New Jersey Eyes Microgrids to Augment Reliability


Excerpt from the December 9, 2016 issue of PUR's Utility Regulatory News

Fortnightly Magazine - January 2017

Seeking to avoid a recurrence of the prolonged and widespread power outages that millions of New Jersey citizens endured in the aftermath of 2012's Super Storm Sandy, the New Jersey Board of Public Utilities, BPU, has endorsed a study and report proffered by its staff which recommended that electric utilities in various designated counties within the state embark on an initiative to add microgrid facilities to their systems.

In support of its decision, the board cited the experience of Princeton University during the 2012 weather event and contrasted it to the Town of Princeton's experience. The board related that because the university had long maintained its own combined heat and power unit, CHP, the school had sufficient generational capability to keep the lights on and its buildings open, while the surrounding town, which had no source of backup generation, remained without electric service for days.

The report states that following Sandy, various local governmental agencies sought state assistance in establishing alternative sources of generation for those times when mainline power sources fail. Board staff listed requests totaling eight hundred megawatts of backup capacity at an estimated cost of upwards of five hundred million dollars. Board staff said that a few localities have been successful in installing the requisite additional capacity, but as a whole, the state's need for backup generation systems at critical facilities remains largely unmet.

Consequently, board staff determined that microgrids, whether based on CHP, fuel cell, solar, or some other technology, offer the promise of increased system resiliency. According to the BPU staff study, microgrids encompass not only enhanced reliability benefits, but also environmental ones, as they can supplement or even replace conventional fossil fuel-fired generation during normal "blue sky" days as well as during "dark sky" major weather events or other emergency situations.

The report notes that, especially with CHP-based microgrids, energy efficiency is advanced as well. As an example, board staff noted that a CHP system can be about twice as efficient as a traditional generating facility because CHP units can use the heat byproduct for some other purpose, such as actual space heating.

According to BPU staff's findings, it clearly would be in the public interest and in comportment with the state's energy policies and laws for the four electric utilities serving the state to commence the process of designing and constructing community-centric microgrid projects. Optimally, such "town center" developments would be located at or near such critical municipal or county sites as police, fire, or other emergency response stations; administrative buildings; hospitals and other healthcare facilities; and water and wastewater treatment plants. As to that latter category, the report underscored the fallout that came when sewage treatment centers across New Jersey lost power after Sandy, allowing large quantities of raw sewage to enter the state's water supply.

Board staff related that the Federal Emergency Management Agency, FEMA, had identified nine New Jersey counties as most affected by Sandy as well as most vulnerable to future storms. They likewise had been declared most in need of reclamation and infrastructure improvements.

The report therefore urges the utilities to concentrate their initial efforts on those nine jurisdictions. The board said it agreed with its staff's assessment that each electric utility should craft at least one town center microgrid system within its territory, with a special emphasis on the nine FEMA-designated counties.

The board similarly concurred with its staff's assertions that the time is ripe for investments in microgrids, as the cost of solar, wind, and other distributed generation technologies has been steadily decreasing while energy policies nationwide have been increasingly promoting renewable resources.

The board further acknowledged the propriety of its staff's suggestion that the utilities be directed to continue to make progress in rolling out their advanced metering infrastructure, AMI, and other smart meter/smart grid facilities. From the BPU's perspective, microgrids will produce the greatest benefits when AMI is deployed simultaneously.

The four utilities entrusted with fulfilling the town center microgrid construct are Atlantic City Electric Company, Jersey Central Power & Light Company, Public Service Electric & Gas Company, and Rockland Electric Company. Not surprisingly, the nine FEMA-identified counties that are the focus of the microgrid strategy are those that are along New Jersey's coastline: Atlantic, Bergen, Cape May, Essex, Hudson, Middlesex, Monmouth, Ocean, and Union.

Microgrid Report, November 30, 2016, New Jersey Board of Public Utilities


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