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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 
(II)

COMMITTEE ON SCIENCE AND TECHNOLOGY 

HON. BART GORDON, Tennessee, Chair 

JERRY F. COSTELLO, Illinois 

EDDIE BERNICE JOHNSON, Texas 

LYNN C. WOOLSEY, California 

DAVID WU, Oregon 

BRIAN BAIRD, Washington 

BRAD MILLER, North Carolina 

DANIEL LIPINSKI, Illinois 

GABRIELLE GIFFORDS, Arizona 

DONNA F. EDWARDS, Maryland 

MARCIA L. FUDGE, Ohio 

BEN R. LUJA ́ N, New Mexico 

PAUL D. TONKO, New York 

STEVEN R. ROTHMAN, New Jersey 

JIM MATHESON, Utah 

LINCOLN DAVIS, Tennessee 

BEN CHANDLER, Kentucky 

RUSS CARNAHAN, Missouri 

BARON P. HILL, Indiana 

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 

RALPH M. HALL, Texas 

F. JAMES SENSENBRENNER JR., 

Wisconsin 

LAMAR S. SMITH, Texas 

DANA ROHRABACHER, California 

ROSCOE G. BARTLETT, Maryland 

VERNON J. EHLERS, Michigan 

FRANK D. LUCAS, Oklahoma 

JUDY BIGGERT, Illinois 

W. TODD AKIN, Missouri 

RANDY NEUGEBAUER, Texas 

BOB INGLIS, South Carolina 

MICHAEL T. MCCAUL, Texas 

MARIO DIAZ-BALART, Florida 

BRIAN P. BILBRAY, California 

ADRIAN SMITH, Nebraska 

PAUL C. BROUN, Georgia 

PETE OLSON, Texas 

SUBCOMMITTEE ON TECHNOLOGY AND INNOVATION

HON. DAVID WU, Oregon, Chair 

DONNA F. EDWARDS, Maryland 

BEN R. LUJA ́ N, New Mexico 

PAUL D. TONKO, New York 

HARRY E. MITCHELL, Arizona 

GARY C. PETERS, Michigan 

JOHN GARAMENDI, California 

BART GORDON, Tennessee 

ADRIAN SMITH, Nebraska 

JUDY BIGGERT, Illinois 

W. TODD AKIN, Missouri 

PAUL C. BROUN, Georgia 

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 
(III)

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
Page

IV

Appendix 2: Additional Material for the Record

Verbal Questions from Subcommittee by Chairman David Wu .......................... 90
(1)

SMART GRID ARCHITECTURE AND STANDARDS: ASSESSING COORDINATION AND 

PROGRESS 

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.
2
3

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. 
4

1The Smart Grid: An Introduction. The Department of Energy, 2008. p. 7. 

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

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. 
5

2The Smart Grid: An Introduction. The Department of Energy, 2008. p. 7. 3 Critical infrastructure Protection: Multiple Efforts to Secure Control Systems Are Under Way, 

but Challenges Remain. The Government Accountability Office, 2007. pp. 3–18. 

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

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. 

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 
6

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 plugin 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 Plugin 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. 
7

4 NIST Framework and Roadmap for Smart Grid Interoperability Standards, Release 1.0, January 2010, p. 14. 

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 webbased 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. 

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 
8

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.
9

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 
10

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 
11

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 
12

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. 
13

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 highlevel 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. 
14

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:]
15

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 
16

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. 
17

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 publicprivate 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 
18

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-toend 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. 
19

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 
20

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, 
21

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. 
22

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 
23

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 Federalstate 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, 
24

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.
25

1 EISA section 1301(2). 

2 EISA section 1306(d)(5). 

3 EISA section 1309(b). 

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

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 
26

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. 
27

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 
28

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 stand-
29

1 NIST Framework and Roadmap for Smart Grid Interoperability Standards, Release 1.0, January 2010. 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. 

ards 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 Roadmap1

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 re-
30

3GridWise Architecture Council, interoperability Path Forward Whitepaper, November 30, 

2005 (v1.0). 4FERC Smart Grid Policy Statement, July 16, 2009.

