Envisioning the Smart Grid: Network Architecture, Information Control, and the Public Policy Balancing Act

While smart grid development promises benefits for utilities and consumers alike, the public policy surrounding its rollout remains conflicted. Will regulation guide the structure and usability of the smart grid, or will the ways in which the smart grid is already being applied force specific types of regulation? Early decisions by regulators will surely influence the balancing of policy concerns later in the smart grid development process; yet these decisions will be made in a regulatory environment in which utilities may lack the proper incentives to promote energy efficiency and consumer awareness-both functions of the smart grid. This Article examines economic and legal constraints in current utility regulation and describes the policy concerns which impact regulators' decisions.

It then studies the interstate market for consumer usage data as a unique source of innovation within the electricity industry, as well as an example of the opposing interests that regulators will need to balance. In this case, such competing interests include consumer privacy protection and information access for edge service providers. Because of the disconnect between parties affected by smart grid development, exemplified by the information marketplace example, regulators need to act quickly and knowledgeably to prevent the death of innovation in this emerging field.