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Multi-UserMicrogrids:ObstaclestoDevelopmentand

RecommendationsforAdvancement

November2018

REVISED

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Acknowledgements

This report was prepared by the Institute of Sustainable Energy (ISE) at Boston University,basedoninterviewsandresearchconductedbetweenMayandSeptember2018.

The research underlying this report was conducted under the leadership of the principalinvestigator,Prof.KiraFabrizio. Prof.Fabriziowasassisted in this researchbyRichardStuebi(PresidentofFutureEnergyAdvisors),withinternsupportfromJosefBenzaouiandRyanSmith.Collectively,Prof.FabrizioandMessrs.Stuebi,BenzaouiandSmithservedastheresearchteamforthisreport.

This report was produced in collaborationwith the Northeast Clean Energy Council (NECEC)Institute,withwhichISEhaspartneredinconductingthisresearch.NECEC’smissionistocreateaworld-classcleanenergyhubintheNortheasternUnitedStatesdeliveringglobalimpactwitheconomic,energyandenvironmentalsolutions.

Feedbackonearlierdraftsofthereportwasprovidedby:

• WillAgate,VPofMicrogridServices,Ameresco• Dr.JacquelineAshmore,ExecutiveDirectorofISE,BostonUniversity• JanetGailBesser,ExecutiveVicePresidentofPolicy&GovernmentAffairs,NECEC• SusanBuchan,E4TheFuture,DirectorofEnergyProjects• JamieDickerson,PolicyAnalyst,NECEC• Dr.PeterFox-Penner,DirectorofISE,BostonUniversity• Prof.PaulMcManus,QuestromSchoolofBusiness,BostonUniversity• JulieMichals,E4TheFuture,DirectorofCleanEnergyValuation• AlistairPim,VicePresidentofInnovation&Partnerships,NECEC• PeterRothstein,PresidentofNECEC

Thisrevisedversionofthereporthascorrectedanerroronpage31regardingMassachusettsHouseBill4324.Theresearchteamissolelyresponsibleforanyremainingerrorsinthisrevisedfinalversionofthisreport.

FundingforthisresearchwasprovidedviaagenerousgiftfromE4TheFuture.

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Table of Contents 1. Acknowledgements.........................................................................................................3

2. ExecutiveSummary.........................................................................................................6

3. IntroductionandContext.................................................................................................8

WhatisaMulti-UserMicrogrid?.............................................................................................................8

WhyStudyMUMs?................................................................................................................................11

4. ProjectDescription........................................................................................................14

ResearchObjectives...............................................................................................................................14

StudyMethodology...............................................................................................................................14

5. KeyFindings..................................................................................................................16

WhatarethemainbarrierstosuccessfulMUMdevelopment?...........................................................16

InabilitytoMonetizeResilience(andOtherValueStreams).............................................................16

HowisResilienceValued?.............................................................................................................17

ConflictswithPre-ExistingRightsAssociatedwithElectricityDelivery.............................................19

PreferentialRightsforUtilitiestoCrossPublicRights-of-Way..........................................................20

AmbiguityAboutViableMUMOwnershipModels...........................................................................21

UtilityAssertionofRightsViaLegalAction........................................................................................21

LackofSuitableRisk-MitigationStructures.......................................................................................22

InsufficientLeadershiptoCoalesceSolutions...................................................................................23

WhatactionshavesuccessfullyaddressedbarrierstoMUMdevelopment?........................................24

UtilityOwnershiporStrongUtilityParticipationinMUMs...............................................................24

CreativelyLeveragingOpportunitiestoReduceMUMCosts............................................................26

TailoringBusinessModelstoSituation-SpecificNeeds.....................................................................26

PhasedDevelopmenttoSpreadCostsOverTime.............................................................................27

RobustExecutionCapabilityandStakeholderCollaboration............................................................28

6. Recommendations.........................................................................................................30

StakeholderActions...............................................................................................................................30

PolicyInitiativestoAdvanceMUMs.................................................................................................31

FutureResearch.....................................................................................................................................36

7. Appendices....................................................................................................................38

Appendix1:SummaryofMUMsSelectedforCaseStudies..................................................................39

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Appendix2:NortheastUnitedStatesmicrogriddataset.......................................................................49

Appendix3:IndividualsInterviewed.....................................................................................................53

8. Endnotes.......................................................................................................................54

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Executive Summary Multi-user microgrids (MUMs) are an emerging approach to electricity service that allowsneighboringcustomers toobtaingreater resilience inelectricity service, fromasetof locally-installed distributed energy resources (DERs) of their own choice (sometimes including solarenergy and energy storage), through joint participation in a power production and deliverysystemthatcanoperateindependentlyfromthehostelectricutility.Todate,therearerelativelyfewMUMsinoperation.Thisisprimarilybecauseregulatedutilityservice from the electricity grid has historically been adequate and cost-effective for mostcustomers – and it is highly likely that this will remain largely true, so thatMUMs will notbecome widespread anytime soon. However, with improving microgrid economics andincreasingcustomerneedsforresilience,therewillbeagrowingnumberofsituationsinwhichMUMswillbecomeviable. Eventoday,certainsetsofcustomersfindthebenefitsofferedbyMUMstooutweightheadditionalcosts.Despite this, MUM activity has been extremely limited because of a number of significantbarriersassociatedwithimplementingthisnovelbusinessmodel.Exacerbatingthis,thereisadearthofcomprehensivestudyonthesebarriers.Consequently,thegoalofthisresearchistoprovideafirstinvestigationintothebarrierstoMUMdevelopmentandsomeearlyhypothesesonpotentialremediesthatwouldfacilitateMUMdevelopmentwhenandwheretheymightbeagoodsolution–withaparticularfocusontheNortheasternU.S.Based on review of publicly-available information augmented by targeted interviews withindividualswho have been active in theMUMarena, the research uncovered seven primarybarrierstoMUMdevelopment:

• InabilitytoMonetizeResilience(andOtherValueStreams)

• ConflictswithPre-ExistingRightsAssociatedwithElectricityDelivery

• PreferentialRightsforUtilitiestoCrossPublicRights-of-Way

• AmbiguityAboutViableMUMOwnershipModels

• UtilityAssertionofRightsViaLegalAction

• LackofSuitableRisk-MitigationStructures

• InsufficientLeadershiptoCoalesceSolutions

OurresearchfurthersurfacedthefollowingactionsthathavegenerallybeenhelpfultodateinaddressingthesebarriersandfacilitatingdevelopmentofMUMs:

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• UtilityOwnershiporStrongUtilityParticipationinMUMs

• CreativelyLeveragingOpportunitiestoReduceMUMCosts

• TailoringBusinessModelstoSituation-SpecificNeeds• PhasedDevelopmenttoSpreadCostsOverTime• RobustExecutionCapabilityandStakeholderCollaboration

Basedonourfindings,theresearchteamrecommendsthefollowingactivitiesbystakeholderscommittedtoadvancingMUMviability:

• IncreasingAwarenessandUnderstandingofMUM-SpecificIssues• StrengtheningRegulationsandPoliciestoImproveMUMPlayingField• StandardizingMUMDesignandImplementation• CreatingViableMechanismsValuingandMonetizingMUMServices• LearningfromMUMInnovationsElsewhere• OrganizingforGreaterImpact

ThereportconcludeswithsomesuggestionsontopicalareasthatmeritadditionalresearchtoimprovetheabilitytosuccessfullydevelopMUMswheretheycancreatesignificantvalueforcustomers.

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Introduction and Context

What is a Multi-User Microgrid? Multi-usermicrogrids,orMUMsforshort,areanemergingapproachintheenergysectorthatprovides multiple energy consumers the ability to self-supply electricity during grid outageswhilecontinuingtoleveragetheexistingpowergridduringthemajorityoftimewhenthegridisoperatingnormally.Formostcustomersandinmostlocationswheretheelectricitygridisrobust,electricityserviceoffered through traditional distribution utilities operating as regulated naturalmonopolies isfullysatisfactory–andthisislikelytoremainthecaseforthemostpart.However,forcertaincustomersandlocations,thebenefitsofadoptingaMUMtoaugmentconventionalelectricityservicemayoutweightheadditionalcosts.Moreover,thistrendislikelytoincreasedueto:

• Recent advances in the performance and economics of distributed energy resource(DER)technologiessuchassolarenergyandenergystorage

• Increasingdesire forelectricity customers tomake theirownchoicesaboutelectricitysupply,particularlyfromcleanersources(e.g.,solar)thanavailablefromthegrid

• Growingnecessityforcontinuouselectricitysupplyinadigitizedworldinthefaceofa

growing array of natural and human forces that threaten interruptions in grid-basedelectricityservice

Referring to the last point, nonstop 24/7/365 access to electricity under any and allcircumstances is sometimes referred to as “resilient power”. The following four examplesillustrateacutecustomerneedsforresilientpower:

• A data center providing web and cloud-based services may be required to paycompensatorydamagesormayotherwise losebusiness fromdissatisfied customers ifoperationsaredisruptedbyalossofpowersupply.

• A fertility clinic that maintains patient eggs at a constant chilled temperature via anindustrialrefrigerationunitmayfacesignificantlegalriskfromlosingpowerforevenashortperiodoftime.

• Certainhealthcareandseniorcitizenresidentcommunities.

• A municipality in a region prone to extreme weather events (such as hurricanes)

becomes subjected to financial and social costswhen power is interrupted to criticalcommunityfacilities(suchasemergencyresponseservices).

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Forcustomerslikethese,anincreasinglycommonplacemethodtoobtainresilientpoweristoimplementamicrogrid.Althoughseveralalternativedefinitions foramicrogridhavebeenput forward, thedefinitionestablishedbytheU.S.DepartmentofEnergy(DOE)isoneofthemostfrequentlycited,andissuitableforthepurposesofthisreport:

“Agroupofinterconnectedloadsanddistributedenergyresourceswithin clearly defined electrical boundaries that acts as a singlecontrollable entity with respect to the grid. A microgrid canconnect and disconnect from the grid to enable it to operate inbothgrid-connectedorisland-mode”.i

AnillustrationofagenericmicrogridfittingDOE’sdefinitionispresentedbelow.

Source:“MicrogridsManagement”byKatiraei,Iravani,HatziargyriouandDimeas,IEEE,2008

AcriticalconceptwithinDOE’sdefinition,theterm“island-mode”meansthatthemicrogridcansustainelectricityserviceforitscustomerswhenthelargergrid(sometimesreferredtointhisreport as the “macrogrid”) is experiencing an outage. The microgrid is able to preserveelectricityservicebydisconnectingasnecessary fromthemacrogrid,at thepointofcommon

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coupling (PCC) where the microgrid normally interfaces with the macrogrid at one of itssubstations,andbecominganindependentnetworkunderitsowncontrol.Foramicrogridtohave the capability of islanded-operation, its network must have a controllable set ofdistributed energy resources (DERs) – including a portfolio of distributed generation (DG)devices, probably of multiple types (e.g., solar, wind, CHP), and most likely also distributedstorage (DS)equipment– tocontinuesupplyingelectricity to itscustomerswithoutaccessingthemacrogrid.Whilemicrogridactivityhasbeenincreasinginrecentyears,mostmicrogridstodatehavebeenimplemented for a single customer. However, many situations exist in which multipleelectricitycustomerscouldbenefitfromjointlyparticipatinginacommonmulti-usermicrogrid(MUM), provided that they are in reasonable proximity to each other and generally shareneeds/preferencesinregardstoresilientpowerandpreferredsourcesofelectricitygeneration.For the purposes of this research, a MUM must fit the DOE’s description of a microgrid –specifically in regards to the ability to island – while also serving multiple decision-makingentities,witheachcustomerpayingseparatelyforthemicrogridservices.Becausetheydonotprovideislandingcapability,“virtualmicrogrids”werenotconsideredMUMs.To be considered a MUM for this report, the microgrid does not need to serve multiplebuildingsorfacilities,aslongasdifferenttenantswithinasinglebuilding/facilitypurchasethemicrogrid’sservicesseparately.Incontrast,microgridswhichservemultiplefacilitiesownedbya commonparty (such as amunicipality or university)werenot considered asMUMs in thisresearch.Theschematicbelowprovidesanillustrationofdifferenttypesofmicrogrids.Thepink-shadedbox in the lower right corner labelled “Utility and CommunityMicrogrids” characterizes theMUMsthatarediscussedinthisreport.

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Why Study MUMs? Whilethemicrogridmarketisstillnascent,ithasbeenandisexpectedtocontinuegrowingatahealthyrate,as indicatedinthechartbelow. However,asthechartalso illustrates– ingray,greenandorange–single-usermicrogridsdominatethecurrentmicrogriduniverse.

