By Faren Bartholomew
A new microgrid is potentially coming to Ward 8 in Washington, D.C. In April 2022, the Federal Emergency Management Agency (FEMA) funded the new St. Elizabeths microgrid, a project that intends to bolster community resilience by maintaining power at several critical locations in Ward 8 in the event of an outage. FEMA awarded several D.C. agencies $20 million to construct the microgrid through its new Building Resilient Infrastructure and Communities grant program (BRIC), designed to fund projects that lower the risks and mitigate the impacts of disasters on communities. The BRIC grant program outlines its guiding principles as “supporting communities through capability- and capacity-building; encouraging and enabling innovation; promoting partnerships; enabling large projects; maintaining flexibility; and providing consistency.” In fiscal year 2020, when BRIC selected St. Elizabeths to receive funding, BRIC had $500 million in available program funding. For fiscal year 2021, BRIC’s program funding doubled, with $1 billion in available funding to distribute to selected resiliency projects for states, territories, and tribes.
While the BRIC program funds various projects that work toward building climate resiliency, several microgrid-related proposals have either received funding or are currently in review as viable grant candidates. For example, BRIC is presently further reviewing funding a feasibility study for California’s Robinson Ranchera Microgrid. However, St. Elizabeths Microgrid remains the only actual microgrid construction project to receive a BRIC grant. With St. Elizabeths supposedly breaking ground as the nation’s first FEMA-funded microgrid, D.C. Mayor Muriel Bowser hopes it will provide a “national model” for similar projects.
St. Elizabeths microgrid is supposed to provide power to St. Elizabeths’ east campus, a psychiatric hospital in the District, as well as the new Cedar Hill Regional Medical Center, the Unified Communication Center (UCC), the D.C. Homeland Security and Emergency Management Agency’s Emergency Operations Center, and a newly constructed men’s shelter. The microgrid will increase energy reliability because it will operate as a small autonomous electric grid that can function separately from the larger power grid. This means the microgrid can maintain localized power if the larger grid experiences an outage, which is especially important for hospital settings and emergency communications centers. Specifically, the microgrid is supposed to provide electricity, chilled and hot water through on-site solar and battery storage, multiple utility feeds, and last resort backup diesel generators. The proposed microgrid also reportedly has large financial benefits. Bracken Hendriks, an energy finance consultant to the D.C. government on the project, calculated that St. Elizabeths’ microgrid could lead to cost savings of more than $100 million over the next ten years. Hendriks argues that the microgrid would result in $5 million to $10 million in energy costs savings, and savings between $8 million to $12 million because the microgrid would supplant a hospital energy plant and associated equipment. Hendriks also predicted that the lack of a hospital energy plant would enable the hospital to construct an entire extra floor for patient rooms and services.
However, new microgrids face regulatory hurdles. The D.C. Public Service Commission proposed regulations in July 2022 that would require microgrid operators seeking to serve multiple customers to comply with the same regulations as large electric utilities. This proposal would require microgrid developers to form regulated utilities in order to create multiuser microgrids with no distinction among the number or size and sophistication of the customers to be served. The rule would also require multiple customer microgrids to obtain certificates of public convenience and have their customer rates approved by the D.C. Public Service Commission. Considering the administrative costs of compliance and the economic uncertainty surrounding what a multisite, multiple customer microgrid project would entail, D.C. microgrid providers argue that the proposed rule will stymy microgrid developments in the District. The rule, if adopted as proposed, would not directly affect the St. Elizabeths microgrid since under the current configuration the D.C. government would be the only consumer of the microgrids’ output. But it would inhibit any expansions or reconfigurations that would serve additional customers and bar other multiuser microgrids from developing.
In initial comments, the proposed rule was largely applauded by the local utility, PEPCO. Indeed, the new rule imposes the types of requirements that PEPCO argued were necessary in the filings it made in opposition to a previously proposed microgrid for the Walter Reed site redevelopment. In this proceeding, PEPCO argued among other things that the rules were important for customer protection, noting the special role of the PSC and the DC Office of the People’s Counsel (OPC) in assuring that protection. PEPCO proposed, however, that the multiple-customer microgrids that it might own should be carved out from the requirements imposed on others. Every other intervenor, however, roundly criticized the proposal, with the vast majority arguing it was inflexible, ill-suited, would discourage multiple-customer microgrids, and create barriers that were contrary to meeting the Commission’s goals for emissions reductions and resiliency.
