With the introduction of retail competition in the electricity industry, regulatory authorities in many jurisdictions are now overseeing the purchase of electricity at wholesale by electric...
When one age ends, another begins.
As new technologies enable disruptive innovation in energy services, relationships are changing among individuals, communities, and franchised utilities.
These changes present some unique complexities and conflicts. Some public interests seem to be at odds with others, putting utilities in the awkward position of investing on behalf of ratepayers, even as local communities and individuals contemplate a different kind of service.
Communities of various descriptions - from real-estate developments, to sprawling military bases, to municipalities of all sizes - are considering alternatives to standard utility service, in pursuit of several goals:
- Improving community resilience, especially for withstanding and recovering from storms;
- Reducing energy consumption and costs;
- Increasing renewable energy penetration;
- Reducing greenhouse gas (GHG) and other emissions; and
- Supporting the local economy by spurring clean tech development, increasing local self-reliance, and keeping more energy dollars local.
In the pecking order of public interest, where do such community goals fit? Are they best met with utility services and rate-based cost recovery? Or are they luxuries that benefit locals and shouldn't be subsidized by other customers? If the latter, what will be the utility's role in meeting those demands?
The way industry leaders answer those questions could determine how quickly and effectively innovation can benefit customers - and communities.
The U.S. Department of Energy's National Energy Technology Lab (NETL) in Morgantown, W.Va., on January 31 released a funding opportunity announcement (FOA) that aims to "enable communities" to design and deploy microgrids to meet "specific objectives for energy resilience (including protection of critical infrastructure and public resources)." For purposes of this program, NETL defines "community" narrowly, as "a local city, town, village, county, or tribal government."
This definition has caused some angst among microgrid proponents, because it omits other types of communities that aren't created as a unit of local government: industrial parks, commercial districts, condo villages, and other real estate developments, for example, not to mention military bases and college and corporate campuses. Moreover NETL says that an application proposing a "permanently islanded microgrid" likely wouldn't be considered for the program, unless it's being operated as a local utility.
In short, NETL defines a community microgrid as one that's sponsored by an official unit of government and that operates like a utility - using utility distribution infrastructure, serving multiple users, and traversing property lines or utility franchise boundaries.
Related processes are happening in several states, most recently Maryland. At the behest of Gov. Martin O'Malley, the Maryland Energy Administration (MEA) convened the "Resiliency through Microgrids" task force in March. ( Editor's note: I served on the task force.-MTB ) At one meeting, MEA Director Abigail Hopper referred participants to a statement intended to focus the task force on public purpose microgrids. "A public purpose microgrid must provide uninterrupted electric service to a series of critical community assets across multiple properties, such as community centers, commercial hubs, and emergency service complexes," the statement read. "A public purpose microgrid