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Single-user microgrids represent the majority of current microgrid activity because it isrelativelyeasyforelectricitycustomers,electricutilities,andvendorstocommerciallystructurea single-usermicrogrid. A single customer can implementan “islandable”microgridon theirown, requiring no coordinationwith other stakeholders nor any changes to any pre-existingregulatorystructuresgoverningelectricutilityservice.Theeconomicsofsingle-usermicrogridsare straightforward to evaluate andmonetarily structure, because the single entity incurs allthecostsofmicrogriddevelopment,operationsandmaintenance–andgainsallofthebenefitsthatthemicrogridaffords.Since the majority of real-world microgrid experience has been with single-user microgrids,nearlyallofthegrowingbodyofliteratureonthegeneraltopicofmicrogridsfocusesprimarily(ifnotexclusively)onsingle-usermicrogrids.Meanwhile, relatively little exploration has been undertaken into the issues inhibiting thedevelopment of MUMs. This deficit is concerning, because the future direction of theelectricity industry–towardsgreaterutilizationofcustomer-sitedDERassets,oftenbasedonintermittently-available renewable energy augmented with energy storage – suggests that agrowingnumberofMUMopportunitieswillbecomeofinteresttobusinesses,institutionsandotherfacilitieswithinageographically-compactarea.ThisisespeciallytrueasDERcosts–andthusthecostofMUMs–continuetodeclineastheindustryfurthermatures.Tobegin filling thisgap inknowledge, this study isaneffort toexamine theparticular issuesfacingMUMs tobetterunderstand thebarriersandobstacles to theirdevelopment–and tomake recommendations to alleviate these challenges to facilitate future development ofotherwiseattractiveMUMopportunities.ThisreportdoesnotconsiderthepotentialforcostreductionsinequipmentandservicesthatcouldimprovetheabilitytodevelopMUMs.Obviously,MUMswillbecomemoreeconomicallyviable and easier to implement in a broader range of circumstances if and as they can bedevelopedandoperatedatlowercost. Likewise,certaintechnical issues,suchasmaintainingpower quality at sufficiently high levels through the transition to islanded operation, mayinhibit MUM development. Vendors and other parties supporting the microgrid industry –particularly those engaged in DER-related technologies – are already intensively active inpursuing cost reductions and technical improvements, and this report is not positioned tocontributeanyincrementalvaluetosuchefforts.SincetheopportunityforMUMstocreatevalueforagrowingnumberofcustomersshouldonlyincrease as DER economics continue to improve, research should be conducted to alleviateotherobstaclestosuccessfulMUMimplementationbeyondcoststhatarecurrentlytoohigh.Suchnon-costobstaclestosuccessfulMUMdevelopmentarenumerousandsignificant.

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Becausemultiplepartieswithdifferingobjectivesare stakeholders toMUMdevelopment, allaspectsofplanning,managing,andmonetizing thesesystems involve reachingagreementonvariouscomplexandnuancedmatters.Multi-usermicrogridsopenquestionsof:

• Whatservicesthatcompaniesdevelopingand/orowningmicrogrids --companiesthatarenotregulatedutilities--areallowedtoselltootherparties,and

• Howthemicrogrid interfacesbothoperationallyandcommerciallywithrespecttotheutilityowningthedistributiongridinthearea

Thisreportinvestigatestheseissuesingreaterdetail,byassessingcommonalitiesacrossasetofcasestudiesofmicrogridsdevelopedintheUnitedStates,withaparticularfocusontheNortheasternU.S.

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Project Description

Research Objectives In order to address the substantial gap in research focused on multi-user microgrids, theNortheastCleanEnergyCouncil(NECEC)andtheInstituteofSustainableEnergy(ISE)atBostonUniversity(BU)collaboratedonthisresearchproject,withtwoprimaryobjectives:

• Identifybarrierstothedevelopmentofotherwiseeconomically-attractiveMUMs• Makespecific,actionablerecommendationstoreduce/eliminatethesebarriers

As noted previously, this research specifically considers MUMs (rather than single-usermicrogrids) becausemany serious impediments tomicrogrid adoption arise oncemore thanoneelectricitycustomerisservedbyamicrogrid.Ifthebarriersthatpreventthedevelopmentof MUMs can be reduced or eliminated, a wide range of stakeholders (private individuals,utilities, businesses, etc.) stand tobenefit from the internalizationof various social surplusesthatMUMscanproduce.TovaryingdegreesfordifferentMUMs,thesesurplusesmayinclude(butarenot limited to) resiliencebenefits, loweroverall costsofelectricity serviceprovision,andreducedenvironmental(primarilygreenhousegasemissions)footprint.ThisresearchwassponsoredsothatstakeholdersinterestedintheadvancementofMUMscantake actions that improve the ability todevelop commercially successfulMUMs. This reportaimstoaccomplishthisgoalby:

• IdentifyingcommonbarrierstothesuccessfuldevelopmentofMUMs• ExploringthecharacteristicsofsuccessfulMUMsandthesituationalattributesthatlend

themselves to successful MUM development, and articulating strategies that keystakeholdershavepursuedorcouldpursuetoreduceoreliminatebarriers

• Providing insights that will improve regulation and policy surrounding multi-usermicrogrids

Study Methodology TheinitialphaseofresearchinthisprojectinvolvedcompilinginformationonmicrogridsintheNortheasternUnitedStates.Thiswasconductedbyperformingaliteraturereview,augmentedbyinterviewswithpartieshighlyknowledgeableaboutregionalmicrogridactivity.Resultingfromthisinitialinformation-gatheringphaseofeffort,atotalof161microgridswerecataloguedintoadataset.Thedatasetwasstructuredtoincludenotablecharacteristicsaboutthemicrogrid,includingsuchelementsas:

• Location

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• Size• Customerprofile• Hostutility

From both the dataset and the perspectives gained from the interviewed experts, theresearchersfurtherinvestigatedasmallersetofmicrogridsthathadthepotentialofbeingtrulymulti-user in nature, and upon confirming that theywereMUMsof interest to the researchteam, sought to identify individuals that were both (1) deeply knowledgeable about themicrogridand(2)willingtosharetheirperspectiveswiththeresearchers.Basedonthisscreeningprocess,fivemicrogridswerechosentostudyin-depthascasestudies:

1) BG&EMicrogrids(BaltimoreandColumbia,MD)-Failedproposal2) BronzevilleMicrogrid(Chicago,IL)–UnderDevelopment3) BurrstoneEnergyCenter(Utica,NY)–Operational4) PhiladelphiaNavyYard(Philadelphia,PA)-Operational5) PotsdamCommunityMicrogrid(Potsdam,NY)-Planningphase

TheteamstrivedtoselectmoreMUMsfromthestatesofNewEngland,butsuitableexamplesdidnotrevealthemselves.Even so, the resulting set of five MUMs reflects a considerable degree of diversity amongvarious segmentation factors (state,utility territory,project type, status, aswell as customerbase, density, and motivation). This breadth was deliberately sought so that any commonfindings fromacross thecase studieswouldmore likely indicate insightswidelyapplicable tothepossibleuniverseoffutureMUMs.OncethefiveMUMcasestudieswereselected,athoroughliteraturereviewwascompletedoneach microgrid in order to bolster our understanding of the project characteristics and thehistoryofitsdevelopmentbeforeconductingfollow-upinterviewswithindividualsinvolvedinthesemicrogrids in some important capacity–either asprojectdeveloper, engineer,orhostutility. Interviewsprovided insight intothechallengesthataroseduringthedevelopmentoftheseparticularMUMs,andhowtheywereaddressed.Incertaincases,challengescouldnotbecompletelyovercomeandeithersignificantlyalteredthefinalmicrogridconfiguration(suchasitsgenerationmixorabilitytoconnecttothemacrogrid)orcausedthemicrogridprojecttobeabandoned.Aftercompletinginterviewsandliteraturereview,shortreportsweredevelopedforeachofthefiveMUM case studies to summarize key takeaways.When compared to each other, thesesummaries surfaced hypotheses on common obstacles that arise during the development ofMUMs.Finally,thesehypothesesweresharedwithaselectgroupofexternalreviewers–firstinaworkshop,andthenintextualform–toproducethefindingspresentedbelow.

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Key Findings

What are the main barriers to successful MUM development? Excludinghighcostsasaninhibitingfactor(forreasonsdescribedabove),ourresearchsuggeststhat the following seven factors are significant and pervasive barriers to successful MUMdevelopment:

Inability to Monetize Resilience (and Other Value Streams) One of the most common challenges facing potential developers of MUMs is the simpleinabilitytoproducesufficienteconomicvalueforstakeholdersrelativetothecostofinstallingandoperatingaMUM.Inthiscase,thenetpresentvalue(NPV)fortheMUMwillbenegative,andthedeveloperwillnotbeabletoattractthefinancingneededtomoveforward.ThereareavarietyofreasonsthataprospectiveMUMfailstogenerateapositiveNPV.MUMcosts are non-trivial, and while they are falling with technological advancement, increasingstandardizationandgreaterefficienciesofvendors/suppliers,thecostsofMUMswillneverbenegligible.EvenwhenthecoststructureforMUMsismuchlowerthanitistoday,therewillbemanycases inwhichtheeconomicbenefitstoprospectivecustomersofaMUMsimplydon’toutweighthecosts.However, even with today’s economics, MUMs in certain circumstances might be able totheoreticallygenerateeconomicvalue inexcessofcosts–butthedeveloper, investorand/orownerofthemicrogridisunabletocapturethateconomicsurplusthroughapricingmechanismorrevenuestream.Theinabilitytocapturethesepotentialrevenuestreamsusuallyderivesfromalackofmarketstructurestocreatepricesignals,orfromthefailureofatleastoneofthekeystakeholders(thedeveloper,theinvestor/owner,and/ortheinvolvedutility)tofullyrecognizethevaluesomeofthebenefitsofferedbytheMUM.Themostvividillustrationofthisphenomenonisresilience.Although it is commonly accepted that “everyone values resilience”, there is nowidespreadagreement on how to actually measure resilience, how much customers value resiliencebeyond levels generally offered by the macrogrid (i.e., current service quality is “taken forgranted”),whethertorequiremoreresilience,andfinally(andcrucially)howtovalueandpriceresilience.

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Withoutanability to transacton resilience,oneof themajor sourcesofvalueofamicrogridcannotbecapturedinarevenuestreamthatcanhelpfinanceitsinstallation.(Pleaseseebox“HowisResilienceValued?”foramoredetaileddiscussionofthisimportanttopic.)While resilience is themostobvious and important value stream that is currently difficult orimpossibleforMUMstocaptureandmonetize,othersmayinclude:

• Capacityandenergyvalueandancillaryservicesinregionalwholesalemarkets• Alleviation of local network constraints and/or deferment of need for distribution

upgrades• Thermal energy opportunities associated with combined heat and power (e.g., heat,

coolingorsteam)• Improved economics associatedwith other non-energy infrastructure changes caused

byMUMimplementation(e.g.,buildingimprovements,watersystemefficiencygains)

How is Resilience Valued? Microgridsusuallycostmillionsofdollarstodesign,developandconstruct.Justifyingsuchasubstantial capital investmenthasbecomeacommonhurdle tomicrogrid implementation.Enhanced electrical service reliability and resilience is one of the most significant valuepropositionsforamicrogrid,astheycanmaintainelectricalserviceintheeventoflargergriddisruptions.Alas,thisvaluehasbeendifficulttoquantify.Historicestimatesofthevalueofresiliencehaverangedfromroughly$30billiontoupwardsof$150billionforthetotalcostoflostservicenationwide.iiEstimatingthemonetaryvalueofmicrogrid reliabilityand resiliencecanbechallenging. For instance,howdoesoneapplyavalue to keeping a patient on life support? Or, howdoes one apply value tomaintainingyears of cancer research? In these situations, the value of electricity service is essentiallypriceless.This is why entities like municipal emergency services (police, fire, emergency medicalservices), hospitals, universities, military facilities, and data centers are more frequentlyelectingtoadoptmicrogridstobetterguaranteeresilience.Institutionsliketheserecognizethehighvalueofsustainingelectricityservice(ormoreprecisely,thehighcostofinterruptedservice).Whileimpactofserviceinterruptionsmaynotbeasdireforprivatesectorcustomersasitisfor institutional customers, appropriately estimating the value of electric reliability andresilienceforindustrial,commercialorresidentialconsumersremainsdifficult–andthereisnoconsensusontheappropriatemethodologytodoso.Entities likeNationalRenewableEnergyLaboratory(NREL),LawrenceBerkeleyNationalLab(LBNL), and Electric Power Research Institute (EPRI) have accumulated extensive researchinvestigatingmethodsandapproachesforvaluingthelossofelectricalservice.iii

