1. Energy Policy and the Smart Grid Howard Schwartz, WA Dept of Commerce WTIA, April 6, 2010

2. Overview The Promise of the Smart Grid Policy Questions Policy Priorities Our Assets Not all roses: the risks of Over-Promising Pushback

3. The Promise of the Smart Grid Make electricity system more reliable and flexible though advanced metering, sensing and communication. Communication is the key to the smart grid Potential: Better load management Faster response to reliability events Integration of variable generation (wind, solar)

4. Our main policy questions Economics Cost/benefit ratio Who pays? How financed? Which applications to prioritize Security Privacy Consumer acceptance Role of Government Establish Standards Mandate? Facilitate? Regulate? Finance?

6. E.g, Synchrophasors to measure voltage throughout transmission system in order to anticipate possible failures

7. Utility distribution system efficiency and reliability

8. Integration of variable renewable generation (wind, solar)

9. Communication between renewable and other generation

10. Enabling of storage technologies (once commercialized)

11. Electric Vehicles

12. Smart charging stations

13. Ultimately, integrate EVs into grid for scheduled charging and storage

14. Demand Response

16. Over-Promise and Push-Back Compare to vision and reality of interstate highway system or internet Clean and smooth vs. cluttered and congested Managing end-use loads will prove difficult (more later on this) Much hardware and software still needs to be developed And what is already developed still needs to be demonstrated

17. Section of the Capital Beltway, shown in the mid-1960s

19. Managing Expectations: The Smart Grid Vision is one of total integration. How realistic is this?

20. Push-Back Difficulties in Residential applications Value to utilities and consumers not yet proven Consumer resistance– complaints, lawsuits, etc Resistance by regulators Technology is the easy part Competition with other utility infrastructure needs

21. For follow up on Policy Issues, contact: Howard Schwartz, PhD Howard.Schwartz@commerce.wa.gov 360-725-3114 For follow up on Business Assistance as well as policy, contact: Tim Stearns Tim.Stearns@commerce.wa.gov 206-256-6121