(11) Enhanced capacity and efficiency of elec-
tricity networks, reduction of line losses, and main-
tenance of power quality. 
(b) SUPPORT.—The Secretary of Energy and the 
Federal Energy Regulatory Commission and other Federal 
agencies as appropriate shall undertake programs to sup-
port the development and demonstration of Smart Grid 
technologies and standards to maximize the achievement 
of these goals. 
(c) BARRIERS.—It is further the policy of the United 
States that no State, State agency, or local government 
or instrumentality thereof should prohibit, or erect unrea-
sonable barriers to, the deployment of smart grid tech-
nologies on an electric utility’s distribution facilities, or 
unreasonably limit the services that may be provided using 
such technologies. 
(d) INFORMATION.—It is further the policy of the 
United States that electricity purchasers are entitled to 
receive information about the varying value of electricity 
at different times and places, and that States shall not 
prohibit nor erect unreasonable barriers to the provision 
of such information flows to end users. 
SEC. 102. GRID MODERNIZATION COMMISSION. 
(a) ESTABLISHMENT AND MISSION.— 
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(1) ESTABLISHMENT.—The President shall es-
tablish a Grid Modernization Commission composed 
of 9 members. Three members of the Commission 
shall be appointed by the President, and one each 
shall be appointed by the Speaker and minority lead-
er of the United States House of Representatives 
and by the majority leader and minority leader of 
the United States Senate. Two members shall be ap-
pointed by the President from among persons rec-
ommended by an association representing State util-
ity regulatory commissioners. The President shall 
designate one Commissioner to serve as Chairperson. 
(2) MISSION.—The mission of the Grid Mod-
ernization Commission shall be to facilitate the 
adoption of Smart Grid standards, technologies, and 
practices across the Nation’s electricity grid to the 
point of general adoption and ongoing market sup-
port in the United States electric sector. The Com-
mission shall be responsible for monitoring develop-
ments, encouraging progress toward common stand-
ards and protocols, identifying barriers and pro-
posing solutions, coordinating with all Federal de-
partments and agencies, and coordinating ap-
proaches on smart grid implementation with States 
and local governmental authorities. 
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(b) MEMBERSHIP.—The members appointed to the 
Commission shall, collectively, have qualifications in elec-
tric utility operations and infrastructure, digital informa-
tion and control technologies, security, market develop-
ment, finance and utility regulation, energy efficiency, de-
mand response, renewable energy, and consumer protec-
tion. 
(c) AUTHORITIES TO INTERVENE.—The Commission 
shall have the authority to intervene and represent itself 
before the Federal Energy Regulatory Commission and 
other Federal and State agencies as it deems necessary 
to accomplish its mission. 
(d) TERMS OF OFFICE.—The term of office of each 
Commissioner shall be 5 years, and any member may be 
reappointed for not more than one additional term of 5 
years. 
(e) TERMINATION.—Unless extended by Act of Con-
gress, the Commission shall complete its work and cease 
its activities by January 1, 2020, or on such earlier date 
that the Commission determines that the proliferation, 
evolution, and adaptation of Smart Grid technologies no 
longer require Federal leadership and assistance. 
(f) COMPENSATION OF MEMBERS.—Each member of 
the Commission who is not an officer or employee of the 
Federal Government shall be compensated at a rate equal 
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to the daily equivalent of the annual rate of basic pay pre-
scribed for level III of the Executive Schedule under sec-
tion 5315 of title 5, United States Code, for each day (in-
cluding travel time) during which such member is engaged 
in the performance of the duties of the Commission. All 
members of the Commission who are officers or employees 
of the United States shall serve without compensation in 
addition to that received for their services as officers or 
employees of the United States. 
(g) TRAVEL EXPENSES.—The members of the Com-
mission shall be allowed travel expenses, including per 
diem in lieu of subsistence, at rates authorized for employ-
ees of agencies under subchapter I of chapter 57 of title 
5, United States Code, while away from their homes or 
regular places of business in the performance of services 
for the Commission. 