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Forcommercialandindustrialconsumers,acommonapproachtoestimatingthevalueoflostservice involves a benefit-cost analysis (BCA). In a simplemanufacturing example, a BCAwouldquantifytheexpectedvalueof interruptedproductionduetointerruptionofelectricservice,resultinginadollarperhourvaluespecifictothatindustrialcustomer.Aggregatedtothenationallevel,ananalysispresentedbyLBNLin2017estimatedthatpowerinterruptions annually cost U.S. commercial customers $41 billion (about $2300 percustomer)andU.S.industrialcustomersat$16billion(over$19,000percustomer).Whenplanningamicrogrid,theestimatedcostof lostservicecorrespondsdirectlywiththevalueofaddedresilienceandreliability.Electricutilitiesmaintainseveralreliabilitymetrics,most prominently SAIDI (System Average Interruption Duration Index) and SAIFI (SystemAverage Interruption Frequency Index). SAIDI and SAIFI are based on the power outagesexperiencedby theaverage customerannually in autility service territory, andprovideanapproximateforecastofanticipatedoutagesaggregatedtotheutilitylevel.By estimating the cost of lost service for a customer using BCA (say $1M per hour) andknowingtheanticipateddurationandfrequencyofoutagesforagivenutility(say4.5hoursannually), one can roughly determine the added value of resilience and reliability for thatsystem. For this example, if a microgrid could maintain service during those expectedperiodsofoutages,onaveragetheconsumerwouldsave$4.5millionannually–thoughthesavings in any one particular year could be much less or greater, depending upon thefrequencyanddurationofoutagesthatactuallywereavoided.However,thisbasicBCAapproachhasseveraldownfalls.First, it is better suited for industrial and commercial consumers: it is straightforward toestimateeconomicconsequencestoafor-profitenterprise,whereasitishardertoassessthecostoflostservicetoresidentialconsumers,forwhomitiscommonlyassumedthatthecostof lost service is relatively minimal. For instance, the 2017 LBNL report indicated theapproximate annual cost of lost service to residential customers was as low as $11 percustomer.iv However, these estimates do not consider the possibility of home-basedbusinessesorthetrueout-of-pocketlossesassociatedwithanoutage(e.g.,foodspoilage).Secondly,utilityreliabilityandresiliencemetricscanbebiasedtowardshortertermoutages,particularlyiftherewerenopreviousextendedblackoutsinanarea.Theimplementationofamicrogridhedgesagainstunexpected,low-frequencyeventsthatmaybespreadperiodicallyovermanyyears.Lastly,andperhapsmostimportantly,thecostbenefitanalysismethoddoesnotincorporatemarketconnectivity.Upstreamsuppliersanddownstreamvendorsareaffectedbyanoutage,even if they didn’t lose service themselves. These upstream and downstream costs are

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typicallyignoredinBCA.Withgrowingdigitizationof society, the increasingneed toeffectivelyvalueeconomicandsocietal costs associated with lost electricity service has spurred additional studies in thisarena. EPRI and the New York State Energy and Research and Development Authority(NYSERDA)completedresearchonthesubjectin2017and2018,respectively.vThesestudiesevaluated the merits of a more comprehensive regional economic analysis, taking intoconsiderationoveralleconomicactivityinagivenregion.Sucheconomicstudiesconsidered“industry-to-industry” transactions, where changes in productivity (due to loss of service)resultineconomictrendswithinasectorsuchaschangesindemand,employment,income,etc.Initsstudy,NYSERDAconcludedthat,inasingleday,amicrogridcouldmitigatemillionslostintheregionaleconomywhileprovidingmillionsinsocietalbenefits.Regardless of the approach, estimating the cost of lost electricity service (or the value ofresilience/reliability) ishighlyvariableand lacksastandardmethodology. Inevitably, this isfurther complicated when there are multiple users who receive the reliability/ resiliencebenefits, but who value those benefits differently. This factor represents an additionalcomplexityfacingMUMdevelopment.

Conflicts with Pre-Existing Rights Associated with Electricity Delivery The reason that most currently operational microgrids have been implemented for singlecustomers issimple: today’sregulatoryandlegalstructureseasilysuitsingle-usermicrogrids,butdon’taccommodateMUMs.Asingleusermicrogrid isanaturalextensionofthecommercialrelationshipinwhichasinglecustomer is served by a regulated utility via the macrogrid. A typical single-user microgridinvolvesaconventionaltariffedserviceagreementbetweentheutilityandthecustomer.Incontrast,aMUMisacommercialconstructthatisnotcontemplatedbymostregulatoryandlegal structures,whichwereestablishedacenturyagounder thehistoric social compact thatprovideselectricutilitiesnaturalmonopoliesondeliveringelectricitywithindefinedterritories.In a single-user microgrid, all electricity generated on the microgrid not consumed by thecustomerissoldbacktothegrid–eithertothedistributionutilityortowholesalemarkets.Thecustomercontinuestobuyelectricityfromthegridasusualtomeetwhateverremainingneedstheyhave:thereisnopurchasingelectricityofthegridinbulk,toreselltomultiplecustomers.Now, consider the circumstances associated with aMUM. Unless owned by themonopolyutility itself, the owner of the MUM is effectively prohibited from delivering and/or sellingelectricitytothevariouscustomersbecause,withinautility’sserviceterritory,anindependentthird-partygenerallycannotdeliverelectricity.

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WhileitmaybepossiblefortheMUMownertobecomethesolebuyerofelectricity–andthensell services defined in someotherway to theMUM customers – the non-electricity serviceintroduces considerable complexity and/or risk to the commercial arrangement thatmay beunattractivetotheMUMand/orthecustomer.The2016rejectionbytheMarylandPublicServiceCommission(MPSC)ofMUMsproposedbythe utility Baltimore Gas & Electric (BG&E) provides another illustration of how regulatoryinterpretationofelectricitydeliveryrightscanhindertheadvancementofMUMs.viWhiletherewereseveralotherreasonsunderlying itsrejection,theMPSCfoundthatusersdonothaveachoiceofelectricitysupplierwhenamicrogridisoperatingin“islandmode”,thereforeviolatingMaryland’sElectricCustomerChoiceandCompetitiveActthatprovidesenduserstherighttochoosetheirelectricitysupplier.vii Thus,theMPSC’s2016rulingeffectivelypreventsanyformof“islandable”microgrids.Theadditionalcomplexityand/orriskinensuringlegalcomplianceofacommerciallyattractiveand workable MUM is an additional burden that MUM development must bear if it is tosucceed.

Preferential Rights for Utilities to Cross Public Rights-of-Way In many jurisdictions, only regulated electric utilities are allowed to distribute and deliverelectricitywithwiresthatcrossapublic right-of-way(ROW). Evenwherethis right isneitherabsolute nor exclusive, exceptions to this generally accepted practice must be affirmativelyobtained.Clearly, this issuegenerallyrestrictsMUMsnotownedbyutilitiestoonlyservecustomersoncontiguousparcelsofprivateproperty,andinhibitsincludingothernearbycustomersinaMUMthatwouldotherwisefindthevaluepropositioncompelling.Indeed,asmoreusersofaMUMare contemplated in order to expand the pool of economic value that can be created, thelikelihoodofneedingtocrossapublicROWincreases.The example of the Burrstone Energy Center, a multi-user microgrid in Utica NY, is highlyinstructiveonthisissue.InplanningtheBurrstonemicrogrid,CogenPowerTechnologies(CPT),confrontedtheneedtocrossapublicROWtoreachaprospectivecustomer,UticaCollege.Forthisproject,CPTshouldtheoreticallyhavefacednoissuesincrossingthepublicROW–butinfactitdid.Independent legal analysisviii suggests that, in the state of New York, “municipalities areprohibitedbystatuteandcaselawfromgrantingtheirownexclusivefranchisebycontract”–althoughmunicipalitiesmightbeabletograntanexclusivefranchiseifgivenspecialpermissionfromacitycouncil.FurtherresearchfailedtorevealanyevidenceindicatingthattheUticacitycouncilhadprovidedanyexclusivefranchisewithincitylimitstoNationalGrid,theutilitythat

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provideselectricity service in theUticaarea. Thus, at leastonpaper,CPT shouldhavebeenabletocrossthepublicROWinitsBurrstonemicrogridwithoutneedingtosecureanyspecialapprovals.Despite these facts, CPTwas nevertheless required to obtain a specialwaiver from theNewYorkPublicServiceCommissiontocrossthepublicROWinordertoserveUticaCollegeat itsBurrstonemicrogrid. Thisprocessofobtaining awaiverwas time-consumingandexpensive,requiringCPTtohireanattorneywithexperienceinhandlingcasesinvolvingutilitiesandpublicservicelaw.

Ambiguity About Viable MUM Ownership Models ProjectedMUM economics and financial viability can depend significantly upon the optimalownership structure for the microgrid – which in turn may not be compatible with currentregulatoryandlegalprecedents.Toillustratehowthismightoccur,notethatcertainpartiesmaybeabletomonetizeselectedvalue streams associated with a microgrid that other stakeholders – including the utilitydeveloper,customersorinvestors–cannot.Twoexamplesofthisphenomenon:

• Taxcreditsassociatedwithownershipofsolarassets inamicrogridmayhavevaluetoonly those stakeholders with a tax obligation that can take advantage of these taxcredits–inwhichcase,itmightbeessentialthatownershipoftheseassetsbeallocatedexclusivelytothosestakeholders.

• SomestakeholdersinaMUMmaybeprohibitedfromparticipating(ormaysimplynot

want to participate) in wholesale power markets offering potential revenue streamsthatmaybenecessarytoensureMUMeconomicviability.

Consequently,hybridownership structuresmaybeof interestorpossiblyevennecessary forsomeMUMs.However,itmaybethecasethatthebest(orperhapstheonlyviable)ownershipstructureforaMUMisprecludedbystateregulations.Asarguablythemostprominentexampleofthispossibility,certainstates(includingNewYork)donot allow forutilityownershipof generationassets. Yet, for someMUMs (suchas thosewithfewornofor-profitstakeholders),anattractivesolutionmayentailutilityownershipofthemicrogrid’sgenerationassets.Totheextentthatthisisthecase,opportunitiesforviableMUMdevelopmentmaybethwarted.

Utility Assertion of Rights Via Legal Action Relating to theprior three issues– rightsassociatedwithelectricitydelivery,preferences forutilities tocrossROWs,andambiguityaboutpotentialMUMownership structures–multiple

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leaders and experts in the microgrid industry expressed the concern that utilities havedemonstratedtheabilitytoeffectivelyasserttheirrightsvialegalaction,therebycausingdelaysandincreasingcostsandrisksinMUMdevelopment.According to a 2010 NYSERDA reportix, “the mere threat of tying up a potentially smallenterprise such as a microgrid, in litigation over franchise rights could stop a project”.Moreover,thereportalsostatesthatit is“likelythatregulatoryauthoritieswillbeinclinedtoprotect the incumbent distribution utility” and that “the utility itself is likely to defend itsfranchiserightsincourt.”Oneintervieweedescribedthecaseofaprivatedeveloperworkingonamicrogridthathadtoabandontheprojectbecausethelocalutilityworethemdownwithlegallitigation.Even the threat of potential legal action by utilities detersMUMmarket advancement, as itincreasesrisksthatthird-partyprojectdevelopersmaybeunwillingtoaccept.

Lack of Suitable Risk-Mitigation Structures The MUM market likely will struggle to approach its full potential until there is a greateravailabilityofstandardizedfinancialinstruments–specifically,insuranceproductsatfairprices–thatmitigatetheriskofaninvestor’sinvolvementinamulti-usermicrogrid.Onedifficulty indevelopinga replicable financingstructure is that it is costly toperformduediligence on customer credit risk for a MUM, because unfortunately there are few if anyeconomiesofscaletocreditriskassessmentasmoreusersparticipateinaMUM.In addition, a MUM is subject to substantial financial risk if and as customers decide todiscontinueparticipation,sincetheoveralleconomicviabilityoftheMUMislikelytorequireallparties(andespeciallythelargestcustomers)toremainbeingservedbythemicrogrid.While“exitpenalties”maybeconsideredtomitigatethisrisk,suchanapproachislikelytodiscouragecertaincustomersfromjoiningthemicrogridinthefirstplace.Although increasing thenumberofusers in the customerbaseof aMUMmightdilute somerisksthroughdiversification,italsoincreasesthelikelihoodofatleastonecustomerdefaultingorexiting.Unless and until financial structures are created to bettermitigate these risks – particularlywhen combined with the ambiguity about the ability to capture certain value streams,especially resilience – obtaining third-party investment inMUMs is likely to remain amajorchallenge.

