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Smart Grid Initiatives Should Not Hinder Energy Competition

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Last month, Congressman Jerry McNerney (D-Stockton), who sits on the U.S. House Committee on Energy & Commerce, introduced the Smart Grid Advancement Act of 2013. See the full article.

Direct Energy has developed a smart grid policy that urges policymakers and regulators to ensure that smart grid initiatives such as the Smart Grid Advancement Act do not hinder competition in states that empower customers to choose an alternative retail energy supplier. Specifically, policymakers and regulators should consider the following:

1) Distinguishing utility and competitive supplier functions: Direct Energy advocates that competitive suppliers, rather than the utility, should be responsible for developing and offering dynamic pricing products that make use of the interval data provided by smart meters.

2) Data control and access issues: Because smart meters have the ability to capture a significant amount of customer-specific data, customers should “own” their data and be permitted to decide whether such information is disseminated to third parties, including competitive suppliers such as Direct Energy. It is necessary for competitive suppliers to access such information to enroll and appropriately bill a customer on a dynamic pricing product, but it should be the customer, not the utility, who controls which third parties have access to such data.

3) Standardization of data exchange between utilities and third parties: It is also important for policymakers to consider standardization of data exchange between utilities and third parties because this will improve meter readings, billing and enhance the ability of customers to take advantage of real-time price differences.

4) Customer billing: Direct Energy believes that an incumbent utility should not be able to tie its provision of services and products in competitive markets to its position as the regulated monopoly utility. A competitive market with smart meters should include a purchase of receivables program whereby the utility purchases the receivables of competitive supplier and directly bills the customer, unless the customer elects to receive separate bills.

As smart meter initiatives are developed and implemented, Direct Energy urges its customers and policymakers to consider these concepts to ensure that such initiatives foster competition and enable customers to reap the full benefits of time-of-use and dynamically priced products that are possible with interval data from smart meters.

Posted: August 15, 2013