Pilot program for demonstration of innovative microgrid applications

(a) Definitions In this section: (1) Eligible entity The term eligible entity means— (A) an electric grid operator; (B) an electricity storage operator; (C) an electricity generator; (D) a transmission owner or operator; (E) a distribution provider; (F) a fuel supplier; (G) a State, a territory of the United States, or an Indian Tribe; (H) an agency, authority, corporation, or instrumentality of a State or Indian Tribe; (I) a unit of local government or a political subdivision of a State or Indian Tribe; (J) an institution of higher education; and (K) any other relevant entity, as determined by the Secretary. (2) Pilot program The term pilot program means the pilot program established under subsection (b). (3) Secretary The term Secretary means the Secretary of Energy. (b) Establishment Not later than 1 year after the date of enactment of this Act, the Secretary shall establish a pilot program to award grants, on a competitive basis, to eligible entities for projects to demonstrate innovative microgrid deployment. (c) Applications An eligible entity seeking a grant under the pilot program shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require. (d) Priority In awarding grants under the pilot program, the Secretary shall give priority to projects that demonstrate innovative microgrid applications, emerging technologies, and distributed energy resources management systems, which may include microgrid projects that— (1) provide ancillary grid services and supply and demand management; (2) aggregate distributed energy resources into virtual power plants; (3) communicate between demand and generation resources; (4) demonstrate effective cybersecurity management; (5) demonstrate methods to protect microgrids and related energy resources during a grid or microgrid fault; (6) facilitate load transfers to alleviate transmission congestion; (7) manage voltage instability or collapses; (8) demonstrate systems to support microgrid and networked microgrid operations, including coordination and resource sharing; (9) demonstrate systems for multi-microgrid control; (10) demonstrate microgrid capabilities and operation in black-start conditions; (11) demonstrate successful operation of microgrids where direct current systems are the primary basis of design; (12) demonstrate successful microgrid operation with a significant penetration of or complete reliance on renewable energy resources, including storage; or (13) adopt a flexible regulatory framework for high-visibility projects that demonstrate advanced microgrid concepts and technologies. (e) Cost share The Federal share of the cost of a project for which a grant is provided under the pilot program shall not exceed 90 percent. (f) Technical assistance The Secretary may provide technical assistance to recipients of grants under the pilot program with respect to— (1) the development of microgrid regulatory frameworks; (2) the design of microgrids; and (3) the feasibility of microgrid projects. (g) Reports (1) Report on microgrid benefits and regulatory processes Not later than 5 years after the date of enactment of this Act, the Secretary, in coordination with the National Laboratories, shall submit to Congress and publish on a publicly available website of the Department of Energy a report that evaluates the outcomes of the pilot program, including— (A) the benefits, challenges, and risks of microgrid deployment; and (B) regulatory processes relating to the deployment of microgrids. (2) Report on pilot projects Annually, the Secretary shall submit to Congress and publish on a publicly available website of the Department of Energy a report describing each project funded under the pilot program as of the date of the report, including the innovative microgrid deployment, applications, and technologies demonstrated by the project. (h) Authorization of appropriations There is authorized to be appropriated to the Secretary to carry out the pilot program $200,000,000 for the period of fiscal years 2027 through 2031.