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Insufficient Leadership to Coalesce Solutions Before a multi-user microgrid starts taking shape, a well-positioned and knowledgeableindividualmustbecomeachampion–identifyingtheopportunitytocreatevalueviaaMUM,becoming convinced that it’sworthpursuing, and convincing the potentialMUMowner of thesevalues, notwithstanding the various barriers – to initiate action towards MUM creation. ToeffectivelyleadaMUMdevelopmentinitiativewithimpact,thisindividualwillalmostcertainlyneedtobeassociatedwithawell-respectedorganizationwithintheenergysector.One obvious possible organizational home for an individualwho can perform this leadershipfunction is the local electric utility,which clearly has the requisite technical and engineeringcapabilities,andalso–becauseeveryuserofelectricityknowstheidentityofthelocalelectricutility–possessespre-existingrelationshipswiththecustomersofanyprospectiveMUM.While some utilities have demonstrated the willingness to pursue a MUM with the aim ofcreating value for a set of customers – as evidenced by National Grid at Potsdam andCommonwealth Edison at Bronzeville – not all utilities have reached this degree ofcommitment.Moreover,eventhoseutilitiesthathaveparticipatedinMUMinitiativeshaveyetto scale these activities into sizable initiatives, due either to insufficient strategic desire toachieve a commercial growth ambition or inadequate tactical capacity to focus on MUMpossibilities in lieu of traditional utility projects. As a result,manyMUMopportunities thatcould be attractive to utilities are almost certainly not being led by utilities (or passionateindividualswithinutilities)atpresent.Absent decisive action by the utility, the individual and organizational leadership needed tomakeprogressonnewMUMdevelopmentisoftenlacking.Inadditiontolikelycapabilityandinformationdeficits,anyonecustomeronaprospectiveMUMispoorlypositionedtoserveasaproject leader because this would create perceived inequality with the other potentialcustomers. A consortium of customers can be created to become a MUM developer, butbringinganewentityintoexistence–nottomentioncapitalizingitandrecruitingkeytalent–isamajorendeavorthatoftencallsforexpertiseandrelationshipsoutsideofthecorecapabilitiesofthecustomers.This gap canbe filledbyalternative serviceproviders: organizationsother thanutilities thattaketheleadinMUMdevelopment.Anumberofsuchcompaniesarealreadypositioningforthisopportunity,including:

• Large multinational corporations, such as Engie, Schneider Electric, Shell, Enel, andVeolia

• Powerprojectdevelopersandenergyefficiencyserviceproviders,suchasAnbaricandAmeresco

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Basedonactivitiestheyhavealreadytakentoaccumulateexpertise,capabilities,andcredibilityindevelopingsingle-usermicrogrids,companiessuchasthesehaveahead-startinpositioningto become significant players in MUM development. In addition to providing competitivechoices to potentialMUM customers, alternative service providers aremore likely than thelocalutility inbecomingdistinctive specialists inparticular typesofMUMs,because they cangaintheirparticularexpertiseandmarketitanywhereasopposedto(atleastprimarily)intheirownserviceterritory.Althoughonlyafewexisttoday,developer-ledMUMsarebeginningtoappear.Oneofthemostsignificant examples of amulti-facetedMUM is the Philadelphia Navy Yard (PNY)microgrid,ownedby the PhiladelphiaAuthority for IndustrialDevelopment (PAID) andmanagedby thePhiladelphia IndustrialDevelopmentCorporation (PIDC). At PNY, amulti-yearmaster energyplanning and implementation project to redevelop a large urban parcel of land led to thecreationofaMUMcommunity. Theresultingmicrogrid isoneof themostdiverseMUMs inNorth America, with approximately 80 electric customers, and PIDC virtually serves as thecommunity’selectricutility. Onlyminimalpublicsubsidieswerenecessary for theviabilityofthePNYMUM,becausePIDCwasabletoearnsuperiorreturnson its investmentsrelativetothe capital and operating costs of “business as usual” that would have been incurred ifgenerationsupplywereinsteadpurchasedfromthelocalutility.

What actions have successfully addressed barriers to MUM development?

WhilenotallMUMsencounteralloftheaboveobstacles,someofthemarelikelytopertaininanygivenMUMprojectdevelopment.Andwhile there are no “silver bullet” solutions to these obstacles, certainMUMdevelopershavebeenabletopartiallyifnotfullyovercometheseobstaclesinMUMdevelopmentactivitiestodatethroughtangibleactions.

Utility Ownership or Strong Utility Participation in MUMs Inmanycases,theobstacleslistedabovecanbeminimizedifnotcompletelyeliminatediftheMUMisdeveloped,ownedandoperatedbythelocalmonopolyutility:

• TheissuesassociatedwithcrossingpublicROWsandauthoritytodeliverelectricitywillbemootedifaMUMisownedbyautility.

• To the extent that assets from a utility-owned MUM can be rate-based, and the

resulting MUM service is delivered via a regulated tariff that satisfies all parties,financing challenges will essentially be eliminated, and customer acquisition will besignificantly eased – although such approaches will confer the utility a competitive

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advantage over any other potential alternative service provider thatmight otherwiseconsiderdevelopingaMUMforthesecustomers.

Not only does utility MUM ownership minimize some of the aforementioned challenges toMUMdevelopment,otheradvantagesmayariseaswell. For instance,utilitiesmaybemoreinclined to increase the reliability and resilience of their ownmacrogrids if they are able orencouraged toparticipate inMUMdevelopment inparticularlyvulnerable locations. Utilitiesmay also be able to take advantage of economies of scale (e.g., in equipment procurement,engineering, and legal/permitting) to reduce MUM costs relative to what a smaller MUMdevelopercouldachieve.Forthesereasons,utility-ownershipisapromisingenablerofMUMadvancement.Thehighly-visible progress being made at the Bronzeville multi-user microgrid under development inChicagobytheutilityCommonwealthEdisonisindicativeofthispromise.Noneof the above is to suggest that utilitiesmust or even should develop andownMUMs.Rather, it is merely an acknowledgement that utility-ownership greatly simplifies the MUMimplementationprocess.Even if theutilitydoesn’tdeveloporowntheMUM,deep involvementof theutility insomemanner(i.e.operation,billing,customermanagement,financing,engineering,etc.)isoftenanimportantfacilitatorofsuccessfulMUMimplementation.Thisisbecauseutilitiesusuallyhavegreat credibility and influence both with customers and regulators, whowill play significantrolesinwhetherornotaproposedMUMwillbecompleted:

• Supportive participation of utilities in MUM planning will not only minimize anyopposition that they might otherwise raise, but should streamline discussions withregulators and other governing bodies (e.g., local permitting), thereby acceleratingreceiptofnecessaryapprovalsandreducingdevelopmentcosts.

• Utilitysupportwillalsobehelpful insecuringthecustomerstoamulti-usermicrogrid,

who might otherwise harbor concerns about project viability or reliability of theresultingservice.

• Utilities can also play a useful role in MUM engineering activities – especially in

navigatingtheinterconnectionprocessatminimumcost–notonlytoensurecontinuedreliabilityofthemacrogrid,butalsotovalidateorevenimprovereliabilityoftheMUMservice.

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Creatively Leveraging Opportunities to Reduce MUM Costs Microgrids are a relatively new approach for electricity service that encompass many still-advancing technologies. As a result, while costs should decline over time with continuedimprovements,microgridsremainsomewhatexpensivetodeveloptoday.Acknowledgingthischallenge,successfuldevelopersarecreativeinfindingwaystoreducethenetcostsofimplementingamicrogrid.Forinstance,manyofthemicrogridsweidentifiedthathavecompletedthearduousdevelopmentprocessandbecameoperational,whethersingleormulti-user,receivedmorethan$1millionfromvariousstateorfederalfundingprograms.AnothercommonaspectofasuccessfulMUMisthepresenceofpre-existinginfrastructurethatcouldbeincorporatedintotheMUM.Similartotheavailabilityofgrantprograms,thepresenceof existing infrastructure helps to alleviate capital costs of microgrids. Both the proposedBaltimore Gas & Electric (BG&E) MUMs and the operational Burrstone MUM representexamplesinwhichthedeveloperstookadvantageofpreexistinginfrastructure.

Tailoring Business Models to Situation-Specific Needs Conventionalelectricityserviceviathemacrogridexemplifiestheconceptofa“one-size-fits-all”offering.Prices,termsandconditions,andotherserviceattributes(e.g.,reliability,quality)arestandardizedandavailableinanon-discriminatorymannertoanyandallcustomerswithinthedefinedcustomerclassinaregulatedmonopolyutilityserviceterritory.Microgrids inherently represent a break from that underlying philosophy. Microgridsintrinsicallyoffermuchgreater customizationof electricity servicedelivery to customers. Assuch,microgrid developers fundamentallymust design and engineer a system of equipmentandinfrastructuretomeetthespecificneedsofthecustomerstobeserved.Ifthephysicaldesignofthemicrogridisconfiguredtomeetthespecificneedsofitscustomers,thenitfollowsthatthecommercialdesignofthemicrogridshouldalsobetailoredtomeetthesituationalcircumstances.The commercial arrangements intrinsic to the Burrstonemicrogrid provide an example of adeveloperofferingacreativeapproachthatreducesenergycostsforparticipatinguserswhileensuringtheresilienceandreliabilityofelectricityservicethattheMUM’scustomersrequire.The Burrstone microgrid owner Cogen Power Technologies (CPT) sells electricity from themicrogrid to National Grid on the macrogrid via a Power Purchase Agreement (PPA) underwhich CPT is reimbursed at thewholesale electricity price during the hour of the sale. CPTmonitors the price to be received for exported power, total power consumption on themicrogrid,andthecostofrunningthemicrogrid’sgeneratorsforanhour.Itthenconsidersthisdataandsimulates50scenariosinordertooptimizemicrogridoperationsatanhourlylevel.

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To take this optimization to the next step, CPT is currently developing a pilot programwithNational Grid that works almost like a supply-side version of demand response, in whichNational Grid will pay a premium on electricity exported by CPT during peak periods whenpricing is high. National Grid will temporarily increase the price they pay for CPT exportedelectricity inorderto incentivizemicrogridcustomers(includingahospitalandnursinghome)totemporarilycurtailelectricityconsumptiontoenableincreasedsalesofelectricitytothegrid.

Phased Development to Spread Costs Over Time Because MUMs are capital-intensive, it may be preferable for both the developer and thecustomer base to implement the microgrid in phases, so as to spread the economic andfinancialimpactsovertime.TheexampleofthePotsdamCommunityMicrogridisillustrativeinthisregard.PotsdamisaremotelylocatedtowninupstateNewYorksubjecttointensestormsduringthewinter that make it difficult for the utility (National Grid) to send a service truck to fixinfrastructure.Tomakemattersworse,Potsdamreceivespowervialongtransmissionlinesofagingvintagethatarehighlysusceptibletodamagefromextremeweather. In1998,Potsdamfacedmajor consequencesof these vulnerabilities,whenawinter storm led toa three-weekpoweroutage.SincePotsdamcommunityleadersdonotwanttofacesuchacircumstanceagain,NationalGridisdevelopingplansforacommunitymicrogridtosupportarangeofcriticalfacilities–includingahospital,localpoliceandfiredepartments,watertreatmentplants,andClarksonUniversity–aswellasanumberofcommercialbuildings.NationalGridrecognizedthataMUMforPotsdammeritsseriousconsiderationasasolution,because the aging electricity infrastructure to supply Potsdam requires significant ongoingrepair and maintenance expenditures, and the cost of full replacement was deemedprohibitive.Alas,forotherreasons,thePotsdamcommunityisfiscallystressedandfindsitdifficulttoaffordthecostsofthecommunitymicrogrid,eventhoughthepaybackon investment is likelytobeattractive.AnoriginalplanpreparedbyNationalGridforthePotsdammicrogrid,involvingcompletebuild-outuponcommissioning,wasdeterminedtobeeconomicallyinfeasiblebecauseitwouldleadtoan increase inelectricitypricestoosubstantial fortheeconomically-challengedcommunitytoabsorb.Consequently,NationalGridsplit theproject intoseveral stages, resulting inmoremodest price increases at the completion of each stage. (Further detail on the stageddevelopmentofthePotsdammicrogridisprovidedinAppendix1.)

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Itcouldbearguedthat,bylengtheningtheMUMdevelopmentprocess,overallprojectscostsfor the Potsdam microgrid may have increased somewhat. Likewise, by not immediatelyimplementing theMUM in its full vision, certain customers in Potsdamwill not immediatelygainaccesstoresilientenergyinfrastructure,andwillthusbedelayedingainingbenefitsthatonlywillmaterializewhentheMUMiscomplete.Nevertheless, itappears that thesedisadvantagesareoutweighedby the fact that largeone-timeeconomicconsequencesofimplementingtheMUMareinsteadspreadovertime.

Robust Execution Capability and Stakeholder Collaboration Developing a MUM is inherently a significant business initiative. As such, successful MUMdevelopment requires the same suite of strong resources critical for any business success:especiallygoodtalent,agoodplan,andacooperative,collaborativeteamofstakeholders.Reflecting the discussion above, a project champion possessing both the passion and therequisite setof technical, commercial and interpersonal capabilities is vital tonavigateMUMdevelopmentthroughthenumerousandsubstantialbarriers.Theprojectleaderwillalsoneedtoplayasignificantleadershiprole,includingboth:

• Relyinguponadeepcadreofsupportingstaff,includingoutsideexpertsinengineeringandlegaldisciplinestoadvancetheproject.

• NurturingcollaborationamongrepresentativesspanningthemultitudeanddiversityofstakeholdersaffectedbyaMUMproject.

