UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

18 CFR Part 35 

[Docket No. RM02-12-000; Order No. 2006] 

Standardization of Small Generator Interconnection Agreements and Procedures 

(Issued May 12, 2005) 

AGENCY: Federal Energy Regulatory Commission. 

ACTION: Final Rule 

SUMMARY: The Federal Energy Regulatory Commission (Commission) is amending 

its regulations under the Federal Power Act to require public utilities that own, control, or 

operate facilities for transmitting electric energy in interstate commerce to amend their 

open access transmission tariffs to include standard generator interconnection procedures 

and an agreement that the Commission is adopting in this order and to provide 

interconnection service to devices used for the production of electricity having a capacity 

of no more than 20 megawatts. A non-public utility that seeks voluntary compliance with 

the reciprocity condition of an open access transmission tariff may satisfy this condition 

by adopting these procedures and agreement. 

EFFECTIVE DATE: This Final Rule will become effective [insert date that is 60 days 

after publication in the FEDERAL REGISTER.] 
FOR FURTHER INFORMATION CONTACT: 

Kumar Agarwal (Technical Information) 

Office of Market, Tariffs and Rates 

Federal Energy Regulatory Commission 

888 First Street, N.E. 

Washington, D.C. 20426 

(202) 502-8923 

Bruce Poole (Technical Information) 

Office of Market, Tariffs and Rates 

Federal Energy Regulatory Commission 

888 First Street, N.E. 

Washington, D.C. 20426 

(202) 502-8468 

Kirk Randall (Technical Information) 

Office of Market, Tariffs and Rates 

Federal Energy Regulatory Commission 

888 First Street, N.E. 

Washington, D.C. 20426 

(202) 502-8092 

Patrick Rooney (Technical Information) 

Office of Market, Tariffs and Rates 

Federal Energy Regulatory Commission 

888 First Street, N.E. 

Washington, D.C. 20426 

(202) 502-6205 

Abraham Silverman (Legal Information) 

Office of the General Counsel 

Federal Energy Regulatory Commission 

888 First Street, N.E. 

Washington, D.C. 20426 

(202) 502-6444 

SUPPLEMENTARY INFORMATION:
- i - 

TABLE OF CONTENTS 

Page No. 

I. INTRODUCTION............................................................................................. - 1 -

A. Background............................................................................................. - 6 -

B. Need for a Standard Generator Interconnection Procedures and 

Agreement............................................................................................... - 7 -

C. The Large and Small Generator Interconnection Rulemaking 

Proceedings ............................................................................................. - 8 -

II. DISCUSSION .................................................................................................. - 13 -

A. Descriptions of the SGIP and SGIA ................................................... - 14 -

B. Overview of the Interconnection Process for Small Generating 

Facilities................................................................................................. - 17 -

C. Issues Related to Both the SGIP and the SGIA................................. - 19 -

Consistency between the Large Generator and Small Generator 

Documents.............................................................................................. - 20 -

Definitions of Terms Used in the SGIP and SGIA ................................ - 23 -

Emergency Condition.................................................................. - 23 -

Network Upgrades....................................................................... - 24 -

Use of Calendar Days v. Business Days ................................................ - 24 -

Maximum Size of a Small Generating Facility...................................... - 25 -

Revising the Maximum Size of a Small Generating Facility...... - 25 -

Increasing the Capacity of an Existing Small Generating 

Facility......................................................................................... - 27 -

Evaluating the Generating Facility Based on Less Than Its 

Maximum Rated Capacity........................................................... - 28 -

Evaluating Small Generating Facilities with Multiple Points 

of Interconnection ....................................................................... - 30 -

Dispute Resolution ................................................................................. - 31 -

Confidentiality........................................................................................ - 34 -

Keeping the Small Generator Interconnection Rules Current................ - 36 -

D. Issues Related to the Interconnection Request.................................. - 37 -

Processing Fees and Study Deposits ...................................................... - 37 -
- ii - 

Receipt Confirmation and Requests for Additional Data ...................... - 40 -

Interconnection Products and Service Options ...................................... - 40 -

Ministerial Changes to the Interconnection Request.............................. - 44 -

E. Issues Related to the SGIP................................................................... - 44 -

Using Voltage Level to Determine Which Procedures to Apply........... - 44 -

Certification of the Small Generating Facility (Proposed SGIP 

Section 3.1)............................................................................................. - 46 -

Super-Expedited Procedures (Proposed SGIP Section 3) and 

Expedited Procedures (Proposed SGIP Section 4.3).............................. - 48 -

Queuing Priority (Proposed SGIP Section 4.4)...................................... - 52 -

Scoping Meeting (Proposed SGIP Section 4.5) ..................................... - 54 -

Interconnection Studies (Proposed SGIP Sections 4.6, 4.7, and 4.8) .... - 55 -

Study Cost Obligations................................................................ - 55 -

Study Requirements .................................................................... - 55 -

Study Deadlines........................................................................... - 56 -

Post Operational Evaluation of the Interconnection ................... - 57 -

Execution of the SGIA ........................................................................... - 57 -

F. Issues Related to the SGIA .................................................................. - 58 -

Responsibilities of the Parties (Proposed SGIA Article 2.2) ................. - 58 -

Metering (Proposed SGIA Article 2.4) .................................................. - 62 -

Equipment Testing and Inspection (Proposed SGIA Article 3.1).......... - 62 -

Right of Access (Proposed SGIA Article 3.3) ....................................... - 63 -

Term of Agreement (Proposed SGIA Article 4.2) ................................. - 64 -

Termination (Proposed SGIA Article 4.3) and Default (Proposed 

SGIA Article 6.17) ................................................................................. - 65 -

Emergency Conditions (Proposed SGIA Article 4.4.1) ......................... - 67 -

Temporary Disconnection – Routine Maintenance, Construction, and 

Repair (Proposed SGIA Article 4.4.2) and Forced Outages (Proposed 

SGIA Article 4.4.3) ................................................................................ - 68 -

Temporary Disconnection – Adverse Operating Effects (Proposed 

SGIA Article 4.4.4) ................................................................................ - 69 -

Temporary Disconnection – Modification of the Generating Facility 
- iii - 

(Proposed SGIA Article 4.4.5)............................................................... - 71 -

Temporary Disconnection – Reconnection (Proposed SGIA Article 

4.4.6)....................................................................................................... - 71 -

Financial Security Arrangements (Proposed SGIA Article 5.2)............ - 72 -

Milestones (Proposed SGIA Article 5.3) ............................................... - 75 -

Billing and Payment (Proposed SGIA Article 5.4)................................ - 76 -

Billing Procedure for Interconnection Facilities Construction 

(Proposed SGIA Article 5.4.1) and Final Accounting (Proposed 

SGIA Article 5.4.2) ................................................................................ - 77 -

Assignment (Proposed SGIA Article 6.5).............................................. - 78 -

Insurance (Proposed SGIA Article 6.16) ............................................... - 80 -

Reservation of Rights (Proposed SGIA Article 6.20)............................ - 88 -

Signatures and Parties to the SGIA (Proposed SGIA Article 9)............ - 88 -

Liability .................................................................................................. - 91 -

General Approach ....................................................................... - 92 -

Consequential Damages (Proposed SGIA Article 6.19)............. - 94 -

Indemnity (Proposed SGIA Article 6.13) ................................... - 95 -

Force Majeure (Proposed SGIA Article 6.14) ............................ - 98 -

Reactive Power....................................................................................... - 99 -

Generator Balancing Requirements ..................................................... - 100 -

Appendices to the SGIA....................................................................... - 101 -

G. The 10 kW Inverter Process.............................................................. - 101 -

H. Other Significant Issues..................................................................... - 104 -

Pricing/Cost Recovery for Interconnection Facilities and Upgrades 

(Proposed SGIA Article 5.1)................................................................ - 105 -

Pricing Comments that the Commission Already Addressed 

in the Large Generator Interconnection Proceeding ................. - 107 -

Applicability of the Commission's Interconnection Pricing 

Policy to the Interconnection of Small Generating Facilities ... - 108 -

Implementation of the Interconnection Pricing Policy for 

Small Generating Facilities ....................................................... - 112 -

Responsibility for Operation and Maintenance Costs............... - 117 -
- iv - 

Responsibility for the Construction of Upgrades...................... - 119 -

Miscellaneous Pricing Issues .................................................... - 120 -

Commission Jurisdiction under the Federal Power Act....................... - 121 -

Arguments that the Commission Should Delay or Abandon the 

Small Generator Interconnection Rulemaking..................................... - 129 -

Arguments in Favor of Deferring to the States on Small 

Generator Interconnections ....................................................... - 129 -

Arguments that the NOPR Is Too Complex ............................. - 132 -

Arguments in Favor of a Non-Binding Model Rule ................. - 134 -

Issues Relating to Qualifying Facilities ............................................... - 134 -

Taxes .................................................................................................... - 136 -

OATT Reciprocity Requirements ........................................................ - 140 -

Coordination with Affected Systems ................................................... - 141 -

I. Compliance Issues .............................................................................. - 142 -

Amendments to the Transmission Provider's OATT ........................... - 143 -

Variations from the Final Rule............................................................. - 143 -

Interconnection Requests Submitted Prior to the Effective Date of 

this Final Rule and Grandfathering of Existing Interconnection 

Agreements........................................................................................... - 145 -

Order No. 2001 and the Filing of Interconnection Agreements........... - 148 -

III. INFORMATION COLLECTION STATEMENT..................................... - 149 -

IV. ENVIRONMENTAL IMPACT STATEMENT......................................... - 153 -

V. REGULATORY FLEXIBILITY ACT ....................................................... - 154 -

VI. DOCUMENT AVAILABILITY .................................................................. - 156 -

VII. EFFECTIVE DATE AND CONGRESSIONAL NOTIFICATION......... - 157 -

REGULATORY TEXT 

Appendix A – Commenter Acronyms 

Appendix B – Flow Chart for Interconnecting a Small Generating Facility Using the 

"Study Process" 
- v - 

Appendix C – Flow Chart for Interconnecting a Certified Small Generating Facility No 

Larger than 2 MW Using the "Fast Track Process" 

Appendix D – Flow Chart for Interconnecting a Certified Inverter-Based Small 

Generating Facility No Larger than 10 kW Using the "10 kW Inverter 

Process" 

Appendix E – Small Generator Interconnection Procedures (SGIP) 

Appendix F – Small Generator Interconnection Agreement (SGIA) 
UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

Before Commissioners: Pat Wood, III, Chairman; 

 Nora Mead Brownell, Joseph T. Kelliher, 

 and Suedeen G. Kelly. 

Standardization of Small Generator 

Interconnection Agreements and Procedures Docket No. RM02-12-000 

ORDER NO. 2006 

FINAL RULE 

(Issued May 12, 2005) 

I. Introduction

1. This Final Rule requires all public utilities1

 to adopt standard rules for 

interconnecting new sources of electricity no larger than 20 megawatts (MW). It 

continues the process begun in Order No. 2003 of standardizing the terms and conditions 

of interconnection service for Interconnection Customers of all sizes.2

 It will reduce 

 1

 For purposes of this Final Rule, a public utility is a utility that owns, controls, or 

operates facilities used for transmitting electric energy in interstate commerce, as defined 

by the Federal Power Act (FPA). 16 U.S.C. § 824(e) (2000). A non-public utility that 

seeks voluntary compliance with the reciprocity condition of an open access transmission 

tariff may satisfy that condition by adopting these procedures and agreement. 

2

 Standardization of Generator Interconnection Agreements and Procedures, Order 

No. 2003, 68 FR 49845 (Aug. 19, 2003), FERC Stats. & Regs. ¶ 31,146 (2003) (Order 

No. 2003), order on reh'g, Order No. 2003-A, 69 FR 15932 (Mar. 26, 2004), FERC Stats. 

& Regs. ¶ 31,160 (2004) (Order No. 2003-A), order on reh'g, Order No. 2003-B, 

70 FR 265 (Jan. 4, 2005), FERC Stats. & Regs. ¶ 31,171 (2005), reh'g pending (Order 

No. 2003-B). See also Notice Clarifying Compliance Procedures, 106 FERC ¶ 61,009 

(2004). We refer to the large generator interconnection rulemaking as Order No. 2003 

throughout this document. The Order No. 2003 Large Generator Interconnection 

(Footnote continued on next page) 
Docket No. RM02-12-000 - 2 - 

interconnection time and costs for Interconnection Customers and Transmission 

Providers,3

 preserve reliability, increase energy supply, lower wholesale prices for 

customers by increasing the number and types of new generation that will compete in the 

wholesale electricity market, facilitate development of non-polluting alternative energy 

sources, and help remedy undue discrimination, as sections 205 and 206 of the FPA 

require.4

 Public utilities must amend5 their open access transmission tariffs (OATTs) to 

include a Small Generator Interconnection Procedures document (SGIP – Appendix E to 

 

Agreement and Large Generator Interconnection Procedures, as amended by Order 

Nos. 2003-A and 2003-B, are referred to in this Final Rule as the LGIA and the LGIP, 

respectively. 

3

 Capitalized terms used in this Final Rule have the meanings specified in the 

Glossaries of Terms or the text of the Small Generator Interconnection Procedures (SGIP) 

or the Small Generator Interconnection Agreement (SGIA). Small Generating Facility 

means the device for which the Interconnection Customer has requested interconnection. 

The owner of the Small Generating Facility is the Interconnection Customer. The utility 

entity with which the Small Generating Facility is interconnecting is the Transmission 

Provider. A Small Generating Facility is a device used for the production of electricity 

having a capacity of no more than 20 MW. The interconnection process formally begins 

with the Interconnection Customer submitting an application for interconnection, called an 

Interconnection Request, to the Transmission Provider. 

We are omitting from the SGIP and SGIA glossaries terms that are defined through 

their use in the documents themselves or are in such common use in the industry that a 

definition is unnecessary. Many terms that were capitalized in the Small Generator 

Interconnection Notice of Proposed Rulemaking are therefore not capitalized in this 

Preamble, SGIP, and SGIA. 

The documents put forward in the Small Generator Interconnection NOPR are 

called the "Proposed SGIP" and the "Proposed SGIA" in this Preamble. The documents 

that are being adopted in this Final Rule for inclusion in a Transmission Provider's OATT 

are called simply the SGIP and SGIA. Provisions of the SGIP are referred to as "sections" 

and provisions of the SGIA are referred to as "articles." 

4

 16 U.S.C. §§ 824d and 824e (2000). 

5

 Compliance procedures are discussed in Part II.I, below. 
Docket No. RM02-12-000 - 3 - 

this Preamble) and a Small Generator Interconnection Agreement (SGIA – Appendix F to 

this Preamble). 

2. The SGIP contains the technical procedures the Interconnection Customer and 

Transmission Provider (the Parties) must follow once the Interconnection Customer 

requests interconnection of its Small Generating Facility. It provides three ways to 

evaluate the Interconnection Request. They are the default Study Process that could be 

used by any Small Generating Facility, and two procedures that use technical screens to 

evaluate proposed interconnections: (1) the Fast Track Process for a certified Small 

Generating Facility no larger than 2 MW6

 and (2) the 10 kW Inverter Process for a 

certified inverter-based Small Generating Facility no larger than 10 kW.7

 All three are 

designed to ensure that the proposed interconnection will not endanger the safety and 

reliability of the Transmission Provider's Transmission System. 

3. The SGIA contains contractual provisions appropriate for the interconnection of a 

Small Generating Facility, including provisions for the payment for modifications made to 

the Transmission Provider's Transmission System to accommodate the interconnection. 

The SGIA is signed by the Parties after they have successfully completed the evaluation of 

a proposed interconnection under the SGIP Study Process or Fast Track Process. The 

SGIA does not apply to requests to interconnect submitted under the 10 kW Inverter 

Process, however, which uses a simplified all-in-one application form/procedures/terms 

and conditions document that is included in SGIP Attachment 5. 

 6

 A Small Generating Facility equipment package is considered certified if it has 

been submitted, tested, and listed by a nationally recognized testing and certification 

laboratory. The Small Generator Interconnection NOPR used the term "precertified" to 

describe such a facility. We adopt in this Final Rule the term "certified" to be consistent 

with industry usage. To avoid further confusion, we also use "certified" when describing 

the Small Generator Interconnection NOPR. See the SGIP, especially Attachments 3 

and 4. 

7

 An inverter is a device that converts the direct current voltage and current of a DC 

generator to alternating voltage and current. For example, the output of a solar panel is 

direct current. The solar panel's output must be converted by an inverter to alternating 

current before it can be interconnected with a utility's alternating current electric system. 
Docket No. RM02-12-000 - 4 - 

4. We conclude that general consistency between the Commission's interconnection 

procedures document and interconnection agreement adopted in this Final Rule and those 

of the states will be helpful to removing roadblocks to the interconnection of Small 

Generating Facilities. To a large extent, this Final Rule harmonizes state and federal 

practices by adopting many of the best practices interconnection rules recommended by 

the National Association of Regulatory Utility Commissioners (NARUC). By doing so, 

we hope to minimize the federal-state division and promote consistent, nationwide 

interconnection rules. We hope that states that do not currently have interconnection rules 

for small generators will look to the documents presented in this Final Rule and NARUC 

as guides for their own. In particular, the "Fast Track Process" and the "10 kW Inverter 

Process" should go a long way towards harmonizing state-federal interconnection 

practices. 

5. Finally, the application of this Final Rule is the same as with Order No. 2003 for 

Large Generating Facilities. Specifically, this Final Rule applies only to interconnections 

with facilities that are already subject to the Transmission Provider's OATT at the time the 

Interconnection Request is made. 

6. The SGIP and SGIA include separate definitions for "Transmission System" and 

"Distribution System" to account for the distinct engineering and cost allocation 

implications of an interconnection with a Distribution System. The SGIP and SGIA, like 

Order No. 2003, define "Transmission System" as "[t]he facilities owned, controlled or 

operated by the Transmission Provider or the Transmission Owner that are used to provide 

transmission service under the Tariff." Any interconnection with a Transmission System 

(under an OATT) by a Small Generating Facility is subject to this Final Rule. 

7. The SGIP and the SGIA, like Order No. 2003, also use the term "Distribution 

System." "Distribution System" is defined as "[t]he Transmission Provider's facilities and 

equipment used to transmit electricity to ultimate usage points such as homes and 

industries directly from nearby generators or from interchanges with higher voltage 

transmission networks which transport bulk power over longer distances. The voltage 

levels at which Distribution Systems operate differ among areas." If a Small Generating 

Facility proposes to interconnect with a portion of the Distribution System subject to an 

OATT for the purpose of making wholesale sales, then this Final Rule would apply.8

 

 8

 See Detroit Edison v. FERC, 334 F.3d 48 (D.C. Cir. 2003) (Detroit Edison). 

There, the court explained that:

(Footnote continued on next page) 
Docket No. RM02-12-000 - 5 - 

However, an interconnection to a portion of a Distribution System that is not already 

subject to an OATT would not be subject to this Final Rule. 

8. "Distribution" is a vague term, usually used to refer to non-networked, often lowervoltage facilities, that carry power in one direction. Commission-jurisdictional facilities 

with these characteristics are referred to as "Distribution Systems subject to an OATT" 

throughout this Final Rule. This Final Rule's use of the term "Distribution System" has 

nothing to do with whether the facility is under this Commission's jurisdiction; some 

"distribution" facilities are under our jurisdiction and others are "local distribution 

facilities" subject to state jurisdiction.9

 This Final Rule does not violate the FPA 

section 201(b)(1) provision that the Commission does not have jurisdiction over local 

distribution facilities “except as specifically provided. . .”10 This is because the Final Rule 

applies only to interconnections to facilities that are already subject to a jurisdictional 

OATT at the time the interconnection request is made and that will be used for purposes 

of jurisdictional wholesale sales. Because of the limited applicability of this Final Rule, 

and because the majority of small generators interconnect with facilities that are not 

subject to an OATT, this Final Rule will not apply to most small generator 

interconnections. Nonetheless, our hope is that states may find this rule helpful in 

formulating their own interconnection rules. 

 

When a local distribution facility is used to delivery [sic] energy to an 

unbundled retail customer, FERC lacks any statutory authority, and 

the state has jurisdiction over that transaction. By contrast, when a 

local distribution facility is used in a wholesale transaction, FERC 

has jurisdiction over that transaction pursuant to its wholesale 

jurisdiction under FPA § 201(b)(1). In sum, FERC has jurisdiction 

over all interstate transmission service and over all wholesale service, 

but FERC has no jurisdiction over unbundled retail distribution 

service – i.e., unbundled retail service over local distribution 

facilities. 

Id. at 51 (citations omitted). 

9

 See Detroit Edison, 334 F.3d at 51. ("For our purposes, the most important result 

of these jurisdictional determinations is that customers can take any FERC-jurisdictional 

service under a utility’s open access tariff, which the utility is required to file with FERC. 

Customers must take non FERC-jurisdictional service, such as unbundled retail 

distribution, under a state tariff.") 

10 16 U.S.C. § 824 (2000). 
Docket No. RM02-12-000 - 6 - 

 A. Background

9. This Final Rule responds to business and technology changes in the electric 

industry. Where the electric industry was once primarily the domain of vertically 

integrated utilities generating power at large centralized plants, advances in technology 

have created a burgeoning market for small power plants that may offer economic, 

reliability, or environmental benefits. 

10. With these developments in mind, the Commission continues in this rulemaking to 

work to encourage fully competitive bulk power markets. The effort took its first 

significant step with Order No. 888,11 which required public utilities to provide other 

entities comparable access to their Transmission Systems. The effort continued with 

Order No. 2000,12 which began the process of developing Regional Transmission 

Organizations (RTOs). Most recently, the Commission established a standard Large 

Generator Interconnection Procedures document (LGIP) and a standard Large Generator 

Interconnection Agreement (LGIA) for generating facilities larger than 20 MW.13

11. The Commission, pursuant to its responsibility under sections 205 and 206 of the 

FPA to remedy undue discrimination, is requiring all public utilities that own, control, or 

operate facilities for transmitting electric energy in interstate commerce to append to their 

OATTs the SGIP and SGIA we are adopting in this Final Rule. These documents provide 

just and reasonable terms and conditions of interconnection service. They also strike a 

 11 Promoting Wholesale Competition Through Open Access Non-Discriminatory 

Transmission Services by Public Utilities: Recovery of Stranded Costs by Public Utilities 

and Transmitting Utilities, Order No. 888, 61 FR 21540 (May 10, 1996), FERC Stats. & 

Regs. & 31,036 (1996), order on reh'g, Order No. 888-A, 62 FR 12274 (Mar. 14, 1997), 

FERC Stats. & Regs. & 31,048 (1997), order on reh'g, Order No. 888-B, 81 FERC 

& 61,248 (1997), order on reh'g, Order No. 888-C , 82 FERC & 61,046 (1998), aff'd in 

part sub nom. Transmission Access Policy Study Group v. FERC, 225 F.3d 667 (D.C. Cir. 

2000), aff'd sub nom. New York v. FERC, 535 U.S. 1 (2002) (TAPS v. FERC). 

12 Regional Transmission Organizations, Order No. 2000, 65 FR 810 (Jan. 6, 2000), 

FERC Stats. & Regs. & 31,089 (1999), order on reh'g, Order No. 2000-A, 65 FR 12088 

(Mar. 8, 2000), FERC Stats. & Regs. & 31,092 (2000), aff'd sub nom. Public Util. Dist. 

No. 1 v. FERC, 272 F.3d 607 (D.C. Cir. 2001). 

13 See Order No. 2003 passim.
Docket No. RM02-12-000 - 7 - 

reasonable balance between the competing goals of uniformity and flexibility while 

ensuring safety and reliability are protected. 

B. Need for a Standard Generator Interconnection Procedures and 

Agreement 

12. In fulfilling its responsibilities under sections 205 and 206 of the FPA, the 

Commission is required to remedy undue discrimination. The Commission must also 

ensure that the rates, contracts, and practices affecting jurisdictional transmission service 

do not reflect an undue preference or advantage for Transmission Providers and their 

affiliates and are just and reasonable. The Commission's regulatory authority under the 

FPA "clearly carries with it the responsibility to consider, in appropriate circumstances, 

the anticompetitive effects of regulated aspects of interstate utility operations. . . ."14

13. The record underlying Order No. 888 showed that public utilities owning or 

controlling jurisdictional transmission facilities had the incentive to engage in, and had 

engaged in, unduly discriminatory transmission practices.15 The Commission in Order 

No. 888 thoroughly discussed the legislative history and case law involving sections 205 

and 206, concluded that it has the authority and responsibility to remedy the undue 

discrimination it found by requiring open access, and decided to do so through a 

rulemaking on a generic, industry-wide basis.16 The Supreme Court affirmed the 

Commission's decision to exercise this authority by requiring non-discriminatory 

(comparable) open access as a remedy for undue discrimination.17 However, Order 

No. 888 did not specifically address interconnection service.18

 14 Gulf States Utils. Co. v. FPC, 411 U.S. 747, 758-59 (1973); see City of 

Huntingburg v. FPC, 498 F.2d 778, 783-84 (D.C. Cir. 1974) (noting the Commission's 

duty to consider the potential anticompetitive effects of a proposed interconnection 

agreement). 

15Order No. 888 at 31,679-84; Order No. 888-A at 30,209-10. 

16 Order No. 888 at 31,668-73, 31,676-79; Order No. 888-A at 30,201-12; TAPS v. 

FERC at 687-88. 

17 New York v. FERC, 535 U.S. 1 (2002). 

18 Order No. 888-A, FERC Stats. & Regs & 31,048 at 30,230-31. 
Docket No. RM02-12-000 - 8 - 

14. In Tennessee Power,

19 the Commission clarified that interconnection is a critical 

component of open access transmission service and thus is subject to the requirement that 

utilities offer comparable service under the OATT. The Commission encouraged, but did 

not require, each Transmission Provider to revise its OATT to include interconnection 

procedures, including a standard interconnection agreement and specific criteria, 

procedures, milestones, and timelines for evaluating applications for interconnection.20

15. As discussed in Order No. 2003, interconnection is a critical component of 

transmission service, and having a standard interconnection procedures and a standard 

agreement applicable to Small Generating Facilities will (1) limit opportunities for 

transmitting utilities to favor their own generation, (2) remove unfair impediments to 

market entry for small generators by reducing interconnection costs and time, and 

(3) encourage investment in generation and transmission infrastructure, where needed.21 

We expect the SGIP and SGIA adopted here will resolve most disputes, minimize 

opportunities for undue discrimination, foster increased development of economic Small 

Generating Facilities, and protect system reliability. 

C. The Large and Small Generator Interconnection Rulemaking 

Proceedings

16. In the Advance Notice of Proposed Rulemaking (ANOPR) issued in Docket No. 

RM02-1-000, the Commission initiated a collaborative process where members of the 

public, electric industry participants, and federal and state agencies (collectively, 

stakeholders) were invited to draft proposed generator interconnection procedures and a 

generator interconnection agreement.22 The stakeholders filed their consensus documents 

in January 2002. The Commission then issued a Notice of Proposed Rulemaking (Large 

 19 Tennessee Power Co. (Tennessee Power), 90 FERC & 61,238 at 61,761 (2000), 

reh'g denied, 91 FERC & 61,271 (2000). 

20 See, e.g., Commonwealth Edison Co., 91 FERC & 61,083 (2000). 

21 Order No. 2003 at P 10. 

22 Standardizing Generator Interconnection Agreements and Procedures, Advance 

Notice of Proposed Rulemaking, 66 FR 55140 (Nov. 1, 2001), FERC Stats. & Regs. 

& 35,540 (2002). 
Docket No. RM02-12-000 - 9 - 

Generator Interconnection NOPR)23 proposing standard interconnection procedures and a 

standard interconnection agreement that generally followed the consensus documents. 

The Large Generator Interconnection NOPR also proposed solutions to issues left 

unresolved in the consensus documents. 

17. Although the Large Generator Interconnection NOPR provided special treatment 

for Small Generating Facilities, some commenters urged the Commission to initiate a 

separate proceeding to develop standard interconnection procedures and agreements that 

addressed the unique concerns of Small Generating Facilities.24 They proposed one set of 

simplified interconnection rules for Small Generating Facilities no larger than 2 MW, and 

another for facilities larger than 2 MW but no larger than 20 MW. Persuaded that 

different procedures and agreements were indeed needed, the Commission severed Small 

Generating Facilities from the Large Generator Interconnection proceeding and issued a 

Small Generator Interconnection Advance Notice of Proposed Rulemaking (ANOPR) in 

August 2002.25 The Small Generator Interconnection ANOPR proposed two SGIPs and 

two SGIAs (ANOPR SGIPs and SGIAs) using 2 MW as a breakpoint. It encouraged 

stakeholders to pursue consensus on the ANOPR SGIPs and SGIAs. To that end, the 

Commission convened a series of public meetings designed to enable them to discuss and 

reach as much consensus as possible. 

 23 Standardization of Generator Interconnection Agreements and Procedures, 

Notice of Proposed Rulemaking, 67 FR 22250 (May 2, 2002), FERC Stats. & Regs. 

& 32,560 (2002). 

24 Those commenters included the Solar Energy Industries Association, the 

U.S. Fuel Cell Council, the American Solar Energy Society, the U.S. Combined Heat and 

Power Association, the International District Energy Association, and the American Wind 

Energy Association. 

25 Standardization of Small Generator Interconnection Agreements and Procedures, 

Advance Notice of Proposed Rulemaking, 67 FR 54749 (Aug. 26, 2002), FERC Stats. & 

Regs. & 35,544 (2002). 
Docket No. RM02-12-000 - 10 - 

18. The negotiating parties, who we refer to collectively as Joint Commenters, then 

filed SGIPs and SGIAs (Joint Commenters' SGIPs and SGIAs) with the Commission.26 

While Joint Commenters reached consensus on some issues, many remained unresolved. 

Joint Commenters' SGIPs included two procedures for evaluating whether a proposed 

Small Generating Facility could be interconnected safely and without degrading 

reliability. The first was a standard Study Process that used a scoping meeting and three 

technical studies to evaluate a proposed interconnection. The second was a streamlined 

procedure that used technical screens to identify those proposed interconnections that 

clearly would not jeopardize the safety and reliability of the Transmission Provider's 

electric system. Public comments on the Small Generator Interconnection ANOPR were 

filed shortly thereafter. 

19. In July 2003, the Commission issued Order No. 2003, which established standard 

procedures and an interconnection agreement for the interconnection of large generators 

and explained the Commission's jurisdiction over interconnections. The Commission 

 26 This group refers to itself as the Coalition. However, in this Final Rule we shall 

refer to the group as "Joint Commenters" to distinguish it from the similarly named Small 

Generator Coalition. With the exception of these early references to Joint Commenters' 

comments submitted in response to the ANOPR, all references in the remainder of this 

Preamble to Joint Commenters are to its supplemental comments. Joint Commenters did 

not file initial comments in response to the Small Generator Interconnection NOPR, only 

supplemental comments. Joint Commenters is a diverse group of stakeholders that 

includes: 

• over 25 small generator trade groups, promoters, and equipment manufacturers, 

who refer to themselves collectively as the "Small Generator Coalition," 

• state regulatory agencies represented by the National Association of Regulatory 

Utility Commissioners, 

• American Public Power Association (which did not participate in the filing of Joint 

Commenters' supplemental comments), and 

• Transmission Providers represented by Edison Electric Institute (EEI) and National 

Rural Electric Cooperative Association (NRECA) 

A list of commenter acronyms may be found in Appendix A. 
Docket No. RM02-12-000 - 11 - 

simultaneously issued the Small Generator Interconnection NOPR.27 Certain provisions 

in the Large Generator Interconnection Final Rule as well as Joint Commenters' 

SGIPs/SGIAs influenced the Small Generator Interconnection NOPR.28 The Commission 

asked commenters to address whether Small Generating Facilities should be treated 

differently from Large Generating Facilities under the LGIP and LGIA adopted in Order 

No. 2003. 

20. Sixty-five entities submitted initial comments in response to the Small Generator 

Interconnection NOPR. The comments generally support the Commission's effort to 

remove barriers to the development of Small Generating Facilities. Following the 

issuance of the Small Generator Interconnection NOPR and the initial comment due date, 

NARUC in October 2003 updated its own interconnection procedures and agreement, 

referred to here as the NARUC Model. NARUC stated that the NARUC Model is based 

on the best practices of the state regulatory agencies that have interconnection procedures 

for small generators. NARUC encouraged state regulators to use the NARUC Model as a 

basis for developing their interconnection procedures and suggested that the Commission's 

documents reflect these "best practices." On July 7, 2004, the Commission staff added to 

the record in this proceeding the latest version of the NARUC Model.29 A few 

commenters favor terminating this proceeding or, in the alternative, adopting the NARUC 

Model. 

21. The Commission then issued a Notice of Request for Supplemental Comments, 

observing that the small generator industry had continued to evolve since the Commission 

first received comments in this proceeding.30 In the notice, the Commission observed that 

 27 Standardization of Small Generator Interconnection Agreements and Procedures, 

Notice of Proposed Rulemaking, 60 FR 49974 (Aug. 19, 2003), FERC Stats. & Regs. 

& 32,572 (2003) (Small Generator Interconnection NOPR). 

28 See, e.g., Proposed SGIA articles 4.1, 5.1.2, 5.1.2.1, 5.2, 6.1-6.9, 6.12-6.20, 7, 

and 8. 

29 NARUC members had participated in the ANOPR discussions fostered by the 

Commission; there was much similarity between the provisions of the NARUC Model and 

the Small Generator Interconnection NOPR. 

30 See Notice of Request for Supplemental Comments, 69 FR 51024 (Aug. 17, 

2004). The Commission then granted two extensions of time at the request of Joint 

Commenters. See Notices issued on September 30, 2004 and November 30, 2004 in 

(Footnote continued on next page) 
Docket No. RM02-12-000 - 12 - 

several states had recently adopted new guidelines for small generator interconnections, 

and that the stakeholders who participated in the Commission's ANOPR process were 

continuing to work toward resolving various SGIP and SGIA issues. The Commission 

invited joint supplemental comments describing new consensus positions but discouraged 

resubmissions of prior positions. 

22. Joint Commenters, which as noted above represents a diverse group of small 

generator interests, Transmission Providers, and state regulators who participated in the 

ANOPR process, was the only group to file a consensus position. Some Joint 

Commenters – Small Generator Coalition, NRECA, and NARUC – filed their own 

supplemental comments as well. Ten other entities (mostly state regulatory 

commissions31) submitted supplemental comments.32

23. In its supplemental comments, Joint Commenters endorsed a single SGIP and 

single SGIA for Small Generating Facilities no larger than 20 MW. Joint Commenters 

recommended several revised provisions in areas where they had not been able to reach 

consensus during the ANOPR process. These included dispute resolution, confidentiality, 

insurance, equipment certification, and technical screens, among others. Joint 

Commenters, which includes NARUC, also endorsed a greatly simplified all-in-one 

application form/procedures/terms and conditions document for the interconnection of 

certified inverter-based Small Generating Facilities no larger than 10 kW. 

24. In Order No. 2003-A, the Commission determined that the LGIP and LGIA were 

designed around the needs of traditional synchronous technology generators and that 

generators relying on non-synchronous technologies, such as wind plants, may find that a 

specific requirement is inapplicable or that a different approach is needed.33 Accordingly, 

the Commission added a blank Appendix G (Requirements of Generators Relying on NonSynchronous Technologies) to the LGIA as a placeholder for requirements specific to 

non-synchronous technologies.34 At a September 24, 2004 technical conference on the 

 

Docket No. RM02-12-000. 

31 CT DPUC, Minnesota PUC, and Massachusetts DTE submitted copies of their 

recently enacted small generator interconnection rules. 

32 The supplemental commenters are listed in Appendix A. 

33 Order No. 2003-A at P 407, n. 86. 

34 Id.
Docket No. RM02-12-000 - 13 - 

interconnection requirements of non-synchronous technologies, panelists were asked 

whether Appendix G type requirements should apply to Small Generating Facilities. They 

responded that special capabilities, such as low voltage ride-through, simply were not 

needed for any Small Generating Facility, whether wind powered or not. As a result, the 

Wind NOPR issued shortly thereafter applies only to the interconnection of wind powered 

generators 20 MW or larger.35 In its supplemental comments, National Grid asks the 

Commission to implement standards for Small Generating Facilities that are similar to 

those proposed for Large Generating Facilities in the Wind NOPR. This Final Rule does 

not include such standards. The wind generating facilities that will interconnect under this 

Final Rule will be small and will have minimal impact on the Transmission Provider’s 

electric system. The reliability requirements proposed for wind powered Large 

Generating Facilities are not needed for small wind generating facilities.

25. In crafting this Final Rule, we considered all of the comments received throughout 

the course of this proceeding, including the initial documents submitted by Joint 

Commenters in response to the ANOPR, the Small Generator Interconnection NOPR and 

the comments filed in response, the NARUC Model, and the supplemental comments. We 

considered all comments filed in response to the Small Generator Interconnection NOPR 

before April 29, 2005, and they are part of the record in this proceeding.36

II. DISCUSSION

26. Part A of this discussion (Descriptions of the SGIP and SGIA) describes in general 

terms the interconnection procedures document (SGIP) and interconnection agreement 

(SGIA) we are adopting in this Final Rule. 

27. Part B (Overview of the Interconnection Process for Small Generating Facilities) 

describes the processes that the Interconnection Customer and the Transmission Provider 

must follow to interconnect the Small Generating Facility with the Transmission 

Provider's Transmission System. 

 35 Interconnection for Wind Energy and Other Alternative Technologies, Notice of 

Proposed Rulemaking, 70 FR 4791 (Jan. 31, 2005) (Wind NOPR). 

36 Comments addressing issues filed in other dockets (for instance, the Wind 

NOPR) are not part of this proceeding even if they were cross-filed in Docket No. 

RM02-12-000. 
Docket No. RM02-12-000 - 14 - 

28. Part C (Issues Related to Both the SGIP and the SGIA) addresses issues that are 

common to the interconnection procedures and agreement documents. 

29. Part D (Issues Related to the Interconnection Request) addresses issues related to 

the Interconnection Request (application form) that the Interconnection Customer submits 

to the Transmission Provider to request interconnection of its Small Generating Facility. 

30. Part E (Issues Related to the SGIP) addresses issues related only to the 

interconnection procedures document. 

31. Part F (Issues Related to the SGIA) addresses issues related only to the 

interconnection agreement. 

32. Part G (The 10kW Inverter Process) describes the simplified all-in-one application 

form/procedures/terms and conditions document for the interconnection of certified 

inverter-based Small Generating Facilities no larger than 10 kW. 

33. Part H (Other Significant Issues) addresses the pricing of Interconnection Facilities 

and Upgrades, jurisdictional issues, variations from the Final Rule, the availability of 

waivers for small entities, the effect of this Final Rule on the OATT reciprocity 

provisions, and others. 

34. Finally, Part I (Compliance Issues) addresses issues pertaining to the requirement 

that a Transmission Provider file conforming amendments to its existing OATT, the 

treatment to be accorded to existing interconnection agreements (grandfathering), and how 

a Transmission Provider is to file executed and unexecuted interconnection agreements. 

A. Descriptions of the SGIP and SGIA

35. In Order No. 2003, the Commission adopted two documents that are to be used for 

the interconnection of Large Generating Facilities – the Large Generator Interconnection 

Procedures document and the Large Generator Interconnection Agreement. The LGIP 

describes how the Interconnection Customer's Interconnection Request (i.e., application) 

is to be evaluated from an engineering perspective using a four-step process. These are 

the scoping meeting, the feasibility study, the system impact study, and the facilities 

study. The purpose of the evaluation is to determine the impact the proposed 

interconnection will have on the Transmission Provider's electric system and identify new 

equipment and modifications needed to accommodate the interconnection. The LGIA, 

which is signed after the proposed interconnection has been successfully evaluated using 
Docket No. RM02-12-000 - 15 - 

the provisions contained in the LGIP, describes the legal relationships of the Parties, 

including who pays for equipment modifications to the Transmission Provider's electric 

system. 

