NY Okays Consolidated Edison Microgrid and Other Unconventional Grid Fixes

New York regulators have okayed a Consolidated Edison microgrid plan and other non-traditional resources to solve problems typically fixed by more conventional means.

The utility, one of the nation’s largest, needs to ward off a 69-MW shortfall brought on by new electric demand in Brooklyn and Queens.

The Public Service Commission called the plan a “significant step forward toward a regulatory paradigm.”

“This is the first time that the commission is requiring a utility to actively and vigorously work to address growth in system demand in a manner other than through traditional utility investment,” said the commission in the order issued late last week.

If the utility went the traditional route, it would likely spend about $1 billion for a new substation, switching station and subtransmission feeders.

Instead, Con Edison will pursue what’s expected to be a less pricey path that includes 52 MW of non-traditional solutions and 17 MW of traditional voltage and demand-side management solutions.

The commission capped spending on the non-traditional solutions at $200 million.  This includes about $150 million for 41 MW of customer-side projects, amounting to about $3.7 million per MW. Con Edison also plans about 11 MW of utility-side non-traditional projects, expected to cost about $50 million, or about $4.5 million per MW.

Meanwhile, the traditional solutions in the plan — 6 MW of capacitor bank installations and 11 MW of load transfers — are expected to cost about $12.3 million.

Con Edison’s non-traditional solutions include developing one or more microgrids located at apartment complexes in the Brownsville load area. The utility proposed installation of generation adjacent to the Brownsville substations that will be synchronized to the secondary grid using a DC Link.  Voltage and Reactive Power (Volt/VAR) would be optimized on the 4-kV grid to reduce voltage 2.25 percent and demand by about 2 MW. The project also includes a demand management system for the 4 kV grid, energy storage capacity, microgrid DG unit, and Volt/VAR optimization equipment.

Batteries Gray Competitive Area

Most of the distributed energy in the plan will be owned by independent parties, but Con Edison intends to own and operate battery storage at certain unit substations.

This raises new competitive questions in restructured states like New York where utilities cannot own generation, but do own and manage the distribution system. Where does battery storage fall in the spectrum?

Independent Power Producers of New York (IPPNY) challenged utility ownership of distributed resources, arguing that energy services are best procured by private companies.

However, the commission said it would allow utility ownership of the batteries in this case for several reasons.

First, the batteries will operate on the utility distribution side of the system and will give Con Edison experience working with storage.

Second, the presence of the batteries will allow for more integration of solar and other distributed energy by independent third parties.

And last, the commission emphasized that it wasn’t precluding battery storage by competitive companies and expects the trend to move in their direction as the market develops.

The commission said it also will allow Con Edison to own distributed generation, but only as a backstop if the market fails to provide resources.

The utility already has issued a request for information for non-traditional solutions, which drew 78 responses. The Electric Power Research Institute (EPRI) and Nexant are acting as consultants helping the utility analyze the results. Con Edison expects to choose winners before the end of the year.

The commission noted that the Con Edison program closely aligns with New York’s move to create a more decentralized electric grid, being pursued through a policy it calls Reforming the Energy Vision, or REV. The commission does not consider the Con Edison ruling, thus far, to be precedent setting for REV.

More details on the ongoing  Con Edison proceeding are here.