Askilledprojectleaderwilldevelopandcoalesesupportamongthediversestakeholderteam,suchthatallmembersarecollectivelyengagedandadvancingtheproject together. It isalsovery important that all team members – both from the developer and from the variousstakeholders –maintain a positive and constructive attitude seeking to overcome challengesratherthanexacerbatethemwiththegoalofthwartingprogress.Inturn,toensurethataMUMdevelopmentteamisalignedinitsactions,asolidbusinessplanisalsovaluable.Multipleintervieweesemphasizedtheimportanceofcreatingasolidbusinessplan,becauseitservesasbothafocusingmechanismandcommunicationdeviceto:

• Targettherightmixofcustomerstomaximizetheaggregateeconomicbenefit• Coordinateamongstakeholders–manyofwhomwithdivergentperspectives–toreach

agreements• Clarify how the benefits of a microgrid will be monetized in order to recover

developmentandoperatingcosts,and• Ensurethatcustomerswouldutilizethemicrogridoverasufficientlylongperiodoftime

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Aswithanyventure,importantcomponentsofastrongbusinessplanforaMUMinclude:

• Thevaluepropositionfor identifiedusers,especiallyrelatedto lossavoidancethroughgreaterresilienceofenergysupply,relativetothestatusquoandotheralternatives

• MechanismsforcapturingsomeofthisaddedvaluefortheMUMdeveloper• Realisticestimatesofcapitalinvestments,operatingexpenses,andrevenueprojections• Identification and assessment of key relationships (e.g. with local utilities, potential

customers)• Governanceindecision-makingandoperational/financialroles/responsibilities• Howgrowthandcontingencies(suchasdeparturesofkeycustomers)willbehandled• Assessmentofprimaryrisks

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Recommendations

Stakeholder Actions Theadvancementofmulti-usermicrogridswill happenonlyhesitantly – and correspondinglythebenefitstheycouldoffertocustomersandsocietywillremainlargelyunrealized–withouttargeted and sustaining actions by stakeholders who have crucial roles to play in MUMdevelopment.OurresearchsuggeststhefollowingthematicinitiativeshavethepotentialofcreatingthemostpositiveimpacttoadvanceMUMactivity:IncreasingAwarenessandUnderstandingofMUM-SpecificIssues:

A critical first step to facilitating the development of MUMs is to increase the level ofunderstanding across the full spectrum of parties involved in microgrids, including utilities,regulators,developers,investors,andcustomers.Becausetheentiretopicofmicrogrids isnewandconsequentlyevolvingrapidly,andbecausemany of its aspects differ quite significantly from the conventional ways of thinking aboutelectricityservice,considerableeducationremainsnecessarytoensurethatstakeholdersevenhaveacommonlanguagetouseinconsideringissuesthatrequiresolutions.Thisisespeciallythecaseforthesubsetofmicrogridsthataretrulymulti-user,sincetheyhaveonlyrarelybeendevelopedtodateandraiseanumberofuniqueissueshighlightedinthisreport.DevelopingacommonunderstandingofthepotentialvalueofMUMsrelativetootherenergyservices, and the circumstances under which MUMs are especially beneficial, will help togalvanize support forMUMdevelopment andassuage fear anduncertainty aboutwhat suchdevelopmentmeans for incumbent interests. All stakeholders need to understand the issuespresentedinthisresearch,anddiscusshowtheseobstaclescanbestbeovercomeinwaysthatbenefitall.Targeting an audience of state regulators, utilities, private developers, and experts onutility/franchiselaw,workshopsthatgatherstakeholdersinvolvedinMUMactivitiesshouldbeconvenedtodiscussbestpracticesandestablishingcommonterminologyandframeworksforconsideringissuesrelatedtoMUMdevelopment.Becauseoftheimportanceofintroducingnewfinancialstructures–manyofwhichareakintoinsurance products – to facilitate greater activity in theMUMmarketplace, special attentionshould be paid to attracting and involving experts on pricing and design of services andsolutionsthatprovidecustomerspowerresilienceundercontingentcircumstances.

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StrengtheningRegulationsandPoliciestoImproveMUMPlayingField:

As this report strives toemphasize, improvingclarityonstate lawssurrounding the franchiserightsofutilitiesandseveralotherregulatoryissueswillbeessential ineliminatingorat leastreducingbarrierstosuccessfulMUMdevelopment.Insomecasesandways,greaterclaritywillnotbeenough:regulationsandpoliciesmayneedtochange.In particular, greater effort should be made to eliminate ambiguities stemming from theabsence of microgrid law by pushing for codified standards pertaining to microgrids. Asdescribed in the sidebarbox “Policy Initiatives toAdvanceMUMs”,MassachusettsHouseBill4324 and New Hampshire House Bill 1338 are strong examples of this. Bills such as theserepresentthetypeofpolicyeffortsthatareneededtoestablishaclearerlegalframeworkformicrogrids.Ideally,changestotheselawscancreatetheassurancesnecessaryforprivatedevelopers(andtheir investors) to implementmulti-usermicrogridswhile still protectingutilities from lossofrevenueandcustomersfromunfairshiftsincostallocation.OncestatescreatelegaldefinitionsforMUMs and clarify the ownership models that are allowed, stakeholders can structure afeasibleMUMwithmuch lessuncertainty,avoidcostlyandtimeconsuming legalbattles,andassureinvestorsthattheirplannedbusinessmodelmeetsregulatoryrequirements.Evenbetter, if thedevelopmentofdefinitionsand regulation forMUMscomes froma largercommunityagreement,manyoftherulesandstandardsmaybecomecommonplaceindustry-wide. Such clarity of rules and standards would allow for the development of morestandardizedmodels forMUMs that can be applied acrossmultiplemicrogrids – and also inmicrogridsindifferentstates.Thiswouldnotonlyreducedevelopmentrisksaboutwhatwillbeaccepted,butwouldalsolowerthesoftcostsofMUMdesignanddevelopment.Forthemostpart,undercurrentregulatoryapproaches,utilitiesareabletoearnprofitsonlyoncapitalexpendituresthatareapprovedtobeincludedinratebase.Totheextentthatutilitiesmightbe interested inaMUMopportunity, this frameworkcreatesastrong incentivefortheutility in favorofassetdeployment,effectivelyensuring that theutilitywouldseek tobe theowner of theMUM – and indeedmight oppose theMUM if utility ownership were not anoption.Therefore,regulatoryinnovationstoallowutilitiestobeabletoearnprofitsonservicesprovided (i.e., engineering services to supportMUM implementation), rather than solely oncapitalinvestments,wouldincentivizeutilityMUMparticipationevenifutilityownershipisforsomereasonnotthebestoption.

Policy Initiatives to Advance MUMs Asdescribed inthisreport, therearemanyaspectsofstate lawandregulationsthataffectwhether and howMUMdevelopment activity can occur. In turn, there is a great deal ofvariabilitybetweenstatesonhowtheselawsandregulationsarewritten.And,inmostcases,therelevantlawsandregulationswerewrittenlongbeforeMUMswereconsideredplausible.

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Reflectingupon thisoftenconfusingand/orambiguous situation,and the interestofmanypartiestoadvanceMUMs,earlyinitiativesareunderwaytoreformorotherwiseclarifylawsand regulations in ways so as to improve the ability for MUM development to proceedefficiently.In the Northeast United States, the following pieces of legislation involving MUMs haverecentlyadvanced:

• DraftedinMarch2018,NewHampshireHouseBill1338“establishesacommitteetostudy the changes in law necessary to allow for microgrids in electricity supply”.xWhile the bill did not come to fruition, it demonstrates the type of state-levelinitiativethatprovidesgreaterregulatoryclarityregardingmicrogrids.

• Earlier in2018, theMaine legislature (both theHouseandtheSenate)passedabill

(H.P.190/L.D.257)allowingforpetitionstoconstructmicrogridsthatservethepublicinterest.However,thebillwasvetoedbyGovernorLePageinApril2018.

• In Massachusetts, House Bill 4324 was drafted to enable the Economic &

DevelopmentCorporationofBostontochoosea“asingleenergyservicecompanyforthe design, construction, operation, maintenance, and financing of a districtenergy/microgrid project and related energy savings performance contract to servethepublicandprivatepropertyownersandtenantsintheRaymondL.FlynnMarinePark.”

The contrast between these bills is particularly noteworthy: Maine HP190/LD257 andMassachusetts HB 4324 work towards the legalization of either a specific microgrid ormicrogrids on a case-by-case basis, whereas the New Hampshire bill is more generalized,providingalegalframeworkformicrogriddevelopmentinthestate.AnotherpowerfulpolicyapproachtopromoteMUMshasbeenimplementedbytheBostonPlanning and Development Agencyxi (BDPA), which now requires all new real estatedevelopmentsintheBostonareaover1.5millionsquarefeettoconductafeasibilitystudyofamicrogrid.StandardizingMUMDesignandImplementation:

While microgrids inherently represent a departure from “one-size-fits-all” electricity servicefromtheregulatedmonopolyutility,anexcessivedegreeofmicrogridcustomizationtoperformoptimally inagiven setof circumstancescan introduce substantial additional complexityandcost.MUMdevelopmentthusfarhasnodoubtbeenhighlysusceptibletothispitfall,asmost

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MUMplanshaverequiredsignificantadaptiontoaccountforexistinginfrastructure,customerneeds,utilityrequirements,tariffrestrictions,andsoon.Rather thanoffering bespoke solutions, parties seeking to advanceMUMdevelopmentmustadopt a “modular and scalable” approach, similar to how vendors of power and coolingsolutionsviewtheirinfrastructureofferingstodatacenters.Whileamicrogridmayinevitablyconsist of a large number of potential components, the components must be sufficientlystandardized so that they can easily be combined with minimal alteration. By combiningstandardizedmodularcomponentstogether,anygivenprojectcanbecustomizedfortheneedsto the specific MUM, and developers will be able to create a manageable number ofstandardizedsolutionsacrossthemultipledimensionsofMUMdesign.Greater commonality of rules and regulations, as well as standards for interoperability andcommunication,willimproveeconomicviabilityofagreaternumberofMUMopportunities,by:

• Streamliningreviewandapprovalbyregulatorsandotherpermittingauthorities• Systematizingunderstandingandfacilitatinglearningacrossprojects• Reducingengineering,installation,commissioning,interconnection,andothersoftcosts

ofdevelopment• Allowing cost reductions in equipment via economies of scale and in shipping via

standardizedlogistics• Making projects easier for financiers to value and invest in, thereby opening up new

sourcesofcapital

CreatingViableMechanismsValuingandMonetizingMUMServices:

Thereisasignificantneedforagreed-uponmechanismstobothcalculatethevalueofresilienceandotherbenefitsofferedbyMUMs,andallowat leastsomeofthisvaluetobecapturedbythe MUM provider – otherwise one of the main economic benefits associated with MUMdevelopmentcannotbeusedtosupportfinancingofusually-significantcapitalcosts.Theapproachforcalculatingthevalueofresiliencemustfirstandforemostreflectthefactthatthe value of resilience varies substantially between users. This need for user-specificcalculationmustbebalancedwiththeneedforacalculationmethodologytobebothrigorousandacceptabletoallparties.Inaddition to standardizingamethodology forbenefit-cost analysis (BCA) calculationsof theexpectedvalueofresilience,reliability,andgridflexibilityofferedbyMUMs,valuationmethodscouldbenefitfromleveragingmoreadvancedvaluationpractices.For example, if one conceptualizes participation in a MUM as providing flexibility (for bothconnected customers and the associateddistributionutility) in the event of uncertain futureevents,itispossibletouserealoptionsanalysistovaluetheaddedbenefitofthisflexibility.In

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this example, the MUMmay offer customers and / or the distribution utility the ability tochoose between using on-site generation assets, drawing from energy storage, purchasingpower from the grid, or reducing load in the event of constrained electricity availability.Because there is uncertainty about future events and about the future value of thesealternatives,theflexibilitytochooseamongthematapointinthefuture(whentheirrelativevaluesareknown)hasvalue.Using valuationmethods such as real options to supplement theexpected value calculationsbasedontheexpectedfrequencyandcostofoutageswilladvancearobustandcomprehensivemethodologyforvaluingMUMservicesthroughouttheconnectedsystem.With an agreed-upon methodology for valuing resilience and other services, the nextrequirementisanacceptablemeansthroughwhichtheMUMoperatorisabletocapturesomeofthisvalueforthepurposesofeconomicandfinancialviability.Thisisaratedesignquestion,but the rules forwhatandhow theMUMoperator is allowed topriceand collectpaymentsfromusersarenotyetwelldeveloped–andinfactrelatetothequestionofwhethertheMUMisconsideredaregulatedutility.Many alternative pricing structures could be considered, including such possibilities as flatmonthly fees for resilience service and premium pricing per kWh, to reflect the value ofresilienceprovidedbytheMUM.Whilenooneratestructuremightbebest forall scenarios,MUM developers need clarity onwhat collectionmechanisms are allowed and accepted, tosupport the revenue projections in their business plans and discussions with prospectiveinvestors.An example of progress in this area can be seen in the proposed Potsdam communitymicrogrid, in which National Grid is proposing a tiered tariff cost recovery plan. In thisapproach,customersthatreceivethegreatestbenefitfromresilienceprovidedbythemicrogrid(i.e., thosewith the greatest potential cost of lost service) contribute themost to the tieredtariff. Thus, in theeventofamacrogridoutage, it isplanned that themicrogridwillprovidehighestpriorityinitsservicetothehospitalandmunicipalemergencyservices,astheywillbepayingmore in the tiered tariff than other customers. (Further detail on the tiered pricingapproachbeingimplementedatthePotsdammicrogridispresentedinAppendix1.)LearningfromMUMInnovationsElsewhere:In general, microgrid stakeholders should look to path-breaking models that are advancinginnovativemodelsformulti-usermicrogrids.Arguablythemostprominentexampleforgingapathfornewutility-ownedMUMpotential istheBronzevillemicrogridinChicago.AtBronzeville,theutilityCommonwealthEdison(ComEd)planstoconstructanewmicrogridthatwill integratewithanexistingmicrogridattheIllinoisInstituteofTechnologyandoperateitoveratenyearperiodtoinformComEdonhowtomostefficiently operate interconnectedmicrogrid networks. Once fully completed, themicrogrid

