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PECO Seeks PUC Approval To Own Distributed Generation, Microgrids

May 23, 2016

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Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

PECO has petitioned the Pennsylvania PUC for authority to conduct a community microgrid pilot, which would include the utility constructing, owning, and operating several distributed energy resource (DER) technologies to power the proposed microgrid, including natural gas engines.

PECO said that, "DERs that can operate in island mode are essential elements of a microgrid to ensure operation of local distribution facilities when those facilities are disconnected from the larger utility distribution system. As explained in the Plan, as part of the Microgrid Pilot, PECO will examine various microgrid research and development issues, including the feasibility of integrating microgrid technology with the distribution system and expanded microgrid capabilities and applications (i.e., integration of customer-owned DER)."

PECO is proposing two integrated microgrids to support a footprint of approximately 388 acres in a high density area of Concord Township with a variety of "essential" public service loads, including healthcare, local emergency services, a retirement community, hotels and gas stations to form a microgrid capable of supplying power to three critical government facilities and twenty-seven public accommodations with a typical aggregate peak load of 8.6 MW

The Concord Township Project is proposed to be powered by a variety of DER technologies. PECO proposes to initially install and test natural gas reciprocating engines (10 MW), ground-mounted solar photovoltaic (PV) installations, two batteries and four dual-port electric vehicle (EV) charging stations

The use of natural gas reciprocating engines ensures that the microgrid will have sufficient generation to meet typical customer peak load during an outage at all times, with the 500 kW of solar PV and 200 kW of batteries included to investigate the use of intermittent resources and storage in microgrid operation. The batteries will also be available to provide uninterruptible power supply to critical government facilities, PECO said

PECO said that, "Notably, the Competition Act did not prohibit EDCs from owning generation or otherwise require them to divest existing generation facilities. See generally 66 Pa.C.S. §§ 2802 and 2804. Furthermore, the Competition Act did not repeal or eliminate provisions of the Code that clearly envision the ownership of generation by electric utilities."

"While PECO believes that the inclusion in distribution base rates of the costs of DERs necessary to operate a microgrid is appropriate given the benefits of the Microgrid Pilot for all distribution customers, there is no existing Commission precedent which clearly authorizes such rate treatment. PECO cannot undertake the significant expense of constructing the Project to enhance reliability and resiliency without certainty that recovery of DER costs in distribution rates is permissible under the Code. Therefore, PECO requests that the Commission issue a declaratory order finding and determining that utility-owned DERs installed as part of a microgrid constitute distribution plant assets that may lawfully be included in a public utility’s distribution rate base in a rate case filed under Section 1308 of the Code, 66 Pa.C.S. § 1308," PECO said

The energy delivered to each customer will be recorded by the customer’s Advanced Metering Infrastructure retail meter in the same manner as during grid-connected mode, and each customer will continue to be billed by its electric generation supplier ('EGS') for generation delivered during island operation in the same manner as they are billed by their EGS for generation delivered during grid-connected mode.

"The operation of the microgrid in island mode will not interfere with the relationship between an EGS and its customers, as EGSs will continue to be provided with meter readings of their customers within the microgrid footprint, which reflect their customers’ electric usage during island operation. Because the microgrid will not be electrically connected to PJM Interconnection, L.L.C. ('PJM') when operating in island mode, EGSs will not be allocated load serving entity responsibilities at PJM for their customers’ load within the microgrid footprint during those periods," PECO said

"During grid-connected mode, the DERs owned by PECO are expected to participate in PJM wholesale markets when it is economic to do so and will not be used to provide default service supply. The net proceeds from any PJM wholesale market transactions involving the DERs will be flowed back to PECO distribution customers" PECO said

PECO noted that it is already partnering with the Philadelphia Industrial Development Corporation (PIDC), Philadelphia’s public-private economic development corporation, on its independent campus electric system at The Navy Yard in Philadelphia to coordinate activities regarding capacity expansion, distribution design and smart grid applications. Pursuant to a DOE-sponsored project, a microgrid network controller technology will be tested in a subgrid at The Navy Yard.

"City of Philadelphia representatives have also confirmed their interest in development of an urban, campus-based microgrid project that supports critical operations and large public events through enhanced reliability and resiliency. PECO looks forward to working in good faith with the City of Philadelphia to identify an appropriate location for consideration. Any such additional microgrid will be the subject of a future petition," PECO said

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