36. The SGIP and SGIA we adopt in this Final Rule serve the same purposes as the 

LGIP and LGIA. The SGIP includes the same four-step process for evaluating an 

Interconnection Request as does the LGIP, except that it is simplified in several aspects 

and includes timelines to accelerate the interconnection of Small Generating Facilities. In 

the SGIP, this procedure is termed the "Study Process." The SGIP also includes special 

procedures for evaluating two subgroups of Small Generating Facilities, (1) a "Fast Track 

Process" that uses technical screens to evaluate a certified Small Generating Facility no 

larger than 2 MW, and (2) a "10 kW Inverter Process" that uses the same technical screens 

to evaluate a certified inverter-based Small Generating Facility no larger than 10 kW. The 

SGIA serves the same purpose for the interconnection of a Small Generating Facility as 

the LGIA does for a Large Generating Facility. It describes the legal relationships of the 

Parties, including who will pay for equipment modifications to the Transmission 

Provider's electric system. 

37. The Commission received many comments proposing modifications to the 

Proposed SGIP and Proposed SGIA, which helped greatly to shape this Final Rule. 

NARUC argued that the Commission should adopt portions of its Model to harmonize 

federal interconnection rules with those found in states with interconnection rules. Small 

Generator Coalition recommended that the Commission in this proceeding adopt the 

NARUC Model instead of the Proposed SGIP and Proposed SGIA. Some of the 

provisions proposed by Joint Commenters (which includes NARUC representation) in its 

supplemental comments also followed the NARUC Model. We are adopting in this Final 

Rule many of these consensus provisions as well as those proposed by NARUC because 

they are just and reasonable and serve the twin goals of removing barriers to the 

development of small generation while preserving the safety and reliability of the nation's 

electric system. 

38. The SGIP, while relying heavily on NARUC's and Joint Commenters' proposals, is 

not a significant departure from the Proposed SGIP. Both use nearly identical 

interconnection study processes ("Study Process") to evaluate Interconnection Requests 

that do not qualify for special handling. Regarding special handling, both use technical 

screens to identify Small Generating Facilities no larger than 2 MW that can be 

interconnected with no adverse impact on safety or reliability. The SGIP we adopt in this 

Final Rule, however, includes two such special procedures, the Fast Track Process and the 

10 kW Process. The choice of which one the Interconnection Customer may use depends 

on the size and technology of the Small Generating Facility. The SGIP also includes the 
Docket No. RM02-12-000 - 16 - 

Interconnection Request (application form) that is to be used by all Interconnection 

Customers except those eligible to use the 10 kW Process, and feasibility study, system 

impact study, and facilities study agreements that are to be used in the Study Process.37

39. The SGIA is to be used for the interconnection of all Small Generating Facilities 

subject to this Final Rule, with the exception of certain very small inverter-based 

generators that use an all-in-one application form/procedures/terms and conditions 

document (the 10 kW Inverter Process document). The Proposed SGIA included several 

provisions that were similar to those contained in the LGIA that was issued concurrent 

with the Small Generator Interconnection NOPR. Some commenters complained that the 

Proposed SGIA was too long and complex for owners of Small Generating Facilities, who 

may be small businesses or operators of small farms, for example. We are streamlining 

and simplifying the SGIA in many ways to address these concerns. We are adopting Joint 

Commenters' proposals submitted in its supplemental comments where appropriate and 

have given consideration to the recommendations contained in the NARUC Model and 

those suggested by other commenters. In particular, the SGIA does away with the 

requirement that Interconnection Customers maintain multiple kinds of insurance, instead 

requiring only that they maintain a reasonable amount based on the specific characteristics 

of the interconnection. We also adopt a streamlined dispute resolution provision designed 

to resolve disputes as quickly and inexpensively as possible. We have also shortened the 

contract termination provisions and the various liability related provisions. 

40. We adopt in the SGIA the same pricing policy for Network Upgrades to the 

Transmission Provider's Transmission System as in Order No. 2003. For a Small 

Generating Facility interconnecting with a non-independent entity such as a vertically 

integrated utility, the Interconnection Customer initially funds the cost of any required 

Network Upgrades (i.e., Upgrades to the Transmission System at or beyond the Point of 

Interconnection) and it is then subsequently reimbursed for this upfront payment by the 

Transmission Provider. However, we expect that, for most interconnections of Small 

Generating Facilities, there will be no Network Upgrades. We also allow more pricing 

flexibility for a Transmission System that is operated by an independent entity such as an 

RTO or Independent System Operator (ISO). The costs of Distribution Upgrades are 

directly assigned to the Interconnection Customer. 

 37 Note that the scope and payment provisions of the feasibility, system impact, and 

facilities studies are contained in the actual study agreements which are included as 

Attachments 6, 7, and 8 to the SGIP, not section 3 of the SGIP. 
Docket No. RM02-12-000 - 17 - 

41. In conclusion, we encourage the standardization of interconnection practices across 

the nation, using as a starting point the SGIP and SGIA found in this Final Rule. We hope 

to foster seamless interconnection procedures for Interconnection Customers and 

Transmission Providers. Equipment manufacturers will have compatible technical 

specifications to meet. New generation will be located on the basis of what works best for 

the Interconnection Customer and the Transmission Provider, not jurisdictional 

differences in interconnection rules. 

B. Overview of the Interconnection Process for Small Generating Facilities 

42. Before submitting its Interconnection Request, the Interconnection Customer may 

informally discuss the proposed interconnection with the Transmission Provider.38 The 

Interconnection Customer then submits an Interconnection Request to the Transmission 

Provider and the Transmission Provider assigns the Interconnection Customer's project a 

Queue Position based on the date and time the Interconnection Request is received by the 

Transmission Provider. The Interconnection Request must be accompanied by a deposit 

that goes toward the cost of the feasibility study, unless it is submitted under the Fast 

Track Process or the 10 kW Inverter Process, which have small processing fees. 

43. As noted above, an Interconnection Request can be evaluated in one of three ways. 

The Study Process is the default method; it relies on the scoping meeting and standard 

feasibility, system impact, and facilities studies to evaluate the safety and reliability of the 

proposed interconnection. It is identical in concept to the evaluation procedure that is 

used for the interconnection of Large Generating Facilities. Two optional methods are 

available to Interconnection Customers whose Small Generating Facilities are certified 

and no larger than 2 MW. The 10 kW Inverter Process is available for owners of inverterbased Small Generating Facilities no larger than 10 kW and the Fast Track Process is 

available for owners of any kind of Small Generating Facility no larger than 2 MW. 

44. The Study Process normally consists of a scoping meeting, a feasibility study, a 

system impact study, and a facilities study. At the scoping meeting, the Parties discuss the 

proposed interconnection and review any existing studies that could aid in the evaluation 

of the proposed interconnection. The feasibility study is a preliminary technical 

assessment of the proposed interconnection. The system impact study is a more detailed 

assessment of the effect the interconnection would have on the Transmission Provider's 

 38 Flowcharts depicting interconnection procedures are presented in Appendices B 

(Study Process), C (Fast Track Process), and D (10 kW Inverter Process). 
Docket No. RM02-12-000 - 18 - 

electric system and Affected Systems. The facilities study determines what modifications 

to the Transmission Provider's electric system are needed, including the detailed costs and 

scheduled completion dates for these modifications. These studies identify adverse 

system impacts39 that need to be addressed before the Small Generating Facility may be 

interconnected and any equipment modifications required to accommodate the 

interconnection. The Interconnection Customer pays the Transmission Provider's actual 

cost of performing the studies. Once the Interconnection Customer agrees to fund any 

needed Upgrades, the Parties execute an SGIA that, among other things, formalizes 

responsibility for construction and payment for Interconnection Facilities and Upgrades.40

45. A Fast Track Process is available for certified Small Generating Facilities no larger 

than 2 MW. Under this process, in place of the scoping meeting and three interconnection 

studies, technical screens are used to quickly identify reliability or safety issues. If the 

proposed interconnection passes the screens, the Transmission Provider offers the 

Interconnection Customer an SGIA. If the proposed interconnection fails the screens, but 

the Transmission Provider determines that the Small Generating Facility may nevertheless 

be interconnected without affecting safety and reliability, the Transmission Provider also 

offers the Interconnection Customer an SGIA. However, if the Transmission Provider is 

concerned that the interconnection could degrade the safety and reliability of its electric 

system, the Parties may conduct a customer options meeting to discuss how to proceed. In 

that meeting, the Transmission Provider must offer to perform a supplemental review of 

the proposed interconnection, paid for by the Interconnection Customer, to identify 

Upgrades needed to accommodate the interconnection. Once the Interconnection 

Customer agrees to pay for any Upgrades called for in the supplemental review, the 

Parties execute an SGIA. If, after the supplemental review, the Transmission Provider 

still is unsure whether the proposed interconnection will degrade the safety and reliability 

of the its electric system, the Interconnection Request is evaluated using the Study Process 

described above; i.e., scoping meeting, feasibility, system impact, and facilities studies, 

followed by the execution of an SGIA. 

 39 An adverse system impact means that technical or operational limits on 

conductors or equipment are exceeded under the interconnection, which may compromise 

the safety or reliability of the electric system. 

40 The Study Process is similar to the LGIP. However, we expect that the 

interconnection of a Small Generating Facility will take substantially less time and cost 

substantially less than a Large Generating Facility. 
Docket No. RM02-12-000 - 19 - 

46. Finally, the 10 kW Inverter Process is available for the interconnection of certified 

inverter-based generators no larger than 10 kW. The all-in-one 10 kW Inverter Process 

document includes a simplified application form, interconnection procedures, and a brief 

set of terms and conditions (akin to an interconnection agreement). The 10 kW Inverter 

Process uses the same technical screens to evaluate the safety and reliability of the 

proposed interconnection as the Fast Track Process. Unless the Transmission Provider 

demonstrates that the Small Generating Facility cannot be interconnected safely and 

reliably based on the results of an analysis using the screens, the Transmission Provider 

approves the application. Once the Interconnection Customer certifies that equipment 

installation is complete and upon a satisfactory inspection by the Transmission Provider, 

the Transmission Provider authorizes the interconnection. To further simplify the 

interconnection process, what would normally be considered a separate interconnection 

agreement has been distilled into a terms and conditions document that the 

Interconnection Customer agrees to at time the Interconnection Request is submitted to the 

Transmission Provider. The all-in-one 10 kW Process document is included in 

Attachment 5 to the SGIP. 

C. Issues Related to Both the SGIP and the SGIA

47. This discussion, and those that follow, addresses the evolution of the SGIP and 

SGIA from the Proposed SGIP and Proposed SGIA. As is the custom in most 

Commission rulemakings, we use the Small Generator Interconnection NOPR as our point 

of reference, discussing each issue in turn, describing the comments addressed to the 

topic, and closing with the Commission conclusion. There are differences between the 

Proposed SGIP and SGIA and the documents we adopt in this Final Rule that reflect the 

helpful comments filed in this rulemaking. For example, we have in some instances 

adopted terminology more compatible with that used in state interconnection documents. 

This should make for simpler, more easily understood documents for small generators that 

are compatible across jurisdictions for both Interconnection Customers and Transmission 

Providers. However, the SGIP and SGIA also need to be interpreted in the broader 

context of the entire collection of generator interconnection documents that will appear in 

a Transmission Provider's OATT, including the LGIP and LGIA. Thus, there are some 

instances where consistency among generator interconnection documents within a single 

tariff makes it necessary to adopt Large Generator Interconnection terminology or policy. 

The Commission asked for comments in the Small Generator Interconnection NOPR 

addressing this topic, and it is the first to be addressed in the discussion that follows. 
Docket No. RM02-12-000 - 20 - 

48. Many of the issues in this rulemaking also arose in the Large Generator 

Interconnecting rulemaking and we will not address them again here at any great length. 

Where there is no compelling reason to depart from prior precedent, we affirm the 

Commission's prior decisions without detailed discussion. Therefore, this order focuses 

on those issues needing a small-generator-specific resolution. 

49. Finally, we note that the 10 kW Inverter Process for certified inverter-based Small 

Generating Facilities is an all-in-one application form/procedures/terms and conditions 

document that does not lend itself easily to the separate discussions of the Proposed 

SGIP/SGIA and the SGIP and SGIA discussions that follow. We will address it in the 

separate Part G discussion, below. We emphasize, however, that the intent of this Final 

Rule is that the 10 kW Inverter Process fits within the framework of the SGIP and SGIA, 

and it is for that reason that we encourage Interconnection Customers and Transmission 

Providers to use this Preamble, the SGIP, and the SGIA for assistance in interpreting the 

10 kW Inverter Process should a dispute arise. 

Consistency between the Large Generator and Small Generator 

Documents

50. In the Small Generator Interconnection NOPR, the Commission asked commenters 

to address the need for consistency between the provisions of the LGIP/LGIA and the 

SGIP/SGIA. 

Comments 

51. NARUC argued that the Small Generator Interconnection NOPR was too 

complicated for most small generator interconnections. Instead, the Commission should 

adopt portions of the NARUC Model or otherwise simplify the interconnection process. 

NARUC pointed out that many Small Generating Facilities (including most inverter-based 

generators) will interconnect with low voltage facilities, whether Commissionjurisdictional or state-jurisdictional. Thus, this Final Rule should be as consistent with 

state interconnection rules as possible to encourage national consistency and discourage 

forum-shopping. Joint Commenters also supports this outcome. 

52. AEP supports consistency between the large and small generator documents. 

However, it notes that Joint Commenters developed consensus positions on many issues 

during the ANOPR process. Where such agreement was reached, AEP proposes that the 

Commission adopt that position. 
Docket No. RM02-12-000 - 21 - 

53. Midwest ISO argues that the Commission should ensure consistency between the 

large and small generator documents, wherever possible, because all stakeholders will 

benefit from a consistent approach to the interconnection of generation facilities. 

54. PJM, on the other hand, proposes that the Commission simply use the LGIA for all 

interconnections, arguing that having different rules for large and small generator 

interconnections would be overly burdensome. PJM also states that its own 

interconnection rules take this approach and are hailed as being very successful. 

55. Baltimore G&E argues that the Commission should require the same terms for all 

generators, regardless of size, unless there is a specific reason not to do so. Therefore, it 

requests that the Commission provide a clear explanation wherever these Final Rule 

provisions differ from those in Order No. 2003. Southern Company agrees, arguing that 

Large and Small Generating Facilities should be treated similarly "because both can have . 

. . significant impacts upon the Transmission Provider's electric system."41

56. BPA argues that the procedures and technical requirements applicable to large 

generators "should not apply to the interconnection of small generators that have minimal 

impacts on a transmission grid."42 However, where the Commission does use 

"substantially similar or consistent procedures, contract terms, and other requirements" for 

both Large and Small Generating Facilities, "the Commission should strive to provide 

consistency between its large and small generator rules."43

57. Nevada Power also supports the concept of having the provisions applicable to 

Small Generating Facilities similar to those in Order No. 2003. According to Nevada 

Power, "[t]hese commonalities will avoid the confusion of differing terminologies, 

facilitate consistent and fair implementation, and minimize the need for separate, parallel 

administrative processes to administer the agreements."44 However, Nevada Power also 

argues that consistency should not compromise the goals of simplifying and expediting the 

interconnection of Small Generating Facilities. Instead, this Final Rule should be 

designed to "enable a common language and common administrative procedures to be 

 41 Southern Company at 19. 

42 BPA at 3. 

43 Id.

44 Nevada Power at 4. 
Docket No. RM02-12-000 - 22 - 

implemented and still maintain appropriate distinctions between the small generators and 

the large generators."45 Nevada Power argues that the benefits of consistency are 

illustrated by Proposed SGIA article 5.1.2.1, which specifies the refund process for 

advances made by the Interconnection Customer for Network Upgrades. By having the 

same refund process for the amounts advanced for Network Upgrades in the SGIA and the 

LGIA, the Transmission Provider can set up one system, instead of two separate systems, 

to track and make any such refunds. 

58. In their supplemental comments, NARUC and the other Joint Commenters 

proposed SGIP and SGIA provisions that balance the need for simplicity with the need of 

Transmission Providers to ensure the safety and reliability of the Transmission Provider's 

electric system. In addition, Joint Commenters also proposed a process for certified 

inverter-based Small Generating Facilities no larger than 10 kW that can also be used as a 

model for the states. 

 Commission Conclusion 

59. Unless expressly changed in this Final Rule, the Commission's existing 

interconnection precedent and Order No. 2003 are relevant to this Final Rule and should 

be used as guidance for interpretation and implementation. We have tried to be consistent 

between the rules for Large and Small Generating Facilities, unless there is a specific 

reason to do otherwise, while considering NARUC's call for federal-state consistency and 

the recommendations of other commenters. 

60. We note Joint Commenters' proposal of much simpler interconnection procedures 

and agreement for inverter-based generators no larger than 10 kW.46 Taking these 

extremely small units out of the mix has allowed us to adopt standard rules for larger 

Small Generating Facilities. According to NARUC, the process of interconnecting with a 

state-jurisdictional facility should not be substantially different from the process for 

interconnecting with a Commission-jurisdictional facility. Standard interconnection 

procedures are especially important for Interconnection Customers and manufacturers of 

off-the-shelf generating equipment. 

 45 Nevada Power at 4-5. 

46 The 10 kW Inverter Process is largely based on the work of the Massachusetts 

DTE and its stakeholders group. 
Docket No. RM02-12-000 - 23 - 

61. In general, we are including standard contractual provisions in the SGIA that are 

consistent with their counterparts in the LGIA. However, in many cases commenters 

stressed the need to simplify those provisions to avoid burdening Small Generating 

Facilities. Many commenters offered ways to shorten and simplify those provisions. 

Where possible, we accept those proposals. These streamlined provisions adequately 

protect the Parties while lowering the transaction costs of entering into an interconnection 

agreement. The SGIP closely tracks the revised NARUC Model but adopts the single 

screen that NARUC and the other Joint Commenters later proposed in supplemental 

comments. Last, we have ensured that provisions common to the SGIP and SGIA (such 

as dispute resolution and confidentiality) are consistent. 

62. Definitions of Terms Used in the SGIP and SGIA – NARUC and others propose 

that the Commission use the defined terms in the NARUC Model instead of those found in 

the Small Generator Interconnection NOPR. We conclude that several of the terms 

defined in the Proposed SGIP and SGIA are either unnecessary or add complexity to the 

interconnection process. We are simplifying the SGIP and SGIA by deleting those 

definitions. Comments on specific terms are discussed below. 

63. Emergency Condition – The Proposed SGIA defined Emergency Condition as a 

situation that, in the judgment of the Party making the claim, is imminently likely to 

(1) endanger life or property, (2) have an adverse impact on the safety or reliability of the 

Transmission Provider's or an affected third party's electric system (Affected System), or 

(3) have a material adverse effect on the safety or operation of the Interconnection 

Customer's facilities. If there is an Emergency Condition, the Transmission Provider may 

take necessary and appropriate actions to protect the safety and reliability of its electric 

system, including interrupting, suspending, or curtailing interconnection service. While 

system restoration and black start are considered Emergency Conditions, the Small 

Generating Facility is not obligated to have black start capability. 

Comment 

64. Bureau of Reclamation objects to the provision that the Small Generating Facility 

is not obligated by the SGIA to have black start capability. Black start capability is an 

issue best handled by the control area rather than the Transmission Provider and that 

mentioning black start here raises the question of by whom and when black start capability 

could be required of the Small Generating Facility. In addition, Bureau of Reclamation 

proposes that the definition of Emergency Condition also include a "threat or danger to the 

environment." 
Docket No. RM02-12-000 - 24 - 

Commission Conclusion 

65. We see no need to modify the definition of Emergency Condition. The SGIA does 

not interfere with the control area's ability to establish a voluntary restoration plan, 

including black start. The SGIA requires the Parties to adhere to all Applicable Laws and 

Regulations relating to pollution and protection of the environment or natural resources. 

Therefore, Bureau of Reclamations' proposed revision is not necessary. 

66. Network Upgrades – Comments concerning the definition of Network Upgrades 

are addressed in Part II.H (Pricing/Cost Recovery for Interconnection Facilities and 

Upgrades). 

67. Use of Calendar Days v. Business Days – The Proposed SGIP and Proposed 

SGIA used both calendar days and Business Days to establish deadlines for particular 

activities. 

 Comments 

68. Ameren, EEI, and NYTO request that all references to calendar day be changed to 

"Business Day." Ameren and EEI state that doing so would make the SGIP and SGIA 

consistent. They also state that this is particularly important for the three and five day 

time limits, especially where the Transmission Provider may not have sufficient staff to 

respond within the required time. Ameren and NYTO argue that using both calendar days 

and Business Days is confusing. NYTO further notes that using Business Days rather 

than calendar days gives the Parties more time to meet deadlines. In addition, NYTO 

states that using calendar days does not account for normal business delays, including 

those caused by storm emergencies. 

Commission Conclusion 

69. We agree that references to the passage of time should be consistent. Accordingly, 

we are changing calendar days to Business Days throughout the SGIP and SGIA, with 

two exceptions. First, using calendar days is proper in the SGIA's billing and payment 

provisions because these activities are traditionally tied to calendar days. Second, SGIA 

article 7.6.1 Default provisions are stated in terms of calendar days to be consistent with 

the Commission's regulations that require at least 60 calendar days notice of a proposed 

cancellation or termination of a contract. Where we have replaced calendar days with 

Business Days, we have adjusted the number of days to reflect about the same passage of 

time. Arguments relating to the amount of time a Party has to complete an action are 

discussed below. 
Docket No. RM02-12-000 - 25 - 

70. Maximum Size of a Small Generating Facility – In the Small Generator 

Interconnection NOPR, the maximum size of a Small Generating Facility is 20 MW. 

Where there is more than one unit generating power at a particular site, the Commission 

proposed to aggregate the total capacity of all generation units using the same Point of 

Interconnection. The Commission sought comments on a circumstance when the 

Interconnection Customer desires to increase the capacity of an existing generating 

facility. The Commission proposed that the total size of the facility would be determined 

by the sum of the existing and the incremental capacity. Thus, a 10 MW addition to an 

existing 15 MW facility would be treated as a 25 MW facility. The Commission also 

sought comments on how to evaluate an Interconnection Request that specifies a level of 

capacity below the maximum rating of the Small Generating Facility. Finally, the 

Commission invited comments on whether Small Generating Facilities with multiple 

Points of Interconnection should be treated separately for queuing and interconnection 

study purposes. 

 Comments 

 Revising the Maximum Size of a Small Generating Facility 

71. Ameren, EEI, and NRECA ask the Commission to reduce the maximum size of a 

Small Generating Facility from 20 MW to 10 MW. They argue that the lower size limit 

would help ensure safety and reliability of the Transmission Provider's electric system. 

They also note that it would also be consistent with IEEE Standard 1547,47 and argue that 

the 20 MW size limit is particularly challenging for Transmission Providers because of the 

types of analyses required to evaluate their interconnection and the restrictive time limits 

placed on performing them. 

72. EEI similarly argues that many states have adopted 10 MW as the maximum size of 

a Small Generating Facility and that the Commission should follow suit. It argues that a 

10 MW size limit is better suited to the Small Generating Facility configurations most 

likely to be proposed under the Final Rule. While reducing the size limit to 10 MW 

 47 IEEE Standard 1547, approved in June 2003, is the Institute of Electrical and 

Electronics Engineers' standard for interconnecting distributed resources with electric 

power systems. The standard applies only to generating equipment no larger than 10 MW. 
Docket No. RM02-12-000 - 26 - 

creates a gap between the Large and Small Generating Facility interconnection provisions, 

that gap can be easily remedied by making the LGIP and LGIA applicable to generating 

facilities larger than 10 MW. 

73. NRECA notes in its initial comments that 10 MW is the upper limit for small 

generators in Texas, California, New York, and Ohio, and that no state currently has rules 

that apply to the interconnection of generators larger than 10 MW. According to NRECA, 

the Commission's statement in the Small Generator Interconnection NOPR that the 

20 MW maximum size would "encourage the development of a greater number of small 

generators and promote the development of innovative small generation technologies" is 

not supported by engineering reality and industry practice. NRECA participated with 

Joint Commenters in developing consensus provisions for the SGIP and SGIA that were 

submitted in Joint Commenters' supplemental comments. Based on those provisions, and 

in particular the technical screens contained in the SGIP, NRECA states that, "while it still 

believes that 20 MW is too large a generator to be considered 'small,' .... [Joint 

Commenters'] SGIA and SGIP will work for all generators up to that size."48

74. Cummins argues that the 20 MW size limit would result in more widespread use of 

on-site Small Generating Facilities. 

 Commission Conclusion 

75. We agree with commenters that generator size does matter when evaluating the 

effect of the Small Generating Facility on the Transmission Provider's electric system. 

However, we are keeping the 20 MW size limit for Small Generating Facilities because 

the interconnection studies and screens will identify any safety and reliability problems. 

In particular, the screens we adopt in the SGIP are supported by small generators, state 

regulators, and Transmission Provider representatives such as EEI and NRECA, as being 

appropriate to evaluate the safety and reliability of interconnections of Small Generating 

Facilities that are eligible for screening. We believe the higher threshold will remove 

barriers to the development of a greater number of Small Generating Facilities and 

promote the development of innovative small generation technologies. 

 48 NRECA Supplemental Comments at 5. NRECA also "believes that the screens 

adopted for review of generators up to 2 MW in capacity reasonably consider the impact 

that generators of those sizes will have on distribution systems." Id. The technical 

screens of which NRECA speaks are the same screens adopted in this Final Rule. 
Docket No. RM02-12-000 - 27 - 

 Increasing the Capacity of an Existing Small Generating Facility 

76. The Small Generator Interconnection NOPR proposed to evaluate increases in 

capacity to existing Small Generating Facilities using the total capacity of the modified 

facility, and the Commission invited comments on whether the proposal was reasonable. 

Comments 

77. Several Transmission Providers49 support the NOPR's proposal. They add that if, 

for example, the capacity of an existing 18 MW Small Generating Facility were to be 

increased by 5 MW, the resulting 23 MW facility should be evaluated under the LGIP. 

This would keep the Interconnection Customer from gaming the system by incrementally 

increasing the size of an existing Small Generating Facility so that the capacity addition 

does not exceed the 20 MW maximum, even though the ultimate capacity of the facility 

does. BPA and ISO New England state that processing the Interconnection Request for 

such an expansion on the basis of the total capacity would better protect the safety and 

reliability of the Transmission Provider's electric system. Tangibl, on the other hand, 

argues that evaluating the Interconnection Request based on the total increased capacity of 

the Small Generating Facility would discourage such increases and hinder the increased 

entry of generators into the energy markets. 

Commission Conclusion 

78. We are persuaded by BPA and ISO New England that when an existing Small 

Generating Facility is expanded, the Interconnection Request should be evaluated based 

on the total capacity of the facility as opposed to the incremental amount of the expansion. 

Similarly, an existing Large Generator seeking to increase its capacity by less than 

20 MW would also have to follow the Large Generator rule, because the total capacity of 

the expanded facility would be more than 20 MW. Section 4.10.1 of the SGIP reflects this 

conclusion. 

 49 E.g., BPA, ISO-New England, NRECA, NYTO, PG&E, and Western. 
Docket No. RM02-12-000 - 28 - 

Evaluating the Generating Facility Based on Less Than Its Maximum 

Rated Capacity 

79. In the Small Generator Interconnection NOPR, the Commission sought comments 

on whether the maximum capacity of the Small Generating Facility should be used to 

evaluate the Interconnection Request when the Interconnection Customer specified an 

output level below the facility's maximum capability. For example, the Commission 

asked whether an Interconnection Request for a generating facility with a maximum 

capacity of 22 MW but seeking an interconnection for only 20 MW (and agreeing to 

restrict delivery to the Transmission Provider's Transmission System to that level) should 

be evaluated under the SGIP or the LGIP. 

Comments 

80. Several Transmission Providers50 argue that the Interconnection Request should be 

evaluated on the basis of the maximum capacity of the Small Generating Facility to ensure 

that safety and reliability are not jeopardized. They argue that the Commission should not 

allow a 22 MW generator to be treated as a 20 MW generator based on a promise by the 

Interconnection Customer that it will never generate more than 20 MW. This would result 

in an additional administrative burden on the Commission or market monitors. They also 

argue that evaluating the Small Generating Facility at less than its maximum rated 

capacity would not ensure that Interconnection Facilities and Upgrades are properly 

designed and installed. 

81. BPA argues that evaluating a Small Generating Facility on the basis of maximum 

rated capacity would prevent gaming by an Interconnection Customer and would prevent 

it from submitting a request to interconnect its Small Generating Facility at a lower 

capacity when it really intend to operate the facility at a higher capacity. Further, 

evaluating a Small Generating Facility based on its maximum operational capacity would 

avoid the need to perform a reevaluation each time the Interconnection Customer seeks to 

operate at a higher output level. 

82. Likewise, NYTO claims that even if a Small Generating Facility supplies local load 

and delivers only half of its output, it still contributes its full fault current to the electric 

system if there is an electrical fault. Also, stability analysis is based on the full physical 

 50 E.g., AEP, Ameren, Avista, BPA, CA ISO, Central Maine, MidAmerican, MISO, 

NYTO, PG&E, SoCal Edison, and Western. 
Docket No. RM02-12-000 - 29 - 

characteristics of the facility, such as maximum power capability and rotation inertia. It 

further argues that if the Commission adopts a value other than the maximum capability of 

the Small Generating Facility, the Interconnection Customer could "forum shop" between 

the Large and Small Generating Facility interconnection provisions to get the "best deal." 

83. On the other hand, Allegheny states that if the Interconnection Customer is willing 

to accept the economic risks of its decision to limit the output of its generating facility, the 

Interconnection Request should be evaluated at the lower capacity. 

84. American Forest, Cummins, Nevada Power, NRECA, and Tangibl also state that 

the Interconnection Request should be evaluated on the basis of requested capacity, not 

the maximum capability of the generator, if the Interconnection Customer commits to 

restrict the output. American Forest says that this is important for generators that 

consume most of their electrical output on-site in various manufacturing processes and 

export only a small fraction of their output. In its supplemental comments, Small 

Generator Coalition proposes a special set of tests that could be used to determine whether 

these kinds of configurations jeopardize safety and reliability. 

Commission Conclusion 

85. We are persuaded that the Interconnection Request should be evaluated based on 

the Small Generating Facility's maximum rated capacity. We agree with commenters that 

evaluating the proposed interconnection at less than the maximum rated capacity of the 

generating facility does not ensure that proper protective equipment is designed and 

installed and the safety and reliability of the Transmission Provider's electric system can 

be maintained. 

86. Nevada Power and other commenters propose that the Interconnection Request be 

evaluated on the basis of requested capacity if the Interconnection Customer agrees to 

restrict the output of its facility. We agree with NYTO, however, that even if the Small 

Generating Facility delivers only a portion of its capability, it still contributes its full fault 

current to the Transmission Provider's electric system if there is an electrical fault. 

Therefore, the maximum capacity of the Small Generating Facility should be used to 

evaluate the Interconnection Request (See section 4.10.3 of the SGIP). 
Docket No. RM02-12-000 - 30 - 

Evaluating Small Generating Facilities with Multiple Points of 

Interconnection 

87. The Small Generator Interconnection NOPR invited comments on whether Small 

Generating Facilities with multiple Points of Interconnection (such as for a wind farm or 

an industrial cogeneration project serving multiple facilities) should be treated as separate 

projects or as a single project for queuing and interconnection study purposes. 

Comments 

88. BPA, CA ISO, ISO New England, and Tangibl argue that Small Generating 

Facilities with multiple Points of Interconnection should be treated as a single project for 

queuing and interconnection study purposes. BPA states that this promotes greater 

efficiency and accuracy because the effects of all the generators can be evaluated in one 

study. According to commenters, evaluating each Point of Interconnection as a discrete 

facility may not account for the aggregate effects when multiple generation resources are 

interconnected. 

89. Tangibl recommends adopting PJM's approach of one Interconnection Request for 

each Point of Interconnection. Tangibl states that the Interconnection Customer should 

aggregate the capacity of the multiple wind or solar projects that lie in close proximity to 

one another. However, for geographically dispersed wind or solar projects, it 

recommends that the project developer be able to ask the Transmission Provider to treat 

each project individually for interconnection study purposes. 

90. Central Maine, Idaho Power, and others argue that evaluating Interconnection 

Requests based upon a single Point of Interconnection may produce flawed results 

because it may identify Upgrades incorrectly. 

91. NYTO recommends that the Transmission Provider have the option, subject to 

Good Utility Practice, to either treat such projects separately for queuing and 

interconnection study purposes, or as a single Point of Interconnection. This is because 

each proposed Point of Interconnection presents numerous technical, operational, and 

reliability issues. 
Docket No. RM02-12-000 - 31 - 

 Commission Conclusion 

92. We adopt NYTO's proposal for the reasons cited by NYTO. The Transmission 

Provider's evaluation of a project with multiple Points of Interconnection should be 

performed, using Good Utility Practice, based on the project’s unique engineering and 

geographic needs. 

93. Dispute Resolution (Proposed SGIA Article 8 and Proposed SGIP Section 

2.11)51 – The Commission proposed adopting the same dispute resolution procedures 

contained in the LGIA and LGIP. This was a departure from Joint Commenters' proposal 

submitted in response to the ANOPR which obliged the Commission to supply technical 

experts to resolve disputes between the Parties. 

 Comments

94. Commenters were split as to which type of dispute resolution procedures should be 

adopted by the Commission. Small generator proponents generally support allowing 

either Party to require binding arbitration, while Transmission Providers generally oppose 

such provisions. However, all commenters stress the need for quick and cost-effective 

dispute resolution. 

95. CT DPUC argues that the procedures in the Small Generator Interconnection 

NOPR are too cumbersome and that state commissions are best positioned to resolve 

disputes in a fair manner, especially disputes over dual use facilities. 

96. NRECA and BPA support adopting the dispute resolution procedures in the LGIA. 

However, BPA opposes binding arbitration and asserts that the Parties should keep 

whatever appeal rights they have. 

97. Small Generator Coalition argues that most Interconnection Customers that own 

Small Generating Facilities do not have the resources to enter into protracted dispute 

resolution procedures with the larger Transmission Provider. It argues that complex 

dispute resolution procedures may discourage Small Generating Facilities from seeking to 

 51 In the remainder of this Preamble, "Proposed SGIA Article xxx" refers to a 

numbered article in the Small Generator Interconnection NOPR, not the SGIA adopted in 

this Final Rule. The same follows for references to the Proposed SGIP. This is because 

the numbering of the SGIP and SGIA does not follow the Proposed SGIP and SGIA. 
Docket No. RM02-12-000 - 32 - 

interconnect with Commission-jurisdictional facilities. Small Generator Coalition 

questions why the Commission would propose retreating from the ANOPR consensus 

result. It fears that Transmission Providers will simply refuse to submit to arbitration, 

forcing an Interconnection Customer to engage in expensive and undefined litigation. 

This is particularly true for owners of Small Generating Facilities no larger than 2 MW. 

98. AEP proposes that either Party be able to require binding arbitration. It states that 

this approach is consistent with the consensus reached during the ANOPR process. 

Cummins agrees, asserting that otherwise one Party can obstruct the process. It points out 

that Interconnection Customers often lack the financial resources to pursue their rights 

before the Commission or in court, and need access to low-cost, binding dispute resolution 

procedures. 

99. American Forest proposes allowing the Parties to agree on other arbitration 

procedures if they want to further tailor the procedures to the needs of the specific Parties. 

It claims that this is the approach common in the industry. 

100. Midwest ISO recommends that where an RTO has Commission-approved dispute 

resolution procedures, it be allowed to apply those procedures to interconnection disputes. 

101. NARUC requests that the Commission adopt the dispute resolution provisions 

found in its Model. It argues that "[e]ach State already has in place a variety of avenues 

for dispute resolution oriented to protect the interests of the retail customer, ranging from 

a simple phone call to a State commission or consumer advocate 'consumer hotline' to a 

full-blown complaint proceeding conducted by the State Commission."52 Specifically, the 

NARUC Model states that "[i]f a dispute arises at any time during these procedures [the 

Parties] may seek immediate resolution through complaint procedures available" through 

the state regulatory commission.53 The Model (1) states that the Interconnection 

Customer's Queue Position is not to be affected by its decision to pursue dispute 

resolution, (2) allows either Party to require binding arbitration, (3) allows the Parties to 

request that the state regulatory agency appoint a "technical master" to conduct the dispute 

 52 NARUC at 12-13. 

53 NARUC Model at F. 
Docket No. RM02-12-000 - 33 - 

resolution process, and (4) states that "where possible, dispute resolution will be 

conducted in an informal, expeditious manner in order to reach resolution with minimal 

costs and delay. When appropriate and available, the dispute resolution may be conducted 

by phone or through Internet communications."54

102. Joint Commenters, in its supplemental comments, proposes that the Commission's 

Dispute Resolution Service (FERC DRS) assist Parties in resolving their disputes. Under 

Joint Commenters' proposal, one Party would give the other Party written notice that they 

have reached an impasse. As soon as two days afterwards, either Party may consult with 

FERC DRS for guidance on how best to resolve the dispute. FERC DRS may provide the 

Parties with a neutral venue to work out their dispute or may recommend alternative 

avenues of dispute resolution including, but not limited to, mediation, settlement judge 

talks, early neutral evaluation, or arbitration. The Parties could agree to make such 

outcomes binding, but would not be required to so agree, or even to participate in 

alternative dispute resolution procedures before FERC DRS. 

 Commission Conclusion 

103. We are adopting a dispute resolution provision for both the SGIP and SGIA that 

closely resembles the consensus recommendation of Joint Commenters. As the widely 

disparate recommendations show, different types of interconnection disputes require 

different types of dispute resolution procedures. Small Generator Coalition and others 

emphasize the need to avoid expensive and time consuming arbitration provisions. 

According to these commenters, if a project is forced to go to arbitration, it will likely 

never be built. Instead, Joint Commenters reached consensus on a set of principles 

designed to encourage the Transmission Provider and the Interconnection Customer to use 

fast and low cost alternative dispute resolution procedures to work through their 

differences. 

104. Because the nature of the disputes that may arise are so varied, this approach will 

allow FERC DRS to make specific recommendations to the Parties designed to resolve the 

dispute quickly and inexpensively. In some cases, FERC DRS may simply provide the 

Parties a neutral venue to discuss their differences. In other cases, FERC DRS may 

recommend that the Parties put their case before a settlement judge or technical master for 

either mediation or arbitration. The Parties are free to specify whether the outcome of this 

alternative dispute resolution is binding. 

 54 Id.
Docket No. RM02-12-000 - 34 - 

105. As recommended by Joint Commenters, we will not mandate that the Parties use 

the FERC DRS' resources. Alternative dispute resolution is, by its nature, a collaborative 

and voluntary process. However, both Parties must work in good faith to resolve their 

disputes. Additionally, the provision specifies that each Party is responsible for paying 

one-half of the cost of a neutral third-party employed to assist in settling the dispute. 

106. We agree with CT DPUC, NARUC, and Joint Commenters (in its supplemental 

comments) that a state regulatory agency may often be the best place to quickly resolve a 

dispute. As mentioned above, the FERC DRS is well-equipped to recommend to Parties 

the best avenue for resolving a dispute. In many cases, that may be a state regulatory 

agency, if that body is willing to mediate or arbitrate the dispute.55

107. While we are allowing Parties to select a dispute resolution process, we count on 

FERC DRS to ensure that both Parties are treated fairly. Thus, we disagree with 

American Forest that the Parties should be able to deviate from the established dispute 

resolution procedures without Commission guidance or oversight. While flexibility is 

important, as many commenters have pointed out, the Parties are rarely on an equal 

footing. Thus, we will scrutinize the process to ensure that Interconnection Customers are 

treated fairly, especially by non-independent Transmission Providers. 

108. In response to Midwest ISO's request to include ISO-specific dispute resolution 

rules, under the independent entity variation, it and other independent Transmission 

Providers may propose such a plan in their compliance filings. 

109. Confidentiality (Proposed SGIA Article 7 and Proposed SGIP Section 2.11) – 

These provisions detailed the rights and responsibilities of each Party to keep any 

Confidential Information shared during the interconnection process. 

 55 The Commission does not require states to serve a dispute resolution function; it 

lacks the statutory authority to do so. However, because commenters argue that state 

participation could be beneficial, we encourage states that have the expertise, resources, 

and interest to help resolve these disputes as they arise. 
Docket No. RM02-12-000 - 35 - 

 Comments

110. Avista and Idaho Power assert that the confidentiality provisions should give state 

regulators conducting an investigation the same access to confidential information as is 

provided to the Commission when it conducts an investigation. Avista also requests that 

the Commission address recent rulings by the Internal Revenue Service applicable to 

confidential transactions. Similarly, NARUC is concerned that the proposed 

confidentiality provisions might prevent state regulators from getting the information they 

need in the course of conducting an investigation. The NARUC Model SGIP includes a 

confidentiality provision that is similar to that proposed in the Small Generator 

Interconnection NOPR. The NARUC Model SGIA simply leaves a place holder to be 

filled in by the Parties. 

