SECTION 1. Chapter 25A of the General Laws is hereby amended by inserting after section 11I the following section:-

Section 11J. (a) As used in this section, the following words shall, unless the context clearly requires otherwise, have the following meanings:-

"Critical facility", any hospital; police or fire station; water or sewage treatment plant; any school, senior center or multi-family housing facility that could serve as an alternative shelter and/or emergency communication resource, particularly for low-income residents; any commercial area of a municipality or municipal center as identified by the chief elected official of any municipality; or any other facility or area identified by the department as a building or structure where loss of electrical service would result in disruption of a critical public safety life sustaining function;

"Clean distributed energy generation", the generation of electricity from a unit with a rating of not more than 65 megawatts on the premises of a retail end user within the transmission and distribution system, which either uses a fuel source listed under the MA Renewable Portfolio Standard (RPS) Class 1, or is a gas-turbine or fuel cell-based combined heat and power (CHP) or trigeneration unit, where appropriate, with a total system efficiency of at least 75%;

"Microgrid", a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid and that connects and disconnects from such grid to enable it to operate in both grid-connected or island mode.

(b) Recognizing the vulnerability to intensifying climate disruption of the electrical macrogrid and critical facilities in Massachusetts, the Department of Energy Resources (“Department”) shall establish a microgrid grant and loan pilot program (“program”), subject to appropriation and/or funding made available through partnership with private parties, to support the development of islandable clean distributed energy generation and/or storage at critical facilities. The Department shall develop and issue a Request For Proposals from municipalities or other public entities including regional school/water/sewerage districts and planning agencies (RPAs); electric distribution companies; participating municipal lighting plants; and private entities seeking to develop a microgrid using clean distributed energy generation, or to repurpose existing clean distributed energy generation for use with microgrids, to support the energy resilience of critical facilities. Any entity eligible to submit a proposal pursuant to this section may collaborate with any other such entity in submitting such proposal.

(c) The Department may award grants or loans under the microgrid grant and loan pilot program to municipalities, electric distribution companies, participating municipal lighting plants and private entities. Such grants and loans shall be used to provide assistance to all recipients for the cost of design, engineering services and interconnection infrastructure for any such microgrid; and to provide recipients who are low-to-moderate income residents demonstrating income levels below 100% of Area Median Income a subsidy of up to 85% of their share of the cost of installing clean distributed energy generation in their eligible facility(ies), which must include their place(s) of residence, with the remainder financed by the recipient(s).  The Department shall provide appropriate avenues within the Request For Proposal for those intending to qualify for the subsidy to demonstrate income eligibility.  In addition, the Department may elect for a portion of the program funds to serve as a Loan Loss Reserve for zero- or low-interest loans secured through partnership with a mission-oriented lender, for purposes of assisting low-to-moderate income residents, demonstrating income levels below 100% of Area Median Income, to meet costs associated with installation of microgrids using clean distributed energy generation. The Department may establish any other financing mechanism to provide or leverage additional funding to support the development of clean distributed energy generation and microgrids that is not limited to the cost of interconnection infrastructure.

(e) On or before January 1, 2016, the Department shall file a report with the clerks of the Senate and the House of Representatives, the Joint Committee on Telecommunications, Utilities and Energy and the Senate and House Committees on Ways and Means identifying other funding sources necessary to expand the microgrid grant and loan pilot program established pursuant to this section and any legislative changes necessary to access such funding.

(f) The Department shall study the methods of providing reliable electric services to critical facilities, taking into consideration the location of such critical facilities. Such study shall evaluate the costs and benefits of such methods, including, but not limited to, the use of microgrids, energy storage technologies, undergrounding and portable turbine generation, and shall make recommendations identifying the most cost-effective and reliable of such methods. Not later than January 1, 2016, the Department shall submit the findings of such study to the clerks of the Senate and the House of Representatives, the Joint Committee on Telecommunications, Utilities and Energy and the Senate and House Committees on Ways and Means.