(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-
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 
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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. 
(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. 
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(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 
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-
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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: 
‘‘(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— 
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‘‘(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.— 
‘‘(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— 
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