The parties critical of the new rule included OPC which, among other points, refuted PEPCO’s assertion that the new rules were needed for OPC to adequately protect customers, and the DC Department of Energy and Environment, which argued that the “proposed regulations would harm the microgrid market in the District of Columbia and stymie the District’s ability to meet its climate commitments.” The DC Department of Energy and Environment further noted that PEPCO’s proposal to exempt itself from regulation for microgrids it might own was unnecessary since current law that bars PEPCO from owning generation would make ownership of a microgrid by PEPCO illegal. Another party, Grid2.0 Working Group, criticized the Commission for failing to recognize the “balanced and measured” recommendations that were developed through a stakeholder working group that was convened under the MEDSIS program, under the PSC’s prior leadership.[1] The DC Commission on Climate Change & Resiliency asserted that the “regulations appear ill-suited for market-based and community-based development.” Industry participants NORESCO LLC and Chesapeake Solar and Storage Association were also among those critical of the new rule. No action has been taken by the Commission in the docket since the last reply comments were filed in September 2022.
Although the D.C. PSC’s hotly contested rule proposal, as proposed, does not necessarily bar a St. Elizabeths microgrid serving only one user, progress has nevertheless stalled under a different branch of government. In April 2022, Mayor Bowser announced that St. Elizabeths microgrid would be operational by 2023. In June 2022, the DC government opened a solicitation for a “microgrid partner” who would design and operate the new microgrid. Bids were initially due on August 9, 2022. DC PSC’s chilling regulatory proposal was released between the offer and bid date. As of early summer 2023, the bid had not yet been awarded. Thus, even bidders willing to move forward in the uncertain haze created by the D.C. PSC’s proposed rule, without knowing the scope of the final rule, are left in limbo.
PSC’s rule proposal and the delay in constructing St Elizabeths’ microgrid demonstrate the regulatory and political obstacles the microgrid market faces in D.C. The uncertain regulatory landscape threatens to stifle opportunities for the District to build community resilience by supplying reliable energy to overburdened communities. While it remains to be seen whether the rule proposal will be adopted, the threat of its approval looms over both present microgrid projects, such as St. Elizabeths’, and all future microgrid projects in D.C.
Additional sources:
- Elisa Wood, District of Columbia Seeks Microgrid Developer for Medical and Communications Facilities, Microgrid Knowledge (July 5, 2022), https://www.microgridknowledge.com/google-news-feed/article/11427191/district-of-columbia-seeks-microgrid-developer-for-medical-and-communications-facilities.
- Lisa Cohn, Microgrids as Utilities in D.C.? One Developer Pushes Forward While Others are Wary, Microgrid Knowledge (Jan. 23, 2023), https://www.microgridknowledge.com/community-microgrids/article/21546157/microgrids-as-utilities-in-dc-one-developer-pushes-forward-while-others-are-wary.
- Press Release, Muriel Bowser, Mayor Bowser Announces a New Microgrid at St. Elizabeths East to Increase Resiliency and Reliability (Apr. 22, 2022), https://mayor.dc.gov/release/mayor-bowser-announces-new-microgrid-st-elizabeths-east-increase-resiliency-and-reliability.
- FEMA, Building Resilient Infrastructure and Communities, FEMA.Gov, https://www.fema.gov/grants/mitigation/building-resilient-infrastructure-communities.
- FEMA, Building Resilient Infrastructure and Communities FY 2020 Subapplication Status, FEMA.Gov, https://www.fema.gov/grants/mitigation/building-resilient-infrastructure-communities/after-apply/fy-2020-subapplication-status.
- FEMA, Building Resilient Infrastructure and Communities FY 2021 Subapplication and Selection Status, FEMA.Gov, https://www.fema.gov/grants/mitigation/building-resilient-infrastructure-communities/after-apply/fy-2021-subapplication-status.
- Alex Koma, Is D.C. Fighting An Energy Upgrade for the New St. Elizabeths Hospital to Help Pepco? Local Environmentalists Think So., Wash. City Paper (Feb. 24, 2022), https://washingtoncitypaper.com/article/549709/is-d-c-fighting-an-energy-upgrade-for-the-new-st-elizabeths-hospital-to-help-pepco-local-environmentalists-think-so/.
[1] Disclosure: The author’s academic advisor, Donna Attanasio, was among those who presented before the MEDSIS Working Group in favor of regulatory flexibility for microgrids and also participated in a few of the past meetings of the Grid2.0 Working Group.
Faren Bartholomew
Law Student at the George Washington University Law School, JD Candidate ’24.