(h) MEETINGS.—The Commission shall meet at the 
call of the Chairman. Commission meetings shall be open 
to the public, but as many as three Commissioners may 
meet in private without constituting a meeting requiring 
public access. 
(i) APPLICABILITY
OF FEDERAL ADVISORY COM-
MITTEE ACT.—The Federal Advisory Committee Act (5 
U.S.C. App. 1 et seq.) shall not apply to the Commission. 
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(j) OFFICES AND STAFF.—The Secretary of Energy 
shall provide the Commission with offices in the Depart-
ment of Energy and shall make available to the Commis-
sion the expertise and staff resources of both the Office 
of Electricity Delivery and Energy Reliability and the Of-
fice of Energy Efficiency and Renewable Energy. 
(k) DETAIL
OF GOVERNMENT EMPLOYEES.—Any 
Federal Government employee may be detailed to the 
Commission without reimbursement, and such detail shall 
be without interruption or loss of civil service status or 
privilege. 
(l) EXECUTIVE DIRECTOR.—The Secretary of En-
ergy shall appoint an officer of the Senior Executive Serv-
ice to serve as Executive Director to the Commission. 
(m) PROCUREMENT OF TEMPORARY AND INTERMIT-
TENT SERVICES.—The Chairman of the Commission may 
procure temporary and intermittent services under section 
3109(b) of title 5, United States Code, at rates for individ-
uals which do not exceed the daily equivalent of the annual 
rate of basic pay prescribed for level V of the Executive 
Schedule under section 5316 of such title. 
(n) INFORMATION FROM FEDERAL AGENCIES.—The 
Commission may secure directly from any Federal depart-
ment or agency such information as the Commission con-
siders necessary to carry out this Act. Upon request of 
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the Chairman of the Commission, the head of such depart-
ment or agency shall furnish such information to the Com-
mission. The Commission shall maintain the same level of 
confidentiality for such information made available under 
this subsection as is required of the head of the depart-
ment or agency from which the information was obtained. 
(o) POSTAL SERVICES.—The Commission may use 
the United States mails in the same manner and under 
the same conditions as other departments and agencies of 
the Federal Government. 
SEC. 103. GRID ASSESSMENT AND REPORT. 
(a) IN GENERAL.—The Grid Modernization Commis-
sion shall undertake, and update on a biannual basis, an 
assessment of the progress toward modernizing the elec-
tric system from generation to ultimate electricity con-
sumption, including implementation of ‘‘smart grid’’ tech-
nologies. The Commission shall prepare this assessment 
with input from stakeholders including but not limited to 
electric utilities, other Federal offices, States, companies 
involved in developing related technologies, the National 
Electric Reliability Organization recognized by the Federal 
Energy Regulatory Commission, electricity customers, and 
persons with special related expertise. The assessment 
shall include each of the following: 
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(1) An updated inventory of existing smart grid 
systems. 
(2) A description of the condition of existing 
grid infrastructure and procedures for determining 
the need for new infrastructure. 
(3) A description of any plans of States, utili-
ties, or others to introduce smart grid systems and 
technologies. 
(4) An assessment of constraints to deployment 
of smart grid technology and most important oppor-
tunities for doing so, including the readiness or lack 
thereof of enabling technologies. 
(5) An assessment of remaining potential bene-
fits resulting from introduction of smart grid sys-
tems, including benefits related to demand-side effi-
ciencies, improved reliability, improved security, re-
duced prices, and improved integration of renewable 
resources. 
(6) Recommendations for legislative or regu-
latory changes to remove barriers to and create in-
centives for smart grid system implementation and 
to meet the policy goals of this title. 
(7) An estimate of the potential costs required 
for modernization of the electricity grid, with speci-
ficity relative to geographic areas and components of 
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the grid, together with an assessment of whether the 
necessary funds would be available to meet such 
costs, and the sources of such funds. 
(8) An assessment of ancillary benefits to other 
economic sectors or activities beyond the electricity 
sector, such as potential broadband service over 
power lines. 
(9) An assessment of technologies, activities or 
opportunities in energy end use devices, customer 
premises, buildings, and power generation and stor-
age devices that could accelerate or expand the im-
pact and effectiveness of smart grid advances. 