111. Southern Company argues that Proposed SGIA article 7.1 should specify that 

information supplied "as part of this [interconnection] agreement" be confidential rather 

than information supplied "prior to execution of this agreement." It also says that 

Proposed SGIA article 7.12 allows a broader class of information to qualify for 

confidential treatment than does article 7.1, and proposes deleting article 7.12. Finally, 

article 7.4 should be revised to prohibit the Interconnection Customer from sharing 

Confidential Information with "potential purchasers or assignees of the Interconnection 

Customer." 

112. In its supplemental comments, Joint Commenters propose the following provision 

in lieu of the proposal: 

Confidential Information is as defined in this Agreement but does not 

include information previously in the public domain, required to be 

publicly submitted or divulged by Governmental Authorities (after 

notice to the other party and after exhausting any opportunity to 

oppose such publication or release), or necessary to be divulged in an 

action to enforce this agreement. Each party receiving Confidential 

Information shall hold such information in confidence and shall not 

disclose it to any third party nor to the public without the prior 

written authorization from the party providing that information, 

except to fulfill obligations under this agreement, or to fulfill legal or 

regulatory requirements. Each party shall employ at least the same 

standard of care to protect Confidential Information obtained from 

the other party as it employs to protect its own Confidential 

Information. Each party is entitled to equitable relief, by injunction 

or otherwise, to enforce its rights under this provision to prevent the 
Docket No. RM02-12-000 - 36 - 

release of Confidential Information without bond or proof of 

damages, and may seek other remedies available at law or in equity 

for breach of this provision. 

 Commission Conclusion 

113. We are adopting confidentiality provisions in both the SGIP and SGIA that closely 

resemble those proposed by Joint Commenters. While the provisions we adopt here are 

shorter than those in the LGIP and LGIA, they are similar in content. 

114. To clarify the Commission's right to otherwise Confidential Information during an 

investigation, we include an SGIA provision similar to LGIA article 22.1.10.56 This 

addition also clarifies that a Party is not prohibited from disclosing Confidential 

Information to a state regulatory body where the state regulatory body has the authority to 

request the information. 

115. We deny Southern Company's request to remove proposed language allowing the 

Interconnection Customer to share Confidential Information with potential assignees and 

financers. The Interconnection Customer must be able to share such information to secure 

financing and remain competitive. However, we are modifying the provision to specify 

that any such person receiving Confidential Information agree to abide by the same 

confidentiality rules as the Parties.57 We agree with Southern Company that 

confidentiality should apply to all information shared between the Parties; however, its 

proposal is obviated by the new language. 

116. Keeping the Small Generator Interconnection Rules Current – The Small 

Generator Interconnection NOPR did not envision that the SGIP and SGIA would be 

periodically revised. 

 56 See Order No. 2003-A at P 486. 

57 Id. at P 490. 
Docket No. RM02-12-000 - 37 - 

 Comment 

117. In its supplemental comments, Small Generator Coalition asks the Commission to 

adopt a mechanism to allow periodic revisiting of its interconnection rules as the industry 

evolves. It proposes that the Commission encourage or charter a stakeholder committee to 

meet periodically to consider and recommend consensus proposals for changes. 

 Commission Conclusion 

118. We commend the persistence of the Joint Commenters who met on numerous 

occasions over the duration of this proceeding to aid the Commission in its decisionmaking. As one can see in the contents of this Final Rule, those negotiations have been 

very successful. We believe Small Generator Coalition's proposal has merit. We ask the 

Joint Commenters to take the lead in this process, and encourage interested entities to 

continue to work together on small generator interconnection issues. We are asking this 

informal group to meet biennially, beginning two years from the issuance of this order, to 

consider and recommend consensus proposals for changes in the Commission’s rules for 

small generator interconnection. The Commission will provide appropriate resources to 

facilitate the process. To the extent that this group identifies needed changes, they may 

file a petition to amend the Commission's regulations. The Commission will review the 

petition and, if appropriate, notice that petition for public comment. 

D. Issues Related to the Interconnection Request 

119. The Interconnection Request is the application form that the Interconnection 

Customer uses to start the process of interconnecting its Small Generating Facility with 

the Transmission Provider's Transmission System. The issues discussed below either did 

not arise in the Large Generator Interconnection proceeding or we conclude that a 

different conclusion should apply to Small Generating Facilities. 

120. Processing Fees and Study Deposits – The Proposed SGIP set out a fixed 

processing fee schedule for processing all Interconnection Requests. The amount of the 

fee was to be tied to the size of the Small Generating Facility. Small Generating Facilities 

no larger than 2 MW in size would be charged the greater of (1) $0.50/KVA rating, or 

$100 for single phase generators no larger than 25 kVA or (2) $500 for generators larger 

than 25 kVA. The fee for a Small Generating Facility larger than 2 MW but no larger 

than 10 MW would be $1,000, and the fee for one larger than 10 MW would be $2,000. 

In addition, if the Small Generating Facility was to be evaluated using the interconnection 

studies, the Interconnection Customer would pay a deposit prior to each study that would 

be applied to the Transmission Provider's actual costs of performing the study. 
Docket No. RM02-12-000 - 38 - 

 Comments 

121. NARUC urges that the processing fee be cost-based so that there is no 

subsidization by either the Transmission Provider or the Interconnection Customer. 

122. NRECA generally supports a fixed processing fee approach, but says that the 

proposed fees are unrelated to the actual cost of conducting the analysis under the screens. 

It asks the Commission to let each Transmission Provider file fees that are designed to 

recover the actual cost of conducting the analysis under the screens. 

123. NYTO asks the Commission to clarify that the proposed fee covers administrative 

and engineering costs not covered by other fees. PacifiCorp states that it does not appear 

that the owner of a Small Generating Facility no larger than 2 MW would pay any fee 

other than the fee to conduct the analysis under the screens. It asks the Commission to 

require the owner of such a generator to pay the actual cost of interconnection, if any, 

beyond the processing fee. 

124. Southern Company states that the proposed processing fee schedule conflicts with 

the deposit provisions of the proposed interconnection study agreements. It argues that a 

Small Generating Facility interconnecting at the transmission level should submit an 

interconnection feasibility study deposit rather than the application fee because it appears 

that the processing fee is a charge for conducting the analysis under the screens. Southern 

Company also states that evaluating an Interconnection Request for a non-certified Small 

Generating Facility requires time and effort, and the Interconnection Customer should pay 

twice the processing fee assessed to the owner of a certified Small Generating Facility. 

 Commission Conclusion 

125. Under this Final Rule, the Interconnection Customer shall submit with its 

Interconnection Request a processing fee or feasibility study deposit, but not both, 

depending on how the Interconnection Request is to be evaluated. If it is to be evaluated 

using the Study Process, which usually includes a scoping meeting and feasibility, system 

impact, and facilities studies, the Interconnection Customer shall make a deposit towards 

the cost of the feasibility study at the time the Interconnection Request is submitted to the 

Transmission Provider. The amount of the deposit is the lesser of 50 percent of the good 

faith estimated feasibility study costs or $1,000. If the Interconnection Request is to be 

evaluated using the Fast Track Process, it is to be accompanied by a $500 processing fee. 

If the Interconnection Request is to be evaluated using the 10 kW Inverter Process, it is to 

be accompanied by a $100 processing fee. 
Docket No. RM02-12-000 - 39 - 

126. The purpose of the $100 and $500 processing fees is to recover the Transmission 

Provider's costs of evaluating Interconnection Requests under the 10 kW Inverter Process 

and Fast Track Process, respectively. This approach to fees is simple, easy to administer, 

and gives many Interconnection Customers the cost certainty they need to move forward 

with their projects. However, because administratively fixed fees will sometimes either 

under- or over-recover a particular Transmission Provider's costs, we will allow the 

Transmission Provider to charge a cost-based fee for processing Interconnection Requests 

if it has first made an appropriate rate filing with appropriate detailed cost justification 

under FPA section 205.58 If the Transmission Provider decides to revise its processing fee 

schedule through a rate filing, the revised fees would, of course, apply prospectively to all 

new Interconnection Requests under the Fast Track Process or the 10 kW Inverter Process. 

Otherwise, the processing fees in the SGIP will serve as a default. 

127. Given our concerns about the need for many Interconnection Customers to know 

beforehand the costs they will incur for the evaluation of their Interconnection Request 

under the screens, we will disallow formula rates or true up provisions in any rate 

submission. The cost support for the filed fixed processing fee schedule (designed in a 

manner similar to the processing fees in the SGIP) shall reflect the Transmission 

Provider's costs for processing Interconnection Requests under the Fast Track and the 

10 kW Inverter Processes, as it would for the embedded cost based pricing of any other 

jurisdictional service. 

128. Southern Company's first comment highlights an unintended inconsistency in the 

NOPR. To clarify, the fixed processing fee schedule delineated above is only for 

submissions under the10 kW Inverter Process and the Fast Track Process which use the 

technical screens. A submission under the Study Process instead will include a deposit 

towards the Transmission Provider's cost of performing the feasibility study, not both a 

deposit and a processing fee. However, an Interconnection Customer whose proposed 

interconnection fails the Fast Track Process or the 10 kW Inverter Process and is then 

evaluated under the Study Process would pay both the fixed processing fee with the initial 

submission and then a feasibility study deposit before the Study Process begins. 

 58 16 U.S.C. § 824d (2000); see also 18 CFR § 35.12 (2004). 
Docket No. RM02-12-000 - 40 - 

129. Receipt Confirmation and Requests for Additional Data – Proposed SGIP 

sections 3.2 and 4.2 govern the submission and receipt of the Interconnection Customer's 

Interconnection Request. 

Comments 

130. Central Maine argues that the Transmission Provider should be able to use 

alternative methods to mail, such as fax and overnight delivery services, to tell the 

Interconnection Customer that it has received the Interconnection Request. It also asks 

that the Commission increase the Transmission Provider's notification time period from 

ten to fifteen Business Days. Central Maine and EEI note that the Interconnection 

Customer does not have a deadline to supply missing information. They recommend that 

the Commission establish ten Business Days as the deadline and to state that failure to 

provide such information within that time will result in the Interconnection Request being 

deemed withdrawn. 

 Commission Conclusion 

131. We agree that the Transmission Provider may use alternate methods of confirming 

receipt of the Interconnection Request. The notification requirement is needed because it 

provides a date certain for affirming that the Transmission Provider has received the 

Interconnection Request. We also decline to increase the time by which the 

Interconnection Customer must be told whether the Interconnection Request is complete. 

Ten Business Days is sufficient time for the Transmission Provider to make an initial 

assessment as to whether the requisite information has been provided; an in-depth 

evaluation of the project is not required during this period. However, we agree with 

Central Maine and EEI that the Proposed SGIP does not address when the Interconnection 

Customer must furnish the missing information. Accordingly, the SGIP provides that the 

Interconnection Customer has ten Business Days after receipt of the notice to submit the 

missing information or to provide an explanation as to why extension of time is needed to 

provide such information. If the Interconnection Customer does not provide the missing 

information or a request for an extension of time within the deadline, the Interconnection 

Request shall be deemed withdrawn. 

132. Interconnection Products and Service Options – The Proposed Interconnection 

Request would have directed the Interconnection Customer to state whether it intends to 

participate as a "Network Resource," "Energy-Only Resource," "Non-Exporting Resource 

Participating in a Wholesale Market," or "Other." 
Docket No. RM02-12-000 - 41 - 

Comments 

133. Alabama PSC, EEI, Mississippi PSC, Southern Company, and others are concerned 

that the Interconnection Request could be construed to mean that a Small Generating 

Facility is eligible for the same Network Resource Interconnection Service that Order 

No. 2003 makes available to Large Generating Facilities. They argue that this service 

should not be provided to a Small Generating Facility. For example, Alabama PSC and 

Mississippi PSC argue that a Small Generating Facility does not meet the basic 

prerequisites to receive a "network" type of service. They state that Small Generating 

Facilities almost universally interconnect with either "distribution" or sub-transmission 

facilities that are not "networked" but are radial in nature. The costs to make such 

facilities networked to provide such a service would be prohibitive. Southern Company 

asks that the references to resource options be deleted. TAPS states that the Small 

Generator Interconnection NOPR correctly dispenses with Order No. 2003's Network 

Resource Interconnection Service, which TAPS claims is incompatible with Network 

Integration Transmission Service under the OATT. 

134. Taking the opposite view, National Grid states that the Commission should 

establish two interconnection products for Small Generating Facilities, arguing that 

Energy Resource Interconnection Service and Network Resource Interconnection Service 

are just as important for a Small Generating Facility as they are for a Large Generating 

Facility. National Grid states that Network Resource Interconnection Service has 

important market implications for new resources, because only generating facilities that 

meet this interconnection standard should qualify for installed capacity credits. It argues 

that Small Generating Facilities should have the option of being studied as deliverable 

network resources so that they may be eligible for such credits. If the Commission does 

not mandate two separate interconnection products for Small Generating Facilities, 

National Grid requests that, at a minimum, the single interconnection product ensure 

deliverability of generating facility output, consistent with the Commission’s ruling in 

New England with respect to large generator interconnections.59

135. NARUC asks the Commission to remove the category "non-exporting resource 

participating in a wholesale market" from the Interconnection Request. It notes that the 

Interconnection Request instructs the Interconnection Customer to declare its intention to 

sell electricity at wholesale in interstate commerce. However, the phrase "non-exporting 

 59 New England Power Pool (New England), 109 FERC ¶ 61,155 at P 43-44 

(2004). 
Docket No. RM02-12-000 - 42 - 

resource participating in a wholesale market," which is used nowhere else in the Small 

Generator Interconnection NOPR, raises unnecessary questions and extends its reach far 

beyond its stated intention. 

136. PacifiCorp states that none of these service categories is defined in the Proposed 

SGIP and that the significance of each designation is unknown. It argues that the different 

service options must be defined in the SGIP and that the additional information needed to 

permit a Transmission Provider to conduct studies must be provided. PacifiCorp asks the 

Commission to explain the significance of "Non-Exporting Resource Participating in a 

Wholesale Market" and "Other." It adds that there should be an opportunity for comment 

on the workability of these proposals and on what information a Transmission Provider 

may need to provide this kind of interconnection service. 

137. SoCal Edison seeks clarification that, to interconnect a Small Generating Facility 

with a Distribution System, the Transmission Provider must study deliverability60 on the 

system, even if no delivery service is sought on either the Transmission or Distribution 

System. In studying distribution-level interconnections, the Small Generating Facility is 

assumed to be running at maximum output and the power is flowing onto the directly 

attached distribution facility. SoCal Edison argues that there is no way to study an 

interconnection with the Distribution System without assuming power flows on that 

Distribution System. 

138. SoCal Edison further argues that, unlike an energy resource on a Transmission 

System, the generator cannot for safety and reliability reasons opt to generate only when 

distribution "capacity" is available because the characteristics of a Distribution System 

(i.e., radial) differ from those of a Transmission System (i.e., network). Given how a 

Distribution System operates, the provision of distribution interconnection service in the 

absence of a wholesale distribution service request is a meaningless exercise, and there are 

considerable efficiencies in requesting and studying the two services at the same time. 

Also, SoCal Edison is concerned that some Interconnection Customers may not realize 

that a separate rate may be charged to use the Distribution System in addition to the 

Transmission System. It states that the Commission should clarify that both 

interconnection and wholesale delivery service may be required. Although SoCal Edison 

 60 Deliverability refers to the ability of the electric system to accept the Small 

Generating Facility's output without regard to the ultimate point of delivery. 
Docket No. RM02-12-000 - 43 - 

does not believe that the Commission needs to require that wholesale distribution service 

and distribution-level interconnection service be provided only on a bundled basis, it asks 

the Commission to permit "bundled" applications like those under SoCal Edison's 

Wholesale Distribution Access Tariff. 

Commission Conclusion 

139. We clarify that the resource options listed in the Small Generator Interconnection 

NOPR's Interconnection Request are not interconnection service options. Rather, they are 

merely the possible ways the Interconnection Customer may use its Small Generating 

Facility once delivery service begins. The purpose of this information is to give the 

Transmission Provider an early indication of how the Small Generating Facility is likely 

to operate. The one interconnection service that the Commission proposed to make 

available to the Small Generating Facility is similar to the Energy Resource 

Interconnection Service that is offered under the LGIA. Nevertheless, based on the 

comments, we are concerned that requesting service-related information in the 

Interconnection Request could lead to misunderstanding. Because the information is 

related to the delivery component of transmission service, not interconnection service, it is 

not needed in the SGIP's Interconnection Request form. Therefore, we are removing this 

information from the Interconnection Request. This should address the concerns of most 

commenters. 

140. In response to National Grid, we note that the LGIA's more expansive Network 

Resource Interconnection Service is intended to give the Interconnection Customer broad 

access to the backbone of the Transmission Provider's Transmission System. In essence, 

it allows the generating facility to pre-qualify as a Network Resource for any Network 

Customer on the Transmission System and, as National Grid notes, may make it eligible 

for installed capacity credits. Because Network Resource Interconnection Service entails 

high technical standards, we expect that an Interconnection Customer, particularly one 

interconnecting at a lower voltage, would rarely find this service to be efficient or 

practical. Nevertheless, we do not want to preclude it from choosing this option. If it 

wishes to interconnect its Small Generating Facility using Network Resource 

Interconnection Service, it may do so. However, it must request interconnection under the 

LGIP and execute the LGIA. 

141. In response to SoCal Edison's request for clarification, we note that the SGIP lets 

the Transmission Provider study the potential impacts of the proposed interconnection on 

the Distribution System. Also, we clarify that nothing in this Final Rule (which concerns 

interconnection service only) prevents the Transmission Provider from evaluating the 

Interconnection Request and requests for wholesale distribution service and transmission 
Docket No. RM02-12-000 - 44 - 

delivery service simultaneously. However, the Transmission Provider may not require the 

Interconnection Customer to request wholesale distribution service or transmission 

delivery service as a condition for granting a request for interconnection service. We 

expect the Transmission Provider to explain to the Interconnection Customer what 

delivery services may be needed to meet its needs. 

142. Ministerial Changes to the Interconnection Request – The Proposed 

Interconnection Request was crafted largely by Joint Commenters in response to the 

ANOPR. It is similar in many respects to the NARUC Model. Joint Commenters in its 

supplemental comments submitted ministerial changes to the Proposed Interconnection 

Request. Other commenters61 also seek changes to the Interconnection Request, most 

reflecting misplaced or missing technical information. The Interconnection Request we 

adopt in this Final Rule largely tracks the NARUC Model version and also reflects many 

of the changes proposed by the commenters. 

E. Issues Related to the SGIP 

143. Using Voltage Level to Determine Which Procedures Apply – The Proposed 

SGIP divided Interconnection Requests into two groups for initial processing based on the 

voltage level of the interconnection. Interconnections to High-Voltage (at or above 69 

kV) would be evaluated using the interconnection studies. Interconnection to LowVoltage (below 69 kV) would be processed differently depending upon the size and the 

certification status of the Small Generating Facility as explained below. An 

Interconnection Request for a certified Small Generating Facility no larger than 2 MW 

interconnecting at Low-Voltage would be evaluated using super-expedited screening 

criteria; an Interconnection Request for a Small Generating Facility no larger than 10 MW 

interconnecting at Low-Voltage would be evaluated using expedited screening criteria; 

and an Interconnection Request for a Small Generating Facility larger than 10 MW but no 

larger than 20 MW interconnecting at Low-Voltage would be evaluated using the 

interconnection studies. If an Interconnection Request did not pass the super-expedited 

screening criteria or expedited screening criteria, it would be evaluated using 

interconnection studies. 

 61 E.g., Bureau of Reclamation, Central Maine, Cummins, EEI, Joint Commenters, 

Northwestern Energy, NYTO, PacifiCorp, PG&E, and Small Generator Coalition. 
Docket No. RM02-12-000 - 45 - 

 Comments 

144. Several commenters62 object to using voltage level to distinguish which review 

process initially applies to an Interconnection Request. They argue that the distinction 

should be based on whether the Small Generating Facility is being interconnected with 

distribution or transmission facilities. The decision should be consistent with the physical 

facilities and operational realities of the electric system. They also contend that electric 

system configurations vary widely in terms of voltage levels and that the effect of an 

interconnection is not necessarily determined by voltage, but also by location and size of 

the Small Generating Facility. In addition, they state that this distinction was not a part of 

the ANOPR proposal and that using voltage to distinguish which set of procedures applies 

is confusing. 

145. In its supplemental comments, Joint Commenters propose using whether the 

proposed interconnection is with a transmission line (i.e., interconnections with 

transmission lines may not be evaluated using the technical screens) to determine whether 

screens may be used to evaluate the proposed interconnection. 

 Commission Conclusion 

146. For the reasons given above, we agree with commenters that interconnection 

voltage should not be used as a determinative factor for whether the Interconnection 

Request may be evaluated using the technical screens. Instead, we are adopting the 

technical screens proposed by Joint Commenters in its supplemental comments. The 

SGIP specifies that an Interconnection Request for a certified Small Generating Facility 

no larger than 2 MW shall be evaluated using the technical screens, either under the Fast 

Track Process or the 10 kW Inverter Process, whichever applies. Under the first provision 

of the screens, SGIP section 2.2.1.1, the proposed Small Generating Facility’s Point of 

Interconnection must be on a portion of the Transmission Provider’s Distribution System 

that is subject to the Tariff.63

 62 E.g., CA ISO, EEI, Idaho Power, PG&E, PSE&G, SoCal Edison, and Southern 

Company. 

 63 As noted above, "transmission" is both an engineering term of art and a term 

used in the FPA. As used in the technical screens, "transmission" is used in the 

engineering sense, not in a jurisdictional sense. Likewise, references in other technical 

screens to "radial distribution circuits," "3-phase primary distribution lines," and other 

uses of the word distribution are used in an engineering sense, not in a jurisdictional sense. 

(Footnote continued on next page) 
Docket No. RM02-12-000 - 46 - 

147. Certification of the Small Generating Facility (Proposed SGIP Section 3.1) – In 

the Small Generator Interconnection NOPR, the Commission proposed that 

Interconnection Requests for certified generators no larger than 2 MW would be reviewed 

using the super-expedited screening criteria that employed technical screens. The 

Commission also noted that Joint Commenters (in its response to the ANOPR) preferred 

that the Commission itself implement a single, uniform, nationwide process for the 

certification of Small Generating Facility equipment packages no larger than 2 MW.64 

The Commission proposed, however, that this function instead be performed by an 

industry-recognized testing organization. In addition, the Commission requested 

comments as to whether IEEE 1547 (Standard for Interconnecting Distributed Resources 

with Electric Power Systems), together with other technical industry documents, could be 

the basis for a national certification standard. 

Comments 

148. Commenters generally agree with the value of having a certification process for 

Small Generating Facilities. They believe that such a process can speed interconnection 

and eliminate the need to "reinvent the wheel" each time an interconnection is made. In 

general, commenters agree that IEEE 1547, in conjunction with other standards, could be 

the basis for a certification standard. 

149. NYTO requests that the Commission adopt the process and registry proposal 

described in the November 12, 2002 Joint Commenters filing. That would have the 

Commission maintain a list of certified equipment and to centralize the registry function. 

It claims that this would provide certainty to the industry as to which equipment has been 

certified and would avoid the development of competing and potentially inconsistent lists 

of certified equipment, which could lead to disputes and slow down the interconnection 

process. 

 

In no case do we intend that this Final Rule applies to non-Commission-jurisdictional 

facilities. 

64 A "certified" Small Generating Facility is one that has been certified by a 

nationally recognized laboratory before the Interconnection Request is submitted to the 

Transmission Provider. Such a facility is said to be "certified" for purposes of the 

interconnection process. 
Docket No. RM02-12-000 - 47 - 

150. The NARUC Model certification provision relies on Nationally Recognized 

Testing Laboratories (NRTL) to test and certify the safety of electrical equipment used for 

the production of electricity. That provision, which was developed for use by state 

regulators, requires that the NRTL be used by the state regulatory authority or approved 

by the U.S. Department of Energy. 

151. American Forest and others state that if the Commission chooses not to certify and 

maintain a registry of equipment, it should establish and oversee a stakeholder process for 

the development of certification criteria. Without the Commission's involvement, the 

process of establishing certification standards will languish. 

152. Cummins and others, however, argue that a nationally recognized testing laboratory 

and agencies like the Department of Energy should oversee the certification process. 

They also note that a national testing laboratory, such as Underwriter Laboratories, 

typically not only tests and verifies the performance of prototype equipment, but also 

provides follow-up services to verify that production equipment is designed and 

manufactured to the same standards as the tested equipment. 

153. Ameren and others complain that the NOPR does not explain what industry 

operational and safety standards are applicable. Likewise, the NOPR does not specify 

what is needed to qualify as a national testing laboratory. They claim that leaving these 

issues open could lead to unnecessary or improper testing. They recommend that the 

Commission (1) adopt a specific set of standards for operation and safety requirements 

that are continually updated to meet current safety and reliability requirements set forth by 

NERC or the regional reliability councils, and (2) maintain a list of qualified national 

testing laboratories. 

154. Allegheny Energy argues that certification guarantees the safety and reliability of 

the equipment in a stand-alone mode only, but not safety and reliability when the 

equipment becomes part of an integrated system. 

155. Joint Commenters, in its supplemental comments, proposes a consensus equipment 

certification provision that it states was developed under a stakeholder process convened 

by the U.S. Department of Energy's Office of Electric Transmission and Distribution. The 

participants in the process included Joint Commenter members representing small 

generator interests, state regulators, and Transmission Providers, as well as experts from 

the electrical equipment manufacturing industry and testing laboratories. Joint 

Commenters' proposed certification provision provides that Small Generating Facility 

equipment shall be considered certified if (1) it has been tested in accordance with 

industry standards for continuous utility interactive operation in compliance with the 
Docket No. RM02-12-000 - 48 - 

appropriate codes and standards by any NRTL recognized by the United States 

Occupational Safety and Health Administration to test and certify interconnection 

equipment pursuant to the relevant codes and standards, (2) it has been labeled and is 

publicly listed by such NRTL at the time the Interconnection Request is made, and 

(3) such NRTL makes readily available for verification all test standards and procedures it 

utilized in performing such equipment certification and, with consumer approval, the test 

data itself. 

Commission Conclusion 

156. We agree with Cummins that nationally recognized laboratories should oversee the 

certification process and maintain registries of certified equipment. A NRTL not only 

tests and verifies the performance of prototypes, but it provides follow-up services to 

verify that production equipment is designed and manufactured to the same standards as 

the tested equipment. In this Final Rule, we are adopting Joint Commenters' proposal. 

This certification provision was vetted by a diverse group of stakeholders and is 

fundamentally consistent with the Proposed SGIP as well as the provision contained in the 

NARUC Model. We are especially encouraged by the report from Joint Commenters that 

one well-known NRTL intends to begin the certification of equipment as soon as the 

summer of 2005. This should hasten the development of certified Small Generating 

Facilities no larger than 2 MW under the Fast Track and 10 kW Inverter Processes. The 

certification provision we adopt in this Final Rule is contained in Attachments 3 and 4 of 

the SGIP. 

157. Finally, we acknowledge Allegheny Energy's concerns. Electric system safety and 

reliability issues are to be addressed when the proposed interconnection of the certified 

equipment is evaluated under the Fast Track Process or the 10 kW Inverter Process. 

158. Super-Expedited Procedures (Proposed SGIP Section 3) and Expedited 

Procedures (Proposed SGIP Section 4.3)

65 – In the NOPR, proposed SGIP section 3 

stated that if the proposed Small Generating Facility is certified, no larger than 2 MW, and 

the interconnection is with Low-Voltage facilities, the interconnection would be evaluated 

 65 In the Small Generator Interconnection NOPR, the term Super-Expedited 

Procedure referred to the process that used the super-expedited screens and Expedited 

Procedure referred to the process that used the expedited screens. In this Final Rule, we 

are adopting only one set of screens, which are used in both the Fast Track Process and the 

10 kW Inverter Process. 
Docket No. RM02-12-000 - 49 - 

using super-expedited screens. Proposed SGIP section 4.3 stated that if the proposed 

Small Generating Facility is no larger than 10 MW and the interconnection is with LowVoltage facilities, the interconnection would be evaluated using expedited screens. 

Proposed SGIP section 4.3 also provided that the expedited screens would be used to 

evaluate proposed interconnections that failed the super-expedited screens. 

159. The NOPR proposed that if the Transmission Provider determines that the 

proposed interconnection fails the super-expedited screens and is not satisfied that the 

Small Generating Facility can be interconnected safely and reliably, the Interconnection 

Customer can pay for an additional review. The review would not exceed six hours and 

would determine whether minor modifications to the Transmission Provider's electric 

system (e.g., changing meters, fuses, relay settings) could enable the interconnection to be 

made safely and reliably. If the results of the review were positive and the 

Interconnection Customer agreed to pay for these minor modifications, the Transmission 

Provider would tender an executable SGIA to the Interconnection Customer. 

Comments 

160. Joint Commenters, Small Generator Coalition, and NARUC recommend that the 

Commission require the use of screens to evaluate Interconnection Requests. NARUC 

and Small Generator Coalition initially proposed using two sets of screens. However, 

Joint Commenters (which includes both NARUC and Small Generator Coalition) now 

recommends adopting a single set of screens that serves the same purpose as the two 

initially proposed. 

161. Several commenters66 asked that the screens be clarified, modified, or eliminated. 

EEI recommended that the screens be available only for interconnection with radial 

facilities. 

162. Cinergy, EEI, Idaho Power, NYTO, and others maintain that even if the Small 

Generating Facility is certified and passes the screens, there is no assurance that safety and 

reliability or the quality of service is not degraded as a result of the interconnection. 

Cinergy and EEI argue the rule should require a showing that the interconnection does not 

degrade safety and reliability. 

 66 E.g., Ameren, BPA, Bureau of Reclamation, Central Maine, Cinergy, EEI, 

Exelon, MISO, NRECA, NYPSC, NYTO, PG&E, PJM, and Southern Company. 
Docket No. RM02-12-000 - 50 - 

163. BPA and Central Maine oppose limiting the additional review to six hours, arguing 

that each interconnection is unique. 

164. PJM argues that the Final Rule should not allow screens to be used in lieu of the 

feasibility study. It claims that while screens allow a project to be expedited, they do not 

necessarily provide the type of information needed by the Interconnection Customer to 

determine whether the project is viable (e.g., information concerning the estimated cost of 

interconnection or the effects on other projects). 

165. BPA claims that it is unreasonable to hold the Transmission Provider to stringent 

deadlines without establishing corresponding deadlines for the Interconnection Customer. 

MISO and BPA contend that the timelines do not give the Transmission Provider 

sufficient time to review the Interconnection Request. MISO proposes that the 

Transmission Provider be permitted to notify the Interconnection Customer if it is unable 

to meet the target date, along with the reasons for delay. 

166. NRECA and others ask the Commission to reduce the maximum size of a facility 

that may be evaluated under the screens to as small as 3 kW. In its supplemental 

comments, Small Generator Coalition argues against imposing any size limits. 

167. Southern Company argues that certain base case assumptions are necessary for an 

accurate representation of the electric system when an Interconnection Request is 

evaluated under screens. It would like the evaluation to include all pending higher-queued 

Interconnection Requests because only then could the effect of an Interconnection Request 

be truly determined. 

 Commission Conclusion 

168. In SGIP section 2.2.1, we are adopting a single set of screens submitted by Joint 

Commenters in its supplemental comments, with minor editorial changes. These are the 

screens that would be applied in the Fast Track and the 10 kW Inverter Processes. We are 

adopting only one set of screens rather than the two in the NARUC Model and the Small 

Generator Interconnection NOPR. The individual screening criteria in this set are very 

similar to those in the NARUC Model and closely track both those contained in the Small 

Generator Interconnection NOPR and those proposed by Joint Commenters in the 

ANOPR process. 
Docket No. RM02-12-000 - 51 - 

169. The NOPR did not contain a screen that would permit interconnection with a 

secondary network67 and Joint Commenters were unable to agree on one. We are also not 

adopting any additional screen that would permit interconnection with a secondary 

network in this Final Rule. 

170. We are deleting "and must comply with all requirements of approved industry 

standards for interconnection technical specifications and requirements" from one of Joint 

Commenters' proposed screens because this language is redundant; a Small Generating 

Facility that is being evaluated under the Fast Track Process or 10 kW Inverter Process 

must meet the codes, standards, and certification requirements of Attachments 3 and 4 of 

the SGIP. 

171. Concerns raised by commenters that screens do not accurately reflect the true effect 

of the interconnection on safety and reliability are unfounded. We believe the thresholds 

used in the screens to be conservative and that there is negligible chance that a proposed 

interconnection could pass the screens and actually impact the safety and reliability of the 

Transmission Provider's electric system. These thresholds have been vetted by 

Transmission Providers, small generator developers, and representatives of state 

regulators alike. 

172. We reject Small Generator Coalition's argument that there should be no size 

restrictions for Small Generating Facilities whose interconnections may be evaluated 

using the screens. We are retaining the proposed 2 MW threshold for certified generators 

as a critical eligibility criterion for using the screens. It helps ensure the safety and 

reliability of the Transmission Provider's electric system. Small Generator Coalition, 

together with a number of Transmission Providers and representatives of state regulatory 

agencies, vetted the threshold when submitting the package of screens through Joint 

Commenters' supplemental comments. 

173. In response to objections to the NOPR's expedited screening procedures, the Final 

Rule SGIP does not include any screens for Small Generating Facilities larger than 2 MW. 

Accordingly, only a request to interconnect a certified Small Generating Facility no larger 

than 2 MW shall be evaluated using the screens. A request to interconnect a Small 

 67 A secondary network is a type of distribution system that is generally used in 

large metropolitan areas that are densely populated in order to provide high reliability of 

service to multiple customers. (Source: Standard Handbook for Electrical Engineers, 11th

edition, Donald Fink, McGraw Hill Book Company) 
Docket No. RM02-12-000 - 52 - 

Generating Facility larger than 2 MW or a Small Generating Facility of any size that is not 

certified shall be evaluated using the Study Process. 

174. BPA and others oppose limiting the additional review to six hours. We are 

eliminating this restriction.68 The SGIP includes a customer options meeting where the 

Transmission Provider may propose modifications to the proposed interconnection or the 

Small Generating Facility itself, or perform a supplemental review if the Interconnection 

Customer agrees to pay for it. This allows the Transmission Provider to determine the 

modifications needed to accommodate the interconnection without the need for detailed 

and more costly interconnection studies. 

175. Southern Company and Joint Commenters (in its supplemental comments) argue 

that the Transmission Provider should be allowed to consider the effects of all pending 

higher-queued Interconnection Requests when evaluating the Interconnection Request 

under the screens. We agree. 

176. Queuing Priority (Proposed SGIP Section 4.4) – In the NOPR, the Commission 

proposed that each Transmission Provider maintain a single queue per geographic area. A 

queue lists Interconnection Requests in the order in which they are received. The Queue 

Position determines the order of performing interconnection studies, if required, and the 

Interconnection Customer's cost responsibility for any Upgrades to the Transmission 

Provider's electric system. In Order No. 2003, the Commission decided that the 

Transmission Provider should maintain a single integrated queue per geographic region. 

However, RTOs and ISOs have flexibility to propose queues and queuing rules designed 

to meet their regional needs.69 We are adopting the same provision here, for the same 

reasons. Accordingly, there is no need to separately address again the same comments 

raised in this proceeding on that issue. 

Comments 

177. Small Generator Coalition requests that the Commission establish separate queues 

for Large and Small Generating Facilities. Failing that, the Commission should clarify 

that the interconnection study periods identified in the SGIP are binding without regard to 

 68 In the Proposed SGIP, the Commission termed this "additional review." In the 

SGIP, we adopt the NARUC Model's term "supplemental review." 

69 Order No. 2003 at P 147. 
Docket No. RM02-12-000 - 53 - 

the Queue Position of other generating facilities. Alternatively, Small Generating 

Facilities should be clustered for study purposes within a given time frame (e.g., 90 days). 

It states that requiring a single queue for all generating facilities undercuts whatever 

progress has been made in interconnecting Small Generator Facilities. Small Generator 

Coalition, Solar Turbines, and others state that, in light of their relatively simple 

interconnection requirements, use of off-the-shelf equipment, and minimal effects on the 

Transmission Provider's electric system, Small Generating Facilities should be able to be 

interconnected quickly. They complain that the interconnection can be delayed by higherqueued Large Generating Facilities that require longer, more frequent, and more 

expensive interconnection studies and restudies. 

Commission Conclusion 

178. We disagree with Small Generator Coalition that a single queue is unfavorable to 

Small Generating Facilities. Although Queue Position determines the order of the 

interconnection studies and the cost responsibility for the Network Upgrades necessary to 

accommodate the interconnection, it does not determine the order in which the 

interconnections are completed. 

179. For many Transmission Providers, the requirement to maintain two queues could 

actually delay, rather than speed up, the interconnection process. Thus, we are requiring a 

Transmission Provider to use a single queue for all Generating Facilities, regardless of 

size. Also, the SGIP allows Small Generating Facilities to be interconnected without 

going through the Study Process if they pass the screens. However, under the independent 

entity variation available to RTOs and ISOs under this Final Rule, such entities may 

propose multiple queues in their compliance filings.70

180. Small Generator Coalition is correct that a non-clustering Transmission Provider 

must meet all deadlines established in the SGIP without regard to queue position or queuerelated delays. 

181. We reiterate that clustering is the Commission's preferred method for conducting 

interconnection studies, and should be seriously considered by all Transmission 

Providers.71 Clustering of studies allows the Transmission Provider to study multiple 

 70 See Order No. 2003 at P 185. 

71 Id. at P 155. 
Docket No. RM02-12-000 - 54 - 

Interconnection Requests simultaneously, thereby maximizing the effectiveness of its 

staff. Clustering may also reduce interconnection study and Upgrade costs; for example, 

multiple Interconnection Customers can share the cost of Upgrades. 

182. Scoping Meeting (Proposed SGIP Section 4.5) – Proposed SGIP section 4.5 

would require the Parties to hold a scoping meeting within ten Business Days after the 

Interconnection Request is deemed complete by the Transmission Provider. The purpose 

of the meeting is to review the characteristics of the Transmission Provider's electric 

system, discuss the technical aspects of the proposed interconnection, and review existing 

studies and the results of the application of the technical screens, if applicable. If the 

Parties agree that a feasibility study is needed, the Transmission Provider would provide 

the Interconnection Customer with a feasibility study agreement. 

 Comments 

183. Central Maine asks that the Transmission Owner also be included in the scoping 

meeting. Small Generator Coalition asks that the provision be revised to allow the Parties 

to conduct the scoping meeting by telephone. 

 Commission Conclusion 

184. In the SGIP, Transmission Provider is defined to include both the Transmission 

Provider and Transmission Owner, when they are separate entities. Accordingly, the 

Transmission Owner may attend the scoping meeting. Also, there was nothing in the 

Proposed SGIP that mandates that the scoping meeting be held face-to-face. We 

encourage the Parties to conduct the interconnection process in the most expeditious 

manner possible and to take advantage of telephone, fax, and e-mail. Finally, as in Order 

No. 2003-A, we are requiring that any scoping meeting between the Transmission 

Provider and an affiliate be announced publicly and transcribed, with the transcripts made 

available upon request for a period of three years.72 While the Transmission Provider may 

redact portions of the transcripts deemed to be commercially sensitive or containing 

Critical Energy Infrastructure Information, the Commission will decide which redacted 

portions are to be made public. 

 72 Order No. 2003-A at P 101-107. 
Docket No. RM02-12-000 - 55 - 

185. Interconnection Studies (Proposed SGIP Sections 4.6, 4.7, and 4.8) – Proposed 

SGIP sections 4.6, 4.7, and 4.8 and the associated study agreements described the 

feasibility, system impact, and facilities studies (collectively, interconnection studies) and 

the Interconnection Customer's cost responsibility for each study. For a Small Generating 

Facility larger than 2 MW but no larger than 10 MW interconnecting at Low-Voltage, the 

Proposed SGIP would first evaluate the proposed interconnection using expedited screens. 

