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BILL AS INTRODUCED 2007-2008

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H.123

Introduced by Representatives Masland of Thetford, Deen of Westminster, Edwards of Brattleboro, Klein of East Montpelier, Mitchell of Barnard and Shand of Weathersfield

Referred to Committee on

Date:

Subject:  Public service; micro‑grid

Statement of purpose:  This bill proposes to allow the public service board to authorize the establishment and operation of micro‑grids within the service areas of distribution utilities.  The bill proposes to establish who is eligible to establish a micro‑grid; the characteristics of such a system; and a notice process.  It proposes to address bilateral exchanges of power and other services between a micro‑grid and a distribution utility, and requires the board to address interconnection issues, agreements between a micro‑grid firm and a distribution utility, licensing requirements for micro‑grid firms, and product quality requirements, among other issues.

AN ACT RELATING TO AUTHORIZING THE DEVELOPMENT AND IMPLEMENTATION OF MICRO‑GRIDS WITHIN THE SERVICE AREA OF A DISTRIBUTION UTILITY

It is hereby enacted by the General Assembly of the State of Vermont:


Sec. 1.  30 V.S.A. § 233 is added to read:

§ 233.  MICRO‑GRID AUTHORIZATION

(a)  The public service board may authorize cooperatives or for‑profit companies other than distribution utilities to establish one or more micro‑grids under this section, provided that:

(1)  a micro‑grid will serve more than one distinct legal entity; and

(2)  a micro‑grid will have one or more independent sources of electric power generation or storage, or both; and

(3)  there is compliance with the requirements of this section.

(b)  Micro‑grids authorized under this section shall have a maximum capacity level of 20 MW and shall serve no more than 100 customers.  The board by order or rule shall develop a symmetric tariff that governs the bilateral transactions of power and other services between micro‑grids and the relevant distribution utility, and shall consider the costs and benefits that may be incurred or provided to the state’s electric power system, by allowing the establishment of a particular micro‑grid.  If a micro‑grid is smaller than 1 MW, it should be served under a standard commercial tariff, which may include both time of day and capacity charges.  In this situation, power sales to the relevant distribution utility shall be covered under the standard tariff for sales by small independent generators.

(c)  A micro‑grid firm and a distribution utility may reach contractual agreements that supersede the basic rates established by the board.  A distribution utility may enter a contractual agreement with a micro‑grid firm without review by the board, provided that the size of the tariff does not exceed a 20‑percent reduction in the basic rates.  Larger reductions shall be subject to board review and approval.  All special tariff agreements shall be set for a fixed term which shall not exceed 20 years, but subsequent renegotiation and extension of special tariffs shall be allowed.

(d)  An applicant for micro‑grid approval shall notify the board and department and the relevant distribution utility no less than nine months in advance of its intent to establish a micro‑grid.  The notice shall include the capacity, location, and number of customers expected on the micro‑grid and an estimate of the power sale and purchase transactions anticipated with, or through, the relevant distribution utility.  It shall include an analysis of the demands on the distribution system associated with scheduled micro‑grid maintenance and plausible unscheduled micro‑grid outages.

(e)  The board shall establish standards for interconnection in order to assure safe and reliable operation, including provisions that address how soon a distributed power resource must disconnect from the distribution system after a distribution system power outage occurs.  However, if a distribution utility has installed intelligent distributed control, the standard shall specify that when a fault occurs in the distribution system, and distributed resources such as micro‑grids are not threatened by large fault currents, micro‑grids should electronically query the distribution system to ask whether they should stay connected in order to supply limited service to nearby customers or disconnect for safety or other reasons.

(f)  The board shall establish approved interconnection specifications and rates for interconnection under which the distribution utility shall be required to cover one‑half of the costs of interconnection.  Tariffs or interconnection standards for micro‑grid systems shall specify minimum power quality supplied by and to a micro‑grid, and the interconnection system shall be designed and tested to meet the power requirements of the system.  Power requirements and any associated penalties in tariffs or interconnection standards shall apply equally to distribution utilities and to micro‑grid firms.

(g)  The board shall establish licensing procedures for micro‑grid firms, which shall include requirement that:  an office be maintained within the state; the applicant has the necessary financial, management, and technical capabilities; necessary records be maintained; and the firm be accessible to the board, the department, consumers, and the distribution utilities of the state.  In addition, an applicant must demonstrate the products and services it will provide; billing and customers dispute resolution methods; a line of credit; a mechanism for collecting any state fees and taxes; a method for meeting minimum electric quality standards and a method for providing data such as consumption and reliability data to customers and to the state.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us