(10) An assessment of potential risks to per-
sonal privacy, corporate confidentiality, and grid se-
curity from the spread of smart grid technologies, 
and if so what additional measures and policies are 
needed to assure privacy and information protection 
for electric customers and grid partners, and cyber- 
security protection for extended grid systems. 
(11) An assessment of the readiness of market 
forces to drive further implementation and evolution 
of ‘‘smart grid’’ technologies in the absence of gov-
ernment leadership. 
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(12) Recommendations to the Secretary of En-
ergy and other Federal officers on actions they 
should take to assist. 
The Commission may request electric utilities to provide 
information relating to deployment and planned deploy-
ment of smart grid systems and technologies. At the re-
quest of the utility, the Commission shall maintain the 
confidentiality of utility-specific or specific security-related 
information. The Commission shall provide opportunities 
for input and comment by interested persons, including 
representatives of electricity consumers, Smart Grid tech-
nology service providers, the electric utility industry, and 
State and local government. 
(b) STATE AND REGIONAL ASSESSMENT AND RE-
PORT.—States or groups of States are encouraged to par-
ticipate in the development of State or region-specific com-
ponents of the assessment and report under subsection 
(a). Such State-specific components may address the as-
sessment and reporting criteria above but also may include 
but not be limited to any of the following: 
(1) Assessment of types of security threats to 
electricity delivery. 
(2) Energy assurance and response plans to ad-
dress security threats. 
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(3) Plans for introduction of smart grid sys-
tems and technologies over 3, 5, and 10 year plan-
ning horizons. 
The Commission may make grants to States that begin 
development of a State or Regional Plan within 180 days 
after the enactment of this Act to offset up to one-half 
of the costs required to develop such plans. 
(c) SMART GRID REPORT.—Based on its completed 
initial assessment under subsection (a), the Commission 
shall submit a report to Congress and the President not 
later than 2 years after the date of enactment of this Act 
and subsequent reports every 2 years thereafter. Each re-
port shall include recommendations to the President and 
to the Congress on actions necessary to modernize the 
electricity grid. The Commission shall annually update 
and revise its report and as well as conduct ongoing moni-
toring and evaluation activities. 
(d) CONSULTATION AND PUBLIC INPUT.—The Com-
mission shall consult with the Secretary of Energy and 
the Federal Energy Regulatory Commission on technical 
issues associated with advanced electricity grid tech-
nologies. The Commission shall to the extent feasible pro-
vide for broad and frequent input from stakeholders and 
the general public 
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(e) INTEROPERABILITY PROTOCOLS
AND MODEL 
STANDARDS FOR INFORMATION MANAGEMENT.— 
(1) IN
GENERAL.—The Grid Modernization 
Commission shall work with Smart Grid stake-
holders to lead towards the earliest feasible develop-
ment of flexible, uniform, and consensus protocols or 
model standards for information management among 
and interoperability of smart grid devices and sys-
tems. Such protocols and model standards shall 
allow such devices to communicate and function over 
multiple technologies, including wireless, cable, sat-
ellite, broadband-over-power line, and telephone. 
Such protocols and model standards should align 
policy, business, and technology approaches in a way 
that enables all electric resources, including demand 
side resources, to contribute to an efficient, reliable 
electricity network, on an automated basis, as appro-
priate. 
(2) SCOPE OF PROTOCOLS AND MODEL STAND-
ARDS.—The protocols and model standards shall ac-
commodate centralized and distributed generation, 
transmission and distribution resources, including 
advanced technologies to improve the efficiency and 
reliability of the electric power transmission and dis-
tributions system, renewable generation, energy stor-
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age, energy efficiency, and demand response and en-
abling devices and systems. 
(3) ESTABLISHMENT
OF
WORKING
GROUP.— 
Not later than 90 days after the date of enactment 
of this Act the Commission shall establish a working 
group comprised of electric industry experts, to be 
appointed by the Chairman, to assist in developing 
the protocols and model standards described in this 
subsection and guide the Federal participation in 
that process. Members appointed to the working 
group shall represent the various sectors of the elec-
tricity industry, including sectors relating to the 
generation, transmission, distribution and end-user. 