However, if the Transmission Provider believed that the interconnection would undermine 

safety and reliability even though the proposed interconnection passed the screens, the 

Transmission Provider would pay for the feasibility study if that study subsequently 

identified no adverse system impact. The cost of the system impact and facilities studies, 

however, would always be paid by the Interconnection Customer. 

 Comments – Study Cost Obligations

186. Central Maine, Exelon, and PacifiCorp argue that the Interconnection Customer 

should always pay for interconnection studies, regardless of the conclusions reached. 

Small Generator Coalition maintains that the Transmission Provider should pay for the 

feasibility study only if it shows no adverse impact. 

 Commission Conclusion 

187. The Interconnection Customer should pay for all of the interconnection studies, 

regardless of the conclusions reached, because it is unreasonable to shift this cost to other 

transmission customers that do not benefit from the studies, which is what would occur if 

the Transmission Provider were to pay for them. The Transmission Provider should, of 

course, use existing studies instead of performing additional analyses to reduce costs for 

the Interconnection Customer, whenever possible. The Interconnection Customer is not to 

be charged for such existing studies; however, it is responsible for costs associated with 

any new study and any modification to an existing study that is reasonably necessary to 

evaluate the proposed interconnection. 

 Comments – Study Requirements 

188. PJM and Southern Company argue that a system impact study should always be 

performed to detect adverse impacts that may not have been detected in the feasibility 

study. Small Generator Coalition argues that in many situations only a feasibility study or 

a system impact study is needed, but not both; Parties should be able to agree to skip the 

feasibility study. PacifiCorp states that, for a small project, the feasibility study is not 

much different from the system impact study and recommends that the former be 

eliminated. SoCal Edison argues that the provisions of the SGIP dealing with 
Docket No. RM02-12-000 - 56 - 

interconnection studies should refer to the distribution provider, if applicable, and the 

Transmission Provider. Bureau of Reclamation asks the Commission to clarify that the 

Transmission Provider should perform flicker and voltage drop studies. 

Commission Conclusion

189. We agree that, on occasion, there may be some overlap between the feasibility 

study and the system impact study. For a small project, the distinction may not be enough 

to require that both studies be performed. In such cases, it may be reasonable to skip the 

feasibility study entirely. Therefore, as the Commission did for Large Generating 

Facilities in Order No. 2003-A, we are allowing the Parties to skip the feasibility study 

upon mutual agreement. As to SoCal Edison's comment, we do not see any need to 

include the term "distribution provider" when referring to SGIP provisions. 

Transmission Provider is already defined as "[t]he public utility (or its designated agent) 

that owns, controls, or operates transmission or distribution facilities used for the 

transmission of electricity in interstate commerce and provides transmission service under 

the Tariff." As to Bureau of Reclamation's request for clarification, voltage drop, voltage 

limit violation, and grounding studies are indeed included in the study process. 

 Comments – Study Deadlines and Restudy

190. Southern Company, PG&E, and others contend that the proposed interconnection 

study deadlines are too short. NARUC proposes giving the Transmission Provider 

30 Business Days to complete the feasibility study, 30 Business Days to complete the 

distribution system impact study, 45 Business Days to complete the transmission system 

impact study, 30 Business Days to complete the facilities study when no Upgrades are 

required, and 45 Business Days to complete the facilities study when Upgrades are 

required. 

191. PacifiCorp states that a restudy provision should be included in the SGIP so that the 

Interconnection Request could be restudied if a higher-queued Interconnection Customer 

drops out. It argues that the LGIP included a restudy provision for each of the three 

studies. 

 Commission Conclusion 

192. We are adopting the deadlines proposed by NARUC and incorporating them in the 

interconnection study agreements. They strike a good balance, allowing sufficient time to 

complete the studies while ensuring that Small Generating Facilities can be interconnected 

within a reasonable time. Also, as noted above, with the exception of payment provisions, 
Docket No. RM02-12-000 - 57 - 

we are replacing "calendar days" with "Business Days" in the SGIP and SGIA. However, 

where appropriate, we are revising the number of days to correspond to the actual passage 

of time. 

193. We disagree that a restudy provision is needed in the SGIP. The very purpose of 

the Small Generator Final Rule is to expedite interconnections of Small Generating 

Facilities by removing unnecessary delays. While a restudy provision in the LGIP context 

is meaningful because system conditions may change between completion of a particular 

study and the Parties' signing the LGIA, it is unlikely that any significant change in 

system conditions will occur that was not foreseen by the Transmission Provider at the 

time of study because the SGIP has a much shorter timeline. 

Comments – Post-Operational Evaluation of the Interconnection

194. PacifiCorp argues that, after the Small Generating Facility is operational, an 

interconnection may cause problems that were unforeseen when the project was initially 

evaluated. For example, wind generators may need to fine tune their reactive power 

output. Also, because the certification and screening processes are new, the Transmission 

Provider should be permitted to perform post-interconnection reviews and adjustments, 

including additional Upgrades, if necessary, to be paid for by the Interconnection 

Customer. 

Commission Conclusion

195. The purpose of the evaluation processes in the SGIP is to determine the effect the 

interconnection will have on the Transmission Provider's electric system. Such 

evaluations are also performed to ascertain the Interconnection Customer's cost 

responsibility for Interconnection Facilities and Upgrades. We reject PacifiCorp's 

proposal because accepting it would make determination of cost responsibility open-ended 

and create uncertainty for the Interconnection Customer. Should unforeseen problems 

arise, the Parties may make a filing with the Commission and request expedited 

consideration. 

196. Execution of the SGIA – Although the Proposed SGIP required the Transmission 

Provider to deliver an executable SGIA to the Interconnection Customer within a time 

certain, the Interconnection Customer had no deadline to sign and return the document to 

the Transmission Provider. 
Docket No. RM02-12-000 - 58 - 

Comment 

197. In its supplemental comments, Joint Commenters propose that the Interconnection 

Customer have 30 Business Days to sign and return the SGIA. 

Commission Conclusion 

198. We adopt Joint Commenters' proposal. The Transmission Provider needs to know 

whether the proposed project will go forward. Giving the Interconnection Customer a 

deadline within which to act gives the Transmission Provider the certainty it needs for 

system planning purposes. The SGIP states that, after receiving an interconnection 

agreement from the Transmission Provider, the Interconnection Customer shall have 

30 Business Days or another mutually agreeable timeframe to sign and return the SGIA, 

or request that the Transmission Provider file an unexecuted SGIA with the Commission. 

If that is not done, the Interconnection Request shall be deemed withdrawn. 

F. Issues Related to the SGIA 

199. Responsibilities of the Parties (Proposed SGIA Article 2.2) – Article 2.2 of the 

Proposed SGIA set out each Party's responsibilities under the SGIA. It included the 

obligation of the Interconnection Customer to interconnect, operate, and construct its 

facilities in a safe manner and to follow Good Utility Practice. It would similarly require 

the Transmission Provider to operate its electric system in a safe and reliable manner. 

 Comments 

200. BPA asserts that Proposed SGIA article 2.2 should require the Interconnection 

Customer to abide by national and regional reliability rules, such as those developed by 

NERC and the Western Electricity Coordinating Council, that are generally applicable to 

all generators in a control area or geographic region. Furthermore, according to BPA, the 

interconnection agreement should require the Interconnection Customer to abide by any 

technical requirements established by the Transmission Provider to govern the safe 

interconnection of generating facilities. 

201. NARUC offers alternative language laying out the responsibilities of the Parties, 

consistent with its Model. Specifically, NARUC proposes replacing article 2.2 with the 

following: 

Each Party will, at its own cost and expense, operate, maintain, 

repair, and inspect, and shall be fully responsible for the facility or 
Docket No. RM02-12-000 - 59 - 

facilities which it now or hereafter may own or lease unless otherwise 

specified in Exhibit A. Maintenance of Interconnection Customer's 

Small Resource and interconnection facilities shall be performed in 

accordance with the applicable manufacturer's recommended 

maintenance schedule. 

The Parties agree to cause their facilities or systems to be constructed 

in accordance with specifications provided by the National Electrical 

Safety Code, the National Electric Code, and as approved by the 

American National Standards Institute, and interconnected in 

accordance with the Institute of Electrical and Electronics Engineers 

standards where applicable. 

Interconnection Provider and Interconnection Customer shall each be 

responsible for the safe installation, maintenance, repair and 

condition of their respective lines and appurtenances on their 

respective sides of the Point Of Common Coupling. The 

Interconnection Provider or the Interconnection Customer, as 

appropriate, shall provide interconnection facilities that adequately 

protect the Interconnection Provider's distribution system, personnel, 

and other persons from damage and injury. The allocation of 

responsibility for the design, installation, operation, maintenance and 

ownership of the Interconnection Facilities shall be made part of this 

agreement as Exhibit C. 

202. Avista states that "the Interconnection Customer should be required not only to 

construct its generating facility in accordance with operating requirements to be set forth 

in Appendix 4 to the Proposed SGIA, but also to maintain and operate its [Small 

Generating Facility] in accordance with such operating requirements."73

203. Nevada Power asserts that the IEEE 1547 standards referred to in Proposed SGIA 

article 2.2.4 were never designed to be applied to generating facilities larger than 10 MW 

and that in fact "there is no extant national standard that can be reasonably applied to 

govern the Interconnection Facilities for Generating Facilities greater than ten 

 73 Avista at 14. 
Docket No. RM02-12-000 - 60 - 

megawatts."74 Instead, Nevada Power proposes that until a national standard is developed 

to address this 10-20 megawatt gap, the Commission modify article 2.2.4 to read: 

Interconnection Customer agrees to cause its facilities or systems to 

be constructed in accordance with applicable specifications that meet 

or exceed those provided by the National Electrical Safety Code, the 

American National Standards Institute, IEEE, Underwriter's 

Laboratory, Operating Requirements, and, where the Generating 

Facility will have a capacity greater than ten megawatts, the 

Transmission Provider's applicable Interconnection Facility standards

in effect at the time of construction . . . .[75] 

204. PacifiCorp notes that the Proposed SGIA assumes that the Interconnection 

Customer and the Transmission Provider are each responsible for the maintenance of 

equipment on its side of the point of change of ownership. But as a practical matter, more 

flexibility is needed because non-utility companies cannot usually maintain certain 

equipment, such as communications equipment, that is critical to the protection of the 

Transmission Provider's electric system. Moreover, the Transmission Provider often owns 

and maintains revenue meters on the customer's side of the point of change of ownership. 

Therefore, argues PacifiCorp, the SGIA should clarify that unless provided otherwise in 

an attachment, each Party is responsible for the equipment on its side of the point of 

change of ownership. 

205. Small Generator Coalition requests that the Commission restrict the ability of the 

Transmission Provider to impose additional technical requirements on the Small 

Generating Facility. Otherwise, it fears that Interconnection Customers will be subjected 

to additional requirements under the guise of reliability rules that make it difficult to 

interconnect in a cost-effective manner. On the other hand, Southern Company contends 

that the standards for operating in parallel should be codified in the SGIA. This way, the 

Transmission Provider can then confirm that all the requirements are met before granting 

the authorization to operate. 

 74 Nevada Power at 15. 

75 Id. (Emphasis added to show the new language proposed by Nevada Power.) 
Docket No. RM02-12-000 - 61 - 

206. In its supplemental comments, Joint Commenters recommends several changes to 

Proposed SGIA article 2.2. Specifically, Joint Commenters recommend clarifying that the 

Transmission Provider must coordinate with an Affected System operator to complete the 

interconnection, but need not negotiate on behalf of the Interconnection Customer. Joint 

Commenters also propose changing the last sentence of proposed article 2.2.4 to read: 

Interconnection Customer agrees to design, install, maintain, and 

operate, or cause the design, installation, maintenance, and operation 

of the Generating Facility and Interconnection Customer 

Interconnection Facility so as to reasonably minimize the likelihood 

of a disturbance, originating on such equipment affecting or 

impairing the system or equipment of Transmission Provider, or 

Affected Systems.[76] 

 Commission Conclusion 

207. We are adopting a version of this provision that is based on the NARUC Model and 

Joint Commenters' proposals. Redrafting article 2.2 as requested by commenters clarifies 

the rights and responsibilities of the Parties and aids them in better understanding their 

roles in the interconnection process. 

208. Several commenters also ask the Commission to clarify the right of the 

Transmission Provider to include supplemental "Interconnection Guidelines," either in the 

SGIA or as an attachment to it. As the Commission stated in Order No. 2003-A, the 

Transmission Provider may include supplemental interconnection requirements if (1) they 

are authorized by the applicable reliability council and (2) the Transmission Provider 

imposes such requirements on itself and all other Interconnection Customers, including its 

affiliates.77 We see no reason to depart from this standard. The Commission has 

consistently held that an Interconnection Customer must adhere to established reliability 

practices within the control area with which it is interconnecting.78 The same would be 

true for including supplemental guidelines for generators larger than 10 MW, as requested 

by Nevada Power. 

 76 Emphasis added to show the language proposed by the Joint Commenters. 

77 Order No. 2003-A at P 399. 

78 See, e.g., Order No. 2003-A at P 44, Order No. 2003 at P 823, and Order No. 888 

at 31,770. 
Docket No. RM02-12-000 - 62 - 

209. In response to Nevada Power's comments about the applicability of the IEEE 1547 

standard to generating facilities no larger than 10 MW, we note that the SGIA states that 

this standard is required only "where applicable." 

210. The SGIA also addresses PacifiCorp's concerns over using the point of change of 

ownership as the basis for establishing the Parties' respective roles and allows the Parties 

to specify their respective roles in SGIA Attachment 2. 

211. Metering (Proposed SGIA Article 2.4) – Proposed SGIA article 2.4 would 

specify that the Interconnection Customer is responsible for the Transmission Provider's 

reasonable cost for the purchase, installation, operation, maintenance, testing, repair, and 

replacement of any metering and data acquisition equipment. It also would require that 

the Interconnection Customer's metering equipment conform to applicable industry rules 

and operating requirements. 

 Comment 

212. CA ISO argues that Proposed SGIA article 2.4 should require any Small 

Generating Facility larger than 1 MW to provide real-time telemetry to the Transmission 

Provider to better maintain reliability and meet regional requirements. 

 Commission Conclusion 

213. We are not requiring Small Generating Facilities to provide real-time telemetry 

because doing so may hamper their development and we are not convinced that it is 

necessary in every instance. However, if regional reliability requirements dictate realtime telemetry for Small Generating Facilities, we expect the Interconnection Customer to 

meet such requirements. 

214. Equipment Testing and Inspection (Proposed SGIA Article 3.1) – Proposed 

SGIA article 3.1 described the pre-operational testing and inspection requirements for the 

Small Generating Facility. 

Comments 

215. Central Maine argues that the Interconnection Customer should periodically test the 

Small Generating Facility and Interconnection Facilities after they achieve commercial 

operation and that the Transmission Provider should be allowed to witness such testing. 

The purpose of such testing is to ensure that the Interconnection Customer's equipment is 
Docket No. RM02-12-000 - 63 - 

operating properly. Southern Company argues that the Interconnection Customer should 

pay the Transmission Provider's expenses for such pre-operational testing. 

 Commission Conclusion 

216. We decline to expand the provisions of this article to require generically that every 

Interconnection Customer perform periodic testing of its Small Generating Facility, 

regardless of circumstances. To so do would be burdensome on the Interconnection 

Customer, costly, and potentially allow a self-interested Transmission Provider to impose 

multiple rounds of costly testing on competing generators. However, should the 

Transmission Provider believe in good faith that the Small Generating Facility or the 

Interconnection Facilities is affecting safety and reliability, the Transmission Provider 

may, upon advance written notice, require the Interconnection Customer to perform 

reasonable additional post-operational testing. The Transmission Provider may witness 

such testing. The Transmission Provider and the Interconnection Customer shall be 

responsible for their own staff, equipment, and other costs associated with the testing and 

inspection.

217. Right of Access (Proposed SGIA Article 3.3) – The Proposed SGIA would give 

the Transmission Provider access to land owned or controlled by the Interconnection 

Customer to construct Interconnection Facilities or for other specified purposes. 

 Comment 

218. NARUC urges the Commission to adopt the following right of access provision 

from its Model: 

Upon reasonable notice, the Interconnection Provider may send a 

qualified person to the premises of the Interconnection Customer at 

or immediately before the time the Small Resource first produces 

energy to inspect the interconnection, and observe the commissioning 

of the Small Resource (including any required testing), startup, and 

operation for a period of up to no more than three days after initial 

start-up of the unit. In addition, the Interconnection Customer shall 

notify the Interconnection Provider at least seven days before 

conducting any on-site Verification Testing of the Small Resource. 

Following the initial inspection process described above, at 

reasonable hours, and upon reasonable notice, or at any time without 

notice in the event of an emergency or hazardous condition, 
Docket No. RM02-12-000 - 64 - 

Interconnection Provider shall have access to Interconnection 

Customer's premises for any reasonable purpose in connection with 

the performance of the obligations imposed on it by this Agreement 

or if necessary to meet its legal obligation to provide service to its 

[customers]. 

 Commission Conclusion 

219. We largely adopt NARUC's proposal. It uses the concepts found in the Small 

Generator Interconnection NOPR, but shortens and simplifies the provisions. However, 

we are adding that each Party is responsible for its own staff, equipment, and other costs 

in carrying out this provision. 

220. Term of Agreement (Proposed SGIA Article 4.2) – Proposed SGIA article 4.2 

would require that the interconnection agreement remain in effect for ten years, or longer 

by request, and that it can be automatically renewed for each successive one year period 

thereafter. 

 Comments

221. BPA argues that the interconnection agreement should remain in effect as long as 

the Small Generating Facility remains interconnected, subject to the termination provision 

of the SGIA or as agreed to by the Parties. The article unnecessarily requires the Parties 

to negotiate a follow-on agreement after ten years. 

222. Central Maine requests that the SGIA terminate after a set number of years agreed 

to by the Parties. It states that the provision is unacceptable because it allows the 

Interconnection Customer to unilaterally select the term of the interconnection agreement. 

 Commission Conclusion

223. We deny BPA's and Central Maine's requests to revise the term of the 

interconnection agreement. These issues were addressed in Order No. 2003, and neither 

commenter raises any new arguments here.79

 79 Order No. 2003 at P 302-304. 
Docket No. RM02-12-000 - 65 - 

224. Termination (Proposed SGIA Article 4.3) and Default (Proposed SGIA Article 

6.17) – Proposed article 4.3.1 would grant the Interconnection Customer the right to 

terminate the SGIA at any time by giving 30 days written notice. Proposed article 4.3.2 

would allow the Transmission Provider to terminate the interconnection agreement if a 

material change in law or regulations would either prevent performance of the 

interconnection agreement or impose on the Transmission Provider substantial additional 

costs that are not reimbursed by another entity. Proposed article 6.17 described when a 

Default takes place and the Parties' right to cure upon notice of a Default. Because these 

provisions are closely related, we discuss them together. 

 Comments 

225. Several commenters ask the Commission to grant the Transmission Provider 

termination rights comparable to those given the Interconnection Customer.80 PG&E and 

Southern Company request that the Transmission Provider have the right to terminate the 

interconnection agreement if the Small Generating Facility is either shut down or 

abandoned. Southern Company asks that the Transmission Provider be allowed to 

terminate the agreement if the Small Generating Facility either does not begin commercial 

operation or is inactive for three years. Absent changes to this provision, the only remedy 

available to the Transmission Provider is to file an application to terminate with the 

Commission. 

226. Central Maine, Joint Commenters, and PacifiCorp ask that if the Interconnection 

Customer terminates the SGIA, neither the Transmission Provider nor its customers 

should have to pay the costs of termination, including the cost of site restoration. Central 

Maine says these costs should be paid by the Interconnection Customer if it defaults on 

the interconnection agreement. PacifiCorp requests that the SGIA require the 

Interconnection Customer to pay any outstanding costs under the SGIP or SGIA during 

the 30 day notice period, or else termination shall not become effective. Joint 

Commenters also propose including a provision specifying that a Party remains liable for 

expenses incurred under the SGIA even after it has terminated. Central Maine states that 

certain critical provisions, such as access, confidentiality, invoicing, limitation of liability, 

and indemnification, should survive any expiration or earlier termination of an agreement. 

 80 See, e.g., BPA, Central Maine, PG&E, and Southern Company. 
Docket No. RM02-12-000 - 66 - 

227. NARUC urges the Commission to adopt its Model interconnection agreement, 

which allows the Interconnection Customer to terminate the agreement for any reason, 

including default, provided 60 days' written notice is given. Alternatively, the 

Transmission Provider may terminate the agreement if the Small Generating Facility does 

not generate energy in parallel with the Transmission Provider's Transmission System by 

the later of two years from the date of the agreement or 12 months after interconnection is 

completed. 

228. NARUC also requests clarification that the Transmission Provider may terminate 

the interconnection agreement for Default. Both NARUC and Joint Commenters propose 

adding a provision specifying that a Transmission Provider may terminate the SGIA if 

there is a material change in a rule or statute concerning interconnection and parallel 

operation of the Small Generating Facility that would impose additional costs on the 

Transmission Provider. Finally, the NARUC Model clarifies that termination does not 

relieve either Party of its obligations to the other Party. 

229. Central Maine and NYTO ask the Commission to clarify the difference between 

"Default" and "Breach," as it did in the LGIA. Specifically, Central Maine states that a 

Breach, if uncured, becomes a Default and may result in termination. 

 Commission Conclusion 

230. As Order No. 2003 stated, there is no reason to allow the Transmission Provider to 

terminate the interconnection agreement if the Interconnection Customer has met all its 

obligations.81 As we have noted elsewhere in this Final Rule, the interests of a 

Transmission Provider may be adverse to those of the Interconnection Customer, and it 

has an incentive to discriminate against the Interconnection Customer. The 

Interconnection Customer's business decision not to operate its Small Generating Facility 

for an extended period of time should not result in the loss of its rights under the SGIA. 

231. We adopt NARUC's proposal that a Party be given 60 calendar days in which to 

cure a Default once notified that it is in Default. If at the end of the 60 calendar days, the 

Default continues to exist, the non-defaulting Party may terminate the interconnection 

agreement. This is consistent with the Commission's regulations that require an entity to 

notify the Commission of the proposed cancellation or termination of a contract at least 

60 calendar days before the cancellation or termination is proposed to take effect. 

 81 Order No. 2003 at P 313. 
Docket No. RM02-12-000 - 67 - 

However, to allow for situations where 60 calendar days are not sufficient time to cure the 

default, the SGIA allows up to six months in which to cure the Default so long as the 

Party "continuously and diligently" works towards curing the Default. 

232. Joint Commenters and Central Maine propose provisions that address the cost 

responsibility of the Parties if the SGIA is terminated. Both the Termination and Default 

provisions now clarify that the Parties' financial obligations and other responsibilities 

survive the termination of the SGIA. The SGIA also addresses PacifiCorp's concern that 

the Interconnection Customer would be able to terminate the interconnection agreement 

and escape financial responsibility for costs it has already incurred. 

233. The Proposed SGIA included a provision allowing the Transmission Provider to 

terminate the SGIA should there be a regulatory change that would impose additional 

costs on the Transmission Provider. Consistent with the LGIA, we are not including such 

a provision in the SGIA Should a significant regulatory change take place, the 

Transmission Provider may request termination of the interconnection agreement under 

section 205 of the FPA. 

234. Central Maine and NYTO are correct that the term "breach" does not appear in the 

SGIA. Upon discovering a Default, the non-defaulting Party gives notice of the Default to 

the defaulting Party. The defaulting Party then has time to cure the Default. If it does not 

do so, the SGIA may then be terminated. We are revising the SGIA accordingly. 

235. Emergency Conditions (Proposed SGIA Article 4.4.1) – Proposed SGIA article 

4.4.1 would give the Transmission Provider the right to immediately suspend 

interconnection service and temporarily disconnect the Small Generating Facility under 

Emergency Conditions. 

Comment 

236. SoCal Edison proposes adding the term "Distribution Provider's Distribution 

System" to each place where the definition of Emergency Condition says "Transmission 

Provider's Transmission System."82 

 82SoCal Edison does not give any rationale for its proposed change, only modified 

tariff sheets. 
Docket No. RM02-12-000 - 68 - 

 Commission Conclusion 

237. The owner of the Commission-jurisdictional facility with which the 

Interconnection Customer interconnects is the "Transmission Provider" regardless of how 

the facility may be classified by the Transmission Provider. As defined by this Final Rule, 

"Transmission Provider" means "the public utility . . . that owns, controls, or operates 

transmission or distribution facilities used for the transmission of electricity in interstate 

commerce and provides transmission service under the Tariff" (emphasis added). The 

change suggested by SoCal Edison would be redundant.83

238. Temporary Disconnection – Routine Maintenance, Construction, and Repair 

(Proposed SGIA Article 4.4.2) and Forced Outages (Proposed SGIA Article 4.4.3) – 

Proposed SGIA article 4.4.2 would require that the Transmission Provider give five 

Business Days' notice before interrupting interconnection service, curtailing the output of 

the Small Generating Facility, or temporarily disconnecting the Small Generating Facility 

for routine maintenance, construction, and repairs. Proposed SGIA article 4.4.3 would 

give the Transmission Provider the right to suspend interconnection service to make 

repairs during forced outages. It would also require the Transmission Provider to give the 

Interconnection Customer written documentation to explain the circumstances of the 

disconnection if prior notice was not given. Both provisions would require the 

Transmission Provider to use its best efforts to coordinate disconnections, curtailments, 

and forced outages with the Interconnection Customer. 

 Comments 

239. PG&E states that it has thousands of small solar projects interconnected with its 

"Distribution System" and requests that the five Business Day notice requirement be 

waived for distribution level generators because it would interfere with a Distribution 

System owner's ability to work on its facilities. 

240. Empire District argues that it should not take five days to shut down a Small 

Generating Facility. If some minimum notice is required, it should apply only to Small 

Generating Facilities larger than 2 MW. Empire District also questions the need for an 

 83 If the Small Generating Facility is interconnected with nonjurisdictional lines, 

then this Final Rule does not reach the issue of whether a jurisdictional Transmission 

Provider may disconnect the Small Generating Facility in an emergency. The 

Transmission Provider would have to deal with the non-jurisdictional utility. 
Docket No. RM02-12-000 - 69 - 

"individual notice" to every generator and whether it is really necessary to notify the 

operators of small certified units under 100 kW in size. If individual notifications are 

required, the Interconnection Customer should have a method in place whereby "nearly 

instantaneous, two-way communication" (notification and verification of receipt of notice) 

can be made within 24 hours. 

241. EEI, PacifiCorp, and Southern Company ask that the term "reasonable efforts" be 

used instead of "best efforts" in Proposed SGIA articles 4.4.2 and 4.4.3, noting that 

"reasonable efforts" was used in the ANOPR consensus document. 

242. EEI and PacifiCorp ask the Commission to clarify that the Transmission Provider 

must provide written documentation to the Interconnection Customer only when the latter 

requests it. 

 Commission Conclusion 

243. We are not convinced that a five Business Day notice is unduly burdensome to the 

Transmission Provider or that it should apply only to Small Generating Facilities larger 

than 2 MW. Even if PG&E has thousands of small solar projects interconnected with its 

Distribution System subject to an OATT, as it states, it is highly unlikely that it will ever 

have to provide notice to all of them simultaneously. 

244. We agree that the term "reasonable efforts" should be used instead of "best efforts" 

in the SGIA. We are making this change throughout the SGIA. 

245. Finally, we are persuaded that written documentation need be provided only upon 

request by the Interconnection Customer, and the SGIA reflects this change. 

246. Temporary Disconnection – Adverse Operating Effects (Proposed SGIA 

Article 4.4.4) – Proposed SGIA article 4.4.4 said that after being notified that its Small 

Generating Facility may degrade the reliability of the Transmission Provider's electric 

system, the Interconnection Customer must be given reasonable time to make necessary 

corrections. If it does not make the corrections within that time, the Transmission 

Provider must provide a second notice to the Interconnection Customer stating that the 

Small Generating Facility may be disconnected in five Business Days. 
Docket No. RM02-12-000 - 70 - 

Comments 

247. Several commenters84 contend that the five day notice period is unreasonable, 

restricts the Transmission Provider's ability to respond to reliability concerns, and could 

be misinterpreted to mean that an Interconnection Customer whose Small Generating 

Facility is causing adverse operating conditions has priority over other customers. 

248. EEI recommends that the last sentence of Proposed SGIA article 4.4.4 be revised to 

read: "Transmission Provider shall provide Interconnection Customer notice of such 

disconnection within a reasonable time period, unless the provisions of article 4.4.1 

[Emergency Conditions] apply." 

249. National Grid states that some form of advance notice and the ability to cure is 

generally reasonable before disconnection; however, such steps cannot be mandated all 

the time. It proposes language giving the Transmission Provider the right to take 

unilateral action to avoid service disruptions to other customers or damage to facilities 

caused by the Small Generating Facility. 

250. According to Small Generator Coalition, the Transmission Provider should notify 

the Interconnection Customer if, based on sound engineering judgment, it concludes that 

adverse operating conditions exist. 

Commission Conclusion 

251. This article applies only if the Transmission Provider determines that the Small 

Generating Facility may adversely affect its electric system and the Interconnection 

Customer has failed to take the necessary remedial action within the time specified by the 

Transmission Provider. We are not convinced that the notice period is too long, could 

endanger reliability or safety, or unnecessarily expose the Transmission Provider to 

liability claims when damage and disruption to its electric system is imminent. There 

could be legitimate reasons for the Interconnection Customer not to make the necessary 

corrections within the allotted time (e.g., replacement parts are on back order). SGIA 

article 3.4.1 provides that the Transmission Provider may declare an emergency and 

disconnect the Small Generating Facility if there is an imminent threat to its electric 

system, which provides the Interconnection Customer with ample incentive to promptly 

 84 E.g., Ameren, EEI, National Grid, PacifiCorp, PG&E, and Southern Company. 
Docket No. RM02-12-000 - 71 - 

resolve any adverse operating effects. Accordingly, we reject the request to eliminate the 

notification period from this article. However, we are revising this provision to specify 

that no notice is necessary in order to resolve an Emergency Condition. 

252. We agree with Small Generator Coalition that the Transmission Provider should 

immediately notify the Interconnection Customer when operation of the Small Generating 

Facility may cause disruption or deterioration of service to other customers and that this 

finding must be based on and supported by sound engineering principles. We also stress 

that all documentation supporting the problem must be provided to the Interconnection 

Customer upon request. 

253. Temporary Disconnection – Modification of the Generating Facility (Proposed 

SGIA Article 4.4.5) – Proposed SGIA article 4.4.5 would require the Interconnection 

Customer to secure written authorization from the Transmission Provider before making 

any material modification to the Small Generating Facility, or it can be disconnected. 

Comment 

254. EEI recommends that the phrase "material modification" be replaced with 

"modification." This revised language is used in LGIA article 5.19.2. 

Commission Conclusion 

255. We agree with EEI that the term "material modification" could be ambiguous. 

Accordingly, we are revising this article to provide that Transmission Provider written 

approval is required before the Interconnection Customer may modify its Small 

Generating Facility in such a way that could materially impact the safety or reliability of 

the Transmission Provider's electric system. We are also requiring that any modifications 

be done according to Good Utility Practice. 

256. Temporary Disconnection – Reconnection (Proposed SGIA Article 4.4.6) – 

Proposed SGIA article 4.4.6 would require the Parties to cooperate with each other to 

restore the Small Generating Facility, the Interconnection Facilities, and the Transmission 

Provider's electric system to their normal operating state as soon as reasonably practicable 

following any temporary disconnection. 
Docket No. RM02-12-000 - 72 - 

 Comments 

257. Southern Company contends that this article should state that restoration is required 

only when the events causing the temporary disconnection are over. Small Generator 

Coalition asks that the provision use "interruption and curtailment" instead of "reduction." 

258. In its supplemental comments, Joint Commenters propose the following alternative 

language: "the Parties shall cooperate with each other to restore the Generating Facility, 

Interconnection Facilities, and Transmission Provider's Transmission System to their 

normal operating state as soon as reasonably practicable following a temporary 

disconnection." 

 Commission Conclusion 

259. We are adopting the proposed language submitted by Joint Commenters because it 

removes unnecessary jargon and simply requires that the Parties work to restore normal 

interconnection service as quickly as possible. This language addresses Southern 

Company's and Small Generator Coalition's concerns as well. 

260. Financial Security Arrangements (Proposed SGIA Article 5.2) – Proposed 

SGIA article 5.2 provided that the Interconnection Customer provide financial security to 

the Transmission Provider for the construction of Interconnection Facilities or Upgrades 

through a guarantee, surety bond, letter of credit, or other form of credit that meets certain 

standards. The type of financial security arrangement and issuing entity would have to be 

reasonably acceptable to the Transmission Provider and have (1) terms and conditions that 

guarantee payment up to an agreed upon amount, (2) a reasonable date of expiration, 

(3) be issued at least 20 days before construction, and (4) be consistent with the Uniform 

Commercial Code of the jurisdiction where the Point of Interconnection is located. 

Comments 

261. PacifiCorp argues that this article does not refer to design costs. It asserts that this 

could lead to unnecessary confusion over whether design costs should be included with 

procurement, resulting in the burden of design costs falling on the Transmission Provider 

and its customers. 

262. Southern Company offers proposed changes to provide protection for the 

Transmission Owner and the Transmission Provider. It asks the Commission to delete any 

references to surety bonds as an acceptable form of payment on the grounds that they are 

not specifically mentioned in the OATT and are not generally accepted as a form of 
Docket No. RM02-12-000 - 73 - 

payment. It also requests that the SGIA state clearly that the terms of any letter of credit, 

guarantee or other security must be reasonably acceptable to the Transmission Provider. 

263. In an effort to avoid fraudulent conveyance issues or problems with the 

enforcement of any guarantee through bankruptcy procedures, Southern Company 

proposes that the parent of the Interconnection Customer (if any) serve as the source of 

any guarantee, specifically excluding affiliates from proposing any guarantee. 

Additionally, any proposed guarantor should have a credit rating of BBB+ to protect 

against rapid credit downgrades. 

264. Southern Company also argues that the dollar-for-dollar reduction of security as 

payments are made to the Transmission Provider is arbitrary and capricious and imposes 

risks under bankruptcy and fraudulent conveyance law upon the Transmission Provider. 

At a minimum, the Commission should not require that security be reduced until the 

expiration of any potential bankruptcy preference period. Southern Company also asks 

the Commission to clarify that credit support is not to be reduced by payments made to the 

Transmission Provider that are unrelated to the actions designated in this article. It also 

proposes the expansion of credit to cover all other obligations of the Interconnection 

Customer under the interconnection agreement. 

265. Finally, NYTO proposes that the Interconnection Customer demonstrate its 

creditworthiness in its Interconnection Request. 

Commission Conclusion 

266. We agree with PacifiCorp that design costs are a part of the development process 

that should be covered and are including such a provision in the SGIA. 

267. While Southern Company opposes using surety bonds as an acceptable form of 

payment, we are following in this Final Rule the same approach taken in the LGIA, which 

states that the Interconnection Customer has the right to select a form of security that is 

acceptable to the Transmission Provider and consistent with commercial practices.85 

Because SGIA article 6.3 grants the Transmission Provider the discretion to reject a form 

of security (if it is reasonable to do so), we reject Southern Company's proposal to 

eliminate the surety bond as an acceptable form of credit. Giving the Interconnection 

 85 Order No. 2003 at P 597. 
Docket No. RM02-12-000 - 74 - 

Customer a choice of security is not unreasonable.86 Furthermore, granting the 

Transmission Provider absolute discretion on what forms of security to allow would 

provide too great an opportunity to erect hurdles to new small generation.87

268. For the same reasons, we reject Southern Company's proposals to (1) limit the 

source of any guarantee to a parent of the Interconnection Customer and (2) require any 

proposed guarantor to have a credit rating of BBB+. These are hurdles that could be 

exploited to discourage Small Generating Facilities. The SGIA grants the Transmission 

Provider the discretion to reject a form, source, or issuing entity of security only if doing 

so is reasonable. Giving the Transmission Provider absolute discretion on these choices 

would create too great an opportunity for exploitation. 

269. We are requiring the reduction of the security amount on a dollar-for-dollar basis as 

payments are made because this protects the Interconnection Customer against providing 

too much security while ensuring that the Transmission Provider is sufficiently protected 

against its real cost exposure.88 We recognize that reducing the security as the 

Interconnection Customer pays its bills may cause a small increase in risk to the 

Transmission Provider, but the chilling effect of requiring the Interconnection Customer to 

maintain the full security during the length of the interconnection process would seriously 

discourage new small generation. 

270. We clarify that credit support is not to be reduced by payments made to the 

Transmission Provider that are unrelated to the actions listed in this article. In response to 

NYTO, we note that the Interconnection Customer is already required to give appropriate 

financial guarantees before the Transmission Provider begins construction. Thus, the 

Interconnection Customer need not demonstrate its creditworthiness when it submits its 

Interconnection Request. 

 86 See Florida Power & Light Company, 98 FERC ¶ 61, 226 at 61,893-94, reh'g 

granted in part on other grounds, 99 FERC ¶ 61,318 (2002); Florida Power & Light 

Company, 98 FERC ¶ 61,324 at 62,358-59 (noting that the Transmission Provider's 

practice of limiting interconnection customers to a letter of credit is unreasonable), reh'g 

rejected as moot, 100 FERC ¶ 61,094 (2002). 

87 Southwest Power Pool, Inc., 100 FERC ¶ 61,096 at P 12 (2002). 

88 See Order No. 2003 at P 264. 
Docket No. RM02-12-000 - 75 - 

271. Milestones (Proposed SGIA Article 5.3) – Proposed SGIA article 5.3 stated that 

the Parties are to agree on milestones that each Party is responsible for meeting. These 

milestones are part of the interconnection agreement. Article 5.3 further specified that if 

either Party does not meet a milestone, it must compensate the other Party for its losses 

(i.e., pay liquidated damages). 

Comments 

272. Several commenters ask the Commission to remove references to liquidated 

damages from the SGIA. Others claim that the Commission lacks the legal authority to 

impose liquidated damages. 

273. EEI seeks the elimination of this article entirely. The provision is vague and 

confusing because conflicting milestone requirements appear in other areas of the 

Proposed SGIA and Proposed SGIP. NYTO contends that Appendix 3 of the Proposed 

SGIA, which requires the Parties to list agreed upon milestones, is unnecessary. 

274. Midwest ISO requests that the Commission adopt the same liquidated damages 

clause as in the LGIA. It states that this will make the large and small generator tariff 

provisions consistent. 

275. PacifiCorp requests that Proposed SGIA articles 5.3.1 and 5.3.2 be deleted. It 

contends that the accomplishment of milestones should be subject to a "reasonable efforts" 

or "good faith efforts" standard rather than liquidated damages being applied. As a matter 

of policy, good faith efforts should not be penalized, since the Transmission Provider does 

not profit from interconnections. 

276. In its supplemental comments, Joint Commenters suggest replacing this provision 

in its entirety. The proposed replacement requires the Parties to agree to extend milestone 

deadlines if the milestone was missed in "reasonable good faith." However, the Party 

affected by the failure to meet a milestone is not required to agree to an extension if: 

(1) it will suffer significant uncompensated economic or operational 

harm from the delay and believes that the delay is not or was not 

unavoidable, (2) attainment of the same milestone has previously 

been delayed, or (3) it has reason to believe that the delay in meeting 

the milestone is intentional or unwarranted notwithstanding the 

circumstances explained by the party proposing the amendment. 
Docket No. RM02-12-000 - 76 - 

277. Joint Commenters also suggest making the provision bilateral and removing the 

monetary penalty for missing a milestone. Additionally, Joint Commenters would require 

the Party missing the milestone to fully explain to the other Party why the milestone was 

missed. Finally, Joint Commenters propose adding a statement that any dispute as to this 

provision should be resolved according to the dispute resolution portions of the SGIA. 

Commission Conclusion 

278. This Final Rule adopts many concepts proposed by Joint Commenters, including 

the notice provisions and the preference that the Parties agree to extend deadlines instead 

of declaring that the other Party has defaulted on the SGIA. 

279. Regarding Joint Commenters' proposal to add a statement regarding dispute 

resolution, such a statement is not needed because the SGIA's dispute resolution provision 

applies to the entire document. 