5SGIPGB and SGIP Charter, Version 1.2, June 10, 2010; SGIP brochure created for the 2010 

IEEE/PES Transmission & Distribution Conference & Exposition; www.sgipweb.org.

sponse. The reliability, fidelity, and security of information exchanges between 

and among Smart Grid systems must achieve requisite performance levels.3

The NIST Roadmap contains several important items that shape the 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 Statement4—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 

- Priorities for developing additional standards and making revisions to existing 

standards, with supporting action plans . . . to resolve major gaps affecting 

interoperability and 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

Initiated by NIST and established in November 2009, the SGIP is dedicated to 

the interoperability of Smart Grid devices and systems. 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 proc-
31

ess 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)
32

• 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.
33

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, 
34

6SGIP Governing Board Meeting, May 24, 2010, presentation materials.

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. 
35

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: 
36

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 Inde-
37

pendence 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 CaliforniaBerkeley. 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 
38

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. 
39

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. 
40

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 infrastruc- ture. 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 regu-
41

lators. 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 
42

1Wireless includes radio and power-line communication techniques. 

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. 

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, utilityto-third parties, etc. In a year or two smart meters will be generating multiple 
43

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. 
44

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 thirdparty use of customer smart grid information. 
45

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). 

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. 

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. 
46

3Olmstead v. United States, 277 U.S. 438, 478 (1928) (Brandeis, J., dissenting). 4See generally EPIC, Public Opinion on Privacy, http://epic.org/privacy/survey (last visited 

June 29, 2010). 5 533 U.S. 27 (2001).

6 Id. at 34. 7 Id. at 37. 8 Id. at 40. 9Martin LaMonica, Cisco: Smart Grid Will Eclipse Size of Internet, CNET, May 18, 2009, 

http://news.cnet.com/8301-11128¥3-10241102-54.html. 10See 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]. 

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

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: 

[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

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

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
47

12See 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 

. . .’’). 13Draft Framework, supra note 11, at 21–22. 14See 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). 15See, e.g., Draft Framework, supra note 11, at 56. 16See Draft Framework, supra note 11, at 65. 17 Id. 18See, 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¥Metering¥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). 19See 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’’). 20 Id.

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. 

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. 

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: 

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

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 
48

21See, 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). 22Draft Framework, supra note 11, at 67. 23Whalen v. Roe, 429 U.S. 589, 599–600 (1977). 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-bibdata-hadoop-tennessee-valley-authority-tva. 25 Id. 26See EPIC, Cloud Computing, http://epic.org/privacy/cloudcomputing (last visited June 29, 

2010). 27See EPIC, Terrorism (Total) Information Awareness, http://epic.org/privacy/profiling/tia

(discussing government data mining of citizens’ personal information) (last visited June 29, 

2010). 28See id. 29Department of Defense, Safeguarding Privacy in the Fight Against Terrorism (2004), available at http://www.epic.org/privacy/profiling/tia/tapac¥report.pdf.

systems by thieves who use techniques known as ‘‘wardriving’’ to seek out unprotected or insufficiently protected wireless communication portals.21

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. 

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

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 
49

30See 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)’’]. 31See generally EPIC, Identity Theft, http://epic.org/privacy/idtheft (last visited June 29, 

2010). 32Fed. Trade Comm’n, 2006 Identity Theft Survey Report 4, 9 (2007) [hereinafter ‘‘FTC Survey 

Report’’]. 33Privacy Rights Clearinghouse, Chronology of Data Breaches, June 25, 2010, http://

www.privacyrights.org/ar/ChronDataBreaches.htm. 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. 37See Rebecca Herold, SmartGrid Privacy Concerns, available at http://

www.privacyguidance.com/files/SmartGridPrivacyConcemsTableHeroldSept¥2009.pdf [hereinafter Privacy Concerns]. 38Security 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).

personal information transmitted through the Smart Grid raises similar privacy 

concerns. 

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. 

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

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

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. 
50

39Google PowerMeter, http://www.google.org/powermeter (last visited June 29, 2010). 40See 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). 42 EPIC, Google Street View and Privacy, http://epic.org/privacy/streetview (last visited June 

29, 2010). 43See Privacy Concerns, supra note 37. 44Draft Framework, supra note 11, at 51. 45 Id. at 52. 

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

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. 

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 organizationissued 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. 

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 
51

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. 47Privacy 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). 48Privacy 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. 49See, e.g., Privacy by Design, supra note 10, at 8–9. 50Smart Grid System Report, supra note 12, at 34. 51Privacy and the New Energy Infrastructure, supra note 46, at 28.

