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The Kentucky Public Service Commission (PSC) has initiated an administrative proceeding to consider the implementation of smart grid technologies - including smart meters - and electricity prices that are tied to the time of usage.

In the order, the PSC says the proceeding will examine all aspects of smart grid technologies, including implementation costs, technical issues and societal impacts. The PSC also will explore whether the use of smart grid technologies can be combined with various dynamic-pricing rate structures to encourage greater energy conservation and efficiency.

All electric utilities in Kentucky have been made parties to the case and have been directed to provide information to the PSC. Kentucky's five major natural-gas distribution companies are also participants, but each company has 30 days to request that the PSC remove them from the case.

Any other parties wishing to become an intervenor or formal participant in the case must file a request with the PSC no later than Oct. 30.

“The purpose of this proceeding is to determine the appropriate course for Kentucky to follow with respect to advanced technologies collectively known as smart grid,” says PSC Chairman David Armstrong. “These technologies enable electric utilities to better manage their systems and may offer customers the opportunity to closely monitor and adjust their electric consumption.”

The PSC has twice before considered the implementation of smart grid standards or requirements in Kentucky.

In 2006, the PSC considered whether to adopt federal smart grid standards set forth in the Energy Policy Act of 2005. Adoption of the standards would have required utilities to offer optional rates that varied according to the time of day, as well as offer smart meters.

The PSC chose not to adopt the standards but required the five electric utilities with generating facilities in Kentucky to offer time-based rates to their largest customers.

The federal Energy Independence and Security Act of 2007 required the PSC to again consider the adoption of federal smart grid standards. 

In October 2011, the PSC decided to adopt the federal standard requiring electric utilities to consider the use of smart grid technologies whenever they invest in their transmission and distribution systems.

However, after considering further issues raised by utility companies, the PSC last month decided to defer a final decision on the federal standard, pending completion of the administrative proceeding it opened this week.

Documents from the earlier case will be incorporated into the record of the new proceeding. This order sets forth an initial schedule for the filing of documents and data gathering in the case. A hearing has not yet been scheduled.



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