H1412B1777A05878 MSP:CMD 03/09/18 #90 A05878
AMENDMENTS TO HOUSE BILL NO. 1412
Sponsor: REPRESENTATIVE BARRAR
Printer's No. 1777
Amend Bill, page 1, lines 6 through 17; page 2, lines 1
through 30; page 3, lines 1 through 16; by striking out all of
said lines on said pages and inserting
Section 1. Title 66 of the Pennsylvania Consolidated
Statutes is amended by adding a section to read:
§ 2816. Microgrid and energy storage.
(a) Pilot projects.--An electric distribution company may
propose energy storage or microgrid pilot projects for review
and approval by the commission. In determining whether a pilot
project under this section is in the public interest, the
commission shall consider the costs and benefits of the project,
in addition to the potential of the pilot project to:
(1) facilitate the use of diverse electric supply
options in this Commonwealth, including distributed energy
resources; and
(2) enhance electric distribution, resiliency and
operational flexibility.
(b) Project requirements.--
(1) A microgrid pilot project shall be designed to
serve:
(i) multiple customer premises, including at least
two essential public purpose assets;
(ii) a single premises used by a Federal, State or
local government customer operating critical government
infrastructure and facilities nec essary to serve the
public during emergencies; or
(iii) a public utility premises.
(2) A petition filed by an electric distribution company
seeking approval of a microgrid or energy storage pilot
project shall include all of the following:
(i) The location of each distribution service
interruption occurring within the electric distribution
company's service territory in the preceding five-year
period.
(ii) The number of customers, other microgrids and
energy storage facilities and critical government
infrastructure located in proximity to the proposed
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microgrid pilot project.
(3) A microgrid pilot project may include distributed
energy resources owned by customers, an electric distribution
company or other entities.
(4) A distributed energy resource included in a pilot
project and owned by an electric distribution company shall
be competitively procured.
(5) The commission may establish reasonable cost caps on
microgrid pilot projects.
(6) Nothing under this section shall be interpreted to
require an electric distribution company to own, develop or
deploy energy storage or microgrids.
(c) Commission review.--
(1) Five years after the date the first pilot project is
approved, the commission shall evaluate the results of each
approved pilot project, including the project costs and
benefits and data on the interconnection and integration of
distributed energy resources and wholesale energy markets.
(2) Within 180 days of completion of the evaluation
under paragraph (1), the commission shall issue an order
determining whether the continued development and deployment
of microgrids and energy storage facilities is in the public
interest.
(3) If the commission determines that the development of
microgrids is in the public interest, the commission may
continue to accept and consider petitions seeking approval of
microgrid pilot projects consistent with the commission's
order.
(d) Report to the General Assembly.--If the commission
determines that the development and deployment of microgrids and
energy storage facilities are in the public interest, the
commission shall, within 60 days of entry of the order under
subsection (c)(2), submit a report to the General Assembly
containing recommendations that shall include all of the
following:
(1) The ownership, development and deployment of
microgrids by entities other than an electric distribution
company.
(2) The specific circumstances and criteria under which
energy storage and microgrids should be developed and
deployed.
(3) Legislative or other recommendations the commission
deems appropriate.
(e) Recovery.--An electric distribution company may recover
in the electric distribution company's distribution rates
established under section 1308 (relating to voluntary changes in
rates) reasonable and prudently incurred costs, including a
pretax return on, and a return of, the original cost of an
energy storage facility or microgrid constructed pursuant to an
approved pilot project and the reasonable and prudently incurred
expenses to operate and maintain the facility.
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(f) Wholesale market participation.--Energy storage and
microgrids pilot projects authorized under this section may
participate in wholesale energy, capacity and ancillary services
markets. Net proceeds resulting from the participation of a
distributed energy resource owned by an electric distribution
company in wholesale energy, capacity or ancillary markets shall
be credited to distribution customers.
(g) Rate structure and cost allocation.--The commission
shall determine the appropriate rate structure and cost
allocation for the just and reasonable recovery of prudently
incurred costs from and the allocation of wholesale market
proceeds to distribution customers.
(h) Definitions.--As used in this section, the following
words and phrases shall have the meanings given to them in this
subsection unless the context clearly indicates otherwise:
"Distributed energy resource." Any of the following:
(1) A distributed generation resource.
(2) Energy efficiency.
(3) Energy storage.
(4) Electric vehicle charging infrastructure.
(5) Demand response technology.
(6) Any other process, resource or technology approved
by the commission.
"Energy storage." A commercially available technology that
is capable of absorbing energy, storing the energy for a period
of time and thereafter dispatching the energy.
"Essential public purpose asset." A facility or site which
supports crucial community functions including, public safety
answering points, police stations, fire companies and fire
departments, emergency medical services agencies, public works,
public transportation, emergency shelters, grocery stores, gas
stations and other entities that provide access to food, water
or shelter when a microgrid is operating in island mode.
"Island mode." The physical disconnection of a microgrid and
customers within the microgrid from the distribution system of
the electric distribution company.
"Microgrid." A group of interconnected loads and distributed
energy resources within clearly defined electrical boundaries
that acts as a single controllable entity with respect to an
electric distribution company's distribution system which can
connect to and disconnect from a distribution system and operate
either connected to the distribution system or in island mode.
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