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willbeabletoservepeakdemands(estimatedat7MW)evenduringanislandingeventofoverathousandcustomersfromadiverseuser-mix,includingresidential,commercialandindustrialcustomers.AnimportantaspectoftheBronzevillemicrogridisthatitscostswillbedispersedacrossallofComEd’s nearly 4.1 million ratepayers, even though when only a thousand customers willdirectlybenefitfromthemicrogrid.However,ComEdsuccessfullyarguedtoitsstateregulator(the Illinois Commerce Commission) that all of its ratepayers, the public, and other relevantstakeholders will benefit from the microgrid and that much will be learned from this pilotprojectformicrogridinterconnections.Inaddition,ComEdinitiallyplannedtoownthegenerationassetsontheBronzevillemicrogrid,eventhoughithadpreviouslyvoluntarilydivestedallofitsgenerationassetsfollowingthe1997restructuring of the Illinois electricity sector. Accordingly, ComEd’s intentions to own theBronzevillegenerationassetsdrewsignificantpushback fromcertain interestgroupswhodidnot want this MUM project to set a precedent for more utility-owned generation assets.However,ComEdexhibitedthewillingnesstocooperateandfindasatisfactorysolution:ratherthanfightingthepushback,ComEdagreedtofacilitateacompetitivebiddingprocessforthird-partiestoownandoperatethemicrogrid’sgenerationassets–andifnoreasonablebidsweremade,ComEdwouldleasethegenerationassets.Although still under development, the Bronzeville MUM serves as a model for MUMs byhighlightingmanyofthecommonattributesofothersuccessfulMUMs,including:

• Directutilityinvolvement• Utilizationofpreexistinginfrastructure• Ambitiousinitsgoals/scope• Diverseuser-mix• Multiplephasesofdevelopment

Twoattributesof theBronzevilleMUM inparticular stand innotablecontrast tomanyotherMUMsunderdevelopment:theambitionofthegoals/scopeandthediversityoftheusermix.Mostimportantly,Bronzevilledemonstratestheimportanceofutilities,regulators,andrelevantstakeholders keeping an open mind and acknowledging each other’s respective concernsthroughnegotiationsandconcessions.The lessons learned fromBronzevillewill inevitablybe important forotherMUMs,especiallyutility-owned MUMs. As Bronzeville and other pioneering MUMs are pursued andimplemented,theirtrialsandtriumphsneedtobefullyunderstood,communicatedandappliedtofutureMUMdevelopmentactivities.Additionally,thereareearlysignsthatprivatelydevelopedandownedMUMsmayalsoprovidea channelofopportunity that takesadvantageofadifferent setof stakeholderbenefits.TheexampleofthePhiladelphiaNavyYardmicrogriddemonstrateshowthiskindofMUMbecomes

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feasible, and many similar projects are currently being considered throughout our studygeography.OrganizingforGreaterImpact:Althoughagrowingnumberofconferencesarebeingconvenedonthetopicofmicrogrids,withtheannualMicrogridKnowledgeconferencexiiarguablybeingthebestandmostwell-attended,themicrogrid community generally lacks a focal point – suchas a tradeassociation– that iswell-positioned to serve in convening, educational, research and advocacy capacities. Nodoubt,thisreflectsthefactthatthemicrogridmarketisstillimmatureandconsequentlysmall,but there is a risk that the microgrid market will remain underdeveloped unless and untilstakeholdersorganizeforimpactandprovidenecessaryleadershipformarketparticipants.

Future Research Thisreportappearstobeoneofthefirstintheoverallbodyofliteraturetoaddressissuesthatspecificallypertaintomulti-usermicrogrids.Assuch,thisreportshouldbeviewedasaninitialattempt to identify and frame the issues in such a manner that they lend themselves toadditionalfurtheranalysis.We believewe have accomplished this goal to a substantial degree, and offer the followingsuggestionsforfollow-onresearch:

1. SummarizestatusofstateregulationsandlawsthatimpingeuponMUMdevelopment.Each state defines in its own unique manner how the topics raised in this report –exclusivity of delivery and sale of electricity, ability to cross public ROWs, viability ofMUMownershipstructures–shallbeinterpretedforlegalandpublicpolicypurposes.Asummaryofstate regulations/lawsrelevant toMUMactivitywouldenablegeographicpriorities to be set for clarification activities, as well as offer possible templates forpreferredwordinginpolicyrecommendations.

2. Designanidealmodelforenablinglegislation.Acollaborativeefforttodesignamodelforenablinglegislationinacoordinatedandcohesivemannerwouldprovideaguideforstate-levelregulatoryinitiativesthatfacilitateMUMdevelopment.Leveragingresearchefforts and learning across states would both reduce the aggregate costs of policyadvancement and promote policy consistency across jurisdictions so as to reduce thesoftcostsofMUMdevelopmentgoingforward.

3. Evaluate lessons from insurance industry regarding pricing and product design. Theprovisionofpowerresilienceservicestocustomersisinmanywaysakintoaninsurancepolicy. As such, itwould likely be highly illuminating to delve into howunderwritersprice and design policies to determine lessons learned that are relevant and can beofferedtothemicrogridcommunity.Inparticular,insurancecompaniesarewell-versed

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atvaluinglowprobability,high-impacteventssuchasprolongedmacrogridoutages,andthese methods could be informative in developing standardized methodologies forvaluingMUMservices.

4. MonitorprogressofBronzevilleandsummarize implications (andpros/cons)ofutility-

ownership of MUMs. As discussed above, utility-ownership alleviates many of thechallengesfacingpotentialMUMopportunities.Fromthis,asubstantialshareoffutureMUMswillprobablybeownedbyutilities.However,itislikelythattherearenegativeconsequencesofMUMswhen theyaredevelopedandownedbyutilities. Moreover,most parties of interestwillwant to ensure that utilities have the ability, but not anexclusiveability,todevelopandownMUMs.Becauseutility-ownedMUMsarelargelyuntested as yet, further research on this area is warranted as progress is made,includingwhether and how the ability for utilities to ownMUMsmight disadvantagealternative service providers, and if/how the ability for utilities to participate in (andprofitfrom)MUMsotherthanbyowningassetsmightalleviateanyconcerns.

5. Undertakecustomer-focusedresearch.ThisresearchwasorientedtowardsidentifyingthebarrierstoMUMdevelopment–fromtheperspectiveofthosewhomightseektodevelop/implementaMUMonbehalfofmultiple customers. In turn, thisbegsmanyquestionsaboutcustomerneedsandpreferences forMUMs. Ofnote, itappears thatmostMUMinitiativestodatehavebeendrivenbydesireforenhancedpowerresilience,yet it would be interesting to test how important environmental considerations – asreflectedbyincreasingquantitiesofcorporatepurchasingofrenewableenergy–mightbe among the potential customer base for MUM developers. In general, furtherincorporating customers into the MUM development stakeholder ecosystem will bevaluable.

6. Improve and maintain microgrid database. The database of microgrids that wasdevelopedforthisresearchislimitedtotheNortheasternUnitedStates(correspondingto the area of interest to the Northeast Clean Energy Council, one of the project’spartners),andmoreoverrepresentsasnapshotintimeinearly2018.ItwouldbeusefultoexpandthedatasetbeyondtheNortheasternUnitedStates,andtorefreshthedataonaperiodicbasis,providingabetterinformationsetfromwhichtoidentifyandfollowemergingtrendsinMUMactivity.

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Appendices

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Appendix 1: Summary of MUMs Selected for Case Studies

BaltimoreGas&ElectricPublicPurposeMicrogrids

CustomerBase Commercialentities(gasstation,bank,grocerystore),AcademicandHospital

UtilityandLocation BaltimoreGas&Electric(Exelonsubsidiary);Baltimore,MDandColumbia,MD

Status ProposalrejectedbyMarylandPublicServiceCommission(MPSC)

MotivationforMicrogrid PublicBenefitMicrogrid–Reliabilityandresilienceforcriticalcommunityservices

Generation/storageassets 3MWnaturalgas;2MWnaturalgas

ObstaclesEncountered: 1) Inequitableallocationofcostsvs.benefits2) Regulatoryinterpretationsofservicerequirements3) Overrelianceonnaturalgasgeneration

EffectiveActionsTaken: 1) N/A,asthemicrogridproposalwasrejectedbytheMPSC.However,thereasonsprovidedintherejectionhavebeenusedasworkingguidelinesandexpectationsforsubsequentmicrogridproposalsinthestate.

InDecember 2015, BaltimoreGas and Electric (BG&E) submitted a proposal for two separate “publicpurpose”microgridstotheMarylandPublicServiceCommission(MPSC),toserveaspilotstudiesfortheimplementationofMUMsinthestateofMaryland.xiii

• The firstmicrogridwas proposed to be located in Baltimore, at the 4600 block of EdmonsonAvenue.Amicrogrid at this locationwould service amajor grocery store andpharmacy, localrestaurants andamedical center (amongstotherbuildings and facilities). Thegivenproposedmicrogridwastobepoweredbya3MWnaturalturbineandcostapproximately$9.2-milliontodevelopandimplement.

• Thesecondmicrogridwasproposed tobe locatedalongGuilfordRoad inColumbia,Maryland

(HowardCounty).Thisproposedmicrogridwastoserviceagasstation,highschool,pharmacy,andlocalmeetinghouse.TheproposedHowardCountymicrogridwouldbeservicedby2MWofnaturalgasgenerationandcostapproximately$7.4million.

In developing thesemicrogrid proposals, BG&E chose siteswhere easily adaptable infrastructurewasalready available, and close to critical community facilities – such as urgent care facilities (hospitals,medicaloffices),schools(orotherplacesofshelter),gasstationsandgrocerystores–thatwouldbenefitmostfromimprovedresilienceenabledbytheimplementationofmicrogrids.

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Underitsmicrogridproposal,BG&Ewastoconstruct,ownandoperateallassetsofthetwomicrogrids,includinggenerationaswellasdistribution. ThecostofthemicrogridswastoberecoupedthroughamonthlytariffappliedtoallBG&Ecustomers.In July 2016, the MPSC rejected the BG&E microgrid proposalxiv for several reasons, including:

1) TheproposedmonthlytarifftorecoupmicrogridcostswouldbeappliedtoallBG&Ecustomersandnotjustthosecustomersbenefittingfromthemicrogrid;

2) Themicrogridswouldsolelyrelyonnaturalgasgenerationassets(asopposedtorenewables);and

3) Whenoperatingunder“island-mode”,microgridcustomersnolongerhavetheoptiontochoosethe electricity supplier – as is mandatory in Maryland since the electricity market wasrestructuredinthelate1990s.

While theBG&Emicrogridproposalwas rejected, theMPSC’s rationale for rejecting theproposalhassubsequentlyhelpedestablishlooseguidelinesandexpectationsformicrogridsinMaryland.FollowingBG&E’s failed proposal, the MPSC initiated PC44 to study electric distribution systems that aresustainable,customer-centric,affordableandreliable–suchasmicrogrids.InOctober2017,PEPCO(anothersubsidiaryofExelonservingotherpartsofMaryland)submittedtheirownproposaltotheMPSCfor“PublicPurpose”microgrids.xvLikeBG&E’sproposal,themicrogridwouldservicecommunityhealthcenters,grocerystores,gasstations,etc.intheeventofanoutage.However,therearedistinctdifferencesthataddresstheresponsesBG&Ereceived.Forinstance:

1) ThemicrogridswouldrelyonnaturalgasgenerationplusrenewablePVandstorage2) PEPCOwould solicit developers to build themicrogrid through a competitive bidding process

andthedeveloperoranotherthirdpartywouldownthegenerationassets.3) PEPCOproposedthat themicrogridcustomerscanretainwhateverretailenergysupplier they

choose,meaning the supply rate the customer pays would not be affected by themicrogriddevelopment.

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BronzevilleMicrogrid

CustomerBase 1060residential,commercial,andindustrialcustomers

UtilityandLocation CommonwealthEdison(Exelonsubsidiary);Chicago,IL

Status UnderDevelopment

MotivationforMicrogrid Demonstrationprojectforinterconnectedmicrogridnetwork

Generation/storageassets Planned7MWloadacrosstwophases:

Phase1:2.5MWloadwithsolarPVandbatteryESS,anddieselgenerators

Phase2:4.5additionalMWload,7MWofnaturalgasanddieselgeneration

ObstaclesEncountered: 1) Oppositiontocost-sharingacrossentirecustomerbase

2) Oppositiontoutilityre-enteringgenerationownershipbusiness

EffectiveActionsTaken: 1) Constructiveengagementbetweenutility,regulatorsandotherstakeholderstoresolveissues

2) Scalingbackambitiousplanfor6microgrids,whichdrewconcernsoverfaircompetitionfromalternativeenergyproviders

3) Allowingforprivateentitiestopurchasegenerationassets

4) Phaseddevelopment

TheBronzevillemicrogridisaplannedcommunityMUMthatwillinterconnectanewmicrogridwith a pre-existing microgrid at the Illinois Institute of Technology in the BronzevilleneighborhoodonthesouthsideofChicago.Oncecompleted,themicrogridwillserveroughly1,060 customers from a diverse user-mix, including residential, commercial and industrialcustomers,andhaveanaggregateloadof7MW.

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The localelectricutilityCommonwealthEdison (ComEd) isplanning theproject,asapilot forgatheringdataoveraten-yearperiodtoinformhowtomostefficientlyoperateinterconnectedmicrogridnetworks,intwophases:

• Thefirstphasewillcost$8million,involve750KWofsolarPVwith500MWhofbatterystorage,andserve490customerswith2.3MWofload.

• Thesecondphasewillcost$17million,largelyinvolvingdieselandnaturalgasturbines,andincorporateanadditional570customerswithabout5MWofload.

