Pennsylvania bill would allow utilities to earn returns on microgrids, storage

Dive Brief:

  • A Republican lawmaker in Pennsylvania has introduced a bill to authorize a microgrid and energy storage pilot program, culminating in a report analyzing whether utility ownership of the facilities is in the public interest.
  • House Bill 1412 would authorize a pilot program allowing utilities to earn a rate of return on the cost of constructing microgrids, and also allow for wholesale participation in markets with the benefits accruing to customers.
  • Last year, Exelon subsidiary PECO Energy proposed a pair of integrated microgrids to boost reliability a high-density area, but withdrew the plans after customers voiced concerns. The legislation sponsored by Rep. Stephen Barrar (R) would address some of the issues that were raised.

Dive Insight:

Pennsylvania is interested in microgrid development—the Public Utilities Commission in 2015 approved a five-year investment plan for PECO that included one—but a proposal that PECO made last year ultimately fell apart. According to the Philadelphia Daily News, a wide range of stakeholders felt it was inappropriate for PECO to own power generation, and questioned who would benefit from the project.

Barrar's legislation would authorize utilities to propose, develop and profit from microgrids and energy storage. Within five years of a pilot project being approved, the Public Utilities Commission would develop a report evaluating the outcome and determining "the circumstances under which the ownership, development and deployment of energy storage and microgrids by electric distribution companies may be in the public interest."

Two months after making that determination, the PUC would need to open a rulemaking to establish regulations that encourage further deployment of energy storage and microgrids.

The legislation also addresses the question of who will benefit from the microgrids, saying they "may participate in wholesale energy markets with net proceeds from participation credited to customers." The utility will be allowed to earn a return on the cost to install, operate and maintain the storage assets.

The bill was referred to the Committee on Veterans Affairs and Emergency Preparedness.

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Filed Under: Distributed Energy