Pepco proposes pilot microgrids in two Maryland counties

Pepco said that it will request that the PSC approve the project before June 1, 2018

Oct 2nd, 2017
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Exelon’s Potomac Electric Power Co. filed with the Maryland Public Service Commission a proposal for a pilot public-purpose microgrid project to provide enhanced energy services in Prince George’s and Montgomery counties, including during emergency events.

Due to the timing of the site selection and other related decisions, the company and the counties are continuing to refine certain aspects of the proposal, including stakeholder outreach, the company said.

As a result, the company plans to supplement the proposal with additional information by Feb. 15, 2018. Pepco added that it requests that the PSC consider holding a technical conference before Dec. 31, in which the company can describe the proposal and receive additional stakeholder feedback.

The company also requested that, beyond the requested technical conference, the PSC accept the filing but hold any further action in abeyance, pending the company’s supplemental filing.

As noted in the proposal, Pepco Holdings, Inc., in March 2016 completed its merger with Exelon, becoming Pepco Holdings LLC. A condition of the PSC’s order approving the merger required that Pepco propose a pilot project for two public-purpose microgrids in the company’s service territory, with one in Prince George’s County and the other in Montgomery County.

Pepco added that the proposal has been developed in coordination with both counties. Pepco said that its staff also met with representatives of the Maryland Energy Administration and U.S. Department of Energy to review the overall microgrid design and to discuss the potential for any available microgrid funding opportunities.

The final selection and approval of the proposed microgrid site location has been made by Prince George’s County, Pepco said, adding that Montgomery County is continuing to evaluate potential locations – the proposal reflects one of those under consideration.

As proposed, the microgrid is anticipated to be designed to serve six Pepco distribution customers, offering essential services to a population of about 220,000 individuals within a five-mile radius. Pepco added that the proposed microgrid participants would include the County Administration Building, the new Prince George’s Regional Medical Center, a medical facility offering health care to the public, a pharmacy, a gas station and a grocery store.

The proposed microgrid design includes such distributed energy resources (DER) as solar photovoltaic (PV), battery energy storage systems (BESS), and natural gas-fired generation, which would be collectively operated to improve the resiliency of the community’s electric supply, Pepco said.

The capacity of the DER within the microgrid would be sized such that it can meet the full load requirements of the microgrid participants at all times, except the Prince George’s Regional Medical Center, which will already have backup diesel generation – the microgrid would serve as a further backup power supply to that facility and would be relied upon in the event of a fuel supply disruption or other impairment to the medical center’s diesel generation.

The microgrid is proposed to include 6.8 MW of distributed generation (DG) capacity and an additional 1.6 MW of energy storage, Pepco added.

In Montgomery County, one potential location that is under consideration is located in Rockville, which is centrally located within the county, accessible to county residents through various modes of transportation, and has the potential for economic development.

At that potential site, the microgrid would be designed to serve 13 microgrid participants, including multiple grocery stores, gas stations, a pharmacy, a fire station, local government, and other facilities that can accommodate the public during periods of prolonged outages, Pepco added.

The proposed microgrid design includes such DER as solar PV, BESS, and natural gas-fired generation that would be collectively operated to improve the resiliency of the community’s electric supply, the company said. The DER capacity within the microgrid would be sized such that it can meet the full load requirements of the microgrid participants, Pepco said, adding that the microgrid is proposed to have 6.8 MW of DG capacity and an additional 0.25 MW of energy storage.

In accordance with its merger commitment, Pepco said that it would competitively source the development and implementation of each microgrid. Pepco said that it proposes to first issue a request for information (RFI) to solicit feedback from market participants on the technical and commercial aspects of the proposal and their qualifications to perform the work. Pepco said that it would incorporate information learned from the RFI process into a subsequent request for proposal (RFP), which would serve as the basis to competitively select the microgrid project developer.

Pepco said that it currently anticipates that because of the RFP, the company would enter into contractual arrangements with the selected developer for the detailed engineering, procurement and construction of the microgrid, as well as subsequent arrangements for operation; Pepco would make recurring payments for microgrid support services.

Subject to the results of the RFP, Pepco proposes that the solar PV and natural gas-fired resources within the microgrid would be owned by the developer or another third party, as determined by the developer, and that the BESS and the microgrid control systems would be owned by Pepco as distribution system assets. Pepco added that in the absence of the availability of an acceptable developer proposal, the company would seek the PSC’s approval to own and operate the microgrids if it can do so at a lower cost.

To ensure that microgrid participants would have the same access to the retail competitive supply market as any other customer, Pepco said that it is proposing that those participants continue to be served by the retail energy supplier of their choosing.

Pepco also noted that it is proposing that the costs of the pilot, net of all other alternative funding resources described in the proposal, be recovered from all customers through its distribution rates. The company said that it proposes that it establish a regulatory asset to capture costs between rate cases and defer them for recovery until the next rate case.

Pepco said that based upon its preliminary estimate of the total project costs, it currently estimates that the total costs of the pilot would be $44.2 million on a net present value basis, and that the resulting estimated first-year annual revenue requirement would have an impact on the typical residential customer’s monthly bill equal to 46 cents.

Among other things, the company said that in its February 2018 update to the proposal, it will request that the PSC approve the project before June 1, 2018, to take advantage of a distribution system investment deferral if Rockville is the selected location for Montgomery County.

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