Will New Jersey Lawmakers Step up for Microgrids before the Next Disaster?

Nov. 18, 2019
Superstorm Sandy inspired New Jersey to pursue town center microgrids. But stakeholders worry that the projects may never see the light of day unless they get a boost through public private partnerships (P3), which require passage of a pending bill.

As New Jersey prepares for a second round of funding for town center microgrids, some worry that the microgrids may never see the light of day.

The problem? The projects need an infusion of private money to go forward. But state rules make it difficult for government to partner with private industry on energy projects.

Town center microgrids are to New Jersey what community microgrids are in other states — generally complex projects designed to electrify multiple critical facilities, such as fire stations, hospitals, and wastewater treatment plants, during a power outage.

Still smarting from the onslaught of SuperStorm Sandy in 2012, the state allotted more than $2 million in 2017 to 13 town center microgrids chosen via a competitive application. The communities used the money for feasibility studies and now the state is preparing to announce a second round of funding for engineering studies.

But for the communities to move into development and construction, they need an infusion of private capital.

Public private partnership (P3) bill

Assemblyman Andrew Zwicker, a Democrat, a physicist and the only scientist in the New Jersey Legislature, believes he has a solution. Zwicker put forward a bill (A4535/S2958) that would allow public private partnerships, or P3, for energy infrastructure projects. The state would create an Energy P3 Unit to carry out the work.

“It provides the framework for how the state of New Jersey can and must partner with the private sector to develop energy-related projects and get them approved and get them built,” said Zwicker in a recent interview with Microgrid Knowledge.

The bill appears to have support, but it is moving at a crawl. Introduced October 15, 2018, the legislation won unanimous approval in May from the Assembly Science, Innovation and Technology Committee, which Zwicker chairs. On the Senate side, the Environment and Energy Committee also approved the bill without contest. (One member was absent.)

Despite its lack of controversy, the proposal has yet to make its way to the full legislature for a vote. Zwicker, who was recently re-elected to office, hopes lawmakers will take it up in the current 10-week lame duck session. But a bevy of other issues are monopolizing their time — legalizing marijuana, driver’s licenses for undocumented immigrants, business tax incentives, banning plastic bags and pension reform.

If no vote is taken during the lame duck session, the legislation must be refiled next year and go through the committee approval process again.

Meanwhile, industry stakeholders worry about New Jersey being unprepared for another storm like Sandy even though the technology is readily available now to keep power flowing to critical services. More than two million households lost power during the storm and the state’s economy took a $30 billion hit. Thirty-seven people died.

“The politics is not moving at the speed of technology,” said Alexander Aksanov the CEO of Barnaby Energy, a New Jersey-based developer, builder and operator of microgrids.

Without the approval of the pending legislation to authorize public private partnerships for microgrid development, the town microgrids, he said, “just won’t get built. And then the next storm is going to come through, power is going to go out. And there’s going to be more people that pass away, for reasons that should have never happened.”

Tipping point for New Jersey microgrids

Gail Lalla, a client manager at T&M Associates who worked on the Hoboken Resilient Microgrids Toolkit, also sees the legislation as crucial.

“We’re at the tipping point of getting a lot more projects to design build in possibly the course of a couple months — depending on whether we can move the needle on the regulatory/market side,” she said.

She noted that building a simple, standalone microgrid on a campus is not difficult — New Jersey has many. Town center microgrids are more complex and may cross utility rights of way, raising potential franchise issues.

Under the bill, either a government or private entity can propose a microgrid through a P3.

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The legislation also works to smooth the way for town center microgrids by:

  • Permitting P3 to develop, design, build, operate, or maintain, energy projects, and to assume financial, developmental, operational, managerial and administrative responsibility
  • Allowing the energy project to serve both government and privately owned buildings
  • Not requiring that distributed energy resources within a microgrid be located on the customer’s property
  • Letting a microgrid serve multiple customers, as long as one is a government entity
  • Allowing a microgrid to use privately owned distribution wires to interconnect distributed energy with customers served by the microgrid and within its boundary
  • Requiring a microgrid compensate the an electric utilities if it uses utility facilities
  • Setting bidding, ownership and leasing parameters for government entities seeking private partners

New Jersey Assemblyman
Andrew Zwicker

For scientist/legislator, a bigger picture

As a scientist Zwicker has been deeply engaged in carbon reduction efforts. In addition to serving as a legislator, he is head of communications and public 0utreach at Princeton University’s Plasma Physics Laboratory. He sees P3 as part of a larger effort to help the state reach its climate and renewable energy goals. The state’s latest energy master plan, now in draft form, calls for 100% clean energy by 2050.

“How are we possibly going to get there?” he said. “The public sector and the private sector working together gives us the greatest opportunity to move as quickly as possible, so that it’s no longer a renewable energy future, but it is a renewable energy present.”

Track news about the progress of New Jersey’s town center microgrids. Subcribe to the free Microgrid Knowledge newsletter.

About the Author

Elisa Wood | Editor-in-Chief

Elisa Wood is an award-winning writer and editor who specializes in the energy industry. She is chief editor and co-founder of Microgrid Knowledge and serves as co-host of the publication’s popular conference series. She also co-founded RealEnergyWriters.com, where she continues to lead a team of energy writers who produce content for energy companies and advocacy organizations.

She has been writing about energy for more than two decades and is published widely. Her work can be found in prominent energy business journals as well as mainstream publications. She has been quoted by NPR, the Wall Street Journal and other notable media outlets.

“For an especially readable voice in the industry, the most consistent interpreter across these years has been the energy journalist Elisa Wood, whose Microgrid Knowledge (and conference) has aggregated more stories better than any other feed of its time,” wrote Malcolm McCullough, in the book, Downtime on the Microgrid, published by MIT Press in 2020.

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