Uponcompletion,theBronzevillemicrogridwillbeabletosupportthepeakelectricitydemandofallitscustomersduringanislandingevent.Consequently,themicrogridoperatorwon’tneedtoworryaboutprioritizingcertainuserstodetermineafeasibleloadsheddingprotocol.There has been a great deal of debate over the proposedBronzevillemicrogrid. OnemajorcriticismisthatthemicrogridcostsaredispersedevenlyacrossallofComEd’snearly4.1millionratepayers, while only 1,060 will directly benefit from the microgrid. However, ComEdsuccessfully argued to the Illinois Commerce Commission (ICC) that all of its customers andotherstakeholderswillbenefitfromthemicrogridbasedonwhatwillbelearnedfromthispilotproject for use in subsequent microgrids – for a cost said to be “pennies per month percustomer”.AnothermajorcriticismwasthatComEdplannedtoownthegenerationassetsoftheproject.Since the Illinoiselectricitymarketwas restructured in1997,ComEdhadvoluntarilydivesteditself of its generation assets, and ComEd’s plans to own generation on the Bronzevillemicrogrid raised concerns that this would set an adverse precedent. Rather than fightingpushbackfromconcernedparties,ComEdagreedtofacilitateacompetitivebiddingprocessforthird-partiestoownandoperatethemicrogrid’sgenerationassets–unlessnoreasonablebidsweremade,inwhichcaseComEdwillstepintoleasethegenerationassets.Although still under development, the Bronzeville microgrid is a promising illustration ofsuccessfulMUMs,andmeritscontinuedmonitoringofprogress.

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BurrstoneEnergyCenter

CustomerBase Academicandmedical(3,000-studentcollege,300-bedhospital,and200bednursinghome)

UtilityandLocation NationalGrid;Utica,NY

Status Operational

MotivationforMicrogrid Lowerelectricitycosts;Improvedresilienceduringextremeweather

Generation/storageassets 3x1,100kWnaturalgasturbines;1x334kWnaturalgasturbine;Steamandheattohospital

ObstaclesEncountered: 1) Right-of-waydisputewithutility

EffectiveActionsTaken: 1) DevelopinginnovativeeconomicmodelsviaPPAwithNGanddevelopingpilotprogramtosellbackelectricitytoNGduringcriticalhoursforapremiumprice

2) SuccessfullyovercomingrightofwaydisputethroughtheawardofawaiverfromthePublicServiceCommission

In upstateUticaNY, the Burrstone Energy Center is a shining example of amulti-usermicrogrid thatovercame significant regulatory hurdles, exhibits an innovative economic model, and is owned by athird-party developer that is neither the local utility nor affiliated with its three sizable institutionalcustomers:1) Faxton-St.Luke’sHospital2) St.Luke’sNursingHome3) UticaCollegeThedeveloperandowneroftheBurrstoneEnergyCenter,CogenPowerTechnologies(CPT)developedand pursued a 15-year business model that produces revenue by providing electricity to all threecustomers(plussteamandheatsalestothehospital)andsellingelectricitytoNationalGridviaaPowerPurchaseAgreement (PPA) inwhich theyare reimbursedat thewholesale electricitypriceduring thehourofthesale.TheBurrstoneEnergyCenteralsomanagedtoovercomeoneofthemostprominentbarrierstomulti-usermicrogrids: exclusive franchise rights to the crossing of public right ofways. In order to deliverelectricitytoUticaCollege,CPTwasobligatedtocrossapublicrightofway.Althoughsubstantiallegaleffortswererequired,CPTwaseventuallygrantedthepermissiontheyneededtobringtheprojecttosuccessfulcompletion.

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PhiladelphiaNavyYard(PNY)(existingcommunitystatistics)

CustomerBase Commercial,Industrial,andAcademicinvolvingover7millionSFinoperation,150+businessesand13,000employees.Thelongrangedevelopmentplananticipatesaddingasmuchas1,500residentunitsandgrowingthetotalcommunitytoasmuchas18millionSF.

UtilityandLocation PhiladelphiaElectricCo(Exelonsubsidiary);Philadelphia,PAandTheNavyYardElectricUtility(TNYEU)operatedprivatelybyPIDC

Status Firstphasecomplete;expandingcapacity

MotivationforMicrogrid Economic/commercialdevelopment

Generation/storageassets 8MWnaturalgaspeakerplant,800kWBloomnitrogenfuelcellgenerator,and400kWcommunitysolar(plannedexpansionto1MW)

ObstaclesEncountered: 1) Rehabilitating and upgrading the aging distribution networkpreviouslyinstalledattheNavyYard

2) Attracting more industrial and commercial utilization withlimitedexistinggenerationassets

3) Managing numerous utility, regulatory, state, and local

stakeholders

EffectiveActionsTaken: 1) A. Prioritizing the development and implementation of thePNY network operations center to remotely monitor andcontrolpowerdistributionandgenerationB. Implementing smart meters and supervisory control anddataacquisition(SCADA)technologies

2) A. PNY first step was to create a comprehensive EnergyMaster Plan, which evaluated current capabilities, currentneeds,andneedsforfuturedevelopment.B. PNY prioritizes microgrid services to largest industrial/commercialstakeholders.

ThePhiladelphiaNavyYard(PNY)wasonceoneofthemostprominentNavalYardsintheUnitedStates.In2000,PhiladelphiaIndustrialDevelopmentCorporation(PIDC)acquiredthePNY,a1,200-acrefacility,onbehalfoftheCityofPhiladelphiainordertocatalyzeeconomicdevelopmentatasitethathadfallen

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intodisuse.By2004,acomprehensivemasterplanwasdraftedtotransformthePNYintoasustainable,mixed-usedevelopment.

ThePNYdevelopmentteamspentyearsdeterminingtheidealcommercialandindustrialmixnecessarytotarget.Knowingthedesiredscaleofdevelopmentandthecurrentcapabilities,PNYturnedtheirfocustodraftinganupdatedNavyYardEnergyMasterPlan(NYEMP).TheupdatedEMPwasfinalizedin2013andoutlinedinitiativesthatsupportedtheirgoalsforexpansion.TheEMPincludedplansforadvancedmetering, a network operation center, distribution automation, grid expansion, energy efficiencyprograms, self-generation and even proposed utility businessmodels – all of which centered aroundexpandingandupdatingtheinfrastructureintoa35MWhybridmicrogrid.

With the acquisition of the Navy Yard, PIDC and the City of Philadelphia acquired the largest,independent and unregulated, non-military electrical grids (i.e. microgrids) in the country (albeitoutdated,with limitedcapacity).BydraftingacomprehensiveMasterPlanandtheupdatedEMP,PNYprovideda strongbusinessplan for expanding themicrogrid in aneconomically and financially viablemanner. And because of its historical designation, themicrogrid expansion facedminimal regulatoryhurdlesduring itsconstruction–allowingforefficientcompletionof theproject.However,duetothenature of the project, the updated EMP alone had to receive buy-in from nearly 60 differentstakeholdersincludingpropertyowners,developers,tenants,utilities,etc.

Asof2017,thePNYmicrogridserved80customerswith188revenue-grademeters,withmorethan7millionSFinoperationemploying13,000workers.Themicrogridboastsexistingcapacityof34MWviatwo substations, with a third substation that will provide an additional 10 MW of capacity underconstruction, thus providing redundancy. Approximately 92% of the total electric usage on the PNYmicrogrid is currently purchased externally from wholesale energy provider Constellation Energy (asubsidiaryofExelon)anddeliveredtothePNYbythelocalutilityPhiladelphiaElectricCompany(anothersubsidiaryofExelon).

To date, capital costs for the microgrid’s development, including the various generation assets, isapproaching $34 million, but this may increase. Commercial and industrial growth at the PNY isforecastedtoresultinelectricloadincreasingfrom34MWin2014to60MWby2022.Oncecomplete,thePNYmicrogridwillsupporttheenergyneedsof30,000employeesand1,500residentialunits,andover15millionsquarefeetofmixed-usespace.

Asofnow,thePNY’sgenerationsources includea6MWNaturalGasPeakerPlant,atotalof3.2MWCombinedHeatandPower,0.8MWoffuelcells,anda1MWSolarPVarray.Tomeetloadgrowth,PNYplanstoexpandthegaspeakerwithanadditional2MWbytheendof2018.However,asmuchas10MW of new supply from PECO may ultimately be needed to complement new distributed energyresources(DERs)anddemandmanagementefforts.

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PotsdamCommunityMicrogrid

CustomerBase Academic,Hospital,Municipal,Commercialand~16,000residents

UtilityandLocation NationalGrid;Potsdam,NY

Status Conceptual/planningphase

MotivationforMicrogrid Improvedresilienceduringextremeweather

Generation/storageassets Pre-existing:1.4MWCHPgenerators(x2),500kWdams(x2),2MWsolar

New:3.2MWhydro,naturalgasCHP,andsolarPV

ObstaclesEncountered: 1) Aginginfrastructureandinclementweather

2) Justifying the additional incurred cost in an economically-challengedarea

EffectiveActionsTaken: 1) Staged implementation approach, where stakeholders can

approvesequentialphasesofconstruction

2) Proposed tiered tariff recovery where those stakeholderswhobenefit themost from themicrogridalsopay themostforthemicrogridservices.

The Potsdam Community Microgrid currently being planned is meant to serve as a demonstrationprojectfortheNewYorkReformingtheEnergyVisionprogram(NYREV).PotsdamisaremotelocationinupstateNewYork,lessthan30milesfromtheCanadianborder,whichischallengedbyintensestormsduringthewinter.Assuch,itisquitedifficultforautilitytosendaservicetrucktofixinfrastructureduringanextremeweatherevent.Tomakemattersworse,Potsdamreceivespowervialongtransmissionlinesthatareespeciallysusceptibletoextremeweather.Potsdamfacedtheconsequencesofthesevulnerabilitiesin1998whenawinterstormledtoathree-weekpoweroutage.For this reason, National Grid is developing plans for a community microgrid to provide increasedresilience to many critical facilities in the Potsdam area, such as a hospital, local police and firedepartments,watertreatmentplants,andanumberofcommercialbuildings.Thus far, thePotsdammicrogridprojecthas receivednearly$3million in combined funding from theNationalScienceFoundation(NSF),theU.S.DOEandtheNYSERDA.Partofthecost-benefit/engineeringfeasibilitystudywasfundedthroughNYSERDA’sElectricPowerTransmissionandDistributionSmartGridProgram.xvi The Potsdam microgrid development project was one of seven projects in New York toreceivefundingthroughthisprogram.Also,whiletheconceptualdesignwasnotfinishedintimetobesubmitted for New York Prize Stage 2 consideration, it is still the goal of the project to submit acompelling New York Prize Stage 3 funding application. NYSERDA announced that the Stage 3

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applicationdeadlinehasbeendelayedtotheendof2018,whichthePotsdamprojectteamfullexpectstomeet. Any potential addition funding received throughNY Prizewould helpwith the feasibility ofimplementation.As ofMay 2018, National Grid finished its engineering designs for themicrogrid and rate design forutilityownedassets. Iftheproject issuccessfullybroughttocompletion,NationalGridhopesfor ittoserveastheindustrystandardforcommunitymicrogrids.ProbablythetwomostdistinctiveaspectsofthePotsdammicrogridare:

• Itsphaseddevelopmentstructure,soastomitigate“rateshock”viaalargeone-timelump-sumincreaseinlocalelectricityprices.Asillustratedbelow,thePotsdamdemonstrationprojecthasoutlinedsixdifferentproposedstagesofimplementation.The first stage, which is identified as the “smaller footprint”, would cost approximately $30million to construct. The smaller footprint microgrid would connect Clarkson University, theVillageCivicCenterandtheCanton-PotsdamHospitalusingtheexistinghydropowerandDERsat ClarksonUniversity. Later stageswould sequentially add assets such as the SUNY-PotsdamCHPandthecommunitysolarPVaswellastieinotherloadslikewastewatertreatmentplantand the national grid service center. The phased development would spread the cost to thecommunityovertimeaseachpieceisapproved.

• Atieredpricingtariff,underwhichcustomersthathavethegreatestneeds(andcorresponding

willingness to pay) for greater resilience pay more for the microgrid. Future microgridparticipantswouldbeassignedtiersbasedonthebenefitsreceived.Those participants with direct benefits and load generating capacity would be served at thehighest priority (Tier 1a), and those with critical services would be served at a close secondpriority(Tier1b).ClarksonUniversityandtheVillageGovernmentwouldfallunderTier1a,while

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theHospital, Rescue Squad,High School,Grocery Store (and a fewothers) fall under Tier 1b.Fromapricingstandpoint, theTier1participantswouldpay thehighest tariff.The lowest tier(Tier5)istheresidentialratepayerswhoreceiveindirectbenefitsfromthemicrogrid–andtheywouldpaytheleastintheappliedtariffstructure.

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Appendix 2: Northeast United States microgrid dataset Thisappendixdetailsthedatasetofmicrogridsthatwascreatedforthisstudy.TitleofData:NortheasternUnitedStatesMicrogridDataSetDatabaseConstructedby:JosefBenzaoui

LastUpdated:July19th,2018

Description of Data: This data set provides a comprehensive listing of microgrids in theNortheastern United States, and to the extent possible describes a number of variables orcharacteristicsforeachmicrogrid.SourcesofData:Variouspublicsourceswereusedintheconstructionofthisdataset.Sourcesofinformationforeachmicrogridarelistedinthedatasetrecordforthatmicrogrid.