280. We reject PacifiCorp's proposal to delete SGIA milestone provisions. These 

provisions provide a single reference to the relevant milestones. They will assist the 

Parties and will minimize disagreements. Removing them would create uncertainty for 

the Parties. 

281. Because we are not imposing in this Final Rule a financial penalty on the 

Transmission Provider for missing milestones, there is no need to discuss commenters' 

arguments on that issue. 

282. Billing and Payment (Proposed SGIA Article 5.4) – Proposed SGIA article 5.4 

would provide that billing and payment obligations are to be performed under the terms of 

the SGIA. 

Comments 

283. PacifiCorp requests that this article be revised to include billing and payment 

requirements for Distribution Upgrades or Network Upgrades. It also states that billing 

and payment for miscellaneous costs, such as restudy costs, should be addressed. 

Commission Conclusion 

284. We agree with PacifiCorp in part and are revising this article to clarify that billing 

and payment requirements are for Distribution Upgrades and Network Upgrades. 
Docket No. RM02-12-000 - 77 - 

However, we see no need to identify specific miscellaneous costs because the obligations 

listed in SGIA article 6.1 are for services rendered, which already includes such costs. 

285. Billing Procedure for Interconnection Facilities Construction (Proposed SGIA 

Article 5.4.1) and Final Accounting (Proposed SGIA Article 5.4.2) – Under Proposed 

SGIA article 5.4.1, the Transmission Provider would bill monthly for expenditures for the 

design, engineering and construction of, or for other charges related to, Interconnection 

Facilities. The Interconnection Customer would remit payment within 30 calendar days 

after receipt of the bill. 

286. Proposed SGIA article 5.4.2 would require that the Transmission Provider submit a 

final accounting report to the Interconnection Customer within 45 calendar days after 

installing the Transmission Provider's Interconnection Facilities. 

Comments 

287. PacifiCorp suggests that Proposed SGIA article 5.4.1 also include procurement 

costs. Small Generator Coalition argues that alternative arrangements for payment of the 

bill should be allowed if the Parties agree. With respect to Proposed SGIA article 5.4.2, 

numerous commenters89 argue that 45 calendar days is not enough time for the 

Transmission Provider to prepare a final accounting report. They offer an array of 

alternative deadlines ranging from 60 Business Days to 90 days after the Small Generating 

Facility begins commercial operation. BPA complains that there is not a similar deadline 

for any additional payments owed by the Interconnection Customer. It proposes that any 

unpaid bill must be paid within 30 days after the bill is submitted by the Transmission 

Provider. 

Commission Conclusion 

288. We agree with PacifiCorp that procurement costs should be included. We are also 

revising the provision to allow the Parties to make other reasonable payment arrangements 

should they agree to do so, as requested by Small Generator Coalition. 

289. While we agree with commenters that the proposed deadline for submitting the 

final accounting report may be too short, tying it to commercial operation of the Small 

Generating Facility is unrealistic because that event may happen long after construction is 

 89 E.g., BPA, Central Maine, NYTO, PGE, and Southern Company. 
Docket No. RM02-12-000 - 78 - 

complete. A more realistic deadline, and one that provides sufficient time for the 

Transmission Provider to compile the expenditures and process the final accounting 

report, is three months from the date construction of the facilities is completed. We are so 

revising this provision. 

290. BPA is correct that proposed SGIA article 5.4.2 did not include a deadline for the 

Interconnection Customer to pay its final accounting bill. We are including in the SGIA 

30 calendar days for the Interconnection Customer to make payment to the Transmission 

Provider. 

291. Finally, we are consolidating Proposed LGIA articles 5.2, 5.3, and 5.4 because they 

are so closely related. The new article is entitled "Billing, Payment, Milestones, and 

Financial Security." 

292. Assignment (Proposed SGIA Article 6.5) – Proposed SGIA article 6.5 would 

allow the Parties to assign their rights under the interconnection agreement to others under 

certain circumstances. 

Comments 

293. Southern Company contends that the proposed assignment provision unreasonably 

allows one Party to freely assign its rights to an affiliate without consent from the other 

Party. It argues that this subjects the Transmission Provider to unnecessary risk from 

which it cannot protect itself by requiring that the assignee have a credit rating equivalent 

to that of the assignor; Transmission Providers typically rely on guarantees or letters of 

credit, which are personal to the obligor and would likely not cover the assignee. Bureau 

of Reclamation emphasizes that its policies allow assignment of an interconnection 

agreement only if both Parties agree to the assignment and the assignor agrees to remain 

bound by the original terms of the SGIA. 

294. Southern Company also argues that it is unreasonable to make the Transmission 

Provider get the Interconnection Customer's agreement before it can assign the 

interconnection agreement as collateral, while at the same time allowing the 

Interconnection Customer to assign the interconnection agreement as collateral without 

the Transmission Provider's permission. Southern Company contends that such 

assignments could unfairly deprive the Transmission Provider of the right to require the 

assignee or purchaser in foreclosure to assume the obligations of the assignor and to fulfill 

performance. In addition, the Transmission Provider could lose the right to require 

collateral assignees to cure Defaults of the assignor, thereby allowing assignees or 

purchasers in foreclosure to gain greater rights under the interconnection agreement than 
Docket No. RM02-12-000 - 79 - 

would have been permitted to the original Interconnection Customer. The requirement 

that notice of collateral assignment be provided by the secured party, trustee, or mortgagee 

is unworkable, as there would be no enforceable penalties for breach of this obligation. 

Not only do these parties lack contractual privity with the Transmission Provider, but they 

are also not typically subject to Commission jurisdiction. 

295. Southern Company contends that this article should provide Transmission 

Providers and Transmission Owners indemnification rights for any losses, costs, and 

expenses they may incur in connection with assignments or foreclosures. In addition, 

Southern Company seeks clarification of the conditions under which the Transmission 

Provider must recognize foreclosure rights and assignments. The provision as written 

could expose the Transmission Provider to uncompensated risks, forcing its native load to 

bear the costs. 

296. Small Generator Coalition requests that this article allow the Interconnection 

Customer to assign its rights and obligations under the interconnection agreement without 

consent of the Transmission Provider if the Interconnection Customer sells or transfers the 

Small Generating Facility and the real property on which it is located. 

297. NARUC urges adoption of its Model interconnection agreement language, which 

allows assignment by the Interconnection Customer in two situations. First, assignment 

may be made to a corporation or other limited liability entity upon the consent of the 

Transmission Provider. Such consent is not to be withheld unless the Transmission 

Provider "can demonstrate that the corporate entity is not reasonably capable of 

performing the obligations of the assigning Interconnection Customer." Second, the 

Interconnection Customer may assign the interconnection agreement to a person who is 

either the "owner, lessee, or is otherwise responsible for the Small [Generating Facility]." 

298. In its supplemental comments, Joint Commenters recommend two changes to the 

Proposed SGIA: (1) deleting the sentence requiring the assignee to notify the other Party 

before exercising its assignment rights and (2) requiring the assigning Party to give the 

other Party 15 days to object to an assignment. 

Commission Conclusion 

299. The assignment provision proposed by Joint Commenters is similar to the provision 

in the Small Generator NOPR. However, Joint Commenters propose two minor changes 

that we will adopt. First, Joint Commenters propose to remove a very technical sentence 

relating to financing from the provision that is not well suited to smaller projects. Second, 

Joint Commenters require that a Party seeking to assign the SGIA merely inform the other 
Docket No. RM02-12-000 - 80 - 

Party of the pending assignment. Should the Party not object, the assignment may go 

forward. If the Party does object, then the remainder of the provision will apply. Making 

these changes to the assignment provision should reduce the administrative burden on the 

Parties without diminishing their substantive rights. 

300. In Order No. 2003-A,90 the Commission modified the assignment provision of the 

LGIA in order to address Southern Company's concerns relating to protecting native load 

customers. We make corresponding changes here, clarifying that (1) an Interconnection 

Customer assigning its rights under the SGIA is required to notify the Transmission 

Provider of the assignment and (2) an assignee is responsible for meeting the same 

insurance and financial security obligations as a normal Interconnection Customer upon 

exercising its right of assignment.91 This is in addition to a sentence specifying that "an 

assignment under this provision shall not relieve a Party of its obligations . . . ." We also 

make various editorial changes that make the provision easier to read. Southern also 

requests that a Transmission Provider be allowed to assign the interconnection agreement 

as collateral. We reject that request for the same reasons discussed in Order 

No. 2003-A.92

301. Insurance (Proposed SGIA Article 6.16) – In the Small Generator 

Interconnection NOPR, the Commission asked whether insurance should be required for 

Small Generating Facility interconnections and if so, how much. While the Proposed 

SGIA itself contained insurance provisions, the Commission did not specify dollar 

amounts and requested proposals from commenters. The Commission also requested 

comments on three specific issues. First, should insurance coverage vary with the size of 

the facility? Should, for example, a 20 MW Small Generating Facility be subject to 

higher coverage amounts than a 10 MW facility, which itself would be subject to higher 

coverage amounts than a 5 MW facility? Second, should coverage types and amounts 

vary according to the type of generator so that, for example, solar or wind facilities would 

require different insurance coverage than gas-fired facilities? Third, should there be a size 

cutoff that would exempt certain facilities from some insurance requirements? 

 90 See Order No. 2003-A at P 470. 

91 See Id. P 471. 

92 See Id. P 475. 
Docket No. RM02-12-000 - 81 - 

Comments

302. The NARUC Model, while not requiring insurance, proposes that state regulators 

recommend that every Interconnection Customer "protect itself with insurance or other 

suitable financial instrument sufficient to meet its construction, operating and liability 

responsibilities. . . ."93

303. NARUC argues that the Commission's proposal to require seven different types of 

insurance is excessive and makes federal interconnection rules incompatible with state 

rules. The very act of requiring insurance would drive up prices because insurance 

companies would then have a captive market that must have insurance. Workers' 

compensation and automobile insurance are already required by state law; accordingly, 

they should not be mandated by the federal government. NARUC also asserts that state 

regulators will have more flexibility to assure low insurance rates if this Final Rule does 

not require insurance. Finally, NARUC reports that while California requires insurance 

for most projects, the majority of other states (including New York, Texas, and Ohio) do 

not. Therefore, requiring insurance would be inconsistent with the practice in most states. 

304. NYPSC reports that its own efforts to establish minimum insurance requirements 

were unsuccessful. While it recognizes the risk Small Generating Facilities pose to the 

Transmission Provider, mandatory insurance "created a substantial barrier to the 

proliferation of distributed generation units."94 The biggest barrier to entry is not the cost 

of insurance (though that is a factor), but the fact that insurance is unavailable at any price 

in many situations. Insurance companies are not yet familiar with the risks posed by the 

interconnection of Small Generating Facilities and often will not insure them. NYPSC 

instead proposes allowing the market to determine insurance requirements. It reports that 

the market has at least partially responded to this need, creating insurance pools to spread 

the risk to multiple entities. It also notes that manufacturers sometimes bundle insurance 

coverage along with the equipment. 

305. ISO New England recognizes that smaller generators generally pose less risk than 

larger ones, but argues that the level of risk should be evaluated on a case-by-case basis. 

This Final Rule should let an independent Transmission Provider waive the insurance 

requirement if it determines that the project poses little risk to its electric system. For 

many smaller facilities, the liability, indemnity, and insurance requirements typically 

 93 NARUC Model – Interconnection Agreement at article 7. 

94 NYPSC at 9. 
Docket No. RM02-12-000 - 82 - 

required of larger facilities may cost too much. Likewise, MISO supports making the 

amount of insurance required a function of the risk of the particular interconnection. 

However, MISO also supports establishing minimum standard insurance requirements 

(although it does not offer specific amounts). 

306. Some Transmission Providers95 want the Commission to keep the proposed 

insurance limits. Central Maine and NYTO, among others, point out that most small 

projects would not have the financial resources to pay any judgment against them and 

argue that insurance is necessary to protect the interests of the Transmission Provider, and 

ultimately, its customers. EEI favors using the same insurance limits as the LGIA. 

307. AEP also argues that there is no reason why standard insurance provisions should 

be different for a 1 MW facility than for a 20 MW facility. Likewise, Allegheny Energy, 

Central Maine, NYTO, and others argue that even a very small generating facility can 

damage the Transmission Provider's electric system. 

308. Empire District, Nevada Power, NRECA, and PG&E assert that the amount of 

insurance required should vary with generator size. As NRECA puts it, "a residential 

consumer installing a 3 kW Small Generating Facility should not have to acquire 

$1 million in insurance . . . ."96 Even so, NRECA states that it would oppose any attempt 

to create a minimum megawatt threshold below which insurance would not be required. 

309. PG&E states that California has long required insurance for all projects larger than 

10 kW and that this requirement has not noticeably dampened the market for on-site Small 

Generating Facilities. 

310. While Nevada Power agrees that solar and wind projects present less risk than does 

a traditional gas-fired generator, it opposes insurance requirements that differ by fuel type. 

The market already recognizes these reduced risks by charging proportionately less for 

some types of insurance than others. NRECA also opposes distinguishing between 

different fuel types, arguing that this is only one of many factors that determine a project's 

risk. 

 95 E.g., AEP, Allegheny Energy, Avista, BPA, Central Maine, Cinergy, EEI, 

NRECA, NYTO, and Southern Company. 

96 NRECA at 34. 
Docket No. RM02-12-000 - 83 - 

311. In contrast, Tangibl supports basing the required amount of insurance on the type 

of generator being interconnected. It argues that the risks posed by Small Generating 

Facilities are largely environmental, such as fuel spills. Tangibl also argues that Small 

Generating Facilities pose less risk than do large generators because the former need 

smaller amounts of fuel to be stored on site. This risk is even less for renewable sources 

such as wind or solar. 

312. Nevada Power says that knowing how much insurance is going to be required at the 

outset of the project is important to its success. 

313. While AEP supports including standard insurance terms in this Final Rule, the 

Parties should be able to negotiate additional terms if warranted by the physical 

characteristics of the project. NRECA argues for permitting the Transmission Provider to 

determine the necessary level of insurance on a case-by-case basis. 

314. Cinergy also argues for increased flexibility. It would let the Transmission 

Provider reduce or eliminate the required insurance provisions on a case-by-case basis if it 

believes in good faith that the full amount of insurance is not required to safeguard its 

interests. Cinergy also argues that this Final Rule should provide a mechanism for dealing 

with insurance requirements that simply do not apply to a given generator, such as 

requiring workers' compensation insurance for a generator that does not have any on-site 

employees. 

315. National Grid proposes that the Commission not set required levels of insurance, 

and instead leave it to the Transmission Provider and state law. It points out that several 

states have, or are in the process of developing, specific insurance requirements for Small 

Generating Facilities. The Commission should not second-guess the attempt of various 

states to encourage on-site Small Generating Facilities. Specifically, National Grid points 

to a proposal developed by a working group of the Massachusetts Public Utilities 

Commission that proposes varying levels of insurance depending on the capacity of the 

project.97

 97 The proposal requires no insurance for projects smaller than 10 kW; $500,000 

for projects between 10 kW and 100 kW ($500,000 aggregate); $1 million for projects 

between 100 kW and 1 MW ($1 million aggregate); $2 million for projects larger than 1 

MW and no larger than 5 MW ($5 million aggregate); and $5 million for projects larger 

than 5 MW ($5 million aggregate). See National Grid Comments, Appendix A (citing 

Tariff to Accompany Proposed Uniform Standards for Interconnecting Distributed 

Generation in Massachusetts, Submitted by the Distributed Generation Interconnection 

(Footnote continued on next page) 
Docket No. RM02-12-000 - 84 - 

316. NYTO makes a similar request, arguing that the Transmission Provider should be 

allowed to fill in specific insurance amounts based on state law, established local practice 

or, absent those, its own business judgment. 

317. Avista states that the Parties should be allowed to negotiate alternative mechanisms 

such as self-insurance. It argues that even a Transmission Provider facing financial 

difficulty can always raise rates to cover any potential liability. Southern Company also 

proposes revisions to clarify the meaning of this article. 

318. NRECA, while it supports the Commission's insurance proposal, opposes making 

the provision bilateral. It argues that the Transmission Provider's operation of its electric 

system does not create any greater risk to the Interconnection Customer than to any other 

customer. The interconnection of the Small Generating Facility, on the other hand, 

increases the risks to the Transmission Provider. Furthermore, according to NRECA, 

most Transmission Providers are already required to either self-insure or otherwise carry 

insurance sufficient to cover any liability that may arise from operation of their electric 

systems, so requiring further insurance is duplicative. 

319. Empire District supports requiring the Transmission Provider to be named as an 

additional insured for generators larger than 5 or 10 kW, while Avista opposes such a sizerelated requirement. 

320. Avista notes that workers' compensation requirements vary significantly by state. 

It argues that the Commission should not attempt to federally preempt these long-standing 

practices. According to Avista and Nevada Power, the interconnection agreement should 

simply require compliance by each Party with the applicable state workers' compensation 

laws. 

321. Cinergy states that while insurance may be a significant barrier to entry for some 

Interconnection Customers, the Commission should heed the insurance market's 

independent assessment of the risk of a particular project. Fundamental economic 

principles require Interconnection Customers to bear the costs of the risks they impose on 

third parties, and there is no sound basis for the Commission to shift that cost to the 

Transmission Provider and its customers. Nevada Power and NRECA make similar 

 

Collaborative to the Massachusetts Department of Telecommunications and Energy in 

Compliance with DTE Order No. 02-38-A (May 15, 2003)). 
Docket No. RM02-12-000 - 85 - 

arguments. NRECA also argues that if Interconnection Customers do not have insurance, 

insurance companies will be forced to raise the cost of insurance for Transmission 

Providers, and that in turn will be paid by all users of the Transmission System. 

322. Small Generator Coalition, like most commenters representing Small Generating 

Facilities, argues that purchasing insurance is a business decision and that the level and 

nature of the insurance should be established by each business according to its needs, not 

mandated by the federal government. It argues that requiring insurance would create a 

major barrier to small generator interconnections and would prevent utility customers (as 

opposed to commercial generation projects) from pursuing interconnection because the 

administrative and financial barriers to entry would simply be too great. It asserts that the 

insurance requirements for a small wind turbine should be less than for a nuclear power 

plant or other large generator. Small Generator Coalition is particularly vehement in its 

opposition to insurance requirements for projects under 2 MW in size. Overall, Small 

Generator Coalition supports NARUC's comments and asks the Commission to use the 

NARUC Model in lieu of the Proposed SGIA. 

323. Small Generator Coalition states that if the Commission does include insurance 

requirements in its Final Rule, it should exempt facilities no larger than 2 MW and require 

only $1 million in general liability insurance for projects 2 MW or larger. 

324. In general, Transmission Providers support requiring an insurance regime with 

larger policy limits and a broad array of coverage. Interconnection Customers and 

NARUC generally support requiring smaller amounts of insurance or none at all. 

Southern Company proposes revisions to Proposed SGIA article 6.16.11 to clarify the 

conditions under which one Party must notify the other of accidents and injuries arising 

out of the interconnection agreement. 

325. Central Maine proposes requiring the following policies: $1 million in employer's 

liability and workers' compensation insurance; $1 million in Commercial General 

Liability Insurance (with a $2 million aggregate combined limit); comprehensive 

automobile liability insurance of $1 million (with a $2 million aggregate combined limit); 

and an additional $1 million in excess public liability insurance (with a $5 million 

aggregate cap). 

326. Nevada Power proposes requiring $1 million in general liability coverage from 

projects greater than or equal to 200 kW and $500,000 if the project is no larger than 

200 kW. It also proposes requiring excess public liability insurance of $10 million if the 

facility is greater than or equal to 10 MW in size ($10 million aggregate); $5 million for 
Docket No. RM02-12-000 - 86 - 

projects between 5 and 10 MW ($5 million aggregate); $2 million for projects between 

200 kW and 5 MW ($2 million aggregate); and none for projects less than 200 kW. 

327. Southern Company is in favor of requiring a flat level of coverage for all Small 

Generating Facilities, regardless of size, and proposes requiring $1 million workers' 

compensation insurance ($1 million aggregate); $2 million general liability insurance 

($6 million aggregate); $2 million comprehensive automobile liability insurance; and 

$10 million excess public liability insurance ($10 million aggregate). 

328. Tangibl proposes differing levels of insurance requirements based on both size and 

type of the generator. For solar or wind generators, Tangibl proposes requiring $2 million 

in insurance for facilities larger than 10 MW; non-solar or wind facilities larger than 

10 MW would maintain $4 million. However, for facilities no larger than 10MW, Tangibl 

proposes $500,000 in workers' compensation insurance; $1 million Commercial General 

Liability Insurance ($2 million aggregate); $1 million comprehensive automobile 

insurance ($1 million aggregate); and $5 million excess public liability insurance 

($5 million aggregate). 

329. SoCal Edison urges the Commission to adopt the same insurance requirements that 

the California Public Utilities Commission (CPUC) requires, asserting that California's 

extensive experience with small generators should serve as a model for the Commission. 

Specifically, California's Rule 21 requires general liability coverage in the amount of 

$2 million for projects larger than 100 kW; $1 million for projects larger than 20 kW and 

no larger than 100 kW; and $500,000 for projects no larger than 20 kW. Rule 21 also 

creates a special reduced insurance requirement of $200,000 for facilities no larger than 

10 kW associated with a retail customer. Rule 21 exempts some classes of solar and wind 

generators from its insurance requirements entirely, and provides for waiver of the 

insurance requirements for some small residential interconnections if insurance is not 

easily obtainable. 

330. In its supplemental comments, Joint Commenters proposes requiring the 

Interconnection Customer to maintain insurance in an amount "sufficient to insure against 

all reasonably foreseeable direct liabilities given the size and nature of the generating 

equipment being interconnected, the interconnection itself, and the characteristics of the 

system to which the interconnection is made." It also specifies that the provision shall not 

require the Interconnection Customer to obtain additional insurance if the insurance it 

already has is sufficient. The Interconnection Customer is required to document its 

insurance coverage no later than ten days before the anticipated commercial operation date 

of the Small Generating Facility, and afterwards as requested by the Transmission 

Provider. The proposed provision also allows the Interconnection Customer to self insure 
Docket No. RM02-12-000 - 87 - 

when appropriate and requires the Transmission Provider to maintain insurance 

"consistent with the Transmission Provider's commercial practice." While Joint 

Commenters were able to reach consensus on the insurance requirement for most Small 

Generating Facilities, they were not able to reach consensus on the issue of insurance 

requirements for inverter-based generators no larger than 10 kW. 

Commission Conclusion 

331. The wide range of insurance recommendations points out the difficulties in 

establishing a set dollar amount or type of insurance appropriate to every Small 

Generating Facility. Insurance can add significant costs to a Small Generating Facility 

and may affect the project's economic feasibility. Nevertheless, a mismanaged 

interconnection can harm the Transmission Provider's electric system and affect power 

customers, potentially subjecting the Parties to liability. 

332. We adopt in its entirety Joint Commenters' proposal, which reflects appropriate 

compromises regarding this diversity of insurance needs. We are pleased that such a 

diverse group of stakeholders could reach consensus on this difficult issue. 

333. The level of risk in interconnecting a 50 kW photovoltaic system with the 

Transmission Provider's Transmission System is very different from the risk involved in 

interconnecting a 10 MW generator. Mandating that the Interconnection Customer 

maintain a reasonable amount of insurance based on the specific characteristics of its 

interconnection avoids the one-size-misfits-all problem and addresses the differing needs 

of different Interconnection Customers and Transmission Providers. 

334. Joint Commenters, however, could not reach consensus on any insurance provision 

for certified inverter-based generators no larger than 10 kW. Commenters have convinced 

us that the risk of interconnecting these small inverter-based generators is low and we 

therefore decline to impose a generic insurance requirement in this Final Rule.98 Instead, 

we adopt the approach proposed by NARUC which is that each Party be required to 

"follow all applicable insurance requirements imposed by the state in which the Point of 

Interconnection is located. All insurance policies must be maintained with insurers 

authorized to do business in that state." Given that most generators of this size and type 

 98 See, e.g., Cinergy, Empire District, ISO New England, NRECA, NYPSC, 

PG&E, and Small Generator Coalition. But see, e.g., AEP, Central Maine, EEI, NYTO, 

and Southern Company. 
Docket No. RM02-12-000 - 88 - 

will be interconnecting with state-jurisdictional facilities, it makes sense to coordinate our 

approach with the approach recommended by NARUC. This will also avoid forum 

shopping. This is also similar to the approach adopted in Order No. 2003-A, which 

deferred to state insurance laws rather than imposing specific dollar amounts for these 

types of insurance.99

335. However, because any uninsured risk will fall squarely on the Transmission 

Provider's customers, who would effectively subsidize the costs of the interconnection, we 

reject proposals that we completely waive insurance requirement. Several commenters 

also advise the Commission to leave the issue of insurance to state regulators. While this 

makes sense for small inverter-based generators, for larger Small Generating Facilities, 

having insurance requirements vary by state would hamper our effort to promulgate 

national small generator interconnection standards. 

336. Cinergy asks that the Transmission Provider be allowed to waive or reduce 

insurance requirements for a given project if it concludes that it poses little risk to its 

electric system. The provision proposed by Joint Commenters would allow this type of 

flexibility. If the Parties agree that the interconnection is safe, then they can agree that 

insurance is not necessary. However, Transmission Providers must waive or reduce the 

insurance requirements on a non-discriminatory basis that does not favor affiliated 

facilities. 

337. We also clarify that an RTO or ISO may propose additional or different insurance 

requirements under the independent entity variation provision contained in this Final Rule. 

338. Reservation of Rights (Proposed SGIA Article 6.20) – Some commenters 

pointed out that Proposed SGIA article 6.20 contained a typographical error, which we are 

correcting. 

339. Signatures and Parties to the SGIA (Proposed SGIA Article 9) – Proposed 

SGIA article 9 required both the Transmission Provider and the Transmission Owner to 

sign the interconnection agreement. This is the same approach taken in Order No. 

2003.100 In an RTO or ISO where the Transmission Provider is not the Transmission 

Owner, the RTO's or ISO's compliance filing may propose a modified interconnection 

 99 See Order No. 2003-A at P 462. 

100 Order No. 2003 at P 909. 
Docket No. RM02-12-000 - 89 - 

agreement that provides the Transmission Provider and Transmission Owner different 

rights and obligations. 

Comments 

340. ISO New England supports the approach taken in Order No. 2003, allowing 

Transmission Owners and Transmission Providers to propose a modified interconnection 

agreement when the Transmission Provider is an entity distinct from the Transmission 

Owner. It contends that this approach is necessary if the Commission wishes to establish 

a single interconnection agreement for a region encompassed by an RTO or ISO. 

341. NYISO argues that the SGIA should assign certain basic responsibilities to either 

the Transmission Owner or Transmission Provider. 

342. Midwest ISO asserts that it is the RTO's role as an independent entity "to ferret out 

unnecessary studies or inappropriate contingencies."101 However, it argues that the 

"NOPR's failure to fully distinguish between a transmission provider and transmission 

owner belies the independence of the RTO,"102 and both it and other commenters103

request clarification of the respective roles of the RTO and the Transmission Owner. 

343. National Grid argues that defining "Transmission Provider" to include both the 

Transmission Provider and the Transmission Owner confuses the issue and adds 

ambiguity into the interconnection process. The Commission should clearly define the 

role of each Party. National Grid also notes that the Small Generator Interconnection 

NOPR did not account for the role of stand-alone distribution companies. 

344. Central Maine asks the Commission to clarify that the Transmission Owner (or 

distribution company, where applicable) must sign the interconnection agreement and to 

clarify whether the Transmission Provider needs to be a Party to the agreement. It asserts 

that the division of functions between the Transmission Owner and the Transmission 

Provider varies by region and depends on the role that the RTO or ISO plays in the region. 

A request for interconnection with a Distribution System may require that a distribution 

 101 Midwest ISO at 6. 

102 Id.

103 E.g., NYTO and PG&E. 
Docket No. RM02-12-000 - 90 - 

company be a Party to the interconnection agreement, in lieu of a Transmission Owner or 

Transmission Provider. Central Maine concludes that the standard interconnection 

agreement resulting from this proceeding must ultimately be a contract between the 

Interconnection Customer and the entity that owns the Transmission System (i.e., the 

Transmission Owner or the distribution company). 

345. In RTO or ISO regions, if the Commission determines that the Transmission 

Provider must also sign the interconnection agreement, Central Maine asks the 

Commission to clarify that, under section 205 of the FPA, the Transmission Owner has the 

right to file the agreement, consistent with Atlantic City Electric Co., et al. v. FERC, 329 

F.3d 856, 858-59 (D.C. Cir. 2003) (explaining that while an ISO may have certain FPA 

section 205 rights, the individual utility also has FPA section 205 rights). Central Maine 

also says that the Transmission Owner, not the Transmission Provider, has the right to file 

executed or unexecuted interconnection agreements. 

346. In lieu of requiring the signatures of both the Transmission Owner and the 

Transmission Provider, EEI contends that the Commission should require the signature 

only of the Transmission Owner. Additionally, the Commission should encourage ISOs 

and RTOs with operational roles that cause this distinction to clearly delineate the rights 

and responsibilities in their operations agreements and protocols. The interconnection 

agreement can specifically refer to the OATT already approved by the Commission, 

thereby eliminating the need to have both a separate agreement between the Transmission 

Provider and the Interconnection Customer and a three-party agreement. 

347. PG&E argues that RTOs and ISOs do not need to become Parties to 

interconnection agreements for distribution level projects because such entities only 

operate transmission systems. These entities have very little interest in the smallest 

projects interconnected with Distribution Systems and therefore, should not be the ones to 

receive Interconnection Requests or maintain the queue for distribution level 

interconnections. The Commission should designate the distribution provider to fulfill 

these roles. 

348. NYTO asserts that since an independent RTO or ISO has no right to bind a 

Transmission Owner, the RTO or ISO should not sign the interconnection agreement. 
Docket No. RM02-12-000 - 91 - 

Commission Conclusion 

349. As in Order No. 2003, we are requiring three-party agreements in areas where the 

Transmission Provider and Transmission Operator are different entities.104 In other 

regions of the country where the Transmission Provider and the Transmission Owner are 

the same entity, there is no need for a second signature block.105 

350. Given that RTOs and ISOs have distinct characteristics and challenges, we have 

permitted each RTO or ISO to propose, on compliance, an interconnection procedures 

document and agreement tailored to its individual needs.106 Such proposals should 

allocate to each entity the appropriate rights and obligations. As the Order No. 2003 

compliance process demonstrated, the Transmission Provider and Transmission Owner are 

capable of dividing responsibility among themselves. 

351. Finally, Central Maine asks the Commission to specify that, under section 205 of 

the FPA, the Transmission Owner, not the Transmission Provider, must file the 

interconnection agreement. This is an issue better resolved on a case-by-case basis 

through the compliance process. It would be premature to conclude that in all 

circumstances the Transmission Owner, and not the Transmission Provider, has the right 

to file the interconnection agreement. 

352. Liability – In the Proposed SGIA, the Commission proposed including provisions 

in the SGIA governing the apportionment of liability between the Parties. These 

provisions (indemnity, consequential damages, and Force Majeure) were similar to the 

provisions in the LGIA. The Commission requested comments on whether Small 

Generating Facilities should be treated differently from Large Generating Facilities with 

respect to liability. We discuss our general approach to the liability provisions first, 

followed by a more detailed discussion of each provision. 

 104 Order No. 2003 at P 909. 

105 We note that whether a public utility characterizes itself as a "transmission" 

provider or a "distribution" provider does not matter, since the Transmission Provider is 

defined to be the "public utility . . . that owns, controls, or operates transmission or 

distribution facilities used for the transmission of electricity in interstate commerce and 

provides transmission service under the Tariff." 

106 Order No. 2003 at P 909. 
Docket No. RM02-12-000 - 92 - 

General Approach 

Comments 

353. In general, Transmission Providers support liability provisions similar to those in 

the LGIA, arguing that interconnecting a Small Generating Facility raises as many safety 

and reliability issues as interconnecting a Large Generating Facility.107

354. Small Generator Coalition and NARUC generally argue that these provisions 

should be tailored specifically to Small Generating Facilities, arguing that the Proposed 

SGIA was simply too complicated for many Small Generating Facilities. They first argue 

that a Small Generating Facility poses less danger to the Transmission Provider's electric 

system than a Large Generating Facility. Second, they argue that imposing liability 

provisions similar to those in the LGIA on Small Generating Facilities would be a major 

financial barrier to entry and deter the development of new Small Generating Facilities. 

Third, they point out that the Transmission Provider has an incentive to include onerous 

liability provisions in the SGIA to deter competition. 

355. ISO New England similarly argues that Small Generating Facilities do not present 

the same risks as do Large Generating Facilities. It asks the Commission to permit 

independent entities to determine, on a case-by-case basis, whether to waive or relax the 

liability provisions for individual generators. 

356. Avista asks the Commission to follow Midwest Independent System Operator, Inc., 

et al., 100 FERC ¶ 61,144 (2002), which allows the Parties to propose customized liability 

limitations. It argues that the August 14, 2003 Northeast Blackout is evidence of the need 

for a comprehensive look at liability limitations. Avista argues that the interconnection 

agreement should have a savings clause to let an RTO conform the liability and dispute 

resolution provisions (and possibly others) to the standards and procedures being 

implemented by the RTO. Otherwise, the Commission's rule could unnecessarily 

grandfather inconsistent provisions.108 For example, the Agreement Limiting Liability 

 107 For instance, AEP, BPA, EEI, and Nevada Power argue that the LGIA and the 

SGIA should be consistent. Nevada Power argues that such provisions would not 

discourage well-run generators from interconnecting with the Transmission Provider. 

108 Avista at 18.
Docket No. RM02-12-000 - 93 - 

Among Western Interconnected Systems ("WIS Agreement")109 should continue to be an 

option for generators and utilities. Avista argues that the SGIA should have a savings 

clause for the WIS Agreement. 

 Commission Conclusion 

357. Many commenters, including NARUC and independent entities like ISO New 

England, agree that the Commission should modify the proposed liability provisions for 

Small Generating Facilities in this Final Rule. We agree that the provisions can generally 

be simplified without increasing the liability of any Party. The liability provisions 

adopted here use many of the proposals made by NARUC and other commenters. They 

address the Transmission Provider's need to protect its electric system while removing 

unreasonable barriers to entry for Interconnection Customers. 

358. We agree with ISO New England that an independent Transmission Provider (via 

the independent entity variation standard) may propose on compliance to evaluate each 

Interconnection Request on a case-by-case basis and fashion liability requirements that are 

suitable to that particular entity. 

359. We deny Avista's request for caps on the amount of liability the Transmission 

Provider may be subject to, or that we allow it to develop its own liability rules.110 The 

liability rules discussed in the interconnection context are distinct from the liability rules 

in the rest of the OATT.111 In the interconnection context, the indemnity provision is twosided (or three-sided, in the case of an independent Transmission Provider). This means 

that the indemnity provisions found in the SGIA are very different than the indemnity 

 109 "The WIS Agreement . . . is a multi-lateral agreement among parties in the 

Pacific Northwest that operates to limit liability among the signatories." Id. 

110 In Puget Sound Energy, Inc., 107 FERC ¶ 61,287 (2004), the Commission 

denied a request by Puget Sound to include the WIS Agreement in its tariff because Puget 

Sound did not explain why such inclusion was "consistent with or superior to" the pro

forma OATT. However, the Commission did not foreclose the possibility that a WIS 

Agreement member may be able to make such a showing in a future compliance filing. 

111 Order No. 2003 at P 636 ("Commenters have convinced us that interconnection 

presents a greater risk of liability than exists for the provision of transmission service and 

that, therefore, the OATT indemnity provision is not suitable in the interconnection 

context.") 
Docket No. RM02-12-000 - 94 - 

provisions found in the OATT. Many of Avista's comments have more to do with the 

liability provisions found in the transmission portions of the OATT than they do with 

interconnection. While we agree that liability protection is important, this rulemaking is 

not the place to decide such an issue. We also deny Avista's request to insert a savings 

clause into the liability provision. Avista has not explained how the Transmission 

Provider's participation in the WIS Agreement would be affected by this Final Rule. If 

Avista wishes, it may seek to include such a provision on compliance under the 

"consistent with or superior to" standard. 

Consequential Damages (Proposed SGIA Article 6.19) 

360. Proposed SGIA article 6.19 used the LGIA consequential damages provision, 

which states that neither Party is liable to the other for special or consequential damages 

except as expressly provided for in the interconnection agreement. 

Comments 

361. Central Iowa Coop is concerned that the phrase "[o]ther than as expressly provided 

for in this agreement" could make the Parties subject to consequential damages when read 

in conjunction with the indemnification provision in Proposed SGIA article 6.13. It asks 

the Commission to clarify that the bar against consequential damages applies in all 

circumstances, except when the Parties have reached an express agreement to the contrary. 

362. Central Maine asks the Commission to clarify that indemnity payments to a third 

party are not consequential damages. 

363. NARUC proposes that the Commission adopt its Model language, which is less 

complicated than the proposed provision. Specifically, NARUC proposes replacing 

Proposed SGIA article 6.19 with a generic statement at the beginning of the liability 

article: 

Each Party's liability to the other Party for any loss, cost, claim, 

injury, liability, or expense, including reasonable attorney's fees, 

relating to or arising from any act or omission in its performance of 

this agreement, shall be limited to the amount of direct damage 

actually incurred. In no event shall either Party be liable to the other 

Party for any indirect, special, consequential, or punitive damages of 

any kind whatsoever. 
Docket No. RM02-12-000 - 95 - 

Commission Conclusion 

364. We retain the provision as proposed. This is a contractual term and no commenter 

has convinced us that it is necessary to deviate from the approach taken in Order 

No. 2003. 

365. Several commenters appear to have misunderstood the relationship between the 

indemnity and consequential damages provisions in the Proposed SGIA. The bar against 

consequential damages does not apply in the indemnity context. Instead, the 

indemnification of one Party by another is comprehensive, and the indemnifying Party is 

responsible for all of the indemnified Party's costs, regardless of whether those costs are 

compensatory or punitive. While the consequential damages provision adopted in this 

Final Rule prevents one Party from seeking consequential damages against another Party, 

the purpose of the indemnification provision is different; it protects the indemnified Party 

from liability to third parties (those who are not Parties to the interconnection agreement). 

Requiring the indemnifying Party to reimburse the indemnified Party for, say, only 

compensatory damages and not punitive damages would not make the indemnified Party 

whole. We are adding language to the beginning of the indemnity section to make this 

clear. 

 Indemnity (Proposed SGIA Article 6.13)

366. Indemnification is compensating another for a loss suffered due to a third party's 

act or default.112 The Proposed SGIA contained indemnity provisions similar to those 

contained in the LGIA. The proposal would require the Transmission Provider and the 

Interconnection Customer to indemnify each other for any damages, losses, claims, and 

obligations by or to third parties arising from performance of the Transmission Provider's 

or Interconnection Customer's obligations under the interconnection agreement on behalf 

of the other contracting party. Indemnity protection would include the amount of the 

indemnified Party's loss, net of any insurance recovery, but would not apply where there is 

gross negligence or intentional wrongdoing. The proposed provision also set forth 

detailed procedures for pursuing an indemnity claim and allowed recovery of legal costs 

in some cases. 

 112 Black's Law Dictionary 772 (7th ed. 1999). 
Docket No. RM02-12-000 - 96 - 

 Comments 

367. AEP, BPA, Idaho Power, and Nevada Power generally agree that Small and Large 

Generating Facilities should be treated consistently with respect to indemnity protections. 

368. Central Iowa Coop, Georgia Transmission, and NYTO request that the 

Commission replace the mutual indemnity provision with a one-way indemnity provision 

in favor of the Transmission Provider. They argue that the Transmission Provider 

receives no benefit from an interconnection, but does face additional safety, reliability, 

and power quality concerns as a result of it. To require the Transmission Provider to 

indemnify the Interconnection Customer unfairly shifts the costs and risks to the 

Transmission Provider's other customers. 

369. Central Maine contends that Proposed SGIA article 6.13 should not exclude 

"insurance or other recovery" from amounts owed to an indemnified party. It argues that 

this is commercially unreasonable and undermines the very intent of the indemnity 

provision. 

