State Regulatory Opportunities and Impediments to Smart Grid

Tags: Technology Policy

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

On August 25, 2010, the Silicon Flatirons Center brought together a number of experts in the fields of economics, technology and policy, including public utility commissioners, economics professors, financial analysts, and policy advisors, to discuss regulatory issues facing smart grid deployment in the United States. The discussion was held at the University of Colorado School of Law and touched upon the economics of the smart grid, incentives for the variety of stakeholders in the smart grid effort, the technological challenges of implementing a ―smart‖ electricity generation and distribution system and its constituent technologies, and the policy implications at both state and federal levels.

The theory of New Institutional Economics – an emerging area of economic thought that gives greater weight to the role institutions play in the operation of economic systems – may have significant relevance in this area. As cost of service regulated entities, utilities are not currently incentivized properly to increase efficiency through innovation, while state regulators face the real risk that at this stage smart grid technologies are not yet a proven investment, so for early adopters the costs could outweigh the benefits.

In terms of the technologies involved in the smart grid, one question is whether they should be open or closed and the implications this may have for near- and long-term competition, innovation and policymaking. There are also important privacy questions as to how to approach the large amount of personal data involved.


Know What’s Next