(4) DEVELOPMENT OF PROTOCOLS AND MODEL 
STANDARDS.—In developing the protocols and model 
standards, the working group shall consult with ex-
pert groups such as the Gridwise Architecture Coun-
cil, the Institute of Electrical and Electronics Engi-
neers, other electric industry groups, customer and 
manufacturer groups, and any appropriate Federal 
and State agencies. The proposed protocols and 
model standards shall be made available in the pub-
lic domain, except to the extent they may allow or 
create threats to grid reliability and security. 
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(5) PROPOSAL
FOR
PROTOCOLS
AND
MODEL 
STANDARDS.— 
(A) IN GENERAL.—Not later than 1 year 
after the date of enactment of this Act, the 
working group shall submit to the Commission 
recommendations concerning development of 
proposed protocols and model standards and 
recommendations for Federal support in the im-
plementation of such protocols and model 
standards. 
(B) REVIEW BY THE COMMISSION.—On re-
ceipt of the recommendations under subpara-
graph (A), the Commission shall take such ac-
tion as necessary to encourage the adoption of 
the protocols and model standards and their im-
plementation. 
(C) PUBLICATION
OF
PROTOCOLS
AND 
MODEL
STANDARDS.—The Commission shall 
publish, not later than 3 years after the date of 
the enactment of this Act, and every two years 
thereafter, a report on the status of interoper-
ability of smart grid technologies, and the avail-
ability of protocols and model standards to 
allow such interoperability. 
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(f) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out the pur-
poses of this section the sum of $25,000,000 for each of 
the fiscal years 2008 through 2012, and such sums as may 
be necessary thereafter through fiscal year 2018. 
SEC. 104. FEDERAL MATCHING FUND FOR SMART GRID IN-
VESTMENT COSTS. 
(a) MATCHING FUND.—The Secretary of Energy 
shall establish a Smart Grid Investment Matching Grant 
Program to provide reimbursement of one-fourth of quali-
fying Smart Grid investments. 
(b) QUALIFYING INVESTMENTS.—Qualifying Smart 
Grid investments may include any of the following made 
on or after the date of enactment of this Act: 
(1) In the case of appliances covered for pur-
poses of establishing energy conservation standards 
under part B of title III of the Energy Policy and 
Conservation Act of 1975 (42 U.S.C. 6291 and fol-
lowing), the documented expenditures incurred by a 
manufacturer of such appliances associated with 
purchasing or designing, creating the ability to man-
ufacture, and manufacturing and installing for one 
calendar year, internal devices that allow the appli-
ance to engage in Smart Grid functions. 
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(2) In the case of specialized electricity-using 
equipment, including motors and drivers, installed in 
industrial or commercial applications, the docu-
mented expenditures incurred by its owner or its 
manufacturer of installing devices or modifying that 
equipment to engage in Smart Grid functions. 
(3) In the case of transmission and distribution 
equipment fitted with monitoring and communica-
tions devices to enable smart grid functions, the doc-
umented expenditures incurred by the electric utility 
to purchase and install such monitoring and commu-
nications devices. 
(4) In the case of metering devices, sensors, 
control devices, and other devices integrated with 
and attached to an electric utility system that are 
capable of engaging in Smart Grid functions, the 
documented expenditures incurred by the electric 
utility and its customers to purchase and install 
such devices. 
(5) In the case of software that enables devices 
or computers to engage in Smart Grid functions, the 
documented purchase costs of the software. 
(6) In the case of entities that operate or co-
ordinate operations of regional electric grids, the 
documented expenditures for purchasing and install-
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ing such equipment that allows Smart Grid func-
tions to operate and be combined or coordinated 
among multiple electric utilities and between that re-
gion and other regions. 
(7) In the case of persons or entities other than 
electric utilities owning and operating a distributed 
electricity generator, the documented expenditures of 
enabling that generator to be monitored, controlled, 
or otherwise integrated into grid operations and elec-
tricity flows on the grid utilizing Smart Grid func-
tions. 