370. ISO New England argues that applying the liability provisions contained in the 

LGIA to Small Generating Facilities is unreasonable because the risks associated with 

interconnecting the latter are not comparable to those associated with interconnecting 

Large Generating Facilities. The Commission should permit independent entities such as 

RTOs and ISOs to determine, on a case-by-case basis, whether a waiver or relaxation of 

the indemnity provisions used for Large Generating Facilities should be permitted based 

on the actual risk the Small Generating Facility presents. Permitting this type of 

flexibility would minimize the cost of interconnection and ensure adequate protection for 

the Transmission Provider. 

371. Southern Company argues that the proposed indemnity provision is not workable. 

The provision requires each Party to indemnify the other for damages arising out of such 

other Party's "performance of obligations under this Agreement on behalf of the 

indemnifying Party."113 It argues that it is unclear whether the indemnity provision would 

ever apply because the Parties do not perform obligations on behalf of each other at all. It 

proposes that each Party indemnify the other from any liabilities or damages resulting 

from activities on the indemnifying Party's own side of the point of change of ownership. 

Additionally, each Party should indemnify the other for the indemnifying Party's failure to 

 113 Southern Company at 34. 
Docket No. RM02-12-000 - 97 - 

adhere to operating requirements and for breaches of the interconnection agreement. 

Southern Company also takes issue with the provision's limitation of expenses paid for the 

legal defense of an indemnified Party. If an indemnified Party has additional legal 

defenses, the proposed article requires the indemnifying Party to pay for only one 

attorney.114 Southern Company requests that the Commission revise the provision to 

require the payment of the indemnified party's reasonable legal expenses. 

372. In its Model interconnection agreement, NARUC proposes a different approach to 

indemnity. There, the Transmission Provider and the Interconnection Customer would 

assume liability and indemnify each other for claims and expenses resulting from their 

own negligence as it relates to the design, construction, and operation of their facilities. A 

Party indemnifies the other only for claims brought by claimants who could directly 

recover from the Party itself. Indemnity for both Parties includes monetary losses, 

reasonable legal fees for defending a third party action, damages related to the 

death/injury of a third party, damages to the Party's property or property of a third party, 

and damages for disruption of a third party's business. Neither the Transmission Provider 

nor the Interconnection Customer assumes liability for consequential, special, incidental, 

or punitive damages, and neither is responsible for disruption of the other's business or for 

the costs and expenses of pursuing legal action against the other. 

 Commission Conclusion 

373. We are adopting a streamlined indemnity provision in this Final Rule. 

374. Several commenters appear to have misunderstood the relation between the 

proposed indemnity provision and the bar against consequential damages provision (now 

called Limitation of Liability). We are therefore including in the SGIA an explanation 

that claims under the indemnity provision are exempt from the bar against consequential 

damages contained in the Limitation of Liability provision. 

375. Many of the comments addressing indemnity are identical to those addressed in 

Order No. 2003 and do not argue that Small Generating Facilities should be treated 

differently from Large Generating Facilities. We will not repeat the discussion in those 

orders. For instance, the Commission addressed comments about the bilateral nature of 

the provision in Order No. 2003 at P 637, and comments on which side of the Point of 

Interconnection work is conducted in Order No. 2003 at P 638. 

 114 See Proposed SGIA article 6.13. 
Docket No. RM02-12-000 - 98 - 

376. Because the purpose of indemnification is to pay another for actual losses, the 

exclusion of "insurance or other recovery" from amounts owed to an indemnified Party 

does not undermine the intent of this provision, as Central Maine argues. Forcing an 

indemnifying Party to pay damages already covered under an insurance policy would 

allow the indemnified Party to profit at the expense of the indemnifying Party. Excluding 

insurance and other recoverable amounts avoids overcompensating an indemnified Party. 

377. In response to Southern Company's request that the provision cover an 

indemnifying Party's failure to meet operating requirements or its breach of the SGIA, we 

note that it covers damages from actions or inactions under the interconnection agreement. 

However, in response to Southern Company's comments, we are modifying the provision 

to add: "arising out of or resulting from the other Party's actions or failure to meet its 

obligations under this SGIA." 

Force Majeure (Proposed SGIA Article 6.14) 

378. Proposed SGIA article 6.14 provided that no Party is considered to be in default 

with respect to contractual obligations, other than payment of money due, if it is prevented 

from fulfilling such obligations by a Force Majeure event. The affected Party is to 

exercise due diligence to remove the disability and provide adequate notice to the other 

Party. These provisions are consistent with those in the LGIA. The Commission 

requested comments concerning whether a different approach should be taken for Small 

Generating Facilities. 

 Comments

379. AEP, BPA, Idaho Power, and Nevada Power generally agree that all generating 

facilities should be treated the same with respect to Force Majeure. AEP argues that 

because Force Majeure can happen for either type of interconnection, there is no reason 

that the contractual protection should differ according to generator size. Nevada Power 

contends that consistent treatment does not interfere with having a simplified and 

expedited interconnection process for Small Generating Facilities. 

380. While NARUC's Model and the Proposed SGIA included similar Force Majeure 

clauses, NARUC recommends that the Commission remove the statement that economic 

hardship is not considered a Force Majeure Event. It also proposes that the Commission 

require that an affected Party use "reasonable efforts" instead of "due diligence" to resume 
Docket No. RM02-12-000 - 99 - 

its performance as soon as possible. Additionally, NARUC proposes changing the 

definition of Force Majeure to include events that "the affected Party is unable to prevent 

or provide against by exercising reasonable diligence."115

 Commission Conclusion 

381. We agree with NARUC that some modification to the Proposed SGIA is needed 

and we are adopting a Force Majeure clause that melds the best aspects of NARUC's and 

the Commission's proposals. For instance, this Final Rule provision allows the Party 

asserting the Force Majeure Event to call or write to the other Party to make the required 

notification. Easy notification ensures that both Parties know of a Force Majeure Event as 

soon as possible. 

382. We are not adopting all of NARUC's proposals, however. The NARUC Model 

would not allow a Party to invoke Force Majeure if it could have prevented the event 

through the exercise of "reasonable diligence." Our SGIA uses the terms "negligence" 

and "intentional wrongdoing," which are commonly accepted legal terms. 

383. Finally, we are moving the definition of Force Majeure Event to the body of the 

SGIA from an appendix. 

384. Reactive Power – The Proposed SGIA did not include a separate provision for 

reactive power; however, the LGIA does. 

 Comments 

385. CA ISO and Southern Company ask the Commission to include a provision for 

reactive power in the interconnection agreement. CA ISO argues that this provision is 

essential for the reliability of the Western Interconnection because the entire region is 

afflicted by voltage instability. A Small Generating Facility interconnecting at the 

transmission level should meet the reactive power requirements of the CA ISO tariff and 

abide by reactive power dispatch instructions from the control area operator. Moreover, a 

Small Generating Facility interconnecting at the "distribution" level should meet reactive 

power requirements specified in the Wholesale Distribution Access Tariff and abide by 

any reactive power dispatch instructions from the Distribution System operator. 

 115 NARUC Model – Definitions. 
Docket No. RM02-12-000 - 100 - 

386. Southern Company notes that the LGIA has a reactive power provision and argues 

that one should be included in the SGIA as well. Otherwise, a Small Generating Facility 

could become a burden on the Transmission Provider's electric system. The Transmission 

Provider should be provided real-time information on the status and output of each 

generator to ensure safe and reliable operation. 

 Commission Conclusion 

387. We are requiring the Interconnection Customer's Small Generating Facility to 

maintain a power factor within the range of 0.95 leading to 0.95 lagging, unless the 

Transmission Provider establishes and the Commission approves different requirements 

that apply to all similarly situated generators. There is no reactive power requirement for 

wind powered Small Generating Facilities. 

388. Generator Balancing Requirements – The Proposed SGIA did not include a 

separate generator balancing provision.

Comment 

389. Southern Company argues that the SGIA should include provisions for generator 

balancing service, and presents several arguments in support of its position. 

Commission Conclusion 

390. In Order No. 2003-A, the Commission determined that generator balancing service 

is more closely related to delivery service than to interconnection service, and because 

delivery service requirements are addressed elsewhere in the OATT, the balancing service 

requirement need not appear in the interconnection agreement. On rehearing, the 

Commission in Order No. 2003-B did not add a generator balancing service provision to 

the LGIA, but it did permit the Transmission Provider to include a provision for generator 

balancing service in individual interconnection agreements. We reach the same 

conclusion here.116 Any such provision should be tailored to the Parties' specific 

circumstances and is subject to Commission approval.

 116 Order No. 2003-B at P 72-75. 
Docket No. RM02-12-000 - 101 - 

391. Appendices to the SGIA – The Proposed SGIA included five appendices (called 

attachments in the Final Rule SGIA) that set forth technical and operating information, 

including: (1) a description and statement of the costs of the Small Generating Facility, 

Interconnection Facilities, and metering equipment; (2) a one-line diagram depicting the 

Small Generating Facility, Interconnection Facilities, metering equipment and Upgrades; 

(3) project milestones; (4) additional operating requirements for the Transmission 

Provider's electric system and Affected Systems needed to support the Interconnection 

Customer's needs; and (5) the Transmission Provider's description of its Network 

Upgrades and Distribution Upgrades and a best estimate of their costs. 

Comments

392. Central Maine and NYTO state that these appendices would require information 

that is not needed. They ask that the appendices include only: (1) Small Generating 

Facility description, (2) one-line diagram, (3) description of the Interconnection Facilities, 

(4) operation and maintenance (O&M) costs, and (5) operating procedures. They state 

that additional operating procedures may have to be developed with input from the 

Transmission Owner and the Interconnection Customer to ensure system integrity and 

reliability. 

 Commission Conclusion 

393. We are not persuaded that any change in the appendices is warranted. With the 

exception of O&M costs, all the items that Central Maine and NYTO would have us 

include in the appendices are already there. We agree with Central Maine and NYTO that 

additional operating procedures with input from both the Transmission Provider and the 

Interconnection Customer may be needed, and we encourage such efforts. The treatment 

of O&M costs is discussed in more detail in Part II.H below (Responsibility for Operation 

and Maintenance Costs). 

G. The 10 kW Inverter Process

394. In the Small Generator Interconnection NOPR, the Proposed SGIP included a 

default interconnection Study Process for Small Generating Facilities and a simplified 

procedure that used technical screens for certified Small Generating Facilities no larger 

than 2 MW. The Proposed SGIA, however, would be used for the interconnection of all 

Small Generating Facilities, up to and including 20 MW in size. The NOPR did not 

include a separate procedures document or interconnection agreement for very small 

generators, although some commenters urged, in comments submitted in response to the 
Docket No. RM02-12-000 - 102 - 

ANOPR, that 0-50 kW facilities (especially facilities that use inverters to convert the 

direct current output of the generator to alternating current) need a separate and simpler 

process than other generators. 

Comments 

395. Some commenters argue that the Proposed SGIP and Proposed SGIA are too 

complicated for very small Interconnection Customers. Small Generator Coalition states 

that unless the Commission is willing to modify the NOPR in fundamental ways, many of 

its members believe that development of Small Generating Facilities would be better 

served if the NOPR were simply withdrawn. It claims that, under the Proposed SGIP and 

Proposed SGIA, the only method by which even a small photovoltaic system, say 10 kW, 

could interconnect with the Transmission Provider is to follow the same process that 

would apply to generators 1,000 times larger. It asks the Commission to "recognize the 

simplicity of the very smallest generators and [to] include an exception for small inverterbased systems." Plug Power, also representing small generator interests, states that a 

special process should be adopted for very small generators because their interconnection 

requirements are fundamentally different from those of larger facilities. Moreover, 

adopting simpler requirements would foster the growth of "plug and play" equipment. 

396. NRECA, which represents a wide variety of cooperative utilities that interconnect 

with small generators, states that it has adopted special procedures for evaluating very 

small generators because they generally interconnect at low voltage and have different 

technical requirements from larger ones. 

397. Some state regulatory authorities already have a simplified process for very small 

generators. NJ BPU points out that it has adopted simplified procedures for qualified very 

small inverter-based generators. NARUC, in its updated Model, supports a simplified 

Interconnection Request (application) for very small generators. 

398. Joint Commenters submits in its supplemental comments a streamlined process for 

certified inverter-based generators no larger than 10 kW. This consists of a simplified 

Interconnection Request, simplified procedures, and a brief set of terms and conditions 

(that is essentially a highly simplified interconnection agreement ) – all contained in a 

single document. This Joint Commenter proposal consists of the following steps: (1) the 

Interconnection Customer completes an abbreviated Interconnection Request and signs the 

terms and conditions when it submits its Interconnection Request to the Transmission 

Provider; (2) the Transmission Provider uses the Fast Track Process technical screens to 

evaluate the Interconnection Request; (3) if the proposed interconnection passes the 

technical screens, the Transmission Provider approves the application; (4) once the 
Docket No. RM02-12-000 - 103 - 

Interconnection Customer's equipment has been installed, it sends a certificate of 

completion to the Transmission Provider; and (5) the Transmission Provider then inspects 

the equipment installation and, if satisfied that it is safe for operation, authorizes the 

interconnection. 

Commission Conclusion 

399. The comments demonstrate a near universal agreement of the need for special 

provisions for very small generators, a need that is being met at least in part by some state 

regulatory authorities. We agree with the commenters who state that the Proposed SGIP 

and Proposed SGIA are too complicated for very small generators, and we recognize the 

desire to accommodate their interconnection needs. However, a single document tailored 

for the needs of the smallest generators would be unsuitable for the interconnection of 

larger small generators; their technical evaluations and their legal rights and 

responsibilities must be set out in greater detail. 

400. We conclude that a balanced response to the comments is to issue two sets of 

documents – an SGIP and SGIA that serve the needs of most small generators, and a 

simplified document that meets the needs of very small generators. 

401. Joint Commenters' proposed process for the interconnection of very small 

generators, which enjoys broad support from a variety of stakeholder interests, is simple to 

implement while ensuring the safety and reliability of the Transmission Provider's electric 

system. Accordingly, we are adopting it in this Final Rule with minor modification under 

the name "10 kW Inverter Process." The simplified 10 kW Inverter Process consists of 

an Interconnection Request, simplified procedures, and a brief set of terms and conditions 

applicable to inverter-based 0-10 kW generators. It is included as Attachment 5 to the 

SGIP. This "all-in-one" document combines the attributes of both an interconnection 

procedures document and an interconnection agreement. We are including it in the SGIP 

because it is the SGIP that the Interconnection Customer will first encounter in the process 

of interconnecting its Small Generating Facility with the Transmission Provider. A 

flowchart showing the 10 kW Inverter Process may be found in Appendix D of this Final 

Rule. 

402. The 10 kW Inverter Process is user friendly and a straightforward interconnection 

should be accomplished in short order. To accelerate the process, by signing the 

application at the time of submission, the Interconnection Customer executes what 

essentially is an interconnection agreement, in the form of standard terms and conditions 

with which it agrees. This eliminates the additional step of signing an interconnection 

agreement if the proposed interconnection passes the screens. 
Docket No. RM02-12-000 - 104 - 

403. The 10 kW Inverter Process, by its very name, applies only to equipment that is 

interconnected with the Transmission Provider's electric system through an inverter. 

Inverter-based equipment has a very small likelihood of causing safety and reliability 

concerns on the Transmission Provider's electric system because it can quickly disconnect 

from the electric system when a disturbance occurs. Nonetheless, while the 10 kW 

Inverter Process should facilitate the interconnection of this class of Small Generating 

Facilities, the technical requirements for interconnection are just as rigid as those for all 

Small Generating Facilities up to 2 MW in size that elect to use the Fast Track Process. 

Specifically, they must be certified by a Nationally Recognized Testing Laboratory and 

the proposed interconnection must pass the technical screens. Consequently, 

interconnections will not be permitted if they jeopardize the safety and reliability of the 

Transmission Provider's electric system. 

404. Although the Interconnection Customer signs an abbreviated set of terms and 

conditions when it submits its Interconnection Request under the 10 kW Inverter Process, 

it is a legal instrument nonetheless. Its provisions are consistent with the SGIA. Should a 

dispute arise, we encourage the Parties to use this rulemaking for assistance in interpreting 

the terms and conditions of the 10 kW Inverter Process. Moreover, because the intent of 

the terms and conditions in this document are the same as those of the SGIA, no separate 

discussion of them is necessary here again in this Final Rule. 

405. The 10 kW Inverter Process is quick, inexpensive, and user friendly. Including it 

in this Final Rule removes barriers to the development and interconnection of this class of 

Small Generating Facilities, both at the federal and state jurisdiction levels. Its adoption 

should promote standardization of interconnection rules across the nation. We encourage 

states that do not have interconnection procedures for very small generators to consider 

using this as a model for their own rules. 

H. Other Significant Issues 

406. A number of issues, such as interconnection pricing policy, variations permitted for 

independent transmission entities, and legal issues such as liquidated damages, transcend 

individual provisions of the SGIP and SGIA. Accordingly, we address them below. 
Docket No. RM02-12-000 - 105 - 

Pricing/Cost Recovery for Interconnection Facilities and Upgrades 

(Proposed SGIA Article 5.1) 

407. In the Small Generator Interconnection NOPR, the Commission proposed to retain 

its then existing pricing policy for the interconnection of a Generating Facility with a 

Transmission System that is operated by a non-independent entity. That policy, as set 

forth in Order No. 2003, was to allocate the costs of the new or upgraded transmission 

facilities based on a locational test: whether they are at or beyond the Point of 

Interconnection. Facilities that are on the Small Generating Facility's side of the Point of 

Interconnection would be considered Interconnection Facilities, while those that are at or 

beyond the Point of Interconnection would be considered Network Upgrades. The 

Interconnection Customer would be directly assigned the costs of all Interconnection 

Facilities because they are sole use facilities. The Interconnection Customer would 

initially fund the Network Upgrades required for the interconnection unless the 

Transmission Provider chooses to pay for them itself. However, the Interconnection 

Customer would be entitled to a refund equal to the total amount paid to the Transmission 

Provider and the Affected System operator, if any, for Network Upgrades, including any 

tax-related payments. Order No. 2003 called for these refunds to be paid to the 

Interconnection Customer, with interest, as credits on a dollar-for-dollar basis for the nonusage sensitive portion117 of transmission charges, as payments are made under the 

Transmission Provider's tariff and the Affected System's tariff for any transmission 

services taken by the Interconnection Customer on the respective systems, whether or not 

the Generating Facility is the source of the power being transmitted.118 Order No. 2003 

permitted the Interconnection Customer, Transmission Provider, and Affected System 

operator to adopt any alternative payment schedule that is mutually agreeable provided all 

amounts paid by the Interconnection Customer for Network Upgrades are refunded, with 

interest, within five years of the generating facility's commercial operation date.119 The 

Interconnection Customer would be allowed to assign its refund rights to any person. 

 117 Non-usage sensitive transmission charges include all transmission charges 

except those for items that vary with the amount of power transmitted, such as congestion 

charges, line losses, and Ancillary Services. 

118 In Order No. 2003-A, this policy was revised to make credits available only for 

transmission service that has the generating facility as the source of the power transmitted. 

119 The five year refund period was subsequently changed to 20 years in Order 

No. 2003-B. 
Docket No. RM02-12-000 - 106 - 

408. Because a Small Generating Facility may interconnect with a Transmission 

Provider's Distribution System subject to an OATT in order to make a sale of electricity at 

wholesale in interstate commerce, the Small Generator Interconnection NOPR also 

addressed cost recovery for Distribution Upgrades at or beyond the Point of 

Interconnection.120 Consistent with Order No. 2003, the Commission proposed that the 

costs of Distribution Upgrades be directly assigned to the Interconnection Customer 

because Distribution Upgrades do not generally benefit all users. 

409. The Commission sought comments on whether this approach should also apply to 

Small Generating Facilities. The Commission also invited commenters to recount their 

recent experiences with interconnecting small generators with the "Distribution System," 

in particular the process for determining whether Distribution Upgrades are necessary, and 

the cost assignment of those Upgrades. 

410. For a Transmission Provider that is an independent entity, such as an RTO or ISO, 

the Commission's policy, as adopted in Order No. 2003, is to allow more pricing 

flexibility, subject to Commission approval. Also in Order No. 2003, we permitted a 

Regional State Committee to establish criteria that an independent entity would use to 

determine which Network Upgrades should be subject to "participant funding." Order 

No. 2003 also permitted, for a period of transition to the start of RTO or ISO operations, 

not to exceed a year, participant funding to be used for Network Upgrades as soon as an 

independent entity has been approved by the Commission and the affected states. In the 

Small Generator Interconnection NOPR, the Commission proposed to adopt the same 

policies for Small Generating Facilities that interconnect with a Transmission System 

operated by an independent entity. The Commission sought comments on this approach. 

411. In the Small Generator Interconnection NOPR, the Commission also proposed 

certain pricing provisions that are consistent with, but have no direct parallel with, the 

Order No. 2003 pricing provisions. The Proposed SGIA provided that costs associated 

with Interconnection Facilities could be shared with other entities that may benefit from 

such facilities by agreement of the Interconnection Customer, such other entities, and the 

Transmission Provider. It also proposed that, if the Parties agree that the Small 

Generating Facility benefits the Transmission Provider's electric system, the 

 120 The costs of all Interconnection Facilities, whether owned by the 

Interconnection Customer or the Transmission Provider, are directly assigned to the 

Interconnection Customer. 
Docket No. RM02-12-000 - 107 - 

Interconnection Customer's cost responsibility for the Transmission Provider's 

Interconnection Facilities or Upgrades would be reduced. The benefits would have to be 

measurable and verifiable. Where there are multiple Interconnection Requests and each 

requires Network Upgrades, Interconnection Customers would be assigned costs or 

benefits separately if effects can be attributed to different projects. Where such attribution 

is not possible, Interconnection Customers would share costs or benefits in proportion to 

their projected Small Generating Facility capacities. 

Pricing Comments that the Commission Already Addressed in the Large 

Generator Interconnection Proceeding 

Comments 

412. Several commenters object to various features of the Commission's current 

interconnection pricing policy, presenting arguments that the Commission has addressed 

in Order No. 2003. For example, Alabama PSC and others argue that prohibiting the 

direct assignment of the cost of Network Upgrades means that native load customers 

subsidize the cost of Network Upgrades that benefit only the Interconnection Customer. 

They argue that this may also cause the Interconnection Customer to make inefficient 

siting decisions. Mississippi PSC objects to the requirement that the Transmission 

Provider pay interest on unused credits and that it make a lump sum payment to the 

Interconnection Customer for credits that remain unused after five years. Alabama PSC 

argues that transmission credits should be provided only for Network Upgrades that 

provide a system benefit and only when the Small Generating Facility is the source of 

power for the transaction. 

413. NRECA argues that if a merchant generator has not committed to serve network 

and native load customers within the Transmission Provider's footprint on a long-term 

basis, the generator and the Transmission Provider's own generators are not comparable. 

It asserts that credits are appropriate only where the Small Generating Facility is 

committed to customers in the Transmission Provider's footprint. 

414. Central Maine requests clarification that transmission credits should be required 

only when the Interconnection Customer is taking and paying for transmission service on 

the Transmission System on which the Network Upgrade was made for the output of its 

facility. Central Maine also requests clarification that cost responsibility for Network 

Upgrades required by an Affected System is consistent with cost responsibility for 

Network Upgrades required by the Transmission Owner with whom an Interconnection 

Customer is directly interconnecting; that is, that transmission credits are required only 

when the Interconnection Customer takes and pays for transmission service from the 
Docket No. RM02-12-000 - 108 - 

Transmission Owner or Affected System for the output of its facility. It also asks that the 

contractual provisions concerning cost responsibility and payment obligations among 

Affected Systems and Interconnection Customers be in a separate agreement, not in the 

interconnection agreement. 

415. Avista, Alabama PSC, and Mississippi PSC argue that allowing pricing flexibility 

to an independent Transmission Provider such as an RTO or ISO is unduly discriminatory. 

They state that this policy penalizes the retail customers of the non-independent 

Transmission Provider because it forces them to bear the cost of Network Upgrades that 

benefit only the Interconnection Customer. Idaho Power argues that having different 

pricing for an independent and a non-independent Transmission Provider is bad public 

policy, arbitrary and capricious, and discriminatory. TAPS states that the NOPR 

incorrectly proposes participant funding for Upgrades to a Transmission System operated 

by an independent entity. 

Commission Conclusion 

416. All of the comments summarized above relate to the Commission's general pricing 

policy, and each was discussed in Order No. 2003.121 We adopt here the general 

conclusions adopted in those orders. However, those orders did not address the specific 

question of whether the Commission's general interconnection pricing policy is suitable 

for Small Generating Facilities. Several commenters raise this question, and we address 

their comments below. 

Applicability of the Commission's Interconnection Pricing Policy to the 

Interconnection of Small Generating Facilities 

Comments 

417. Several commenters support the use of the Commission's current interconnection 

pricing policy. Western supports the Commission's proposal to have the Interconnection 

Customer initially fund interconnections and associated Transmission System 

improvements and states that this approach is consistent with the budgetary realities that 

 121 See Order No. 2003 at P 675-750, Order No. 2003-A at P 562-697, and Order 

No. 2003-B at P 15-57. 
Docket No. RM02-12-000 - 109 - 

Western faces. Georgia PSC agrees that Interconnection Facilities are sole use facilities 

and, accordingly, should be directly assigned to (paid for by) the Interconnection 

Customer. 

418. Nevada Power states that interconnection pricing policies must be consistent for 

both Small and Large Generating Facilities to avoid the possibility of pricing 

manipulation. It opposes credits for facilities that do not increase transfer capability, but 

states that the requirement that the Interconnection Customer initially fund the Network 

Upgrade costs is an important safeguard to ensure that the Transmission Provider and 

other customers do not subsidize what would otherwise be an uneconomic project. SoCal 

Edison states that the Small Generator Interconnection NOPR correctly mirrors the Large 

Generator Final Rule with respect to the pricing policies for Network Upgrades and sole 

use Interconnection Facilities. BPA generally supports consistency between pricing for 

Small and Large Generating Facility interconnections, provided the Commission clearly 

articulates the physical boundary between Interconnection Facilities and Network 

Upgrades. 

419. AEP and Midwest ISO agree that an independent Transmission Provider should be 

allowed interconnection pricing policy flexibility, subject to Commission approval. 

Midwest ISO states that few circumstances would warrant an approach for Small 

Generating Facilities that differs from the approach that an RTO would establish for a 

Large Generating Facility. A common approach makes good business sense, assures 

comparability and makes the interconnection process more effective. Also, BPA 

generally supports RTO pricing flexibility, provided it does not conflict with an RTO's 

obligations under its governing agreements. 

420. Cummins, however, argues that the Commission should adopt different pricing 

rules for Small Generating Facilities because the Commission's current policy gives the 

Transmission Provider the discretion to place a huge cost burden on the Small Generating 

Facility. These costs may even exceed the installation and operating costs of a Small 

Generating Facility, completely destroying project economics. Cummins argues that this 

problem can be addressed only by specific performance standards (which Cummins does 

not describe) that only the Commission can establish. Also, if the Interconnection 

Customer is deemed to be the only beneficiary of the Upgrade or interconnection, the 

five year refund mechanism would be of no benefit, as the project would not go forward. 

421. The Small Generator Interconnection NOPR asked for specific examples of 

situations where a Transmission Provider has seemingly applied excessive fees for 

Upgrades. Cummins describes two examples that highlight its concerns: 
Docket No. RM02-12-000 - 110 - 

A manufacturer installed a 300 kW synchronous generator and 

cogeneration system, and provided the interconnection equipment 

specified by the [Transmission Provider]. The system was approved 

by the [Transmission Provider] and went into successful operation. 

When the owner decided to expand the facility to include a second 

300 kW generator, they were informed that the distribution system 

would need upgrades that would cost in excess of $140,000. On 

further investigation, it was learned that the upgrades included only 

"block closing" provisions on a recloser. This device is effectively a 

simple voltage sensing relay that would interconnect into the existing 

infrastructure at a substation. After intensive negotiations and 

investigations, the customer was able to get the cost reduced to under 

$50,000, and the project went forward. The $50,000 cost was still far 

more than the upgrade should have cost, but the customer was forced 

to pay it because the generator was key to the viability of the 

customer's business. This represented a 10% increase in the overall 

project. 

In another case, a customer installed a 2 MW synchronous generator 

with equipment that allowed it to parallel with the utility for 1/10th of 

a second. The equipment included timer functions that prevented the 

machine from staying in parallel for more than 1 second, as required 

by local rules. The [Transmission Provider], unsatisfied with the 

"quality" or "performance" of the relay in the customer's device, 

forced the customer to install a new relay costing over $2,000 for the 

1 second time function. This was an excessively expensive piece [of] 

equipment to perform a simple operation; however the 

Interconnection Customer needed the equipment to operate, and had 

to pay the price. 

422. Small Generator Coalition argues that the Small Generator Interconnection NOPR's 

cost allocation provisions appear to guarantee pancaked wheeling charges on energy 

produced by Small Generating Facilities, contrary to the Commission's goal of eliminating 

such pancaking.122

 122 By "pancaking," we presume that Small Generator Coalition is referring to the 

possibility that the Interconnection Customer may be required to pay for Distribution 

Upgrades and to make an up-front payment for Network Upgrades. 
Docket No. RM02-12-000 - 111 - 

423. MidAmerican states that a Commission rule requiring a Transmission Provider to 

pay any interconnection-related costs could supersede state policy and also would affect 

the ability of states to set retail rates following well-established cost causation principles. 

MidAmerican argues that the rules should permit the Transmission Provider to directly 

assign all costs to the Interconnection Customer unless that violates state regulatory 

policy. 

Commission Conclusion 

424. We recognize that the Interconnection Facilities, Distribution Upgrades, and 

Network Upgrades required to interconnect a generator can be costly. Indeed, such costs 

can be a significant portion of the total project costs. Nevertheless, each Generating 

Facility, whether large or small, must bear its fair share of the cost of the facilities and 

Upgrades from which it benefits; otherwise, the facility simply does not make economic 

sense. 

425. To this end, the Small Generator Interconnection NOPR proposed to apply to Small 

Generating Facility interconnections the same pricing policy that the Commission adopted 

for Large Generating Facilities in Order No. 2003. Among other things, this means that 

the Interconnection Customer must bear the cost of necessary Interconnection Facilities 

and Distribution Upgrades. Also, the Interconnection Customer must initially fund the 

cost of Network Upgrades, but is entitled to credits against its charges for transmission 

delivery service equal to the amount funded, plus interest. None of the arguments 

presented here convinces us that the policies adopted in Order No. 2003 should not also 

apply to Small Generating Facility interconnections. In particular, contrary to the 

assertions of Cummins and Small Generator Coalition, we do not view the policy as 

creating rate pancaking or an undue burden for the Small Generating Facility. Thus, we 

adopt the Order No. 2003 pricing policies for small generator interconnections in this 

Final Rule. 

426. With regard to Cummins's concern that the Transmission Provider may be able to 

force the Small Generating Facility to bear unreasonable costs, we note that our principal 

purpose in adopting a standardized procedures document and agreement for generator 

interconnections, and making them part of the Transmission Provider's tariff, is to 

eliminate much of the opportunity for the Transmission Provider to act in this manner. 

Indeed, adoption of this Final Rule should greatly reduce the likelihood of the two 

negative experiences that Cummins describes, if indeed the cost were unreasonable. 
Docket No. RM02-12-000 - 112 - 

427. In response to MidAmerican, this Final Rule applies only to generator 

interconnections that are under the jurisdiction of the Commission. It does not apply 

where we do not have jurisdiction. Although state regulators or other rate-making 

authorities may model their own policies after those adopted herein, or the similar 

NARUC Model, they are free to establish whatever rules for determining cost 

responsibility that they deem reasonable for interconnections under their jurisdiction. 

428. The Commission modified and clarified its pricing policy for Large Generator 

Interconnections in Order Nos. 2003-A and 2003-B, which were issued after the Small 

Generator Interconnection NOPR in this proceeding. Upon review of the revisions to the 

Commission's pricing policy included in those orders, we conclude that they should apply 

to the interconnection of Small Generating Facilities as well. Therefore, we are revising 

the Proposed SGIA to reflect our current interconnection pricing policy as modified by 

Order Nos. 2003-A and 2003-B. (See articles 4 and 5 of the SGIA) 

Implementation of the Interconnection Pricing Policy for Small Generating 

Facilities 

Comments 

429. Midwest ISO notes that Chart 1 of the Proposed SGIP shows a difference between 

the Point of Interconnection and the "point of common coupling"123 and says that 

equipment Upgrades may sometimes be needed between these two points. Midwest ISO 

asks who is to be responsible for such Upgrades and whether transmission service credits 

will be provided to the Interconnection Customer if it finances the Upgrades. 

430. Empire District agrees that Upgrades that are directly assigned, such as radial 

extensions to the generator, should not be paid for (or reimbursable to the Interconnection 

Customer) by the Transmission Provider. In addition, it states that interconnection costs 

should be treated in a manner similar to the crediting methods used by the Southwest 

Power Pool (which Empire District does not describe). 

 123 The term "Point of Common Coupling" is not used in the SGIP and SGIA. 
Docket No. RM02-12-000 - 113 - 

431. Many commenters support the Commission's proposal to directly assign the cost of 

Distribution Upgrades to the Interconnection Customer.124 For example, AEP states that a 

Distribution Upgrade that is required to accommodate the proposed generator does not 

benefit all users; rather, its sole purpose is to accommodate one customer. AEP contends, 

therefore, that it is entirely reasonable for the Interconnection Customer to be responsible 

for the cost of the Distribution Upgrade. Cinergy states that such responsibility follows 

from the radial nature of the Distribution System and is consistent with the LGIA. 

Baltimore G&E states that the Commission must guarantee that distribution utilities 

receive full cost recovery from interconnecting Small Generating Facilities to avoid 

subsidization by retail customers. 

432. Nevada Power agrees that the cost of Distribution Upgrades should be directly 

assigned to the Interconnection Customer, but is concerned that Proposed SGIA 

article 5.1.3 does not adequately protect the Transmission Provider from having to bear 

such costs. This article could be construed to say that wholesale transactions by the 

Interconnection Customer change the segment of the distribution facilities to which the 

Interconnection Customer connects into transmission facilities. Nevada Power argues that 

the Proposed SGIA definition of Transmission System illustrates this concern: 

"Transmission System shall mean the facilities owned, controlled or operated by the 

Transmission Provider or Transmission Owner that are used to provide transmission 

service under the Tariff." An inference can be drawn that what was previously a 

distribution facility is now a transmission facility because it provides transmission service, 

and is therefore subject to the crediting process. To address this concern, Nevada Power 

proposes specific changes to Proposed SGIA article 5.1.3. 

433. SoCal Edison notes that in the Small Generator Interconnection NOPR, 

Distribution Upgrades and Network Upgrades are both defined as being at or beyond the 

Point of Interconnection. Distribution Upgrades are defined as upgrades to the 

Distribution System, while Network Upgrades are defined as upgrades to the 

Transmission System. However, "Transmission System" is defined to include any facility, 

be it transmission or distribution, that is subject to an OATT. Therefore, SoCal Edison 

contends that because "Transmission System" is defined to include portions of the 

Distribution System, the definition of Network Upgrades (in combination with other 

provisions of the SGIP and SGIA) is confusing. SoCal Edison argues that keeping the 

terms Transmission System and Distribution System distinct is crucial. For this reason, 

 124 See, e.g., AEP, Alabama PSC, Baltimore G&E, Central Maine, Cinergy, 

Consumers, MidAmerican, Mississippi PSC, Nevada Power, NRECA, and SoCal Edison. 
Docket No. RM02-12-000 - 114 - 

the definition of Transmission System needs to exclude distribution facilities, which 

facilities already are included in the term Distribution System. 

434. In a similar vein, PacifiCorp argues that the definition of Network Upgrades must 

be revised to prevent it from being applied to Upgrades to a Transmission Provider's 

Distribution System. The Proposed SGIA's definition of Network Upgrades could be read 

to include Upgrades to radial feeders or other facilities that are part of the Transmission 

Provider's Distribution System. In PacifiCorp's view, Network Upgrades should include 

only Upgrades to networked transmission or sub-transmission facilities. Any Upgrades to 

radial feeders or other facilities that make up the Transmission Provider's Distribution 

System should be paid for by the Interconnection Customer without credits. 

435. PSE&G states that the definition of Network Upgrades should be modified as 

follows: "[Network Upgrades] shall mean the additions, modifications and 

upgrades...required (strike out "at or") beyond the point at which the Interconnection 

Customer interconnects to the Transmission Provider's or Transmission Owner's or 

distribution owner's (strike out "Transmission" and add "Distribution") System to 

accommodate the Generating Facility..." 

436. NRECA states that the Commission has an important role in determining whether 

facilities are distribution or transmission. The Commission should apply the seven-factor 

test where there are disputes and should not in doing so give undue deference to state or 

public utility classifications of facilities. As shown by cases such as Arkansas Power & 

Light,

125 the Commission may conclude that a facility serves a transmission function even 

if it is lower voltage and serves a few end-use customers, if the predominant use of the 

facility is to provide wholesale transmission service. 

437. In addition, NRECA seeks clarification of the NOPR's statement that "if a proposed 

interconnection passes either the super-expedited screening procedures or the expedited 

screening procedures, the Interconnection Customer would have no cost responsibility for 

Upgrades." NRECA contends that this contradicts article 5.1.3 of the Proposed SGIA 

(Distribution Upgrades), and thus is inconsistent with the Commission's proposal to 

require Distribution Upgrades to be directly assigned to the Interconnection Customer. 

 125 Arkansas Power & Light Co. v. FPC, 368 F. 2d 376 (8th Cir. 1966) (Arkansas 

Power & Light). 
Docket No. RM02-12-000 - 115 - 

Furthermore, the statement would shift costs from the Interconnection Customer to 

utilities and their other customers. Also, Cummins says that the proposal runs counter to, 

or may confuse the application of, screens that would expedite the interconnection 

process. 

438. Small Generator Coalition states that although Proposed SGIA article 5.1.5 gives 

the Interconnection Customer an opportunity to demonstrate benefits to the Transmission 

Provider's electric system that would reduce the Interconnection Customer's costs, the 

NOPR's discussion of Distribution Upgrades at P 72 appears to rule out any cost 

reductions for Distribution Upgrades. In addition, Small Generator Coalition argues that 

ambiguous NOPR provisions may permit Transmission Owners to require the 

Interconnection Customer to pay for Network Upgrades with no compensation to the 

Interconnection Customer or consideration of network benefits. Because downstream 

resources can benefit system reliability, Small Generator Coalition argues that the 

Commission's rule should allocate Upgrade costs according to benefits to all portions of 

an affected Transmission System, including facilities operating at distribution voltages. 

439. Alabama PSC and Mississippi PSC argue that distribution facilities should be 

directly assigned. However, because the Commission lacks jurisdiction over distribution 

facilities, cost responsibility for Distribution Upgrades is an issue for state regulators to 

address. 

440. Midwest ISO notes that Proposed SGIA article 5.1.5 provides that if the Parties 

agree that the Small Generating Facility benefits the Transmission Provider's electric 

system, the Interconnection Customer's cost responsibility may be reduced accordingly. 

The Small Generator Interconnection NOPR says that, if multiple facilities are involved, 

pro rata allocation of the costs or benefits must be made. These provisions appear to 

conflict with the NOPR's proposal at P 71, which allows an RTO flexibility with respect 

to interconnection pricing. 

Commission Conclusion 

441. With reference to Chart 1 of the Proposed SGIP, Midwest ISO asks who is 

responsible for the cost of Upgrades between the point of common coupling and the Point 

of Interconnection. Chart 1 was in error. The Point of Interconnection is the point 

identified as the point of common coupling, which is the point in the diagram where the 

Interconnection Facilities connect to the Transmission Provider's Distribution System 

subject to an OATT. Thus, the Upgrades to which Midwest ISO refers are in fact 

Interconnection Facilities, and their cost is directly assigned to the Interconnection 

Customer. 
Docket No. RM02-12-000 - 116 - 

442. In response to Empire District, we confirm that radial extensions to the Small 

Generating Facility are to be directly assigned to the Interconnection Customer if they are 

Interconnection Facilities; that is, if the radial line is a sole use facility located between the 

Small Generating Facility and the Point of Interconnection, its cost is directly assigned to 

the Interconnection Customer. Also, Empire District recommends that the Commission 

adopt a crediting policy that is similar to the methods set forth by the Southwest Power 

Pool. However, Empire District does not explain how its recommended methods differ 

from or are better than those proposed in the NOPR. 

