Sec. 4. Smart water heater demonstration program
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In this section: The term eligible entity means— an electric utility; and a retail service provider of electricity. The term program means the demonstration program established under subsection (b)(1). Not later than 1 year after the date of enactment of this Act, the Secretary, in consultation with the Director of the National Science Foundation, shall establish a demonstration program under which the Secretary shall provide grants to eligible entities to carry out projects for the design and production of smart water heater optimization programs.
The goals of the program are— to demonstrate large-scale implementation of smart water heaters as an energy storage resource used on a regular basis as part of grid operation to improve the operational efficiency of the electric grid; to demonstrate control of water heaters to compensate for the intermittent nature of renewable energy resources; to diminish the market barriers to the broad adoption of smart water heaters; to provide funding to address nonrecurring engineering costs; and to demonstrate best practices for— customer participation and satisfaction; and maximizing customer benefits.
To be eligible to receive a grant under the program, an eligible entity shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require, including a proposal described in subparagraph (B). An eligible entity shall submit as part of the application under subparagraph
(A)a proposal that— demonstrates that the eligible entity will closely collaborate with one or more manufacturers of water heaters or water heater control equipment to coordinate sales and marketing across distribution channels; defines a specific geographical area in which the smart water heaters will be available and in operation for a period of not less than 1 year, but ideally for the full useful life of the smart water heaters; demonstrates that the one or more participating manufacturers of water heaters or water heater control equipment identified under subclause
(I)support the standards described in clause (ii); includes the stated intent and plan of the eligible entity to maintain the project after the program ends; demonstrates the ability to execute control events on not fewer than 120 days per calendar year; stipulates a plan for increasing the number of smart water heaters on the electric grid, including by retrofitting existing hot water heaters with controls; and includes— an interoperability plan for the proposed project; a cybersecurity plan for the proposed project; a privacy plan for the proposed project, including a provision relating to the protection of the privacy of individual customer information, the secure storage, handling, and destruction of data, and the access of energy use data by third parties; and a formal approval of the project from the regulatory body of jurisdiction, such as a State public utility commission. With respect to a water heater produced or retrofitted under a project receiving a grant under the program, the standards referred to in clause (i)(III) are the following: Water heaters or retrofit devices shall have— an ANSI/CTA–2045 communication interface; or a communication interface using a standard or specification for a nonproprietary communication interface from a recognized standards-based organization. Water heaters shall support one or more standard application protocols, such as— OpenADR; IEEE 2030.5; or the CTA–2045 application layer. The Secretary shall provide grants under the program to eligible entities carrying out projects in diverse geographical regions of the United States to ensure that projects are carried out in service territories with diverse utility business models. The amount of a grant provided to an eligible entity under the program for a project shall be not less than $500,000 and not more than $10,000,000. There is authorized to be appropriated to carry out this section $50,000,000, to remain available for a period of 10 years following the fiscal year for which the amounts were appropriated.