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MICROGRIDS

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MICROGRIDS ( microgrids )

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MICROGRIDS: INSOURCING MORE RELIABLE ENERGY RESOURCES TO CONNECTICUT TOWNS AND CITIES FIRST DRAFT FOR DISCUSSION PURPOSES ONLY Connecticut towns and cities have been frustrated that innovations in microgrid regulation, technology and financing conceived of by Connecticut law makers, companies and energy improvement districts are being implemented to develop microgrids in other states that compete with Connecticut economically. Besides leading the nation in passing laws and providing financial incentives for microgrids, the State hosts offices for some of the world’s best microgrid technology companies, such as General Electric, Fuel Cell Energy, Burns & McDonnell, van Zelm Engineers and United Technologies. Also, the Energy Improvement District concept first created and enacted by Connecticut legislators has been adopted by a number of other states. It has been frustrating for municipal leaders to learn, therefore, that while several states that compete with Connecticut have seen their first microgrid projects, no working community microgrid has ever been installed in-state. One of the most sophisticated fuel cell projects is being installed to provide clean reliable power to trading floors at the new World Trade Center (“WTC”) that will compete against those in Connecticut. Last year, UBS nearly moved the largest trading floor in the world from Stamford to the WTC. Connecticut-based engineers are implementing path- breaking microgrid projects in New York, the District of Columbia, California and Maryland. Meanwhile, grid expansion plans being filed with the State do not call for a higher percentage of local generation in the future and instead propose increasingly higher costs for modernizing the centralized grid system. By contrast, Consolidated Edison of New York has committed to 800 MWs of customer-owned distributed energy before 2030 and has launched an initiative known at the 3G System of the Future to work with developers and customers on microgrid interconnection technologies and best sites for microgrid pilot projects. Similarly, seven utility companies that are members of the Edison Electric Institute (“EEI”) have formed a working group to consider new utility business models that accommodate customer-owned distributed generation. To quote the mission statement of the EEI group “the marriage of smart grid (SG) technologies with distributed energy resources (DER) has the potential to change fundamentally traditional utility operating paradigms, and the utility business. This has become more pressing as public policy encourages the development of DER owned by customers and third parties. We think it is vital, therefore, to understand the implications of these new technologies and policies.” By not developing local microgrids, many of Connecticut’s towns and cities also believe that they are losing opportunities to earn income from contributing to the stability of New England’s transmission network. For example, the operator of the transmission grid, the New England Independent System Operator, provides incentives to communities that best manage power use and generation during times of peak power demand. Page 5

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