443. In order to eliminate the confusion expressed by Nevada Power, SoCal Edison and 

others about the distinction between Distribution Upgrades and Network Upgrades, we are 

adding the following sentence to the definition of Network Upgrades: "Network 

Upgrades do not include Distribution Upgrades." 

444. NRECA seeks clarification of the Small Generator Interconnection NOPR's 

statement that "if a proposed interconnection passes either the super-expedited screening 

procedures or the expedited screening procedures, the Interconnection Customer would 

have no cost responsibility for Upgrades." The issue of who pays for an Upgrade in the 

case of a proposed interconnection passing all the screens is moot because one of the 

provisions of SGIP section 2.2.1 is a requirement to pass a screen that the interconnection 

must not require an Upgrade. 

445. Small Generator Coalition is concerned that the Proposed SGIA may assign to the 

Interconnection Customer cost responsibility for Interconnection Facilities in a way that 

gives no recognition to the benefits that the Interconnection Facilities may bring to the 

Transmission Provider’s electric system. In response, we clarify that the Interconnection 

Customer is responsible for the cost of Interconnection Facilities except when such cost is 

shared with other entities that may benefit from the Interconnection Facilities by 

agreement of the Interconnection Customer, the other entities, and the Transmission 

Provider. This provision for cost sharing is included in SGIA article 4.1.1. 

446. Small Generator Coalition also asks about sharing cost responsibility for 

Distribution Upgrades and initial funding responsibility for Network Upgrades. The 

Interconnection Customer is responsible for the upfront funding of Network Upgrades 

unless the Transmission Provider elects to provide the upfront funding itself. This 

payment option is included in SGIA article 5.2. However, we are not adopting the explicit 
Docket No. RM02-12-000 - 117 - 

cost sharing provisions of Proposed SGIA article 5.1.5 relating to Distribution Upgrades 

because they are not consistent with Order No. 2003 which specified that all Distribution 

Upgrades shall be directly assigned to the Interconnection Customer.126

447. In response to Midwest ISO, we clarify that we are allowing flexibility for the 

pricing that an independent Transmission Provider may propose to adopt, subject to 

Commission approval, under the "independent entity" variation. Accordingly, an 

independent Transmission Provider may propose a pricing method that differs from what 

this Final Rule otherwise requires. 

448. Alabama PSC and Mississippi PSC assert that cost responsibility for Distribution 

Upgrades is beyond the scope of the Commission's authority. As explained above, the 

Commission's assertion of jurisdiction here is no broader than in Order No. 888. This 

Final Rule applies to interconnections with a Transmission System or with a Distribution 

System subject to an OATT for the purpose of making wholesale sales. The 

Commission's authority over such interconnections with Distribution Systems, for the 

purposes of making a wholesale sale of electricity in interstate commerce, includes 

allocating the cost of all of the Transmission Provider’s Upgrades needed to effect the 

interconnection.. Otherwise, the Commission could not ensure that the costs incurred to 

provide a jurisdictional service are allocated appropriately. The pricing policy for 

Distribution Upgrades directly assigns costs to the Interconnection Customer so there is no 

impact on retail customers of the Distribution System. 

Responsibility for Operation and Maintenance Costs 

449. Proposed SGIA article 5.1.4 stated that the Interconnection Customer is responsible 

for the operating and maintenance costs associated with the Interconnection Facilities that 

it owns as well as those owned by the Transmission Provider. The Proposed SGIA did not 

assign responsibility for O&M costs associated with Network Upgrades or Distribution 

Upgrades. 

 126 See LGIA article 11.3 ("The Interconnection Customer shall be responsible for 

all costs related to Distribution Upgrades.") 
Docket No. RM02-12-000 - 118 - 

Comments 

450. Central Maine and NYTO ask the Commission to clarify that the Interconnection 

Customer is responsible for ongoing O&M costs associated with Network Upgrades when 

the Interconnection Customer does not take and pay for transmission service for the output 

of its Small Generating Facility. 

451. Southern Company contends that Proposed SGIA article 5.1.4 contemplates that 

the Interconnection Customer is responsible for all reasonable expenses associated with 

operating and maintaining its own Interconnection Facilities and the Transmission 

Provider's Interconnection Facilities, but it is unclear whether all applicable O&M costs 

are covered. It notes that LGIA article 10.5 does not limit O&M cost recovery to the 

Transmission Provider's Interconnection Facilities, but explicitly provides that the 

Interconnection Customer is responsible for all reasonable O&M costs. Therefore, 

Southern Company proposes to revise article 5.1.4 to include Distribution Upgrades so as 

to ensure that all appropriate O&M costs are included. 

452. Robert L. Carrey contends that the Interconnection Customer should pay only the 

O&M costs of the Interconnection Facilities built on its behalf. He argues that the 

Interconnection Customer should not have to pay for routine O&M costs where no 

Interconnection Customer and Transmission Provider share the same poles and rights-ofway. 

Commission Conclusion 

453. The Commission has long held that O&M costs associated with Network Upgrades 

cannot be directly assigned to the Interconnection Customer, because Network Upgrades 

are part of the integrated transmission system from which all transmission users benefit. 127 

 127 See, e.g., PJM Interconnection, L.L.C., 109 FERC ¶ 61,326 (2004) (holding that 

O&M costs associated with Network Upgrades may not be directly assigned to the 

Interconnection Customer). We note, however, that the Transmission Provider may 

propose to recover the cost of Network Upgrades from the Interconnection Customer 

through an incremental transmission rate. In that case, the Commission would entertain a 

proposal to include in the incremental rate O&M costs associated with the Network 

Upgrades. Order No. 2003-B at P 57. 
Docket No. RM02-12-000 - 119 - 

Therefore, we deny the requests of Central Maine and NYTO that the Commission require 

the Interconnection Customer to pay O&M costs associated with Network Upgrades.128

454. While the SGIA authorizes the Transmission Provider to collect O&M costs 

associated with Interconnection Facilities, this Final Rule does not contain a rate recovery 

mechanism for collecting those costs, because such costs will vary from case to case. 

Therefore, if a Transmission Provider wishes, it may propose and justify its rate to recover 

such costs under section 205 of the FPA.129 In response to Southern Company, a 

Transmission Provider may make a similar filing to recover from the Interconnection 

Customer an appropriate share of any Commission-jurisdictional component of the O&M 

costs of Distribution Upgrades. Absent Commission approval of such a rate schedule, the 

Transmission Provider may not collect Commission-jurisdictional O&M costs associated 

with Interconnection Facilities or Distribution Upgrades. 

455. In response to Mr. Carrey, the Transmission Provider is free to propose to recover 

these expenses in any manner it sees fit; however, the Commission will approve the 

Transmission Provider's proposed rate if it is shown to be just and reasonable and not 

unduly discriminatory or preferential. 

Responsibility for the Construction of Upgrades 

456. Proposed SGIA article 5.1.2 stated that the Transmission Provider or Transmission 

Owner shall design, procure, construct, install, and own the Network Upgrades. 

Comments 

457. PacifiCorp states that the Parties should be permitted to agree that the Network 

Upgrades will be built by the Interconnection Customer on its land. This could facilitate a 

faster interconnection. In addition, Proposed SGIA article 3.3 should be revised to give 

the Transmission Provider the right to inspect, operate, or maintain Network Upgrades on 

the Interconnection Customer's land. 

 128 This issue was discussed at P 421-424 of Order No. 2003-A. 

129 16 U.S.C. § 824d (2000); see also 18 CFR § 35.12 (2004). 
Docket No. RM02-12-000 - 120 - 

458. AMP-Ohio states that, in the region where its members' Distribution Systems are 

located, the Transmission Provider would be an RTO. It notes that Proposed SGIA 

article 5.1.3 stated that the "Transmission Provider or Transmission [Owner] shall design, 

procure, construct, install, and own the distribution Upgrades..." AMP-Ohio is concerned 

that this article could be construed to allow the RTO to own and operate piecemeal 

sections of a member's electric system. The Commission should clarify that one entity 

cannot assert the right to own a portion of another's electric system. 

Commission Conclusion 

459. In response to PacifiCorp, neither Proposed SGIA article 5.1.2 nor article 5.1.3 

precluded the Parties from agreeing that the Interconnection Customer may construct 

Network Upgrades or Distribution Upgrades on its own land. Nevertheless, we make this 

option explicit in SGIA articles 4.2 and 5.2. PacifiCorp's proposed revisions to Proposed 

SGIA article 3.3 are addressed above in our discussion of that article. 

460. In response to AMP-Ohio, we clarify that this Final Rule does not authorize any 

entity, including the Transmission Provider, to own a portion of another entity's 

Transmission System without the permission of the Transmission Owner. 

Miscellaneous Pricing Issues 

Comments 

461. PacifiCorp notes that Proposed SGIA article 5.1.2.1 would permit a refund to an 

Interconnection Customer whose Small Generating Facility does not achieve commercial 

operation, if another customer uses the Network Upgrades for which the first 

Interconnection Customer paid. PacifiCorp asks that this provision specify that a refund is 

available only if the second Interconnection Customer actually requires the Network 

Upgrades for its Small Generating Facility. 

462. TAPS states that the NOPR does not make the Transmission Provider remove its 

own Interconnection Facilities from rate base. 

Commission Conclusion 

463. We agree with PacifiCorp that the first Interconnection Customer should not 

receive a refund of amounts it has advanced for Network Upgrades unless the later 

Interconnection Customer's Small Generating Facility actually would have required the 

construction of the Network Upgrades. However we believe that the SGIA, as written, 
Docket No. RM02-12-000 - 121 - 

makes this clear. To make a change to this provision would imply that it means 

something different from the similar provision adopted in the LGIA, and that is not our 

intent, therefore we decline to accept PacifiCorp’s proposed modification. 

464. With regard to the issue that TAPS raises, the Commission addressed this matter in 

Order No. 2003. There the Commission required the Transmission Provider to remove 

from transmission rates the costs of Interconnection Facilities constructed by the 

Transmission Provider after March 15, 2000 to interconnect generating facilities owned by 

the Transmission Provider on the effective date of the Final Rule in the Large Generator 

Interconnection proceeding.130 The Commission's conclusion about the need for the 

Transmission Provider to remove its own Interconnection Facilities from rate base was not 

intended to be limited to Large Generating Facilities. We clarify here that it applies to all 

of the Transmission Provider's Interconnection Facilities, regardless of the size of the 

associated generating facility. 

Commission Jurisdiction under the Federal Power Act

465. Sections 205 and 206 of the FPA require the Commission to remedy undue 

discrimination by public utilities. In Order No. 888, the Commission found that public 

utilities owning or controlling jurisdictional transmission facilities had the incentive to 

engage in, and had engaged in, unduly discriminatory practices.131 Because 

interconnection is an element of transmission service that must be provided under the 

OATT, the Commission in Order No. 2003 established generic interconnection terms and 

procedures under its authority to remedy undue discrimination under sections 205 and 

206.132 The Small Generator Interconnection NOPR proposed that its jurisdictional reach 

would be identical to Order No. 2003. 

 130 See Order No. 2003 at P 744 and Order No. 2003-A at P 663. 

131 Order No. 888 at 31,679-84; Order No. 888-A at 30,209-10. 

132 Order No. 2003 at P 18-20. 
Docket No. RM02-12-000 - 122 - 

Comments

466. NARUC, NRECA, several state regulatory commissions,133 and others134 argue that 

the Small Generator Interconnection NOPR unlawfully encroaches upon the jurisdiction 

of the states by proposing to regulate interconnections with "local distribution" facilities. 

467. Many of the commenters opposing the Commission's exercise of jurisdiction over 

facilities used both for Commission-jurisdictional and for state-jurisdictional transactions 

("dual-use" facilities) cite Detroit Edison.

135 They appear to have read Detroit Edison as 

forbidding the exercise of federal jurisdiction over any facilities used to any degree to 

distribute bundled power to end-users at retail, regardless of whether those facilities are 

also used for transactions that are under the Commission's jurisdiction.136 Other 

commenters, including Small Generator Coalition and SoCal Edison,137 assert that nothing 

in Detroit Edison prevents the Commission from asserting jurisdiction over all 

interconnections made to facilitate Commission-jurisdictional activities. 

468. Interconnections with "distribution" facilities, argues Alabama PSC, should be 

exclusively state-jurisdictional. It argues that "the Courts have long recognized and 

enforced the State's primacy over the regulation of distribution facilities."138 CPUC makes 

a similar argument, stating that: 

 133 E.g., Alabama PSC, CPUC, CT PUC, Florida PSC, Iowa Utilities Board, 

Mississippi PSC, North Carolina Commission, and NYPSC. 

134 E.g., Baltimore G&E, Central Maine, Consumers, EEI, Idaho Power, 

PacifiCorp, Progress Energy, and Southern Company. 

135 Shortly before comments were due in this docket, the D.C. Circuit issued 

Detroit Edison v. FERC, 334 F.3d 48 (D.C. Cir. 2003) (Detroit Edison). Since then, the 

Commission has issued both Order Nos. 2003-A (at P 705 et seq.) and 2003-B (at P 14), 

which discuss Detroit Edison at length. 

136 Alabama PSC at 4-5 (citing 16 U.S.C. § 824(b) (2003), which states that "[t]he 

Commission . . . shall not have jurisdiction . . . over facilities used in local distribution . . . 

.") 

137 Id. at 10 (emphasis in original).

138 Id. at 5 (citing Southern Co. Services, Inc. v. FCC, 293 F.3d 1338, 1344 (11th 

Cir. 2002)). 
Docket No. RM02-12-000 - 123 - 

federal law was meant to supplement – and not to supplant – state 

regulation of those utilities. The FPA was enacted to fill in gaps not 

covered by state regulation, not as a mechanism for avoiding state 

regulation of public utilities. In enacting the FPA, Congress did not 

purport to exercise all of the authority it might have exercised under 

the Commerce Clause, because its intention was to preserve, not 

override, state regulatory jurisdiction.[139] 

469. Alabama PSC, Mississippi PSC, and Southern Company also cite the preemption 

doctrine (that federal preemption of state law is not to be assumed unless Congress 

expresses a clear intent to do so) as another reason why the Commission is not permitted 

to exercise jurisdiction over "distribution" facilities. "To the contrary," Alabama PSC 

argues, "the FPA expressly provides that FERC does not have such jurisdiction."140

470. CT PUC asks the Commission to clarify that this Final Rule does not preempt state 

regulatory authority with respect to electric distribution company regulation, 

environmental protection (including Clean Air Act permitting), fire and building safety 

regulation, etc., as these may apply to Small Generating Facility interconnections with 

"distribution" facilities. 

471. Idaho Power states that "[t]he 'dual use' theory leaves the "distribution" facility 

owner that is trying to design an efficient and reliable "distribution" system in the 

untenable position of having two masters attempting to control the same physical line for 

differing purposes."141

472. PacifiCorp cites forum shopping concerns and suggests that a Small Generating 

Facility interconnecting as a Qualifying Facility (QF) to a dual use facility could receive 

different treatment depending on whether it sells its output to the host utility under the 

Public Utility Regulatory Policies Act of 1978 (PURPA)142 or to a customer other than the 

host utility. In the first instance, the interconnection would be state-jurisdictional; in the 

 139 CPUC at 8 (citing Conn. Light & Power Co. v. FPC, 324 U.S. 515, 529-30 

(1945)). 

140 Alabama PSC at 6 (citing 16 U.S.C. § 824(b)). 

141 Idaho Power at 3. 

142 16 U.S.C. § 824a-3 (2004). 
Docket No. RM02-12-000 - 124 - 

second, Commission-jurisdictional. PacifiCorp asserts that this is a confusing outcome 

and could be avoided if the Commission disclaims jurisdiction over low voltage and dual 

use facilities. 

473. Small Generator Coalition argues that not asserting jurisdiction over all 

interconnections made to facilitate Commission-jurisdictional activities means adopting a 

circuit-by-circuit approach to jurisdiction. This would be contrary to the Commission's 

approach taken in a variety of contexts, including assignment of system losses143 and 

recovery of fixed costs144 on a system-wide basis. Further, if the Commission allows a 

Transmission Provider to refuse interconnections with the low-voltage "distribution" 

portions of its system not already used for jurisdictional transactions, "small resource 

development would be inhibited if not eliminated."145 Transmission Providers could "pick 

and choose among interconnection applicants based on any criteria they elected to 

employ."146 Finally, Small Generator Coalition argues that the Commission adequately 

recognizes state jurisdiction by claiming jurisdiction over only interconnections with 

"distribution" facilities that are used for wholesale transactions. 

474. NRECA argues that, as more and more distributed generators participate in the 

wholesale market, "many if not most distribution facilities will carry a few wholesale 

electrons."147 Indeed, "many if not most distribution facilities will become subject to 

Commission jurisdiction. The jurisdictional divide between the Federal Government and 

the States that Congress clearly intended in the FPA will have collapsed."148 Baltimore 

G&E asks the Commission to explain how it will avoid a "chicken and egg" situation 

where the jurisdictional status of a particular facility would change after the 

interconnection takes place. 

 143 Small Generator Coalition at 37 (citing Northern States Power Co. v. FERC, 

30 F.3d 177 (D. C. Cir. 1994)). 

144 Id. (citing Fort Pierce Utilities Authority v. FERC, 730 F.2d 778, 782 (D.C. Cir. 

1984)). 

145 Id. at 39. 

146 Id. at 39. 

147 NRECA at 41. 

148 Id.
Docket No. RM02-12-000 - 125 - 

475. Solar Turbines expresses concern that "[a] utility apparently need merely deny that 

a particular line is currently being used for any transmission of power in interstate 

commerce or for any sales for resale, and can then refuse to accept an application for 

interconnection to that specific facility"149 and requests that the Commission clarify what 

the Interconnection Customer should do if it finds itself in such a situation. 

476. MidAmerican asks whether this Final Rule would apply to a net metering 

arrangement that allows a Small Generating Facility to net only a portion of its output and 

resell the remainder to the host utility. It also asks what happens if it sells the non-net 

metered portion of its output to a third party. 

477. Avista asks the Commission to address the effect of Detroit Edison on an 

interconnection for a purpose other than to "engage in sale for resale in interstate 

commerce or to transmit electricity in interstate commerce." Avista differentiates "load 

interconnections" from "generator interconnections," which are interconnections made to 

export power. It requests clarification that a load interconnection to a dual use facility is 

an exclusively state-jurisdictional interconnection "except if and to the extent there is an 

OATT on file by the owner of the facilities that makes available new Commissionjurisdictional service over those facilities."150 Absent such a clarification, Avista argues 

that "uncontrolled deregulation of service at the distribution level may occur, since any 

new load can seek to characterize its service as 'wholesale' by inserting a 'sham utility' 

between the customer and the incumbent utility."151 Avista states that FPA section 212(h) 

already prohibits "sham wholesale transactions"152 and argues that "the Commission has 

determined that Section 212(h) only applies to transmission orders, not interconnection 

 149 Solar Turbines at 4. 

150 Avista at 9. 

151 Id. at 9-10 (citing, e.g., Snake River Valley Elec. Ass'n v. PacifiCorp, 238 F.3d 

1189 (9th Cir. 2001)). 

152 16 U.S.C. § 824k(h) (2000). 
Docket No. RM02-12-000 - 126 - 

requests."153 Without such a clarification, Avista fears that load interconnections with 

dual use facilities could be used to force otherwise non-Commission-jurisdictional 

"distribution" facilities into Commission-jurisdictional status. 

478. USCHPA and Solar Turbines ask the Commission to exert jurisdiction over all load 

interconnections. Additionally, many cogeneration projects, USCHPA asserts, make 

sporadic sales of power when the economics favor doing so. Such projects should not be 

denied the benefits of standardized interconnection rules simply because their sales into 

the wholesale energy marketplace are sporadic. Solar Turbines argues that the needs of 

Small Generating Facilities are different and that there are good reasons to depart from the 

large generator precedent in this rulemaking. Specifically, Small Generating Facilities are 

more likely to be near to load, while Large Generating Facilities are more likely to be far 

from their load. 

479. Midwest ISO argues that all interconnections with "distribution" facilities within an 

RTO or ISO to sell power at wholesale should be processed under a single set of rules. 

This would include both state- and Commission-jurisdictional facilities. Midwest ISO 

remarks that regardless of "[w]hether the physical requirements of the interconnection 

come under the RTO's purview, the generating facility's operation will" come under the 

RTO's jurisdiction. Therefore, the RTO should be able to "evaluate the proposed 

interconnection with the generating facility's subsequent operation in mind."154

480. Finally, several comments address whether the use of a 69 kV cutoff in the SGIP 

affects the Commission's jurisdiction. 

Commission Conclusion 

481. The Commission's assertion of jurisdiction in this Final Rule is identical to the 

jurisdiction asserted in Order Nos. 2003 and 888 and upheld by the Supreme Court in New 

York v. FERC. Just as the Commission stated in Order No. 2003-A: 

 153 Avista at 9-10 (citing Laguna Irrigation District, 95 FERC ¶ 61,305 (2001), aff'd 

sub nom. Pacific Gas & Electric Co. v. FERC, 44 Fed. Appx. 170 (9th Cir. 2002) 

(unpublished opinion); City of Corona v. Southern California Edison Co., 101 FERC 

¶ 61,240 at 62,025-026 (2002)). 

154 Midwest ISO at 6. 
Docket No. RM02-12-000 - 127 - 

There is no intent to expand the jurisdiction of the Commission in 

any way; if a facility is not already subject to Commission 

jurisdiction at the time interconnection is requested, the Final Rule 

will not apply. Thus, only facilities that already are subject to the 

Transmission Provider's OATT are covered by this rule. The 

Commission is not encroaching on the States' jurisdiction and is not 

improperly asserting jurisdiction over "local distribution" 

facilities.[155] 

482. Many commenters seek clarification of issues (particularly related to the Detroit 

Edison case) that were discussed at length in Order Nos. 2003-A and 2003-B, which were 

issued after comments on the Small Generator Interconnection NOPR were due.156 Since 

the jurisdiction asserted in this Final Rule is identical to that asserted in Order No. 2003, 

we adopt here our discussion from those orders rather than repeat the same information. 

483. However, several commenters focused on how the jurisdictional issues raised by 

small generator interconnections may differ from those raised in the Large Generator 

Interconnection rulemaking. Additionally, some commenters raised issues in this 

proceeding that were not addressed in Order Nos. 2003-A or 2003-B. These issues we 

discuss in more detail below. 

484. We disagree with Alabama PSC, Mississippi PSC, and Southern Company that the 

Commission is evading FPA section 201(b)(1) or preempting state law. In New York v. 

FERC, the U.S. Supreme Court approved the Commission's assertion of jurisdiction in 

Order No. 888.157 The applicability of this Final Rule is identical to the applicability of 

Order No. 888. 

 

485. CT PUC is correct that this Final Rule in no way alters the permitting and other 

environmental requirements applicable to Interconnection Customers. Nor does this Final 

Rule affect any other state police powers. 

 155 Order No. 2003-A at P 700. 

156 See Order No. 2003-A at P 698 et seq. and Order No. 2003-B at P 12 et seq.

157 New York v. FERC, 535 U.S. 1 (2002). 
Docket No. RM02-12-000 - 128 - 

486. NRECA asserts that while there are now relatively few Small Generating Facility 

interconnections that are Commission-jurisdictional, that number will increase as time 

passes. Small Generator Coalition complains that the number of lower voltage 

Commission-jurisdictional facilities is too small. Ultimately, however, the Commission's 

jurisdiction does not rest on how common dual use facilities may be or how many 

interconnections are Commission-jurisdictional. 

487. Baltimore G&E asks if the jurisdictional status of a facility would change after an 

interconnection takes place. Whether a facility is subject to this rule depends on whether 

it is subject to an OATT at the time the Interconnection Request is filed. The use of a 

facility and thus its inclusion in an OATT can change over time. Nothing in this Final 

Rule (or Order No. 2003) alters the status of any facility. 

488. Avista is correct that some interconnections are made simply to receive power from 

the electric system. These "load interconnections" are not subject to this Final Rule. 

489. In response to USCHPA's concern over Interconnection Customers who may wish 

to make sporadic sales of power into the marketplace, we clarify that there is no 

requirement that an Interconnection Customer's participation in the wholesale marketplace 

be constant. An Interconnection Customer is free to request interconnection service and 

then wait until the economics are favorable before actually making a wholesale sale. 

490. In response to Midwest ISO's desire to process all interconnections (whether to 

Commission-jurisdictional or non-Commission-jurisdictional facilities) under its tariff, we 

note that the Commission does not have the authority to order states to use Midwest ISO's 

tariff to process interconnections with state or other non-jurisdictional facilities. 

However, we encourage the states and others to use the Commission's interconnection rule 

or the NARUC Model as a starting point for developing their own interconnection rules. 

491. Many commenters also address the legality of the Small Generator Interconnection 

NOPR's proposed use of 69 kV to determine whether portions of the SGIP would apply. 

Since the Commission has abandoned this distinction in this Final Rule, these arguments 

are moot. 
Docket No. RM02-12-000 - 129 - 

Arguments that the Commission Should Delay or Abandon the Small 

Generator Interconnection Rulemaking 

492. Several commenters argue that the Proposed SGIP and Proposed SGIA are too 

complicated for small entities and would create a barrier to entry. Some commenters 

argue that the Commission should delay issuing a Final Rule and allow the various states 

and other entities to develop their own model rules. Others disagree.158

493. This Final Rule includes several provisions to address these concerns. First, we are 

adopting a separate application/procedures/terms and conditions document for very small 

certified inverter-based Small Generating Facilities. This is a big step in facilitating quick 

interconnections at very little cost, as long as they can be made safely and without 

harming reliability. We are also simplifying many SGIA provisions at the request of 

commenters. This Final Rule borrows liberally from NARUC's Model interconnection 

rules, which are simpler than the Small Generator Interconnection NOPR. 

494. We address below specific comments relating to our decision to proceed with this 

Final Rule. We have divided commenters' arguments into three sections: (1) arguments 

that the Commission should defer to the states to deal with small generator 

interconnections; (2) arguments that the Commission's NOPR is too complex; and 

(3) arguments that the Commission should adopt a policy statement or model rules instead 

of a Final Rule. 

Arguments in Favor of Deferring to the States on Small 

Generator Interconnections 

Comments 

495. NARUC proposes that the Commission adopt its Model, arguing that it "would 

offer the greatest possibility of consistency between Federal and State interconnection 

policies"159 It explains that "the NARUC Model was developed by melding the best 

 158 CT DPUC at 1 ("The CT DPUC generally supports the effort by the 

Commission to initiate standardization of interconnection agreements and procedures . . . 

."); see also Cummins at 1 ("We strongly support the Commission's continued work in this 

area.") 

159 NARUC at 18. 
Docket No. RM02-12-000 - 130 - 

practices of existing State distributed generation interconnection programs."160 NARUC 

argues in its supplemental comments that state programs are successful and that imposing 

an unnecessary layer of federal regulation will be disruptive to small generator developers 

and customers. Commission action can only create confusion and impede project 

development. Because states have better insight into local operating, planning, safety, 

reliability, and adequacy needs and conditions, they are in the best position to address the 

interconnection of small generators, regardless of what those generators may do with the 

output from their facilities or where they are interconnected. At bottom, NARUC urges 

the Commission to take no action on the Small Generator Interconnection NOPR. In the 

alternative, if the Commission implements small generator interconnection rules, it should 

grandfather existing state interconnection programs and the interconnections 

accomplished under such programs, and include a mechanism for granting deference to 

future state small generator interconnection programs. 

496. CPUC states that California, New York, Ohio, and Texas all have interconnection 

procedures applicable to their state-regulated utility "distribution" systems.161 Because 

one third of the country's population already lives in states with standard interconnection 

rules, there is no need for Commission action. It also contends that (1) existing California 

interconnection rules meet the needs of small generators seeking to connect to statejurisdictional utility "distribution" systems, (2) California procedures already provide 

small generators with one-stop shopping, and (3) there is no "actual or legitimate need for 

FERC assistance to cover interconnections to state-jurisdictional facilities in states where 

distributed generation interconnection rules are already in place."162

497. Furthermore, CPUC argues, only state-specific interconnection rules can account 

for "regional practices." As an example, CPUC's rules allow it to exempt small 

Transmission Providers, but the Small Generator Interconnection NOPR lacks such 

needed flexibility.163 In sum, CPUC questions the need for the Commission's proposal 

 160 Id. at 8. 

161 Virginia, Massachusetts, and other states also have small generator 

interconnection rules. 

162 CPUC at 16. 

163 Id. at 18. 
Docket No. RM02-12-000 - 131 - 

and asserts that "there is no legitimate public policy basis for the assertion of FERC 

jurisdiction over small generators that would result if the FERC proposal were 

adopted."164

498. In contrast, Cummins argues that the Commission should assert jurisdiction over all 

interconnections, regardless of whether the interconnection is with a Commissionjurisdictional facility. Cummins argues that, although Small Generating Facilities often 

connect at the "distribution" level, their effects can be felt on the Transmission System. It 

explains that, because Small Generating Facilities can relieve congestion on crowded 

transmission facilities, the effect of even on-site Small Generating Facilities is felt beyond 

the Point of Interconnection. Thus, it is important that the Commission use all its 

jurisdictional authority to apply this rule as broadly as possible. And, where the 

Commission does not have jurisdiction, Cummins encourages state regulators to develop 

interconnection rules that are consistent with this Final Rule. 

499. Plug Power claims that by not proposing standards applicable to interconnections 

with distribution facilities, the Commission's interconnection rules will not help small 

generators. Further, the rules proposed in the NOPR are inferior to those already in place 

in several states. 

500. EEI urges the Commission to work with states to better define the state-federal role 

in small generator interconnections. According to EEI, this approach would provide both 

Interconnection Customers and Transmission Providers with clear guidance as to which 

rules apply to which interconnections. Finally, EEI states that, with certain modifications, 

the interconnection procedures document and agreement could be a model for use by both 

federal and state authorities to process small generator Interconnection Requests. 

501. CT DPUC, while supporting the Commission's efforts, argues that this Final Rule 

should not lead to a loss of state jurisdiction. 

Commission Conclusion 

502. We agree with commenters that general consistency between the Commission's 

interconnection procedures document and agreement and those of the states will be helpful 

to removing roadblocks to the interconnection of small generators. To a large extent, this 

Final Rule harmonizes state and federal practices by adopting many of the provisions 

 164 Id. at 15. 
Docket No. RM02-12-000 - 132 - 

proposed by NARUC and Joint Commenters. This Final Rule adopts interconnection 

rules that are largely consistent with the "best practices" interconnection rules proposed by 

NARUC. By doing so, we hope to minimize the federal-state division and promote 

consistent, nationwide interconnection rules.165 We hope that states that do not currently 

have interconnection rules for small generators will look to the documents presented in 

this Final Rule and the NARUC Model as guides for their own rules. To grandfather 

existing state interconnection programs and grant deference to future state small generator 

interconnection programs would not fulfill the Commission’s statutory mandate to 

regulate jurisdictional activities, of which generator interconnection is one. However, as 

discussed elsewhere, the all-in-one document for certified inverter-based generators no 

larger than 10 kW should go a long way towards harmonizing state-federal 

interconnection practices for this class of generators. 

503. Our hope is that states may find these interconnection rules helpful in formulating 

their own interconnection processes. In particular, we hope the Fast Track and 10 kW 

Inverter Processes will prove helpful as starting points from which to develop their own 

procedures and agreements. 

504. The concerns of CPUC and several other commenters that the Commission is 

claiming jurisdiction over interconnections with non-Commission jurisdictional facilities 

are addressed elsewhere in more detail. 

Arguments that the NOPR Is Too Complex 

Comments 

505. CPUC argues that the Proposed SGIA and Proposed SGIP are too complicated for 

small Interconnection Customers, especially the smallest, to use. Small Generator 

Coalition argues that unless the Commission is willing to modify the NOPR in 

fundamental ways, many of its members believe that development of Small Generating 

Facilities would be better served if the NOPR were simply withdrawn. According to 

Small Generator Coalition, the NOPR's framing of 

interconnection issues as a competition between maintaining system 

reliability and encouraging small resources is wholly inappropriate, 

 165 A particular state's interconnection rules may also differ from the NARUC 

Model. 
Docket No. RM02-12-000 - 133 - 

and it gives disproportionate weight to the reliability 'concerns' of 

transmission/distribution owners with generating units of their own. 

That system reliability must not be compromised goes without 

saying, but the need for system reliability does not compete with the 

goal of encouraging small resource development via affordable and 

clear interconnection terms and conditions. The compatibility of 

small resources with the grid was proven long ago – there are literally 

thousands of such small resources in place and operating in the 

United States, safely interconnected with the grid (such as the solar 

array on the roof of the Commission's own office building).[166] 

506. Small Generator Coalition says that on-site Small Generating Facilities actually 

enhance electric system reliability, and that complex technical provisions should therefore 

not be required. 

507. Plug Power asserts that unless the Commission adopts a simpler SGIA, the 

Commission's rulemaking will not help to reach national interconnection standards.167 Of 

particular concern to Plug Power are the Proposed SGIA's insurance requirements and 

what Plug Power terms its open-ended cost provisions. 

508. CT DPUC urges the Commission to adopt rules that are not unnecessarily 

complicated to administer. 

Commission Conclusion 

509. We agree with commenters that the Small Generator Interconnection NOPR 

contained some provisions that were overly complicated for many Small Generating 

Facility interconnections. Wherever possible, we have simplified the SGIP and SGIA. 

And, for very small certified Small Generating Facilities, this Final Rule includes the 

highly simplified 10 kW Inverter Process. 

 166 Small Generator Coalition at 7-8. 

167 Plug Power at 3. 
Docket No. RM02-12-000 - 134 - 

Arguments in Favor of a Non-Binding Model Rule 

Comments 

510. CPUC states that it would support Commission efforts to establish non-binding 

guidelines, or a model rule, for use by states that have not yet adopted their own standards. 

511. NARUC comments that any standard interconnection procedures document and 

agreement issued by the Commission that disclaims jurisdiction over "local distribution" 

facilities has limited applicability. It also claims that states are better situated to handle 

small generator interconnections, and having two competing interconnection regimes for 

small generator interconnections would be confusing. NARUC therefore also urges the 

Commission to adopt a policy statement instead of a binding rule. 

Commission Conclusion 

512. We conclude that as much standardization as possible of the rates, terms, and 

conditions of jurisdictional interconnection service will help eliminate undue 

discrimination. A non-binding policy statement would not end this undue discrimination. 

Further, not regulating jurisdictional interconnections would leave a regulatory gap where 

neither the states nor the Commission held sway. A gap of this sort would make it more 

difficult for Interconnection Customers wanting to interconnect and would in fact, leave 

them worse off than the owners of Large Generating Facilities. 

513. This Final Rule both fulfills the Commission's duty to remedy undue discrimination 

when covered by this rule and, when not covered by this rule, provides a model that state 

regulators may wish to use as a starting point for developing their own procedures and 

agreement. We hope that the SGIP and SGIA we adopt in this Final Rule are a step 

towards having a seamless interconnection process where interconnections with federaljurisdictional facilities and state-jurisdictional facilities will be handled in a similar 

fashion. By doing so, we intend to avoid the very federal-state clashes NARUC 

anticipates. 

Issues Relating to Qualifying Facilities 

514. The NOPR did not address the issue of how QFs would be impacted by the small 

generator rulemaking. 
Docket No. RM02-12-000 - 135 - 

 Comments 

515. EEI and PacifiCorp ask the Commission to clarify that a QF that is not selling at 

wholesale, other than to a host utility under PURPA, should seek interconnection service 

through state procedures, not through Commission procedures. PacifiCorp states that the 

PURPA regulatory scheme for QFs involves considerable deference to state regulation 

with regard to the interconnection of QFs to state-regulated utilities. The Iowa Utilities 

Board agrees and asserts that this Final Rule should say that states have authority to 

establish standards for the interconnection of QFs. To avoid confusion, PacifiCorp 

proposes that the SGIP state clearly that a Small Generating Facility with QF status or one 

seeking such status is not eligible for interconnection under the Commission's rule. 

PacifiCorp recommends amending the Interconnection Request so that the Interconnection 

Customer must certify that it does not intend to seek QF status. If it then seeks QF status, 

PacifiCorp proposes to require a review of the interconnection to determine whether it 

meets state interconnection standards for QFs. The Interconnection Customer would also 

pay any costs incurred by the Transmission Provider that a QF would have paid, if such 

costs would not be recovered by the Transmission Provider under the SGIP. 

 Commission Conclusion 

516. The Commission has regulations that govern a QF's interconnection with most 

electric utilities in the United States,168 including normally non-jurisdictional utilities.169 

When an electric utility is required to interconnect under section 292.303 of the 

Commission's regulations, that is, when it purchases the QF's total output, the state has 

authority over the interconnection and the allocation of interconnection costs.170 But 

when an electric utility interconnecting with a QF does not purchase all of the QF's output 

 168 18 CFR §§ 292.303, 292.306 (2004). 

169 The absence of interstate commerce in Alaska, Hawaii, and portions of Texas 

and Maine, and Puerto Rico is not germane to the Commission's jurisdiction over QF 

matters under PURPA. See 16 U.S.C. § 2602 (2000). 

170 See Western Massachusetts Electric Co., 61 FERC ¶ 61,182 at 61,661-62 (1992), 

aff'd sub nom. Western Massachusetts Electric Co. v. FERC, 165 F.3d. 922, 926 (D.C. 

Cir. 1999). 
Docket No. RM02-12-000 - 136 - 

and instead transmits the QF's power in interstate commerce, the Commission exercises 

jurisdiction over the rates, terms, and conditions affecting or related to such service, such 

as interconnections.171

517. The Commission thus exercises jurisdiction over a QF's interconnection if the QF's 

owner sells any of the QF's output to an entity other than the electric utility directly 

interconnected with the QF. This Final Rule applies when the owner of the QF seeks 

interconnection with a facility subject to the OATT to sell any of the output of the QF to a 

third party. This applies to a new QF that plans to sell any of its output to a third party 

and to an existing QF interconnected with an electric utility or on-site customer that 

decides in the future to sell any of its output to a third party. States continue to exercise 

authority over QF interconnections when the owner of the QF sells the output of the QF 

only to the interconnected utility or to on-site customers.

518. PacifiCorp's proposal that the Commission require the Interconnection Customer to 

certify that it does not intend to seek QF status is unnecessary. This Final Rule only 

applies when the interconnection is subject to the Commission's jurisdiction. Other rules 

apply if the generator seeks to interconnect as a QF. PacifiCorp has provided no 

convincing rationale why this proposed amendment is necessary for this rulemaking. 

Taxes

519. The NOPR did not explicitly address the potential taxation of payments made by 

the Interconnection Customer to the Transmission Provider for Interconnection Facilities 

and Upgrades. 

 Comments 

520. A few commenters urge the Commission to address taxes. They argue that the 

Commission should adopt an approach similar to that taken in the LGIA so that any taxes 

incurred by the Transmission Provider are not shifted to its customers. 

 171 Id. at 61,661-62. The Commission further clarified that "[t]he fact that the 

facilities used to support the jurisdictional service might also be used to provide various 

nonjurisdictional services, such as back-up and maintenance power for a QF, does not vest 

state regulatory authorities with authority to regulate matters subject to the Commission's 

exclusive jurisdiction." Id. at 61,662. 
Docket No. RM02-12-000 - 137 - 

521. Because payments received for Upgrades by the Transmission Provider may be 

taxed, EEI and Ameren ask the Commission to clarify how the Transmission Provider will 

recover those tax payments. Further, EEI argues that additional financial security may be 

required because such facilities could be jurisdictional to either the Commission or state 

utility commissions. Additional financial security would ensure that the utility is not 

forced to recover such costs from its entire customer base. EEI proposes that the 

following sentence be added to Proposed SGIA article 5.2: "[The] Transmission Provider 

may request additional financial security to cover tax liabilities that it may incur as a result 

of a transaction being deemed by the Internal Revenue Service to have been a taxable 

event, for example, when an Interconnection Customer terminates a signed 

Interconnection Agreement." 

