Oregon has taken a groundbreaking step in clean energy with the enactment of two pioneering microgrid bills—HB 2065 and HB 2066. According to the Center for Climate and Energy Solutions, there are currently 692 microgrids operating in seven U.S. states: Alaska, California, Georgia, Maryland, New York, Oklahoma, and Texas. However, Oregon’s new laws are the first to establish a regulatory framework for microgrids, which could provide new opportunities for development, especially in transmission-constrained regions.

A microgrid is a collection of loads and distributed energy resources within a defined geographical area that functions as a single controllable system. Microgrids may operate independently or in conjunction with the main grid. Microgrids typically offer an array of benefits, from enhancing community resilience to reducing energy costs. Oregon’s new legislation positions the state as a leader in addressing the challenges posed by climate change and an aging utility infrastructure.

A Closer Look at HB 2065 and HB 2066

HB 2066

HB 2066 directs the Oregon Public Utility Commission (the “PUC”) to investigate and create a structure for regulating frameworks for the ownership, deployment, and use of microgrids within electric companies’ service territories by the end of January 2027. In developing their framework, the PUC must consider the benefits and constraints of microgrid deployment, their role in economic growth and reliable electricity service, and various design approaches. HB 2066 emphasizes the importance of accessible application processes, compensation frameworks recognizing the value microgrids provide, and the ability for excess energy to be sold to utilities on a nondiscriminatory basis. It also anticipates the incorporation of front-of-meter energy resources into microgrids, and for utilities to partner with municipalities, businesses, or communities for microgrid development.

HB 2065

HB 2065 aims to reduce bottlenecks to microgrid deployment by creating clear guidelines for the evaluation of microgrid interconnection applications, and by allowing the microgrid developer to elect to have a third-party consultant to conduct the interconnection study or evaluation (subject to “reasonable review and approval” by the public utility). Further, HB 2065 seeks to reduce delays by giving public utilities a limited amount of time to provide relevant information to the developer’s consultant and to approve or deny microgrid applications. Finally, application decisions must be based on safety, reliability, and compliance with published standards.

Analysis

While other states have taken a stab at their own microgrid legislation, Oregon is the first to create a clear path toward implementation. The regulations will not be finalized for another 18 months, so many questions still remain unanswered. Nonetheless, the new legislation is unambiguously intended to create new opportunities for microgrid development and preemptively address the anticipated bottleneck caused by the existing interconnection process.

Oregon has taken a significant step in supporting the clean energy transition by adopting HB 2065 and HB 2066. These laws are the first step in adopting a clear regulatory framework for the development of new microgrids, promoting energy resilience within the state, and providing a guide for other states that do not yet host microgrids.

This article summarizes aspects of the law. This article does not constitute legal advice. For legal advice for your situation, you should contact an attorney.