alternate Retail Electric Supplier (ARES) to access and use usage and billing data for billing purposes. Any authorization to access historical data or other information not directly related to billing and collection should be explicitly stated in such an agreement. Authorization to provide usage information to an ISO should be included, if necessary. Cancellation or expiration of the supply agreement should also revoke a supplier's access rights to the customer's data. A utility should not be required to customize or disaggregate data.

7. Utilities and customer-authorized third parties should be responsible for protecting all meter data in their possession from unauthorized release.

8. The utility should be allowed to use customer-specific meter data to support operation of utility systems and the electricity transmission and distribution network, or as required by State and federal authorities.

9. The utility should be allowed to use customer-specific meter data to solicit participation in Commission-approved demand response and energy efficiency programs.

10. Stakeholders agree that the utility should only be allowed to make use of the Meter Data and Customer Data for offering a competitive service or share such information with any affiliated or unaffiliated entity to the extent allowed by, and consistent with all applicable laws, ICC rules and orders. Some stakeholders further believe that if a utility or its affiliate offers competitive services, they should not, under any circumstances, be allowed to use customer Meter Data in offering those services without affirmative customer authorization and application of third party disclosure requirements.

11. Governmental units should not have unauthorized access to customer-specific data except insofar as some customer-specific data (such as regarding outages, disconnections, and other information potentially affecting public health and safety) is already shared with government by the utility under existing law, policies and agreements. [See e.g., 220 ILCS 5/8-202(b)] The utility should adopt policies and procedures that comply with state and federal law to respond appropriately to law enforcement requests for AMI-derived data.

12. Customers should be educated and informed about what it means to allow access to AMI-derived data.

13. If a utility provides a third party with aggregated AMI meter data, it must take reasonable measures to protect the identity of individual customers. Where individual customer data privacy cannot reasonably be assured, the third party should obtain authorization from the customer for access to identifiable customer data prior to its release by the utility.

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