VariablesExplained:

Cost:Thisvaluerepresentsthecapitalcostoftheproject,whenavailable.Sometimesonlytheoverallcostoftheproject(includingsoftcosts) is listedinanarticleorpressreleaseandthatvalueisusedinstead.Ifneitherthecapitalnoroverallcostoftheprojectisavailable,thevalueislistedas9999.Amount Awarded: This value represents the total sum of grants awarded to the microgridproject.Ifnograntswereawardedtotheproject,thisvalueislistedasN/A.Ifitisuncertainastowhetherornotgrantswereawardedor theamountofgrant funding isnotavailable, thisvalueislistedas9999.ApplicationTeam:Thislistoforganizationsrepresentstheteamwhoparticipatedinthegrantapplication. Ifnograntwasappliedfor,thisvalue is listedasN/A. Ifanapplicationtoagrantprogramwasmadebuttheteammembersareunknown,thenthisvalueislistedas9999.Critical Facilities: This list of facilities are those deemed critical to the town/community inwhichthemicrogridexistsbytheprojectteam.Ifnocriticalfacilitiesareapartofthemicrogrid,thisvariableislistedas‘none’.Commercial Buildings: This list of facilities are commercial in nature and supported by themicrogrid.Ifnonearesupportedbythemicrogrid,thisvariableislistedas‘none’.

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Utility:This istheutility (orutilities)thatoperate inthearea(s)withinwhichthemicrogrid islocated.ProjectStatus:Thisvaluerepresentsthemostcurrentlyavailableupdateonthestatusofthemicrogrid.ForprojectsthatparticipatedintheNYPrizeprogram:

• IfthevalueislistedasNYPrizeStage1Winner,itmeansthemicrogridwasastageonewinnerbutdidnotgopastafeasibilitystudy.

• If the value is listedas aNYStage2Winner, itmeans themicrogridwasa stage twowinnerbutnofurtherupdateswereavailable.

• Somestage2winnershadpubliclyavailable informationabouttheirprogress,suchasbecomingoperational,andarelistedasoperational.

Generation: This variable lists the most detailed information about the generationtechnology/assets utilized by the microgrid, or that was planned to be utilized as per thefeasibilitystudy.Contact:Thisrepresentsthemostspecificpointofcontactassociatedwiththemicrogridoritsfeasibility study. If no specific point of contact is available, a general company ormunicipalrepresentativeassociatedwiththeprojectislisted.Ifnocontactisavailable,thevalueislistedas9999.ContactInfo:Thisrepresentscontactinformation(phone,email,orboth)forthelistedpointofcontact.Ifnocontactinformationisavailable,thisvalueislistedas9999.StateCode:ThisvalueisanumericallycodedversionofthevariablecalledState.

1=Connecticut2=Maine3=Maryland4=Massachusetts5=NewHampshire6=NewJersey7=NewYork8=Pennsylvania9=RhodeIsland10=Vermont

ProjectStatusCode:ThisvalueisanumericallycodedversionofthevariablecalledProjectStatus.

1=AppliedforGrant2=Failed3=FeasibilityStudy

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4=GrantFunded5=NYPrizeStage1Winner6=NYPrizeStage2Loser7=Operational8=Proposed9=UnderDevelopment

Multi-User:Thisisabinaryvariablethatrepresentswhetherthemicrogridis(orisplannedtobe)single-userormulti-user.Avalueof0indicatesthemicrogridissingle-userandavalueof1indicatesthemicrogridismulti-user.Ifthatinformationisuncertainornotyetdetermined(asisthecaseinsomefeasibilitystudies),itislistedas9999.UserMix:Thisisanumericallycodedvariablethatrepresentsthemixofuserswhichare(orareplannedtobe)supportedbythemicrogrid.Ifmorethanonetypeofuserissupported,itisconsideredmixed-use.Ifthatinformationisuncertainornotyetdetermined(asisthecaseinsomefeasibilitystudies),itislistedas9999.

1=Industrial2=Commercial3=Residential4= Municipal5=Medical6=Education7=Mixed-use(2ormoreofanyofthelistedusertypes)8=Navy9=Military

Generation Mix: This is a numerically-coded variable that represents the generationtechnologies/sources that are (or are planned to be) incorporated into themicrogrid. If thatinformationisuncertainornotyetdetermined(asisthecaseinsomefeasibilitystudies), it islistedas9999.

1=Solar2=Wind3=Hydro4=NaturalGas5=NaturalGaswithCHP6=CHP7=Diesel8=Mixed9=Coal10=FuelCell11=WastetoEnergy

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Storage:This isabinaryvariablethatrepresentswhetherornot themicrogrid includes (or isplanned to include) storage technologies. A value of 0 indicates no storage and a value of 1indicatesstorage.Ifthatinformationisuncertainornotyetdetermined(asisthecaseinsomefeasibilitystudies),itislistedas9999.Islanding: This is a binary variable that represents whether or not themicrogrid has (or isplannedtohave)islandingcapabilities.Avalueof0indicatesnoislandingcapabilityandavalueof1indicatesislandingcapability.Ifthatinformationisuncertainornotyetdetermined(asisthecaseinsomefeasibilitystudies),itislistedas9999.ProjectCount:Dummyvariabletofacilitatecountingnumberofmicrogridssatisfyingparticularcharacteristic.

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Appendix 3: Individuals Interviewed The following table lists the individuals thatwere interviewed in the courseof this research.Wewouldliketothanktheseindividualsfortheirperspectivesandtheirassistance.IntervieweeName Organization/CompanyEdLinton NorthernPowerSystemsWillAgate Ameresco(formerlyPhiladelphiaNavyYard)MarkJohnson CleanEnergyBlockchainNetworkTomLovett&JackGriffin VeoliaSourceOne/HudsonYardsDanDobbsandLuisOrtiz AnbaricGalenNelson MassachusettsCleanEnergyCouncilTravisSheehan GridlingGlobalJamesMader AvangridKarenMorgan DynamicEnergyNetworksMichaelDeSocio NewYorkIndependentServiceOperatorMarkFeasel SchneiderElectricBradSwing CityofBostonManuelEsquivel BostonPlanningandDevelopmentAgencyJohnMoynihan CogenPowerTechnologiesPaulTyno BostonNiagaraMedicalCampusArunkumarVedhathiri NationalGrid–NewEnergySolutionsMichaelP.Razanousky NYStateEnergyResearch&DevelopmentAuthorityJoshDoolittleandVishalPatwari B2QAssociatesHeatherTakle 2ndPathEnergy

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Endnotes

iDanT.TonandMerrillA.Smith,“TheU.S.DepartmentofEnergy’sMicrogridInitiative”,TheElectricityJournal,October2012,Vol.25,Issue8.Copyright2012.https://www.energy.gov/sites/prod/files/2016/06/f32/The%20US%20Department%20of%20Energy%27s%20Microgrid%20Initiative.pdfiiEto,JosephH.,“TheNationalCostofPowerInterruptionstoElectricityCustomers–EarlyPeekatLBNL’s2016UpdatedEstimate”2016IEEEPESGeneralMeeting,July19,2016.http://grouper.ieee.org/groups/td/dist/sd/doc/2016-09-02LBNL2016UpdatedEstimate-NatCostofPwrInterruptionstoElecCusts-JoeEto.pdfiiiLBNLreports:KristinaHamachiLaCommareandJosephH.Eto.“CostofPowerInterruptionstoElectricityConsumersintheUnitedStates(U.S.)”LBNLEnvironmentalEnergyTechnologiesDivisionLBNL-58164,February2006.Eto,JosephH.,“TheNationalCostofPowerInterruptionstoElectricityCustomers–EarlyPeekatLBNL’s2016UpdatedEstimate”2016IEEEPESGeneralMeeting,July19,2016.“EstimatingPowerInterruptionCosts:AGuidebookforElectricUtilities”LBNLandNexant,Inc.MichaelSullivan,MylesT.Collins,JoshSchellenberg,Nexant,Inc.andPeterH.Larsen,LawrenceBerkeleyNationalLaboratory.July2018.EPRIreport:“TheIntegratedGrid:ABenefit-CostFramework”EPRIReport3002004878.FinalReport,February2015.NRELreports:“ValuingtheResilienceProvidedbySolarandBatteryEnergyStorageSystems”NREL/BR-6A20-70679,January2018.SummaryofLaws,NicholasD.,KateAnderson,NicholasA.DiOrio,XiangkunLi,andJoyceMcLaren.“ImpactsofValuingResilienceonCost-OptimalPVandStorageSystemsforCommercialBuildings.”KateAnderson(NREL),NicholasD.Laws(NREL),SpencerMarr(CUNY),LarsLisell(NREL),TonyJimenez(NREL),TriaCase(CUNY),XiangkunLi(NREL),DagLohmann,andDylanCutler(NREL),“QuantifyingandMonetizingRenewableEnergyResilience”SustainabilityJournal2018,Vol10,pg933.http://www.mdpi.com/journal/sustainabilityivEto,JosephH.,“TheNationalCostofPowerInterruptionstoElectricityCustomers–ARevisedUpdate”2017IEEEPESGeneralMeeting,January10,2017.v“MeasuringtheValueofElectricSystemResilience:AReviewofOutageCostSurveysandNaturalDisasterImpactStudyMethods,”CornellUniversityandEPRI.TechnicalUpdate3002009670,January2017.“Draft-EstimatingtheRegionalEconomicResilienceBenefitsofCommunityMicrogrids”,DatedJune28,2018.PreparedforNYSERDAbyIndustrialEconomics,Inc.ofCambridge,MA.viWood,Elisa.“MarylandRegulatorsRejectBGE’sUtilityMicrogrids;RaiseCompetitionIssues”MicrogridKnowledgeJuly22,2016.https://microgridknowledge.com/utility-microgrids/.“CommentsoftheNationalEnergyMarketersAssociation-IntheMatteroftheMergerofExelon)CorporationandPepcoHoldings,Inc.”StateofMarylandPublicServiceCommission–CaseNo.9361.April6,2018https://www.energymarketers.com/Documents/NEM_cmts_Pepco_microgrid_proposal_final.pdfviiMarylandOfficeofPeople’sCounsel,RegulatoryActivities–Electricity.Maryland.gov,Copyright2015.http://opc.maryland.gov/RegulatoryActivities/Electricity.aspx.viiiHoedl,Seth.“AComparisonofLegalIssuesforMicrogridsinMassachussets,NewYorkandD.C.”EmmetEnvironmentalLawandPolicyClinic,Slide12.June29th,2015.http://environment.law.harvard.edu/wp-content/uploads/2015/08/masschusetts-microgrids_overcoming-legal-obstacles.pdfix NewYorkStateEnergyResearchandDevelopmentAuthority.“Microgrids:AnAssessmentoftheValue,Opportunities,andBarrierstoDeploymentinNewYorkState”NYSERDAElectricPowerTransmissionandDistributionReports-R&DTechnicalReports,page23.September2010.https://www.nyserda.ny.gov/About/Publications/Research-and-Development-Technical-Reports/Electric-Power-Transmission-and-Distribution-Reportsxhttps://legiscan.com/NH/text/HB1338/id/1656666

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xiBostonPlanningandDevelopmentAgency.“SmartUtilitiesPolicyforArticle80DevelopmentReview”.June2018.http://www.bostonplans.org/planning/planning-initiatives/boston-smart-utilities-projectxiiMicrogridKnowledge.MicrogridKnowledgeConferenceSeries.May2018.https://microgridknowledge.com/microgrid-2018-conference/xiii“BGE’sPublicPurposeMicrogridProposal”viaelectronicfiling;BaltimoreGas&Electric,December18,2015.https://www.bge.com/MyAccount/MyBillUsage/Documents/BGE%20Microgrid%20Proposal%20Filing%20wATT_121815_F.pdf.xivWood,Elisa.“MarylandRegulatorsRejectBGE’sUtilityMicrogrids;RaiseCompetitionIssues”MicrogridKnowledgeJuly22,2016.https://microgridknowledge.com/utility-microgrids/.“CommentsoftheNationalEnergyMarketersAssociation-IntheMatteroftheMergerofExelon)CorporationandPepcoHoldings,Inc.”StateofMarylandPublicServiceCommission–CaseNo.9361.April6,2018https://www.energymarketers.com/Documents/NEM_cmts_Pepco_microgrid_proposal_final.pdfxvWood,Elisa.“MarylandUtilityProposes$44.2MPilotforPublicPurposeMicrogrids”MicrogridKnowledge,October3,2017.https://microgridknowledge.com/public-purpose-microgrids-pepco/.“CommentsoftheNationalEnergyMarketersAssociation-IntheMatteroftheMergerofExelon)CorporationandPepcoHoldings,Inc.”StateofMarylandPublicServiceCommission–CaseNo.9361.April6,2018https://www.energymarketers.com/Documents/NEM_cmts_Pepco_microgrid_proposal_final.pdfxviRizzo,Alan.“SmartEnergyGridtoKeepPotsdam,N.Y.,PoweredDuringEmergencies”EmergencyManagement,July30,2014.http://www.govtech.com/em/disaster/Smart-Energy-Grid-Potsdam-NY.html