H. R. 6—298 
SEC. 1306. FEDERAL MATCHING FUND FOR SMART GRID INVESTMENT 
COSTS. 
(a) MATCHING FUND.—The Secretary shall establish a Smart 
Grid Investment Matching Grant Program to provide reimburse-
ment of one-fifth (20 percent) of qualifying Smart Grid investments. 
(b) QUALIFYING INVESTMENTS.—Qualifying Smart Grid invest-
ments 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 purposes of estab-
lishing energy conservation standards under part B of title 
III of the Energy Policy and Conservation Act of 1975 (42 
U.S.C. 6291 et seq.), the documented expenditures incurred 
by a manufacturer of such appliances associated with pur-
chasing or designing, creating the ability to manufacture, and 
manufacturing and installing for one calendar year, internal 
devices that allow the appliance to engage in Smart Grid func-
tions. 
(2) In the case of specialized electricity-using equipment, 
including motors and drivers, installed in industrial or commer-
cial applications, the documented 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 communications devices to enable 
smart grid functions, the documented expenditures incurred 
by the electric utility to purchase and install such monitoring 
and communications devices. 
(4) In the case of metering devices, sensors, control devices, 
and other devices integrated with and attached to an electric 
utility system or retail distributor or marketer of electricity 
that are capable of engaging in Smart Grid functions, the 
documented expenditures incurred by the electric utility, dis-
tributor, or marketer 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 coordinate oper-
ations of regional electric grids, the documented expenditures 
for purchasing and installing such equipment that allows Smart 
Grid functions to operate and be combined or coordinated 
among multiple electric utilities and between that region and 
other regions. 
(7) In the case of persons or entities other than electric 
utilities owning and operating a distributed electricity gener-
ator, the documented expenditures of enabling that generator 
to be monitored, controlled, or otherwise integrated into grid 
operations and electricity flows on the grid utilizing Smart 
Grid functions. 
(8) In the case of electric or hybrid-electric vehicles, the 
documented expenses for devices that allow the vehicle to 
engage in Smart Grid functions (but not the costs of electricity 
storage for the vehicle). 
(9) The documented expenditures related to purchasing 
and implementing Smart Grid functions in such other cases 
as the Secretary shall identify. In making such grants, the 
Secretary shall seek to reward innovation and early adaptation,
H. R. 6—299 
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 following: 
(1) Investments or expenditures for Smart Grid tech-
nologies, devices, or equipment that are eligible for specific 
tax credits or deductions under the Internal Revenue Code, 
as amended. 
(2) Expenditures for electricity generation, transmission, 
or distribution infrastructure or equipment not directly related 
to enabling Smart Grid functions. 
(3) After the final date for State consideration of the Smart 
Grid Information Standard under section 1307 (paragraph (17) 
of section 111(d) of the Public Utility Regulatory Policies Act 
of 1978), an investment that is not in compliance with such 
standard. 
(4) After the development and publication by the Institute 
of protocols and model standards for interoperability of smart 
grid devices and technologies, an investment that fails to incor-
porate any of such protocols or model standards. 
(5) Expenditures for physical interconnection of generators 
or other devices to the grid except those that are directly 
related to enabling Smart Grid functions. 
(6) Expenditures for ongoing salaries, benefits, or personnel 
costs not incurred in the initial installation, training, or start 
up of smart grid functions. 
(7) Expenditures for travel, lodging, meals or other personal 
costs. 
(8) Ongoing or routine operation, billing, customer rela-
tions, security, and maintenance expenditures. 
(9) Such other expenditures that the Secretary 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 relationship 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 receive digital 
information concerning electricity use, costs, prices, time of 
use, nature of use, storage, or other information relevant to 
device, grid, or utility operations, to or from or by means 
of the electric utility system, through one or a combination 
of devices and technologies. 
(2) The ability to develop, store, send and receive digital 
information concerning electricity use, costs, prices, time of 
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 characteristics 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 communicate such information 
instantaneously and automatically for purposes of enabling 
automatic protective responses to sustain reliability and secu-
rity of grid operations.
H. R. 6—300 
(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 devices. 