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

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

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

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 
52

52Privacy by Design, supra note 10, at 11. 53 Id. at 25. 54See Privacy Concerns, supra note 37; Dangers (Part I), supra note 30. 55See Dangers (Part I), supra note 30. 56See Privacy Concerns, supra note 37. 57 Id. 58Draft Framework, supra note 11, at 29. 59SANS 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.’’). 60See 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. 61See Privacy and the New Energy Infrastructure, supra note 46, at 30; Privacy Concerns, 

supra note 37; Dangers (Part I), supra note 30. 62Morgan, et al., supra note 60, at 5. 

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

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

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. 

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

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. 

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
53

63See generally EPIC, Domestic Violence and Privacy, http://epic.org/privacy/dv (last visited 

June 29, 2010). 64See. e.g., Violence Against Women and Department of Justice Reauthorization Act of 2005, 

Pub. L. No. 109–162, 119 Stat. 2960 (2005). 65See EPIC, Violence Against Women Act and Privacy, http://epic.org/privacy/div/

vawa.html (last visited June 29, 2010). 66 Id. at 12. 67Dep’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’’]. 68OECD, 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). 69 HEW Report, supra note 67, at xx–xxiii. 70OECD Privacy Guidelines, supra note 68.

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. 

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: 

(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

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: 
54

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. 73 Cyber Security Strategy, supra note 14, at 9. 

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.’’

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

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 
55

74See EPIC, Department of Homeland Security Chief Privacy Office and Privacy, http://

epic.org/privacy/dhs-cpo.html (last visited June 29, 2010). 75Letter 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. 76See, 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). 77 Cyber Security Strategy, supra note 14, at 105. 78David 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.

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. 

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

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
56

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. 82Pew 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.pdf. 83 Cyber Security Strategy, supra note 14, at 106. 84See Viktor Mayer-Scho ̈nberger, 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). 

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. 

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. 

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

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. 

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 
57

85See 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)). 88See 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). 89Latanya Sweeney, Weaving Technology and Policy Together to Maintain Confidentiality, 25 

J. Law, MED., & ETHICS 98, 98–99 (1997). 90 U.S. Gen. Accounting Office, Identity Fraud Survey Report: Consumer Version 2–3 (2009). 91 Id. at 3. 92See Alessandro Acquisiti & Ralph Gross, Predicting Social Security Numbers from Public 

Data, 106 Proceedings of the National Academy of Sciences 10975. 

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. 

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

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

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. 

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, 
58

93Patrick McDaniel & Stephen McLaughlin, Security and Privacy Challenges in the Smart 

Grid, IEEE SECURITY AND PRIVACY, May/June 2009, 75–77. 94David Chaum, Achieving Electronic Privacy, SCIENTIFIC AMERICA, Aug. 1992, at 96–101, 

available at http://chaum.com/articles/Achieving¥Electronic¥Privacy.htm. 95 Bruce Schneier, Applied Cryptography 21–46 (2d ed. 1996). 96Peter Neumann, Computer Related Risks 132–180 (1995). 97 EPIC, Social Networking Privacy, http://epic.org/privacy/socialnet/ (last visited June 30, 

2010). 

service identity theft, malicious software, cyber attacks, pranks and various types 

of surveillance.93

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

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. 

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 ORGANIZA- TIONS

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
59

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 
60

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. 
61

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 con-
62

stituents 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 
63

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 
64

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 
65

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 mar-
66

kets. 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. 
67

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. Luja ́n, please proceed. 

Mr. LUJA ́ N. 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. LUJA ́ N. 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? 
68

Mr. LUJA ́ N. 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. LUJA ́ N. 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. Luja ́n, 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. LUJA ́ N. 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 
69

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 
70

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 
71

‘‘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. 
72

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. Luja ́n. 

Mr. LUJA ́ N. 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 
73

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. LUJA ́ N. 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. LUJA ́ N. 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 
74

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. LUJA ́ N. 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. LUJA ́ N. 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. LUJA ́ N. Ms. Biggert, I could not agree more. I appreciate 

that. 

And with that, Mr. Chairman, I yield back my time. 
75

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 
76

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 Americanmade 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 everpresent 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. 
77

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 
78

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 
79

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? 
80

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, 
81

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 recharged. 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? 
82

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. Luja ́n 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. 
83

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.] 

(85)

Appendix 1: 

ANSWERS TO POST-HEARING QUESTIONS
86

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.
87

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.
88

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. 
(89)

Appendix 2: 

ADDITIONAL MATERIAL FOR THE RECORD
90

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, 
91

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.

Æ