Washington (Platts)--13Jun2011/532 pm EDT/2132 GMT

The US government will offer another $250 million in loans to add new technologies to the aging power grid and launch programs meant to speed integration of renewable resources, according to a White House report on smart grid policy released Monday.

The policy report includes the formation of a Renewable Energy Rapid Response Team, to be co-led by DOE, the White House Council on Environmental Quality and the Department of Interior. The group will try to improve coordination and timely review of renewable projects and transmission lines.

The report also says the Department of Agriculture's Rural Utilities Service will provide $250 million in loans for smart grid infrastructure.

RUS has provided millions of dollars in loans over the years for utilities, including numerous loans for advanced meters.

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Obama administration officials noted during a White House event Monday that the policy framework touches on several elements of smart grid efforts, such as cybersecurity and data privacy, standards development, consumer engagement, demand-side management and supporting investment by utilities and the private sector in infrastructure and clean energy technologies.

Yet because much of the smart grid technologies are at the transmission and distribution level for utilities and subject to cost recovery approval from state regulators, the federal document presents some challenges in bringing the policy outline to fruition, industry representatives commented at the event.

Because the costs of smart grid technologies are precise while the benefits are diffuse, and about 70% of the costs are at the state level, the cost-recovery process challenges the regulatory structure set up for utilities, said Bob Shapard, Chairman and CEO of Texas utility Oncor and chairman of the GridWise Alliance. The utility sector will have to build the case that the benefits are so compelling that customers will want new energy technologies, but "I don't think we can solve this state-by-state" and the federal guidance is welcome by the industry, Shapard said.

Several industry representatives and trade groups welcomed it as another signal by the Obama administration to support clean energy technologies, demand-side management plans and other steps already being taken by utilities and others in the energy management sector.

The administration has overseen billions of dollars in stimulus funding for smart grid efforts, with billions more invested by utilities over the past few years.

Secretary of Energy Steven Chu noted that when there are federal mandates on certain policies, pushback at the grass roots level can result.

The good news for smart grid advocates is "we have no authority" and thus cannot dictate smart grid directives from the federal level, he joked.

The report also launched a private sector initiative called Grid 21, to promote consumer-friendly innovations and tools to help consumers manage their electricity use.

--Tom Tiernan, tom_tiernan@platts.com