A utility microgrid bill is headed to the Pennsylvania House of Representatives following unanimous committee approval Monday.
The Veterans Affairs and Emergency Preparedness Committee voted in favor of HB 1412, which clears the way for utilities to build microgrid pilot projects and recover their costs through rates.
The bill arose out of uncertainty about the utility role in microgrid development in the restructured state. Pennsylvania’s competitive rules limit a utility’s ability to build and own generation. Because microgrids include generation assets , utilities have been reticent to move forward with projects without assurance that they will be allowed to recover costs.
The bill allows utilities to recover costs as long as the the state public utility commission deems them prudent.
If the microgrid participates in wholesale power markets, the utility must channel any revenue from the transactions to ratepayers. Microgrids can earn such revenue by selling energy or ancillary services to the grid, when their services are not needed by their immediate customers.
Microgrids for resiliency
But the committee’s main focus was on the use of microgrids for back-up power when the central grid fails. Rep. Steve Barrar (R-Chester/Delaware), who championed the bill, cited the benefit of microgrid power during disasters. Microgrids island from the grid during a power outage and activate their own generators to serve local customers.
“It’s important to provide resiliency in the provision of electricity for our emergency responders, especially during power outages. We all know that medical issues and other emergencies don’t stop during outages. In fact, they can be more frequent, with vulnerable citizens being exposed to more extreme temperatures and a lack of food and necessities,” Barrar said.
The microgrid bill also was championed by utilities Duquesne Light and PECO, along with the Edison Electric Institute, which testified in its favor in June.
A bill amendment requires that the PUC evaluate results from the first pilot microgrid after five years and report them to the General Assembly. The report must include a cost/benefit analysis and specific criteria upon which energy storage and microgrids should be developed and deployed. The report must also detail whether microgrids and energy storage are in the public’s best interest.