(8) In the case of electric or hybrid-electric ve-
hicles, the documented expenses for devices that 
allow the vehicle to engage in Smart Grid functions. 
(9) The documented expenditures related to 
purchasing and implementing Smart Grid functions 
in such other cases as the Secretary of Energy shall 
identify. In making such grants, the Secretary shall 
seek to reward innovation and early adaptation, even 
if success is not complete, rather than deployment of 
proven and commercially viable technologies. 
(c) 
INVESTMENTS
NOT
INCLUDED.—Qualifying 
Smart Grid investments do not include any of the fol-
lowing: 
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acteristics such as voltage level, current, cycles per 
second, or source or type of generation and to store, 
synthesize or report that information by digital 
means. 
(4) The ability to sense and localize disruptions 
or changes in power flows on the grid and commu-
nicate such information instantaneously and auto-
matically for purposes of enabling automatic protec-
tive responses to sustain reliability and security of 
grid operations. 
(5) The ability to detect, prevent, communicate 
with regard to, respond to, or recover from system 
security threats, including cyber-security threats and 
terrorism, using digital information, media, and de-
vices. 
(6) The ability of any appliance or machine to 
respond to such signals, measurements, or commu-
nications automatically or in a manner programmed 
by its owner or operator without independent human 
intervention. 
(7) The ability to use digital information to op-
erate functionalities on the electric utility grid that 
were previously electro-mechanical or manual. 
(8) The ability to use digital controls to manage 
and modify electricity demand, enable congestion 
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management, assist in voltage control, provide oper-
ating reserves, and provide frequency regulation. 
(9) Such other functions as the Secretary of 
Energy may identify as being necessary or useful to 
the operation of a Smart Grid. 
(e) OFFICE.—The Secretary of Energy shall— 
(1) establish an Office to administer the Smart 
Grid Investment Grant Program, assuring that ex-
pert resources from the Commission on Grid Mod-
ernization, the Office of Energy Distribution and 
Electricity Reliability, and the Office of Energy Effi-
ciency and Renewable Energy are fully available to 
advise on its administration and actions; 
(2) appoint a Senior Executive Service officer 
to direct the Office, together with such personnel as 
are required to administer the Smart Grid Invest-
ment Grant program; 
(3) establish and publish in the Federal Reg-
ister, within 180 days after the enactment of this 
Act procedures by which applicants who have made 
qualifying Smart Grid investments can seek and ob-
tain reimbursement of one-fourth of their docu-
mented expenditures; 
(4) establish procedures to assure that there is 
no duplication or multiple reimbursement for the 
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same investment or costs, that the reimbursement 
goes to the party making the actual expenditures for 
Qualifying Smart Grid Investments, and that the 
grants made have significant effect in encouraging 
and facilitating the development of a smart grid; 
(5) maintain public records of reimbursements 
made, recipients, and qualifying Smart Grid invest-
ments which have received reimbursements; 
(6) establish procedures to provide, in cases 
deemed by the Secretary to be warranted, advance 
payment of moneys up to the full amount of the pro-
jected eventual reimbursement, to creditworthy ap-
plicants whose ability to make Qualifying Smart 
Grid Investments may be hindered by lack of initial 
capital, in lieu of any later reimbursement for which 
that applicant qualifies, and subject to full return of 
the advance payment in the event that the Quali-
fying Smart Grid investment is not made; 
(7) establish procedures to provide, in the event 
appropriated moneys in any year are insufficient to 
provide reimbursements for qualifying Smart Grid 
investments, that such reimbursement would be 
made in the next fiscal year or whenever funds are 
again sufficient, with the condition that the insuffi-
ciency of funds to reimburse Qualifying Smart Grid 
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Investments from moneys appropriated for that pur-
pose does not create a Federal obligation to that ap-
plicant; and 
(8) have and exercise the discretion to deny 
grants for investments that do not qualify in the 
reasonable judgement of the Secretary. 
