Last week the Biden Administration announced a tectonic rule that would, when finalized, mandate data portability across the entire banking system.
The question we’ve been asking is: Will Biden’s Department of Energy do the same for electricity and natural gas utilities?
Two years ago, the Biden Administration issued an Executive Order on competition, which called for a “whole of government” approach to establish “a fair, open, and competitive marketplace.” On Wednesday, the Consumer Financial Protection Bureau released a 299-page Notice of Proposed Rulemaking. The proposed Personal Financial Data Rights rule would:
…jumpstart competition by forbidding financial institutions from hoarding a person’s data and by requiring companies to share data at the person’s direction with other companies offering better products.
The rule includes an indictment of anti-competitive banking practices that are – let’s be honest – practically identical to electric and gas utilities’:
Currently, people’s access to their financial data is inconsistent from one financial institution to another. Even among companies that do share data at a customer’s request, the terms of the sharing vary greatly. This lack of norms in the market allows incumbents to play games to their own customers’ detriment – including hiding or obscuring important data points like prices.
In energy, we have seen data inconsistencies and widely-varying terms and conditions between utilities. We’ve also seen utilities play a deceptive shell game in which the customer data necessary for participation in virtual power plants (such as transmission zone, peak load contribution, service voltage, or participation in conflicting programs) are not electronically accessible.
CFPB’s proposal for Open Banking would modernize the financial sector, catching up the U.S. to much of the developed world. The question now is whether the Biden Administration will take the same approach to energy.
On Thursday last week, the Department of Energy (DOE) announced $1.1 billion in Smart Grid Grants. This is the same grant program that Congress funded in 2009 and is widely credited with kick-starting advanced metering across the U.S. But has DOE made its funding contingent upon the same data portability principles as in banking?
The answer appears to be “no.”
None of the 32 utilities granted $1.1 billion last week mention data portability, nor does DOE address it in their project summaries. This is despite DOE saying, in its Funding Opportunity Announcement, that smart grid projects are required to:
…support data standards (e.g., Green Button Connect), interoperability, and non-discriminatory data access on a real-time basis.
So will DOE put pen to paper and follow through on their stated requirements? There is still time for the Biden Administration to act: the awards are contingent upon negotiation with each recipient. If DOE mandated data portability, 36 million meters nationwide would be impacted, 22% of the nation’s total, nearly doubling the current number of meters with a Green Button Connect mandate.
The next 30 days will be critical. Without action, DOE will grant $250 million of taxpayer funds to seven (7) utilities that were among the worst offenders of Recovery Act funds from a data portability perspective: AEP, Central Maine Power, DTE, FPL, Oklahoma Gas & Electric, Rappahannock Electric Cooperative, and SMUD. These utilities represent 15.1 million electric meters, or about 9.3% of the total nationwide. According to our report last year, 97% of smart meters funded by DOE had their data-sharing capabilities deactivated. In their 2014 final grant reports to DOE, utilities like AEP and DTE bragged about “enabling customers to make more informed decisions about electricity usage to control costs,” but then they shut off access to usage data (in the case of AEP) or required customers to pay $1.99/month to a utility affiliate in order to access real-time electricity usage data (in the case of DTE).
We can’t afford to duplicate past mistakes. Whether for reasons of ideological consistency, climate, or competition, DOE needs to act now. 80-160 gigawatts of virtual power plants are waiting.