The City of Milford has signed an agreement for the design and construction of a $4.5 million microgrid in the downtown area, a system of generators and energy storage that is expected to keep key city buildings powered up when storms disrupt service.

The city will pay $1.6 million for its share of the project, leasing the generators and energy storage unit for 15 years at $125,000 a year for 15 years. City leaders say the system should pay for itself eventually, saving Milford $2 million in energy costs over a 20-year period, primarily in the final years, after the lease has been paid off.

A state grant will fund the rest, $2.9 million, through the Connecticut Department of Energy and Environmental Protection (DEEP) Microgrid Program.

Mayor Ben Blake told the aldermen at their meeting Sept. 7 that even though the state funding was announced several years ago, changes to the grant and other issues stalled the project, but those issues are now resolved.

When Gov. Dannel Malloy announced the program more than two years ago, he said microgrids are an essential part of the state’s strategy to better withstand “the type of catastrophic storms we have experienced in recent years – and the extended loss of power that accompanies them.”

In Milford, the microgrid will be able to power the Parsons Government Center, Harborside Middle School, the Milford Senior Center, the senior housing building near City Hall, and City Hall. The middle school and senior center will be available as shelters for residents during a power outage.

The DEEP grant provides funding for design, engineering and connecting the building with underground cables: The city is responsible for funding the two generators that will supply heat and power, and the battery energy storage system.

At its September meeting, city aldermen voted to sign a contract with Schneider Electric USA for the design and construction of the microgrid.

The mayor said the grid will save the city money and add resiliency.

“When [power] goes down, lights at five buildings will stay on: The senior center, Toulson building, Parsons, City Hall and Harborside,” Blake said.

The mayor said there will be savings, but the main focus is to secure the city’s infrastructure so that city business doesn’t stop during a natural disaster. Hurricanes Harvey and Irma were wake up calls, he said.

According to Public Works Director Chris Saley, Tom Ivers, former block grant coordinator, started work on the project, and then the Public Works Department took it over.

“This is a very nice project for the city,” Saley said.

Saley estimates it will be about 18 months before the system is up and running.

Alderman Nick Veccharelli asked if it would be a good idea to have a backup oil system in case a disaster is so extreme it knocks out the natural gas feed. But Jake Friedman of Schneider Electric said dual feed generators would make the project less economical.

Alderman Anthony Giannattasio, responding to a comment from the mayor that the project almost died due to state changes to the grant, which threatened to make the funding a reimbursement rather than direct pay to the contractor, said, “I was in favor of this from the beginning. I would never walk away from a deal like this. I’m glad it’s before us right now because we don’t want to be caught in the middle of a storm and not have this in place.”

Alderman Bill Bevan asked if the police department and public works should also be connected to the microgrid. Saley said those departments have backup generators, which are tested monthly.