How the FCC Will Promote Open Smart Grid Networks & Real Time Energy Data

PALM SPRINGS, CALIF — We just got the first glimpse into how the Federal Communications Commission (FCC) will work with and oversee the smart grid industry. On Thursday afternoon at the Cleantech Investor Summit, Nick Sinai, the FCC’s new Energy and Environmental Director, said that the FCC will make specific recommendations for how to bring broadband to the smart grid through the National Broadband Plan due to the U.S. Congress on March 17 (it was delayed by a month). Those recommendations will include how to promote open standards and commercial networks, how to use policies to encourage utilities to provide their customers with real-time open access to energy data and potential ways to use federal spectrum bands for utilities’ smart grid deployments.

Sounds like the sector of the smart grid industry with roots in the IT world (Cisco (s CSCO), IBM (s IBM), Silver Spring Networks) just got a close ally. All of the potential recommendations Sinai discussed could help promote innovation that will enable companies and entrepreneurs to build tools and products that interconnect with, and work on top of, smart grid infrastructure. Sinai’s business-friendly presentation wasn’t a surprise, given his background in the investing world, most recently as a principal at Tenaya Capital (Lehman Brothers Venture Partners) and at Polaris Ventures for three years before that. FCC Chairman Julius Genachowski has taken a similar pro-innovation approach throughout the FCC.

Sinai said that the FCC “will look at how to remove impediments and disincentives to using commercial networks.” Specifically he said the FCC is “exploring ways to encourage private networks built by utilities to operate in the same band, in order to drive down costs, and to drive open, non-proprietary standards.” One of the ways to do that could be working with the National Telecommunications and Information Administration (NTIA) to look at available federal spectrum bands, said Sinai.

As we’ve pointed out, power providers like AEP and utility trade groups have long been asking for dedicated wireless spectrum. The argument behind these calls is that as utilities roll out more smart grid services, utilities will need more network bandwidth. AEP presented to the FCC group late last year and said, “Dedicated spectrum is much less likely to receive interference and has a remedy procedure if interference is experienced.” While it’s unclear what the FCC will decide on this issue, it’s interesting that the FCC is looking at this so closely.

Sinai also focused on the importance of encouraging utilities to enable their customers to access real-time energy data to help promote innovation and also change consumer behavior. As I wrote in an article last year (Why The Smart Grid Won’t Have the Innovations of the Internet Any Time Soon) most utility networks are not currently being built to provide consumers real-time access to energy data. Sinai said “Real-time feedback in standard digital formats,” will allow companies to innovate new products and services, and “we must aspire for policies that facilitate the ferocious competition that drives innovation.”

Sinai said that the FCC is reviewing how best to urge utilities to move fast when it comes to providing real-time information from smart meters. For example, the FCC could work with the government by rewarding states and utilities with strong data access policies (like California and Pennsylvania) in its grants and loan programs, said Sinai. Other options include stronger moves like “national energy data accessibility legislation.”

Google’s comments on Sinai’s speech here.