PUC Tells House Committee Microgrids Offer Many Benefits To Grid, Consumers

Gladys Brown, Chairman of the Public Utility Commission, told the House Veterans Affairs and Emergency Preparedness Committee Monday microgrid systems offer many potential benefits to the electrical grid, including increased resiliency during large scale electric disruption, increased integration of highly efficient Distributed Energy Resources (like solar energy and combined heat and power systems) and potential cost savings for consumers, ratepayers and utilities.

Microgrids serve a small number of electricity users with a local source of power that is able to function independently from the larger electricity grid, but is still connected to it.

Legislation pending in the Committee-- House Bill 1412 (Barrar-R-Delaware)-- would encourage the use of microgrids and energy grid storage capabilities by providing a clearer regulatory framework for approving microgrid systems.

Brown said microgrids fall into three categories: utility owned, privately owned and hybrid microgrid and would encourage changes to House Bill 1412 to encourage all three types of microgrids.

Martyn Nevil, Deputy Director at the PA Emergency Management Agency, told the Committee a strategy that helps people return to normal life as the recovery proceeds begins with the restoration of power and other lifeline centers.

He said microgrid and energy storage solutions are localized grouping of electric storage and systems that normally operate on a macro grid, but cannot disconnect and work as autonomously as physical and economic conditions dictate.

Nevil said they believe it is the efforts to effectively integrate various sources of distributed generation sources within the Commonwealth that is vital.

Tony Cusati, PA chair of the Retail Energy Supply Association, said his members made investments to position themselves to be microgrid providers, noting microgrids are being developed on a large scale without electric distribution company pilots or ratepayer subsidies in many states.

Cusati noted Pennsylvania has a competitive electricity market for electric generation and utilities cannot recover the cost of electricity from all of its customers.  House Bill 1412 would do the opposite and allow utilities to recover costs from all customers.

Cusati said there is nothing preventing private money now from establishing microgrids.

Bill Patterer, PECO Energy Company, said his company strongly supports House Bill 1412 because it will promote the development of microgrids.

Patterer stated PECO is interested in exploring pilot microgrid projects, both to build technical expertise to offer dramatically improved system resiliency to critical customers in communities and to deliver enhanced reliability solutions to all customers.

He said the challenge that utilities in the state face is that Pennsylvania’s utility laws do not define how microgrids and battery storage systems are to be regulated.

Will Agate, CEO NetZero Microgrid Solutions, said he strongly supports the legislation since it will promote the development of scalable microgrids.

He said his company installed the Philadelphia Navy Yard’s microgrid. That project is just one example of successful microgrid pilots in the United States, Agate said.

He said now it is essential to turn the corner to allow a flexible framework of understanding so that the publicly regulated utilities within Pennsylvania can also propose projects of these kinds.

Also providing testimony and comments to the Committee were--

-- Tanya McCloskey, Acting Consumer Advocate, PUC

-- John Caldwell, Chief Economist, Edison Electric Institute

-- Sunil Cherian, CEO  Spirae LLC

-- Rick Hartlein, Georgia Tech National Electric Energy Testing, Research and Applications Center

-- John Stampfel, EATON

A video of the hearing is posted on the Committee Video webpage.

Rep. Stephen Barrar (R-Delaware) is Majority Chair of the Committee and can be contacted by sending email to: sbarrar@pahousegop.com  and Rep. Chris Sainato (D-Lawrence) is Minority Chair and can be contacted by sending email to: csainato@pahouse.net.