Late last week the New York Public Service Commission issued a policy statement that recommends (among other things) that utilities consider using carrier networks for smart grid. Specifically, the PSC stated that “[w]e expect that smart grid technologies will utilize a hybrid of both public and private networks. We urge the electric utilities and communication providers to work together to ensure the appropriate use of commercial facilities, and to limit utility capital investments in dedicated communications infrastructure to those functions where it is appropriate.”

The PSC further explained that “[t]he comments we received reflect a wide variety of opinion regarding the proper role of commercial networks in furnishing smart grid communications. Utilities favored greater use of dedicated systems while telecommunication companies advocate for increased reliance on existing commercial networks. For both economic and technical reasons, the smart grid will likely employ a hybrid public-private approach.” The PSC reasoned that even though “dedicated or proprietary systems may provide certain benefits in functionality and other areas,” costs are likely to be “significant”.

Further, the PSC opined that innovation and customer engagement may be facilitated through using commercial networks. Therefore, it concluded that “the lack of clarity regarding the proper balance of public and private facilities suggests to us that a significant investment in, or commitment to proprietary communications infrastructure at this time may limit future options or incur unnecessary costs.” Additionally, it recommended that “Utility proposals for long-term or large-scale investments in a unified communications infrastructure therefore should demonstrate both that such investments represent the best possible solution and that the utility has adequately considered a range of alternatives, including existing communications infrastructures.” For more information, contact the UTC Legal/Regulatory Department.