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-
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-
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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. 
(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-
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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. 
(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. 
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(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. 
(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. 
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(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-
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. 
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(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: 
(1) Expenditures for electricity generation, 
transmission, or distribution infrastructure or equip-
ment not directly related to enabling Smart Grid 
functions. 
(2) After the effective date of a standard under 
paragraph (21) of section 111(d) of the Public Util-
ity Regulatory Policies Act of 1978 (relating to 
Smart Grid information), an investment that is not 
in compliance with such standard. 
(3) After the development and publication by 
the Commission of protocols and model standards 
for interoperability of smart grid devices and tech-
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nologies, an investment that fails to incorporate any 
of such protocols or model standards. 
(4) Expenditures for physical interconnection of 
generators or other devices to the grid except those 
that are directly related to enabling Smart Grid 
functions. 
(5) Expenditures for ongoing salaries, benefits, 
or personnel costs not incurred in the initial installa-
tion, training, or start up of smart grid functions. 
(6) Expenditures for travel, lodging, meals or 
other personal costs. 
(7) Ongoing or routine operation, billing, cus-
tomer relations, security, and maintenance expendi-
tures. 
(8) Such other expenditures that the Secretary 
of Energy determines not to be Qualifying Smart 
Grid Investments by reason of the lack of the ability 
to perform smart grid functions or lack of direct re-
lationship to smart grid functions. 
(d) SMART GRID FUNCTIONS.—The term ‘‘smart 
grid functions’’ means any of the following: 
(1) The ability to develop, store, send and re-
ceive digital information concerning electricity use, 
costs, prices, time of use, nature of use, storage, or 
other information relevant to device, grid, or utility 
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operations, to or from or by means of the electric 
utility system, through one or a combination of de-
vices and technologies. 
(2) The ability to develop, store, send and re-
ceive digital information concerning electricity use, 
costs, prices, time or use, nature of use, storage, or 
other information relevant to device, grid, or utility 
operations to or from a computer or other control 
device. 
(3) The ability to measure or monitor electricity 
use as a function of time of day, power quality char-
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 
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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 
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; 
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(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 
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 
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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 
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 
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