Rules make markets, and rules are driving the immediate smart grid activities. However, as customers are making their own energy decisions, such as implementing rooftop solar panels, they too are forcing regulatory activity.

A smart grid policy statement from the various entities that will govern the technology is needed. Other major areas of regulatory interest include demand response and federal eminent domain for transmission siting. At the end of the day, much of the focus needs to be on energy security, not just on renewables, costs or any other dynamic.

In the US, standards are often seen as hindering innovation. However, the industry cannot move forward with conflicting standards. The main focus of the standards should be on interoperability issues as opposed to the specific aspects of operation within a given utility territory.

With 50 states plus several ISOs/RTOs to try different regulatory approaches to a smart grid environment, first movers and earlier adopters will be in a position to set precedence and lead the smart grid market.

A more detailed summary of the executive-level energy and utility industry dialog held at KEMA’s 2^nd annual Utility of the Future conference – including the Regulatory and Policy Directions and Impacts panel – is available on-line and as a download at www.kema.com/utilityfuture2009.