(f) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary of En-
ergy the sums of— 
(1) $10,000,000 for each of fiscal years 2008 
through 2012 to provide for administration of the 
Smart Grid Investment Matching Fund; and 
(2) $250,000,000 for fiscal year 2008 and 
$500,000,000 for each of fiscal years 2009 through 
2012 to provide reimbursements of one-fourth of 
Qualifying Smart Grid Investments. 
SEC. 105. SMART GRID TECHNOLOGY DEPLOYMENT. 
(a) POWER GRID DIGITAL INFORMATION TECH-
NOLOGY.—The Secretary of Energy shall conduct pro-
grams to— 
(1) deploy advanced techniques for measuring 
peak load reductions and energy efficiency savings 
on customer premises from smart metering, demand 
response, distributed generation and electricity stor-
age systems; 
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(2) implement means for demand response, dis-
tributed generation, and storage to provide ancillary 
services; 
(3) advance the use of wide-area measurement 
networks including data mining, visualization, ad-
vanced computing, and secure and dependable com-
munications in a highly distributed environment; and 
(4) implement reliability technologies in a grid 
control room environment against a representative 
set of local outage and wide area blackout scenarios. 
(b) SMART GRID REGIONAL DEMONSTRATION PRO-
GRAM.— 
(1) ESTABLISHMENT OF PROGRAM.—The Sec-
retary of Energy shall establish a program of dem-
onstration projects specifically focused on advanced 
technologies for power grid sensing, communications, 
analysis, and power flow control, including the inte-
gration of demand-side resources into grid manage-
ment. The goals of this program shall be to— 
(A) demonstrate the potential benefits of 
concentrated investments in advanced grid tech-
nologies on a regional grid; 
(B) facilitate the commercial transition 
from the current power transmission and dis-
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tribution system technologies to advanced tech-
nologies; and 
(C) facilitate the integration of advanced 
technologies in existing electric networks to im-
prove system performance, power flow control 
and reliability. 
(2) DEMONSTRATION
PROJECTS.—The Sec-
retary shall establish Smart Grid demonstration 
projects for not more than 5 electric utility systems 
of various types and sizes under this subsection. 
Such demonstration projects shall be undertaken in 
cooperation with the electric utility. Under such 
demonstration projects, financial assistance shall be 
available to cover not more than one-half of the 
qualifying Smart Grid technology investments made 
by the electric utility. Any project receiving financial 
assistance under this section shall not be eligible to 
receive financial assistance (including loan guaran-
tees) under any other Federal program. 
(c) AUTHORIZATION.— 
(1) POWER GRID DIGITAL INFORMATION TECH-
NOLOGY PROGRAMS.—There are authorized to be ap-
propriated to carry out subsection (a) such sums as 
are necessary for each of the fiscal years 2008 
through 2012. 
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(2) SMART
GRID
REGIONAL
DEMONSTRATION 
PROGRAM.—There is authorized to be appropriated 
to carry out subsection (b) $20,000,000 for each of 
the fiscal years 2008 through 2012. 
SEC. 106. SMART GRID INFORMATION REQUIREMENTS. 
(a) FINDINGS.—Congress finds that Smart Grid 
technologies will require, for their optimum use by elec-
tricity consumers, that such consumers have access to in-
formation on prices, use, and other factors in possession 
of their utilities or electricity suppliers, in order to assist 
the customers in optimizing their electricity use and lim-
iting the associated environmental impacts. 
(b) DEVELOPMENT OF RULES.—The Commission on 
Grid Modernization shall within one year of its initial 
meeting develop and declare a standard for the collection, 
presentation and delivery of information to electricity pur-
chasers as required by the standard under section 
111(d)(21) of the Public Utility Regulatory Policies Act 
of 1978. Such standard shall provide purchasers with dif-
ferent access options for such information. Such standard 
shall be developed with input from the Secretary of En-
ergy, the Federal Energy Regulatory Commission, the Ad-
ministrator of the Environmental Protection Agency, 
States, and stakeholders representing, but not limited to, 
electric utilities, energy efficiency and demand response 
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experts, environmental organizations and consumer orga-
nizations. 
