Natural disasters and climate change have made it apparent that energy infrastructure needs to be modernized and microgrids are one type of technology that can help the electricity grid become more resilient, reliable, and efficient. Different states have begun developing microgrid pilot projects including California, New York, Connecticut, and Pennsylvania. The City of Pittsburgh, Pennsylvania is the first city to propose implementing “energy districts” of microgrids that will serve as critical infrastructure, in the first phase, and then expand to commercial and community settings. This large project involves many shareholders including public utilities, government agencies, and private entities. Utilizing microgrids on such a large scale raises issues regarding its classification, as energy generation or energy storage, and whether it should be regulated by public utilities, private entities, or municipalities. In a state like Pennsylvania where the energy market has been deregulated, there is strong concern on what the public utilities involvement will be with microgrid projects.

This Note focuses on the regulatory issues that are raised with the construction and operation of microgrids at such a large scale in Pittsburgh. It addresses the difficulties that arise when implementing microgrids in a deregulated energy market state such as Pennsylvania, where little to no statutory language exists regarding microgrids. It will give an overview of proposed Pennsylvania legislation that may impact a public utilities’ control over microgrid technology and the benefits and costs when examining the extent of the public utilities’ role regarding ownership and control of microgrids in a deregulated energy market.