In recent testimony before the Senate Finance Committee, an official of the Demand Response and Advanced Metering Coalition (DRAM) urged Congress to spur the faster deployment of demand response, smart meters and other components of a smart electricity grid.

DRAM executive director Dan Delurey briefed the members of the Senate Committee on the benefits of demand response and smart grid technologies and what steps the Congress can take so that smart technologies are deployed by utilities as soon as possible and so that demand response resources become a greater part of the nations electricity mix.

Delurey's testimony before the Senate focused on the following benefits of demand response and smart grid technologies such as smart meters, the benefits of which are:

  • Consumers get information on their electricity usage that they have never had before, resulting in better management of electricity usage and reducing overall consumption.
  • The ability to dynamically dispatch demand response -- and to precisely measure and verify that it was delivered -- allows it to be used during peak periods instead of additional power plants. Plants dispatched at peak are often the highest cost and least environmentally friendly plants available. In this vein, demand response has potential for use as a dynamic emissions management tool.
  • Demand response can be coupled with renewable resources to make the latter more viable, especially during peak periods. The result would be an expansion and acceleration of the overall development of renewable energy resources.
  • Demand response technologies and practices will not only lead to greater energy efficiency but also to greater accountability of energy reductions, something that will be increasingly important under any policy where emissions are constrained and reduction-based offsets are monetized.

In his Senate testimony, Delurey outlined four steps that the Congress could take to increase demand response and the deployment of smart technologies:

  • Accelerate the depreciation schedule for smart metering systems to bring such systems in line with the tax treatment of other high-technology hardware and software-based systems.
  • Institute an Investment Tax Credit (ITC) to stimulate the capital investment needed to modernize the electricity system and create a smart grid.
  • Create a Reduction Tax Credit (RTC) that would be based on electricity savings that have been specifically verified using smart metering and other smart grid technologies. The objective would be to support the growth of demand response in a manner similar to the way that the federal Production Tax Credit (PTC) has helped the renewable energy industry grow and mature over the past decade.
  • Institute a Federal System Benefits Charge (SBC) on electricity that raises funds that could be used to support smart grid investments. The model would be the many State System Benefits Charges that are in place which raise funds for expenditures on energy efficiency and renewable energy.

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