191 
as the ‘‘Commission’’), in cooperation with other relevant 
federal agencies, shall coordinate with smart grid stake-
holders to develop protocols for the establishment of a 
flexible framework for the connection of smart grid devices 
and systems that would align policy, business, and tech-
nology approaches in a manner that would enable all elec-
tric resources, including demand-side resources, to con-
tribute to an efficient, reliable electricity network. 
(c) SCOPE OF FRAMEWORK.—The framework devel-
oped under subsection (b) shall be designed— 
(1) to accommodate traditional, centralized gen-
eration and transmission resources and consumer 
distributed resources, including distributed genera-
tion, renewable generation, energy storage, energy 
efficiency, and demand response and enabling de-
vices and systems; 
(2) to be flexible to incorporate— 
(A) regional and organizational differences; 
and 
(B) technological innovations; and 
(3) to consider include voluntary uniform stand-
ards for certain classes of mass-produced electric ap-
pliances and equipment for homes and businesses 
that enable customers, at their election and con-
sistent with applicable State and federal laws, and 
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192 
are manufactured with the ability to respond to elec-
tric grid emergencies and demand response signals 
by curtailing all, or a portion of, the electrical power 
consumed by the appliances or equipment in re-
sponse to an emergency or demand response signal, 
including through— 
(A) load reduction to reduce total electrical 
demand; 
(B) adjustment of load to provide grid an-
cillary services; and 
(C) in the event of a reliability crisis that 
threatens an outage, short-term load shedding 
to help preserve the stability of the grid. 
(4) Such voluntary standards should incor-
porate appropriate manufacturer lead time. 
SEC. 258. STATE CONSIDERATION OF SMART GRID. 
Section 111(d) of the Public Utility Regulatory Poli-
cies Act of 1978 (16 U.S.C. 2621(d)) is amended by add-
ing at the end the following: 
‘‘(16) CONSIDERATION OF SMART GRID IN-
VESTMENTS.—Each State shall consider requir-
ing that, prior to undertaking investments in 
nonadvanced grid technologies, an electric util-
ity of the State demonstrate to the State that 
the electric utility considered an investment in 
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a qualified smart grid system based on appro-
priate 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 rate-
payers 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 re-
turn 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 elec-
tric utility or other party of the State to 
deploy a qualified smart grid system to re-
cover in a timely manner the remaining 
book-value costs of any equipment ren-
dered obsolete by the deployment of the 
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