Top-6 Smart Grid Legal Risks

Smart grids are the wave of the future due to their ability to better meet customer demand, reduce power plant operational costs, and provide more robust data and analytical capabilities.  For these reasons, many utilities are currently exploring smart grid use.  However, the approach must be cautious, especially since there are several smart grid legal risks that must be accounted for.

Top 6 Smart Grid Legal Risks

According to this Utility Dive article, there are 6 commonly misunderstood smart grid legal risks that all utilities must be aware of.  Below is a summary of each one.

1. Utilities do not tend to have robust experience with large-scale technology and software deployments, which often results in delayed implementation timelines and can make the legal and contracting work tricky due to the many hiccups that can appear along the way.
2. Smart grids require ongoing maintenance and repair throughout their life cycles, and these services are often contracted out to specialty firms.  However, these firms are notorious for trying to limit as much of their liability as possible, so buyer beware.
3. There is no one-stop shop – the best smart grid components typically come from different vendors, each of which have strengths and weaknesses and various approaches to working cooperatively with other component manufacturers.  From a legal and contracting perspective, this can sometimes be akin to herding cats.
4. Technology companies often merge with or acquire other companies, which presents special risks and considerations in terms of continuance of service as originally envisioned.  Contracts must pay special attention to the utility’s rights if one or more of its smart grid vendors is involved in a merger or acquisition. 
5. Internal resource demands must be accounted for.  In other words, smart grid vendors can’t deploy solutions in a bubble, these implementations require assistance from a team of people “on the inside.”  This could encompass up to 10 employees who will participate in varying degrees for several years, so these costs must be properly estimated to gauge overall ROI.
6. Outside legal and technology consultants will be needed to ensure that the utility, which most times will have no experience with smart grids, doesn’t get contractually bamboozled by a vendor.

So, there you have it – the top-6 smart grid legal risks for utilities.  Like emergency planning, it’s all about being prepared for as many scenarios as possible.  Good luck!