(c) APPLICATION
OF SMART GRID INFORMATION 
STANDARD
TO FEDERAL ENTITIES
AND WHOLESALE 
MARKETS.—Within 60 days of the declaration of the 
standard under subsection (b), the Federal Energy Regu-
latory Commission shall propose a rule under which all 
public utilities, with respect to federally jurisdictional sales 
for resale of electricity in interstate commerce, and all ap-
proved regional transmission organizations subject to its 
jurisdiction, will implement those elements of the Smart 
Grid information standard developed pursuant to this sec-
tion that the Commission determines to be relevant and 
to add value for purchasers of wholesale power or those 
utilizing interstate transmission. The Tennessee Valley 
Authority, Bonneville Power Administration, and Federal 
power administrations shall, within 90 days of the adop-
tion of a final rule by the Commission, adopt it for their 
own sales or transmission of electricity. 
SEC. 107. STATE CONSIDERATION OF INCENTIVES FOR 
SMART GRID. 
(a) CONSIDERATION OF ADDITIONAL STANDARDS.— 
Section 111(d) of the Public Utility Regulatory Policies 
Act of 1978 (16 U.S.C. 2621(d)) is amended by adding 
at the end: 
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‘‘(18) UTILITY INVESTMENT IN SMART GRID IN-
VESTMENTS.—Each electric utility shall prior to un-
dertaking investments in non-advanced grid tech-
nologies demonstrate that alternative investments in 
advanced grid technologies have been considered, in-
cluding from a standpoint of cost-effectiveness, 
where such cost-effectiveness considers costs and 
benefits on a life-cycle basis. 
‘‘(19) UTILITY COST OF SMART GRID INVEST-
MENTS.—Each electric utility shall be permitted 
to— 
‘‘(A) recover from ratepayers the capital 
and operating expenditures and other costs of 
the utility for qualified smart grid system, in-
cluding a reasonable rate of return on the cap-
ital expenditures of the utility for a qualified 
smart grid system, and 
‘‘(B) recover in a timely manner the re-
maining book-value costs of equipment rendered 
obsolete by the deployment of a qualified smart 
grid system, based on the remaining depreciable 
life of the obsolete equipment. 
‘‘(20) RATE DESIGN MODIFICATIONS TO PRO-
MOTE ENERGY EFFICIENCY INVESTMENTS.— 
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‘‘(A) IN GENERAL.—The rates allowed to 
be charged by any electric utility shall— 
‘‘(i) align utility incentives with the 
delivery of cost-effective energy efficiency; 
and 
‘‘(ii) promote energy efficiency invest-
ments. 
‘‘(B) POLICY OPTIONS.—In complying with 
subparagraph (A), each State regulatory au-
thority and each nonregulated utility shall con-
sider— 
‘‘(i) removing the throughput incen-
tive and other regulatory and management 
disincentives to energy efficiency; 
‘‘(ii) providing utility incentives for 
the successful management of energy effi-
ciency programs; 
‘‘(iii) including the impact on adoption 
of energy efficiency as 1 of the goals of re-
tail rate design, recognizing that energy ef-
ficiency must be balanced with other objec-
tives; 
‘‘(iv) adopting rate designs that en-
courage energy efficiency for each cus-
tomer class; and 
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‘‘(v) allowing timely recovery of en-
ergy efficiency-related costs. 
‘‘(21) SMART GRID INFORMATION.— 
‘‘(A) 
STANDARD.—All 
electricity 
pur-
chasers shall be provided direct access, both in 
written and electronic machine-readable form, 
to information from their electricity provider as 
provided in subparagraph (B). 
‘‘(B) 
INFORMATION.—Information 
pro-
vided under this section shall conform to the 
standardized rules issued by the Commission on 
Grid Modernization under section 106(b) of the 
Smart Grid Facilitation Act of 2007 and shall 
include: 
‘‘(i) PRICES.—Purchasers and other 
interested persons shall be provided with 
information on— 
‘‘(I) time-based electricity prices 
in the wholesale electricity market; 
and 
‘‘(II) time-based electricity retail 
prices or rates that are available to 
the purchasers. 
‘‘(ii) USAGE.—Purchasers shall be 
provided with the number of electricity 
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