Sen. Peter Welch (D-Vt.) introduced legislation last week that would channel $700 million to microgrids. But a more important part of the bill costs nothing.
The Supporting Transformative Resilience, Operations, and Next-Generation Grid Innovation Deployment (STRONG GRID) Act of 2026 would start the clock on state proceedings about what resilience is worth – a stumbling block the microgrid industry has wrestled with for years.
If enacted, the bill would kick off resilience proceedings in states within a year, with decisions due within two years.
States would consider, among other things:
- Which events, circumstances and essential services require resilience
- What level and duration of service counts as achieving it
- Whether critical customers have on-site or behind-the-meter generation capacity and have shared that information with their utility
They would develop methods to justify resilience investments and determine how benefits are allocated among ratepayers.
Not all states would be required to participate. Much would depend on whether they have already evaluated or instituted similar microgrid policies.
Tackling interconnection
The proposed bill also asks each state to consider establishing a regulatory framework for microgrid interconnection, which may include revising existing distributed energy interconnection requirements to better account for islanding, resource availability and scheduling, resource protection and controls.
Where the Money Goes
The $700 million figure combines two different things.
First, the bill appropriates $500 million directly — funds available without a subsequent appropriation — for fiscal years 2027 through 2031.
Second, it authorizes an additional $200 million over the same period for a Department of Energy pilot program, which would still require Congressional appropriation.
The $500 million would flow to state energy offices under the State Energy Program allocation formula in effect on Dec. 31, 2024. Each state would award competitive grants for microgrid development. The money could pay for feasibility studies, design and engineering, permitting and siting assistance, construction of generation and storage assets, cybersecurity and operational controls, operations and maintenance, and staff training on real-time microgrid systems.
States would prioritize projects that reduce the frequency, duration or scale of outages, improve reliability, generate multiple value streams including ancillary services, address needs identified in hazard mitigation or state energy security plans, primarily benefit rural areas or low-income communities, provide demand management or congestion control, or deploy distributed and renewable resources.
Notably, the bill does not define who is eligible for $500 million in funding. That discretion sits with state energy offices, which means that who gets to vie for money could likely vary by geography.
Those eligible for the $200 million DOE pilot are named, however: grid operators, storage operators, generators, transmission owners and operators, distribution providers, fuel suppliers, states, territories, Tribes, state and Tribal instrumentalities, local governments, institutions of higher education, and any other entity the energy secretary determines relevant.
Pilot priorities include: aggregating distributed energy into virtual power plants, networked microgrid coordination and resource sharing, multi-microgrid control, black-start operation, DC-primary designs, high renewable penetration, fault protection, load transfers to relieve transmission congestion, and voltage instability management.
Two Provisions Worth Noting
In addition, the legislation:
- Amends the State Energy Program to make microgrids explicitly eligible under one provision and inserts “such as distributed energy resources and virtual power plants” into another.
- Directs DOE to provide technical assistance to utilities, regulators, state energy offices, local governments and tribes on interconnection processes, valuation and verification of microgrid benefits, integrated distribution and resource planning including behind-the-meter resources, and co-locating microgrid infrastructure with large industrial and commercial loads.
Welch has become increasingly visible on grid modernization. Earlier this year, he joined Sen. Dave McCormick (R-Pa.) in introducing legislation to speed transmission upgrades and expand grid capacity. He also serves as ranking member of the Senate Agriculture Subcommittee on Rural Development, Energy and Credit, giving him a platform on rural energy and grid issues.
The GridWise Alliance, Honeywell Technologies, the Information Technology Industry Council, the National Association of Electrical Distributors, the National Association of State Energy Officials and the National Electrical Manufacturers Association endorse the bill.
For a more in-depth look at resilience, listen to this conversation.