(6) The ability of any appliance or machine to respond 
to such signals, measurements, or communications automati-
cally or in a manner programmed by its owner or operator 
without independent human intervention. 
(7) The ability to use digital information to operate 
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 operating reserves, and provide fre-
quency regulation. 
(9) Such other functions as the Secretary may identify 
as being necessary or useful to the operation of a Smart Grid. 
(e) The Secretary shall— 
(1) establish and publish in the Federal Register, within 
1 year after the enactment of this Act procedures by which 
applicants who have made qualifying Smart Grid investments 
can seek and obtain reimbursement of one-fifth of their docu-
mented expenditures; 
(2) establish procedures to ensure that there is no duplica-
tion 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; 
(3) maintain public records of reimbursements made, recipi-
ents, and qualifying Smart Grid investments which have 
received reimbursements; 
(4) establish procedures to provide, in cases deemed by 
the Secretary to be warranted, advance payment of moneys 
up to the full amount of the projected eventual reimbursement, 
to creditworthy applicants 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 Qualifying Smart Grid invest-
ment is not made; and 
(5) have and exercise the discretion to deny grants for 
investments that do not qualify in the reasonable judgment 
of the Secretary. 
(f) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 
to be appropriated to the Secretary such sums as are necessary 
for the administration of this section and the grants to be made 
pursuant to this section for fiscal years 2008 through 2012. 
SEC. 1307. STATE CONSIDERATION OF SMART GRID. 
(a) 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 
the following: 
‘‘(16) CONSIDERATION OF SMART GRID INVESTMENTS.— 
‘‘(A) IN GENERAL.—Each State shall consider requiring 
that, prior to undertaking investments in nonadvanced grid 
technologies, an electric utility of the State demonstrate
H. R. 6—301 
to the State that the electric utility considered an invest-
ment in a qualified smart grid system based on appropriate 
factors, including— 
‘‘(i) total costs; 
‘‘(ii) cost-effectiveness; 
‘‘(iii) improved reliability; 
‘‘(iv) security; 
‘‘(v) system performance; and 
‘‘(vi) societal benefit. 
‘‘(B) RATE
RECOVERY.—Each State shall consider 
authorizing each electric utility of the State to recover 
from ratepayers any capital, operating expenditure, or 
other costs of the electric utility relating to the deployment 
of a qualified smart grid system, including a reasonable 
rate of return on the capital expenditures of the electric 
utility for the deployment of the qualified smart grid 
system. 
‘‘(C) OBSOLETE EQUIPMENT.—Each State shall consider 
authorizing any electric utility or other party of the State 
to deploy a qualified smart grid system to recover in a 
timely manner the remaining book-value costs of any equip-
ment rendered obsolete by the deployment of the qualified 
smart grid system, based on the remaining depreciable 
life of the obsolete equipment. 
‘‘(17) SMART GRID INFORMATION.— 
‘‘(A) STANDARD.—All electricity purchasers shall be pro-
vided direct access, in written or electronic machine-read-
able form as appropriate, to information from their elec-
tricity provider as provided in subparagraph (B). 
‘‘(B) INFORMATION.—Information provided under this 
section, to the extent practicable, shall include: 
‘‘(i) PRICES.—Purchasers and other interested per-
sons shall be provided with information on— 
‘‘(I) time-based electricity prices in the whole-
sale 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 units, expressed in kwh, pur-
chased by them. 
‘‘(iii) INTERVALS
AND
PROJECTIONS.—Updates of 
information on prices and usage shall be offered on 
not less than a daily basis, shall include hourly price 
and use information, where available, and shall include 
a day-ahead projection of such price information to 
the extent available. 
‘‘(iv) SOURCES.—Purchasers and other interested 
persons shall be provided annually with written 
information on the sources of the power provided by 
the utility, to the extent it can be determined, by 
type of generation, including greenhouse gas emissions 
associated with each type of generation, for intervals 
during which such information is available on a cost- 
effective basis. 
‘‘(C) ACCESS.—Purchasers shall be able to access their 
own information at any time through the Internet and 
on other means of communication elected by that utility