Correction: An earlier version of this story incorrectly characterized the amount of money that power failures cost businesses and consumers. They cost about $150 billion a year. This version has been corrected.

For years, Howard University has relied on Pepco for most of its power needs. But a new project could free the campus from its dependence on the utility and turn it into a power provider for its Northwest Washington neighborhood.

Howard plans to be among the first universities in the area to install a microgrid, a system that would allow it to generate and manage power and save the university millions of dollars. The campus will still remain connected to Pepco’s grid but will have the ability to sever the connection and maintain power even in the event of an outage.

The project is a joint venture between the university and Pareto Energy, a District-based company that specializes in microgrid design and development. The microgrid will be built with the help of students and faculty at the school’s Center for Energy Systems and Control.

“This will give our students the chance to do more meaningful practical research,” said James Momoh, the center’s director and an engineering professor. “They’ll have the ability to test and demonstrate [microgrid] tools.”

As part of the project, two natural gas generators will be installed on campus that will initially provide about half of the campus’s power. That share will eventually grow. The microgrid could be in place within two years, although some regulatory issues still need to be worked out, officials said.

Pepco officials declined to offer details about the university’s microgrid project, citing “customer confidentiality restrictions.”

‘Back to the future’

A smaller power grid that operates parallel to a larger power grid is not new. Officials with the Energy Department note that the United States gradually shifted from a decentralized electrical grid to the system that now exists.

But in recent years, microgrids have grown in popularity as officials seek solutions to improve the reliability of the aging U.S. energy infrastructure and try to incorporate renewable energy sources, such as solar power, into the grid.

“In the beginning, the whole system was based on microgrids,” said Peter Asmus, a senior analyst with Pike Research, a market research and consulting firm that provides analyses of clean technology markets. “We’re kind of going back to the future.”

According to the Galvin Electricity Initiative, a nonprofit group that promotes electricity reliability through microgrid technology, power failures cost businesses and consumers about $150 billion a year. About 500,000 Americans spend at least two hours without electricity every day.

In the Washington region, where Pepco provides power to 778,000 customers, businesses and residents have grown accustomed to outages in good weather and bad. In a recent survey, the utility ranked near the bottom in customer satisfaction among the 25 largest investor-owned energy utilities. According to the Galvin Electricity Initiative, the average Pepco customer suffers outages of about 300 minutes each year, compared with the national average of 200 minutes.

Guy Warner, chief executive of Pareto Energy, said that if deployed correctly, microgrids such as the one at Howard could improve power reliability in the region.

Asmus said that universities and military bases have been among the first to embrace the technology as a way to improve reliability and save money. The Energy Department has also begun funding microgrid research and small pilot projects across the country.

Gaining independence

Although some utilities have been leery of microgrids for economic and safety reasons, others see benefits in a network of smaller, less centralized power sources.

The Sacramento Municipal Utility District is building a microgrid at its Northern California headquarters to see whether the technology will allow critical functions to remain running in the event of a systemwide outage.

“There’s a lot of buzz,” said Robert Lasseter, an emeritus professor in the department of electrical and computer engineering at the University of Wisconsin at Madison. Lasseter, considered by some to be one of the fathers of the modern microgrid movement, gives more than 30 lectures a year on microgrids to groups ranging from lawyers to companies such as Caterpillar, a leading manufacturer of heavy equipment machines. “Everyone wants a microgrid.”

At the University of California at San Diego, a microgrid installed in the 1990s provides about 85 percent of the campus’s power needs. Officials there estimate they save about $8 million a year in utility costs.

“Instead of having [San Diego Gas and Electric] give us the power, we’re the power company,” said John Dilliott, manager of energy and utility for the university.

And although its main focus is providing power for the 23,000-student campus, it has also proved useful in emergency situations. During the wildfires that swept through the area in 2007, the university was able to supply power to the larger grid when the local utility was under stress.

Initially, Howard’s system will focus on providing power for the university, but the hope is that it will ultimately be able to provide power for the surrounding neighborhood, according to Pareto Energy.

Warner said Howard’s microgrid project will also help improve reliability because it will take some stress off the main power grid operated by Pepco.

The project comes at an opportune time for the campus, which is drafting its 10-year plan.

Momoh, the engineering professor, said that “having a microgrid at Howard will not only increase [power reliability] but will also enable the university to serve as an example it can be done.”