Toronto: Transmitters and distributors in Ontario are expected to bring forward plans for development of a smart grid in the near future. A recent initiative from the OEB (“Developing Guidance for the Implementation of Smart Grid in Ontario”) laid out the process that will be used for developing future rules and guidelines. The OEB initiative followed a directive from the provincial government that established the OEB’s responsibilities in the area, and defined a set of objectives for smart grid development.
Notable amongst the terms set by the government is the requirement for regionally coordinated smart grid implementation. This includes requiring distributors to share information and results of pilot projects and engage in common procurements. The government mandate also specifies that smart grid development should lead to improvements in both cyber-security and customer privacy.
The OEB began a consultation process in January and invited input from interested parties. In February it published submissions presented by 50 organizations and announced the appointment of 25 people to the Smart Grid Working Group. A meeting held on March 1 revealed wide diversity among distributors in terms of how they expect to be able to participate in smart grid development. For further information, see the OEB website under the topic of “Developing Guidance for the Implementation of Smart Grid in Ontario (EB-2011-0004).” Key language from the Minister’s directive is shown below.
Key excerpts from the Minister’s Directive
The following material is extracted from the text of an order in council approved November 23 2010. It is an order to the OEB to encourage transmitters and distributors to move forward with the development of smart grid investments.
“The Board shall take the following steps in relation to the establishment, implementation and promotion of a smart grid:
1. The Board shall provide guidance to licensed electricity distributors and transmitters, and other regulated entities whose fees and expenditures are reviewed by the Board, that propose to undertake smart grid activities, regarding the Board’s expectations in relation to such activities in support of the establishment and implementation of a smart grid.
2. For licensed distributors and transmitters, the guidance referred to in paragraph 1 shall be provided in particular to:
(a) guide these regulated entities in the preparation of plans for the development and implementation of the smart grid, as contemplated in subparagraph 70(2.1)2(ii) of the Act (“Smart Grid Plans”); and
(b) identify the criteria that the Board will use to evaluate Smart Grid Plans.
3. In developing the guidance referred to in paragraph 1, and in evaluating the Smart Grid Plans and activities undertaken by the regulated entities referred to in that paragraph, the Board shall be guided by, and adopt where appropriate, the parameters for the three objectives of a smart grid referred to in subsection 2(1.3) of the definition for “smart grid” as provided for under the Electricity Act, 1998, where such elements of said objectives are set out in Appendices A through C.
4. Further, in developing the guidance referred to in paragraph 1 and in evaluating the smart grid activities of the regulated entities referred to in that paragraph, the Board shall be guided by the following policy objectives of the government:
(i) Efficiency: Improve efficiency of grid operation, taking into account the cost-effectiveness of the electricity system.
(ii) Customer value: The smart grid should provide benefits to electricity customers.
(iii) Co-ordination: The smart grid implementation efforts should be coordinated by, among other means, establishing regionally coordinated Smart Grid Plans (“Regional Smart Grid Plans”), including coordinating smart grid activities amongst appropriate groupings of distributors, requiring distributors to share information and results of pilot projects, and engaging in common procurements to achieve economies of scale and scope.
(iv) Interoperability: Adopt recognized industry standards that support the exchange of meaningful and actionable information between and among smart grid systems and enable common protocols for operation. Where no standards exist, support the development of new recognized standards through coordinated means.
(v) Security: Cybersecurity and physical security should be provided to protect data, access points, and the overall electricity grid from unauthorized access and malicious attacks.
(vi) Privacy: Respect and protect the privacy of customers. Integrate privacy requirements into smart grid planning and design from an early stage, including the completion of privacy impact assessments.
(vii) Safety: Maintain, and in no way compromise, health and safety protections and improve electrical safety wherever practical.
(viii) Economic Development: Encourage economic growth and job creation within the province of Ontario. Actively encourage the development and adoption of smart grid products, services, and innovative solutions from Ontario-based sources.
(ix) Environmental Benefits: Promote the integration of clean technologies, conservation, and more efficient use of existing technologies.
(x) Reliability: Maintain reliability of the electricity grid and improve it wherever practical, including reducing the impact, frequency and duration of outages.
The Board may consider such other factors as are relevant in the circumstances.
5. In furtherance of the government’s policy objective as described in item (iii) of paragraph 4 above, the Board shall undertake a consultation process with licensed electricity distributors and other relevant stakeholders for the purpose of developing a regional or otherwise coordinated approach to the planning and implementation of smart grid activities by licensed electricity distributors that promotes coordination amongst them having regard to, among other things, cost-effective outcomes.
6. Nothing in paragraph 5 shall be construed as limiting the ability of licensed electricity distributors to engage in smart grid activities or the authority or discretion of the Board in exercising its responsibilities in relation to the smart grid activities of licensed electricity distributors pending the development of the regional or coordinated approach referred to in that paragraph.”