522. Southern Company proposes a tax provision modeled after the ANOPR consensus 

documents. Under Proposed SGIA article 5.1.2.1, the refunds paid to the Interconnection 

Customer through transmission credits include "any tax gross-up or other tax-related 

payments" in connection with Network Upgrades required for interconnection. It argues 

that if the Interconnection Customer receives transmission credits for such payments, all 

other transmission customers will have to bear the tax liability created by the 

Interconnection Customer. Transmission credits should be provided to the 

Interconnection Customer for the cost of installing facilities only if those costs may 

facilitate transmission delivery service. Any tax gross-up paid by the Interconnection 

Customer would not facilitate transmission delivery service, but instead would be a tax 

liability created solely by the interconnection. Moreover, requiring the refund through 

credits of taxes paid, plus interest, would force the Transmission Provider to pay the full 

carrying cost of income taxes on the Interconnection Customer's assets with no means of 

recouping the expenditure. 

Commission Conclusion 

523. The commenters are correct that payments received for Upgrades by the 

Transmission Provider may be taxed under certain circumstances. If construction of 

Upgrades is necessary, any associated taxes are to be handled consistent with Commission 

precedent and applicable tax rules and regulations. In particular, the Parties should then 

look to the LGIA's tax framework.172 We also reiterate that it is Commission policy that 

each Party must cooperate with the other Party to maintain the Transmission Provider's tax 

exempt status, where applicable. 

 172 See, e.g., LGIA articles 5.17 and 5.18 and Order No. 2003-A at P 324 et seq.
Docket No. RM02-12-000 - 138 - 

OATT Reciprocity Requirements 

524. The Small Generator Interconnection NOPR did not propose any changes to the 

existing reciprocity policy; accordingly, the Small Generator Interconnection NOPR did 

not discuss it. 

 Comments 

525. NRECA states that it "applauds the Commission's decision to apply the reciprocity 

provision in the OATT and the reciprocity policy articulated in Order No. 888 [and] 

appreciates the sensitivity the Commission has demonstrated to the needs of nonjurisdictional service providers."173 However, it remains concerned that non-public 

utilities may be discouraged from interconnecting new generation out of fear that such an 

interconnection will make them subject to the jurisdiction of the Commission. To avoid 

this, NRECA advocates the creation of a safe harbor for non-jurisdictional entities that 

want to interconnect new generation, yet maintain their non-jurisdictional status. NRECA 

points to several Commission natural gas decisions that it asserts provide precedent for 

creating a safe harbor of the type it proposes. NRECA also states that the Commission 

could achieve the same result by ordering an interconnection under section 211 of the 

FPA. 

526. AMP-Ohio and LADWP ask the Commission to clarify that the reciprocity 

condition applies only to the public utility over whose system the non-public utility takes 

transmission service. They also ask the Commission to clarify that there is no reciprocity 

obligation on the part of a non-public utility that owns only distribution facilities, not 

transmission facilities. The effect of most small generators is felt at the distribution level, 

LADWP argues, and these interconnections are more likely to affect retail customers. 

SMUD makes a similar argument. 

527. PacifiCorp requests that the Commission clarify that if a public utility is forced to 

offer interconnection service on its distribution lines to a non-public utility under the 

reciprocity condition, then the public utility must be offered similar rights to interconnect 

with the non-public utility. PacifiCorp argues that 

 173 NRECA at 57. 
Docket No. RM02-12-000 - 139 - 

[b]ecause many non-jurisdictional utilities own distribution systems 

that they do not consider 'transmission,' even when the corresponding 

system of a public utility is considered transmission by the 

Commission, the potential for discriminatory impact is real. At a 

minimum, the definition of a non-jurisdictional utility's 'transmission 

facilities' should be modified to include any distribution facility that 

would be considered 'transmission' if it were owned by a 

jurisdictional utility.[174] 

528. SMUD asks if reciprocity applies when the Interconnection Customer seeks to 

connect at distribution voltage to the non-jurisdictional utility and proposes to engage in 

sales for resale. It also asks if reciprocity applies differently for non-jurisdictional utilities 

seeking bilateral agreements with public utilities than to non-jurisdictional utilities seeking 

approval of safe harbor tariffs. 

529. NRECA asks the Commission to clarify that a non-jurisdictional utility is not 

required to offer interconnection service if doing so would jeopardize its tax-exempt 

status. 

530. Finally, Bureau of Reclamation, BPA, and others assert that as federal agencies, 

they are not able to comply with all of the provisions of the Proposed SGIP and SGIA. 

For instance, BPA says its contracts must accommodate the Freedom of Information Act 

and that it could not comply with all aspects of the Commission's proposed confidentiality 

provisions. BPA and Bureau of Reclamation request clarification that they are not 

required to comply with these provisions. 

 Commission Conclusion 

531. Most of the comments focus on whether interconnections with "distribution" 

systems are subject to the reciprocity condition. The answer is, to satisfy the reciprocity 

condition of Order No. 888, a non-public utility must offer to a public utility with an 

OATT service comparable to that offered to its own or affiliated Interconnection 

Customers.175

 174 PacifiCorp at 2-3. 

175 Order No. 2003-A at P 775. 
Docket No. RM02-12-000 - 140 - 

532. PacifiCorp is correct that what the facility is termed by its owner does not affect its 

jurisdictional status. The reciprocity condition would apply to any facility used to offer 

services that would be Commission-jurisdictional if the non-public utility were a public 

utility. 

533. The reciprocity requirement in Order No. 888 permits a public utility to require, as 

a condition of providing open access service to a non-public utility that owns, controls, or 

operates transmission facilities, that the non-public utility provide reciprocal transmission 

service. In Order No. 2003-A, the Commission explained that the reciprocity provision 

applies to Interconnection Service in the same way.176

534. There are three ways a non-public utility may satisfy the reciprocity provision.177 

First, it may provide service under a Commission-approved "safe harbor" tariff – a tariff 

that the Commission has determined offers truly open access service. Second, it may 

provide service to a public utility under a bilateral agreement that satisfies its reciprocity 

obligation. Third, the non-public utility may ask the public utility to waive the reciprocity 

condition. 

535. A non-public utility that has a "safe harbor" tariff that is modeled on the OATT 

must add to that tariff an interconnection procedures document and interconnection 

agreement that either are modeled on the OATT interconnection procedures document and 

agreement or are otherwise found to offer truly open access service if it wishes to continue 

to qualify for "safe harbor" treatment.178 A non-public utility that owns, controls, or 

operates transmission, has not filed with the Commission a "safe harbor" tariff, and seeks 

transmission service from a public utility that invokes the reciprocity provision must either 

satisfy its reciprocity obligation under a bilateral agreement or ask the public utility to 

waive the OATT reciprocity condition. 

536. This Final Rule does not modify the Commission's reciprocity policy as laid out in 

Order Nos. 888 and 2003. 

 176 See Order No. 2003-A at P 760 et seq.

177 Id. at P 761. 

178 Id.
Docket No. RM02-12-000 - 141 - 

537. LADWP also states that there are relatively few Commission-jurisdictional Small 

Generating Facility interconnections and urges the Commission not to apply its reciprocity 

policy in the small generator context. The fact that there may be relatively few 

interconnections subject to this Final Rule does not justify abandoning long-standing 

reciprocity policy. 

538. As the Commission determined in Order Nos. 888179 and 2003-A,180 reciprocal 

service is not required if providing such service would jeopardize the tax-exempt status or 

bond status of the non-public utility. 

539. As to BPA and Bureau of Reclamation's comments, we reiterate that reciprocity 

does not require federal entities to provide services or sign contracts that they cannot 

legally enter into. If such entities choose to amend their safe harbor tariffs on compliance, 

they may propose modifications to the SGIP and SGIA that address their concerns. 

540. Finally, we deny NRECA's proposed safe harbor provision. As it notes, section 

211 of the FPA already allows a non-public utility to safeguard its non-jurisdictional 

status. We see no need to fix a system that does not appear to be broken. 

Coordination with Affected Systems 

541. An Affected System is an electric system other than the Transmission Provider 

that may be affected by the proposed interconnection. In the Small Generator 

Interconnection NOPR, the Commission proposed to treat coordination between the 

Transmission Provider, Interconnection Customer, and any Affected Systems the same 

way as in the LGIA. Order Nos. 2003 and 2003-A required the Transmission Provider to 

coordinate with an Affected System. The Commission requested comments on whether 

there are any issues specific to Small Generating Facilities that necessitate a different 

policy. 

 179 Order No. 888 at 31,762, n.499. 

180 Order No. 2003-A at P 782. 
Docket No. RM02-12-000 - 142 - 

Comments 

542. While no commenters present any arguments on this issue specific to the small 

generator context, some discuss the Affected System provision in terms of Distribution 

Systems. 

 Commission Conclusion 

543. We are adopting an Affected System provision comparable to the one in the LGIP 

and LGIA. Regarding the comments addressing the Affected System provision in terms 

of Distribution Systems subject to an OATT, we note that the definition of Affected 

System includes not only transmission facilities. The definition is more inclusive; it is "an 

electric system . . . that may be affected by the proposed interconnection." Thus, an 

Affected System may be any type of electric system.181

 I. Compliance Issues

Amendments to the Transmission Provider's OATT 

544. In this Final Rule, we are requiring all public utilities that own, control, or operate 

interstate transmission facilities to adopt the SGIP and SGIA, but are using a process 

different from the one used in Order No. 2003. On the effective date of Order No. 2003, 

the OATT of each Transmission Provider was deemed to have included the LGIP and 

LGIA.182 On the effective date of this Final Rule, as in Order No. 2003,183 the OATTs of 

all non-independent Transmission Providers are deemed revised to include the Final Rule 

SGIP and SGIA. But unlike the Order No. 2003 process, where the Commission directed 

Transmission Providers to make ministerial filings to include the LGIP and LGIA in their 

next filings with the Commission, here the Commission will require no formal amendment 

 181 We note that, similar to when the Affected System is a non-jurisdictional entity, 

the Commission does not have to have jurisdiction over the Affected System in order for 

the interconnection to proceed. See Order No. 2003-A at P 114-115. 

182 Order No. 2003 at P 910. 

183 See Standardization of Generator Interconnection Agreements and Procedures, 

Notice Clarifying Compliance Procedures, 106 FERC ¶ 61,009 at P 2 (2004). 
Docket No. RM02-12-000 - 143 - 

until compliance is due in the Commission's rulemaking on Electronic Tariff Filings.184 

This means that a non-independent Transmission Provider that wishes to adopt the SGIP 

and SGIA (without variations) into its OATT need not formally add the documents to its 

OATT until it submits a compliance filing in response to the Commission's pending 

Electronic Tariff Filings rulemaking. A non-independent Transmission Provider that 

decides to take this option nevertheless must apply the SGIP and SGIA to any request for 

small generator interconnection that it receives after the effective date of this Final Rule, 

but before it complies with the rulemaking on Electronic Tariff Filings. The compliance 

obligation is different for non-independent Transmission Providers that seek variations 

from the Final Rule documents, as discussed further below. 

545. If an RTO or ISO wishes to adopt the SGIP and SGIA into its OATT, it may also 

await compliance with the Electronic Tariff Filings rulemaking before formally adding the 

documents to its OATT. But the RTO or ISO should notify the Commission by the 

effective date of this Final Rule that it will adopt the Final Rule documents and that 

requests for interconnection of Small Generating Facilities will be subject to the SGIP and 

SGIA in the interim period. An RTO or ISO that does not adopt the SGIP and SGIA will 

have additional time to submit its compliance filings to allow for the stakeholder process 

and other measures that must be taken before an RTO or ISO adopts tariff changes. 

Therefore, an RTO or ISO that seeks variations will have an additional 90 days to submit 

its compliance filing. As in the Order No. 2003 proceeding, until the Commission acts on 

the compliance filing of an RTO or ISO that seeks variations, the RTO's or ISO's existing 

Commission-approved interconnection procedures and agreement remain in effect. 

Variations from the Final Rule 

546. As in Order No. 2003, the Commission will consider two categories of variations 

from the Final Rule submitted by a non-independent Transmission Provider.185 First, the 

Commission will consider "regional reliability variations" that track established reliability 

requirements (i.e., requirements approved by the applicable regional reliability council). 

Any request for a "regional reliability variation" must be supported by references to 

 184 Electronic Tariff Filings, Notice of Proposed Rulemaking, 69 FR 43929 

(July 23, 2004), FERC Stats. & Regs., Proposed Regulations, ¶ 32,575 (July 8, 2004) 

185 Order No. 2003 at P 824-25. 
Docket No. RM02-12-000 - 144 - 

established reliability requirements,186 and the text of the reliability requirements must be 

provided in support of the variation. If the variation is for any other reason, the nonindependent Transmission Provider must demonstrate that the variation is "consistent with 

or superior to" the Final Rule provision. Blanket statements that a variation meets the 

standard or clarifies the Final Rule provision are not sufficient. Any request for 

application of this standard will be considered under FPA section 205 and must be 

supported by arguments explaining how each variation meets the standard. 

547. Requests for regional reliability variations are due on the effective date of this Final 

Rule. Requests for "consistent with or superior to" variations may be submitted on or 

after the effective date of the Final Rule. We note that the "consistent with or superior to" 

standard is difficult to meet because the burden of showing that a variation is "consistent 

with or superior to" the relevant provision or provisions in the Final Rule document is 

significant. 

548. Any request for a variation should be accompanied by a request to include the 

complete SGIP and SGIA into the Transmission Provider's OATT. The Commission will 

consider incomplete any request for a variation that does not also propose to append to the 

Transmission Provider's OATT the complete SGIP and SGIA. As explained above, an 

RTO or ISO will have 90 additional days (for a total of 150 days) to submit a compliance 

filing. That compliance filing must contain all proposed independent entity variations. 

549. With respect to an RTO or ISO, at the time its compliance filing is made, as 

explained in Order No. 2003, the Commission will allow it to seek "independent entity 

variations" from the Final Rule pricing and non-pricing provisions.187 The RTO or ISO 

should explain the basis for each variation. 

550. Finally, for a non-independent Transmission Provider that belongs to an RTO or 

ISO, the RTO's or ISO's Commission-approved standards and procedures are to govern 

interconnection with its members' facilities that are under the operational control of the 

RTO or ISO. An interconnection with a Commission jurisdictional facility that is owned 

by a non-independent Transmission Provider but is not under the operational control of 

the RTO or ISO is to be conducted according to the non-independent Transmission 

 186 See also New York Independent System Operator, Inc., 108 FERC ¶ 61,159 at 

P 95 (2004), reh'g pending. 

187 Order No. 2003 at P 827. 
Docket No. RM02-12-000 - 145 - 

Provider's procedures and agreement. A non-independent Transmission Provider, even if 

it belongs to an RTO or ISO, is not eligible for "independent entity variations" for 

procedures and agreements applicable to interconnection with facilities that remain within 

its operational control (and therefore, are subject to a tariff different from the RTO or 

ISO's OATT). To clarify, if a non-independent Transmission Provider belongs to an RTO 

or ISO, but keeps operational control of some jurisdictional facilities, and those facilities 

are not subject to the interconnection procedures under the OATT of the RTO or ISO, then 

the non-independent Transmission Provider must have a separate set of interconnection 

procedures and agreement applicable to these facilities. To address the confusion that 

may arise from having inconsistent interconnection procedures and agreements applicable 

within an RTO or ISO region, we allow a non-independent Transmission Provider that 

keeps control over some jurisdictional facilities to subject these facilities to an RTO- or 

ISO-controlled interconnection process. In such instance, the non-independent 

Transmission Provider must agree to transfer to the RTO or ISO control over the 

significant aspects of the interconnection process, including the performance of all 

interconnection studies and cost determinations applicable to Network Upgrades.188 

Interconnection Requests Submitted Prior to the Effective Date of this 

Final Rule and Grandfathering of Existing Interconnection Agreements

551. The grandfathering of existing agreements was not specifically addressed in the 

Small Generator Interconnection NOPR; however, the Commission did request comments 

on whether generic Commission policies applicable to Large Generating Facilities (such 

as grandfathering) should be applied to Small Generating Facilities. 

Comments 

552. American Forest and National Grid seek clarification that small generators that are 

already interconnected are not subject to this rulemaking. To avoid unintended barriers to 

Small Generating Facilities, they urge the Commission to follow the Order No. 2003 

approach for grandfathering. American Forest states that generators should not have to 

undergo this new interconnection process, particularly where the generating facilities that 

are already interconnected have not changed their physical operations. 

 188 See Order No. 2003-B at P 80. 
Docket No. RM02-12-000 - 146 - 

553. California Wind Energy requests that, as in Order No. 2003, contract conversion of 

pre-existing interconnection contracts with former QFs should not trigger an obligation 

under this Final Rule to file an Interconnection Request because a change in contract 

status alone does not affect a generator's demand on the electric system. It also seeks 

clarification that, when the QF's interconnection agreement provides for greater capacity 

than what is to be sold to the interconnecting utility under the PURPA power purchase 

contract, upon contract conversion, the former QF should not have to submit an 

Interconnection Request if the transmission requirements are consistent with those 

provided for in the prior agreement. 

554. Finally, if the Commission adopts the approach used in Order No. 2003, California 

Wind Energy requests that the Commission clarify when a change in a QF's contract status 

triggers an obligation to file a new Interconnection Request. It notes that Order No. 2003 

states that the owner of a QF formerly interconnected with a Transmission System has no 

obligation to file an Interconnection Request when its contract status changes if the output 

of its generator "will be substantially the same as before."189 California Wind Energy 

asserts that the term "output" leaves ambiguous the effect of the Commission's criteria on 

projects that are to be repowered after contract conversion. It explains that when a QF 

repowers, it increases energy production while maintaining its maximum megawatt 

output. California Wind Energy seeks clarification that when a small generator increases 

energy production as a result of a post-PURPA contract repower, and there is no 

meaningful change in the generator's maximum output, there is no obligation to file a new 

Interconnection Request. 

Commission Conclusion 

555. As in Order No. 2003, the Commission is not requiring changes to interconnection 

agreements filed with the Commission before the effective date of this Final Rule. 

Interconnection agreements submitted for approval by the Commission before the 

effective date of this Final Rule are grandfathered and will not be rejected outright for 

failing to conform to the SGIA. Small Generating Facilities already interconnected that 

have not changed their physical operations in such a way as to require a new 

Interconnection Request are not subject to this rulemaking. 

 189 Order No. 2003 at P 815. 
Docket No. RM02-12-000 - 147 - 

556. We also note that the Small Generator NOPR did not address what happens to 

Interconnection Customers whose Interconnection Requests are pending at the time this 

Final Rule goes into effect. LGIP section 5 addresses how such interconnections are to be 

processed, and we adopt a shortened version of that provision in the SGIP as well. The 

new section 1.7 clarifies that nothing in this Final Rule is intended to affect an 

Interconnection Customer's Queue Position assigned prior to the effective date of this rule. 

It also states that the Parties shall continue to process any executed interconnection study 

agreements (or study agreements that have been filed unexecuted with the Commission) 

once this Final Rule becomes effective. However, we will require that any new 

interconnection study agreement entered into after this Final Rule becomes effective 

follow the pro forma study agreements contained in the SGIP. Any accommodation 

needed to process such Interconnection Requests (i.e., should the pre- and post- Final Rule 

study processes be significantly different) should be filed with the Commission and will 

be evaluated on a case-by-case basis. 

557. If an interconnection agreement has been executed prior to the effective date of this 

Final Rule, then no additional steps need to be taken. We agree with the commenters that 

an existing Interconnection Customer whose Small Generating Facility is already 

interconnected should not have to undergo a new interconnection process. 

558. We also reiterate that a change in an Interconnection Customer's contract status 

does not, by itself, trigger an obligation to file an Interconnection Request. As the 

Commission noted in Order Nos. 2003 and 2003-A, a former QF interconnected with a 

Transmission System that sells electric energy at wholesale in interstate commerce need 

not submit an Interconnection Request if it represents that the output of the generating 

facility is substantially the same as before.190 Under the Commission's regulations,191 a 

QF must provide electric energy to its interconnecting utility much like the 

interconnecting utility's other network resources because the utility must purchase the 

QF's power to displace its own generation. When the owner of a QF that was formerly 

interconnected with a Transmission System seeks to sell energy at wholesale and 

represents that the output of its generator will be substantially the same after conversion, it 

would be unreasonable for a Transmission Provider to require the former QF to join the 

interconnection queue. 

 190 Order No. 2003 at P 815. 

191 18 CFR § 292.303 (2004). 
Docket No. RM02-12-000 - 148 - 

559. California Wind Energy also asks the Commission to clarify that a plant 

repowering at the time of contract conversion that does not increase plant capacity will not 

trigger an obligation to file an Interconnection Request. We clarify that a contract 

conversion that does not affect a generator's demands on the Transmission System does 

not trigger an obligation to file. When a QF's existing interconnection agreement provides 

for capacity greater than the capacity sold by the QF to the interconnecting utility under 

the PURPA power purchase contract, the QF's contract conversion will not trigger an 

obligation to file an Interconnection Request if its transmission requirements are 

consistent with the capacity provided for in the existing interconnection agreement. 

Order No. 2001 and the Filing of Interconnection Agreements

560. Order No. 2001192 revised how traditional public utilities and power marketers 

must satisfy their obligation, under section 205 of the FPA and Part 35 of the 

Commission's regulations, to file agreements with the Commission.193 Public utilities that 

have standard forms of agreement in their OATTs, cost-based power sales tariffs, or tariffs 

for other generally applicable services no longer need to file conforming service 

agreements with the Commission. The filing requirement for conforming agreements 

(those that follow the standard form) is now satisfied by filing the standard form of 

 192 Revised Public Utility Filing Requirements, Order No. 2001, 67 FR 31043 

(May 8, 2002), FERC Stats. & Regs. & 31,127 (2002); reh'g denied, Order 2001-A, 

100 FERC & 61,074 (2002); reconsideration and clarification denied, Order No. 2001-B, 

100 FERC & 61,342 (2002); further order, Order No. 2001-C, 101 FERC & 61,314 (2002). 

193 Order No. 2001 pointed out that Part 35 of the Commission's regulations does 

not make a distinction between an interconnection agreement and other agreements for 

service that must be filed under the Commission's regulations. Order No. 2001, therefore, 

said that if an interconnection agreement conforms to a Commission-approved standard

form of interconnection agreement, the utility does not have to file it, but must report it in 

the Electric Quarterly Reports. It also stated that the requirement to file contract data and 

transaction data begins with the first Electric Quarterly Report filed after service begins 

under an agreement, and continues until the Electric Quarterly Report filed after it expires 

or by order of the Commission. However, an interconnection agreement that does not 

precisely match the Transmission Provider's approved interconnection agreement or that is 

unexecuted must be filed with the Commission. The Transmission Provider must clearly 

show where the agreement does not conform to its standard interconnection agreement, 

preferably through red-lining and strike-out. 
Docket No. RM02-12-000 - 149 - 

agreement and an Electronic Quarterly Report. Order No. 2001 also lifted the requirement 

that Parties to an expiring conforming agreement file a notice of cancellation or a 

cancellation tariff sheet with the Commission. The public utility may simply remove the 

agreement from its Electric Quarterly Report in the quarter after it terminates. 

561. Non-conforming agreements, which are agreements for transmission, cost-based 

power sales or other generally applicable services that do not conform to a standard form 

of agreement in a public utility's tariff, must continue to be filed with the Commission for 

approval before going into effect. This category includes unexecuted agreements and 

agreements that do not precisely match the standard form of agreement. 

562. Order No. 2003 explained that, under Order No. 2001, if an interconnection 

agreement conforms to a Commission-approved standard form of interconnection 

agreement, the Transmission Provider does not have to file it with the Commission, but 

must report it in its Electric Quarterly Reports. The same filing rules will apply to nonconforming SGIAs as for non-conforming LGIAs. However, an interconnection 

agreement that does not precisely match the Transmission Provider's Commissionapproved standard interconnection agreements or that is unexecuted must be filed in its 

entirety. The Transmission Provider shall clearly show where the filed agreement does 

not conform to its standard interconnection agreement through red-lining and strike-out 

and justify the basis for the nonconformance. 

III. Information Collection Statement 

563. The Office of Management and Budget (OMB) regulations require that OMB 

approve certain reporting and record keeping (collections of information) imposed by an 

agency.194 The information collection requirements in this Final Rule are identified under 

the Commission data collection, FERC-516A "Standardization of Small Generator 

Interconnection Agreements and Procedures." Under section 3507(d) of the Paperwork 

Reduction Act of 1995,195 the proposed reporting requirements in the subject rulemaking 

will be submitted to OMB for review. Interested persons may obtain information on the 

reporting requirements by contacting the Federal Energy Regulatory Commission, 

888 First Street, NE, Washington, D.C. 20426 (Attention: Michael Miller, Office of the 

Executive Director, 202-502-8415) or from the Office of Management and Budget 

(Attention: Desk Officer for the Federal Energy Regulatory Commission, fax: 202-395-

7285, e-mail:mailto: oira_submission@omb.eop.gov). 

 194 5 CFR § 1320.11 (2004). 

195 44 U.S.C. § 3507(d) (2000). 
Docket No. RM02-12-000 - 150 - 

564. The "public protection" provision of the Paperwork Reduction Act196 requires each 

agency to display a currently valid OMB control number and inform respondents that a 

response is not required unless the information collection displays a valid OMB control 

number on each information collection. This provision has two legal effects: (1) it creates 

a legal responsibility for the agency; and (2) it provides an affirmative legal defense for 

respondents if the information collection is imposed on respondents by the Commission 

through regulation or administrative means in order to satisfy a legal authority or 

responsibility of the Commission. If the Commission should fail to display an OMB 

control number, then it is the Commission not the respondent who is in violation of the 

law. “Display” is defined as publishing the OMB control number in regulations, 

guidelines or other issuances in the Federal Register (for example, in the preamble or 

regulatory text for the final rule containing the information collection).197 Therefore, the 

Commission may not conduct or sponsor, and a person is not required to respond to a 

collection of information unless the information collection displays a valid OMB control 

number. 

565. Public Reporting Burden: The Commission did not receive specific comments 

concerning its burden estimates and uses the same estimates here in the Final Rule. 

Comments on the substantive issues raised in the NOPR are addressed elsewhere in the 

Final Rule. 

 196 44 U.S.C. § 3512; 5 CFR § 1320.5(b); 5 CFR § 1320.6(a). 

197 See 1 CFR § 21.35 and 5 CFR § 1320.3(f)(3). 
Docket No. RM02-12-000 - 151 - 

Data Collection No. of 

Respondents 

No. of 

Responses 

Hours Per 

Response 

Total Annual 

Hours 

FERC-516A 

SGIPs & 

SGIAs 

238 1 25 5,950 

Recordkeeping 238 1 2 476 

Totals 6,426 

Total Annual Hours for Collection: 5,950 (reporting) [238 respondents x 1 x 25 hours] + 

476 hours (recordkeeping ) [238 hours x 1 filing x 2 hours to retain interconnection 

documents] = 6,426.198

566. Information Collection Costs: The Commission sought comments about the time 

needed to comply with these requirements. No comments were received. Staffing 

requirements to review and modify existing SGIPs and SGIAs = $309,400 [238 

respondents x $1,300 (25 hours @ $52 hourly rate)]. To be added to this cost are the 

annualized costs for operations and management (238 respondents x $34 [2 hours @ 

$17 hourly rate for recordkeeping] or $8,092)). Total costs of $317,492 for preparing 

filings for modification of the OATT and for recordkeeping of interconnection documents. 

There will be a one-time start up cost to comply with these requirements for the 

procedures and agreements and then an additional cost to maintain them.199

Titles: FERC-516A "Standardization of Small Generator Interconnection Agreements 

and Procedures 

 198 Adjustments made to reflect an increase in the number of respondents from the 

estimates in the Small Generator Interconnection NOPR. 

199 Adjusted figures to reflect an increase in the number of respondents. 
Docket No. RM02-12-000 - 152 - 

Action: Revision of Currently Approved Collection of Information 

OMB Control Nos: 1902-0203. 

Respondents: Business or other for profit. 

Frequency of Responses: One occasion. 

Necessity of Information: The Final Rule revises the reporting requirements contained in 

18 CFR Part 35. The Commission promulgates a standardized SGIP and SGIA that public 

utilities must adopt. As noted in the Final Rule, adopting these procedures and agreement 

will (1) reduce interconnection costs and time for the owners of Small Generating 

Facilities and Transmission Providers alike; (2) limit opportunities for Transmission 

Providers to favor their own generation; (3) facilitate market entry for generation 

competitors; and (4) encourage needed investment in generator and transmission 

infrastructure. 

567. Interconnection plays a growing, crucial role in bringing generation into the market 

to meet the needs of electricity customers. However, requests for interconnection 

frequently result in complex technical disputes about interconnection feasibility, cost and 

cost responsibility. The Commission expects that a standardized SGIP and SGIA will 

reduce interconnection costs and time for Interconnection Customers and Transmission 

Providers, resolve most interconnection disputes, minimize opportunities for undue 

discrimination, foster increased development of economic generation, and improve system 

reliability. 

568. For information on the requirements, submitting comments on the collection of 

information and the associated burden estimates including suggestions for reducing this 

burden, please send your comments to the Federal Energy Regulatory Commission, 

888 First Street, NE, Washington, D.C. 20426 (Attention: Michael Miller, Office of the 

Executive Director, 202-502-8415) or send comments to the Office of Management and 

Budget (Attention: Desk Officer for the Federal Energy Regulatory Commission, fax: 

202-395-7285, e-mail oira_submission@omb.eop.gov). 
Docket No. RM02-12-000 - 153 - 

IV. Environmental Impact Statement 

569. Commission regulations require that an environmental assessment or an 

environmental impact statement be prepared for any Commission action that may have a 

significant adverse effect on the human environment.200 No environmental consideration 

is necessary for the promulgation of a rule that is clarifying, corrective, or procedural or 

does not substantially change the effect of legislation or regulations being amended,201 and 

also for information gathering, analysis, and dissemination.202 The Final Rule updates 

Part 35 of the Commission's regulations and does not substantially change the effect of the 

underlying legislation or the regulations being revised or eliminated. In addition, the Final 

Rule involves information gathering, analysis, and dissemination. Therefore, this Final 

Rule falls within categorical exemptions provided in the Commission's regulations. 

Consequently, neither an environmental impact statement nor an environmental 

assessment is required. 

570. While some Small Generating Facilities, such as reciprocating engines, may 

produce more pollution, others, such as photovoltaics and fuel cells, produce significantly 

less air, water and noise pollution than do new central station technologies. Others, such 

as micro-turbines, provide opportunities to reduce emissions by improving the efficiency 

with which energy is consumed, through improved heat rates and combined heat and 

power applications. Small Generating Facilities may eliminate the need to run older, more 

polluting generating units and reduce power line losses. As one of the goals of this rule is 

to allow interconnection of Small Generating Facilities that can provide environmental 

and economic benefits, this rule will benefit customers by providing alternative generation 

sources. 

 200 Regulations Implementing National Environmental Policy Act, Order No. 486, 

52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs. & 30,783 (1987). 

201 18 CFR § 380.4(a)(2)(ii) (2004). 

202 18 CFR § 380.4(a)(5) (2004). 
Docket No. RM02-12-000 - 154 - 

V. Regulatory Flexibility Act 

571. The Regulatory Flexibility Act (RFA)203 requires that a rulemaking contain either 

a description and analysis of the effect that the proposed rule will have on small entities or 

a certification that the rule will not have a significant economic impact on a substantial 

number of small entities. However, the RFA does not define “significant” or “substantial” 

instead leaving it up to any agency to determine the impacts of its regulations on small 

entities. In the NOPR, the Commission stated that the proposed regulations would impose 

requirements only on interstate Transmission Providers, which are not small businesses. 

The Commission certified that the proposed regulations would not have a significant 

adverse impact on a substantial number of small entities. In making its certification, the 

Commission determined that the rule applies only to public utilities that own, control, or 

operate facilities for transmitting electric energy in interstate commerce and not to electric 

utilities per se. Small entities that believe this rule will have a significant impact on them 

may apply to the Commission for waivers. 

 Comments 

572. NRECA questions this certification. NRECA argues that to lessen the impact of 

this rule on small entities, the Commission should: "(1) Provide a durable blanket waiver 

of the NOPR requirements to all currently FPA-jurisdictional utilities, that qualify as 

'small' public utilities under the Small Business Administration (SBA) utility size 

standards, and (2) provide a safe harbor for all 'small' non-jurisdictional providers that 

want to work with consumers to interconnect generation, but want to maintain their nonjurisdictional status." 

Commission Conclusion 

573. We are applying the same standards to any entity seeking a waiver of the 

requirements of this Final Rule. Because the possible scenarios under which small entities 

may seek waivers are diverse, they are not susceptible to resolution on a generic basis, and 

we are requiring applications and fact-specific determinations in each instance. The 

Commission does not have jurisdiction over non-public utilities' rate, terms and conditions 

of transmission service under sections 205 and 206 of the FPA, and Order No. 888 does 

not require that non-public utilities file open access transmission tariffs. In addition, 

under the waiver provisions of Order No. 888, small non-public utilities may seek waiver 

 203 5 U.S.C. § 601-612 (2000). 
Docket No. RM02-12-000 - 155 - 

from the reciprocity provision. This waiver policy follows the SBA definition of a small 

utility.204 The SBA defines a small electric utility as one that disposes of 4 MWh or less 

of electric energy in a given year.205

574. We disagree with NRECA that this Final Rule will have a significant economic 

effect on a substantial number of small entities. Of the 931 electric cooperatives in the 

47 states across the country, 686 receive financial assistance from the U.S. Department of 

Agriculture and therefore are not subject to the Commission’s jurisdiction.206 Of the 

67 members of NRECA who have generation and transmission facilities, only 34 electric 

cooperatives are subject to the Commission’s jurisdiction. They are only a small subset of 

the entities considered when determining a significant impact on a substantial number of 

small entities. Within the subset of 34 entities, only a few own, control, or operate 

interstate transmission facilities. 

575. As NRECA noted in its comments, the Commission has an important role in 

determining whether facilities are distribution or transmission, and as the Commission 

noted elsewhere in this Final Rule, the only facilities that are already subject to a 

Transmission’s Provider’s OATT are covered by this rule and apply only to a small 

percentage of small generator interconnections. The Commission recognizes that most 

small generators will interconnect with facilities that are not subject to the OATT. 

576. However, in drafting this rule the Commission has followed the provisions of 

both the RFA and the Paperwork Reduction Act to consider the potential impact of 

regulations on small business and other small entities. Specifically, the RFA directs 

agencies to consider four regulatory alternatives to be considered in a rulemaking to lessen 

the impact on small entities: tiering or establishment of different compliance or reporting 

requirements for small entities, classification, consolidation, clarification or simplification 

of compliance and reporting requirements, performance rather than design standards, and 

exemptions. The Commission has adopted both tiering, and classification and 

simplification when developing technical accelerated procedures to apply to 

interconnections that will have no adverse effect on the Transmission Provider’s electric 

 204 See 5 U.S.C. § 601(3) and § 601(6) and 15 U.S.C. § 632(a). 

205 See 13 CFR § 121.601. 

206 Source: Rural Utilities Service, U.S. Department of Agriculture, 

http://www.usdagov.rus/electric/borrowers/index.htm. April, 2005. 
Docket No. RM02-12-000 - 156 - 

system. By the use of tiering, the Commission is creating three ways to evaluate 

Interconnection Requests that can be applied to size and operating conditions of a small 

generating facility. As noted earlier, all Small Generating Facilities are subject to the 

Study Process, but in order to expedite the process and reduce the requirements on 

facilities smaller than 2 MW, technical screens were developed for certified Small 

Generating Facilities no larger than 2 MW (Fast Track) and certified inverter-based Small 

Generating Facilities no larger than 10 kW (10 kW Inverter Process). The latter process 

was further simplified as it does not use an SGIA, instead using an all-in-one document 

that includes the application form, interconnection procedures, and terms and conditions. 

In addition, many provisions of the SGIA are based on the NARUC Model which in turn 

is based on the experience of several states for implementing interconnections. 

577. A core issue has been whether standards could be developed that will allow for a 

cost effective interconnection solution without jeopardizing the safety and reliability of 

the Transmission System. One study showed that the typical cost of interconnection 

ranges from $50/kW – $200/kW depending on the size of the generating facility, 

application and utility requirements.207 By simplifying both the interconnection 

procedures document and interconnection agreement, the costs of small generating 

facilities should be reduced, equipment manufacturers will be able to operate from a single 

set of technical specifications, and seamless procedures will be in place that do not 

jeopardize the safety and reliability of the Transmission System. 

VI. Document Availability 

578. In addition to publishing the full text of this document in the Federal Register, the 

Commission provides all interested persons an opportunity to obtain this document from 

the Public Reference Room during normal business hours (8:30 a.m. to 5:00 p.m. Eastern 

Time) at 888 First Street, N.E., Room 2A, Washington, D.C. The full text of this 

document is also available electronically from the Commission's eLibrary system 

(formerly called FERRIS) in PDF and Microsoft Word format for viewing, printing, and 

downloading. eLibrary may be accessed through the Commission's Home Page 

(http://www.ferc.gov). To access this document in eLibrary, type "RM02-1-" in the 

docket number field and specify a date range that includes this document's issuance date. 

 207 Source: Arthur D. Little, Distribution Generation: System Interfaces, Arthur D. 

Little, Inc., Cambridge, Massachusetts, 1999. 
Docket No. RM02-12-000 - 157 - 

579. User assistance is available for eLibrary and the Commission's website during 

normal business hours from our Help Line at 202-502-8222 or the Public Reference Room 

at 202-502-8371 Press 0, TTY 202-502-8659. E-Mail the Public Reference Room at 

public.referenceroom@ferc.gov. 

VII. Effective Date And Congressional Notification 

580. This Final Rule will take effect on [insert date that is 60 days after date of 

publication in the FEDERAL REGISTER]. The Commission has determined, with the 

concurrence of the Administrator of the Office of Information and Regulatory Affairs of 

the Office of Management and Budget, that this rule is not a "major rule" within the 

meaning of section 251 of the Small Business Regulatory Enforcement Fairness Act of 

1996.208 The Commission will submit the Final Rule to both houses of Congress and the 

General Accounting Office.209

List of Subjects in 18 CFR Part 35

581. Electric power rates, Electric utilities, Reporting and recordkeeping requirements. 

By the Commission. 

( S E A L ) 

Magalie R. Salas, 

Secretary. 

In consideration of the foregoing, the Commission revises part 35, Chapter I, 

Title 18 of the Code of Federal Regulations, as follows. 

PART 35 B FILING OF RATE SCHEDULES

1. The authority citation for part 35 continues to read as follows: 

 208 5 U.S.C. § 804(2) (2000). 

209 5 U.S.C. § 801(a)(1)(A) (2000). 
Docket No. RM02-12-000 - 158 - 

Authority: 16 U.S.C. § 791a-825r, §§ 2601-2645; 31 U.S.C. § 9701; 42 U.S.C. 

§§ 7101-7352. 

2. In § 35.28, the heading of paragraph (f) is revised, the first sentences of 

currently existing paragraphs (f)(1), (f)(1)(i), (f)(1)(ii), (f)(2), (f)(3) and (f)(3)(i) are 

revised, a new paragraph (f)(1)(ii) is added, currently existing paragraph (f)(1)(ii) is 

renumbered to account for new paragraph (f)(1)(ii), and paragraphs (f)(4), (f)(4)(i), and 

(f)(4)(ii) are added, all to read as follows: 

§ 35.28 Non-discriminatory open access transmission tariff. 

* * * * * 

(f) Standard generator interconnection procedures and agreements. 

(1) Every public utility that is required to have on file a non-discriminatory open 

access transmission tariff under this section must amend such tariff by adding the standard 

interconnection procedures and agreement contained in Order No. 2003, FERC Stats. & 

Regs. & 31,146 (Final Rule on Generator Interconnection) and the standard small 

generator interconnection procedures and agreement contained in Order No. 2006, FERC 

Stats. & Regs. ¶ _____ (Final Rule on Small Generator Interconnection), or such other 

interconnection procedures and agreements as may be approved by the Commission 

consistent with Order No. 2003, FERC Stats. & Regs. & 31,146 (Final Rule on Generator 

Interconnection) and Order No. 2006, FERC Stats. & Regs. ¶ _____ (Final Rule on Small 

Generator Interconnection). 

(i) The amendment to implement the Final Rule on Generator Interconnection 

required by the preceding subsection must be filed no later than January 20, 2004. 

(ii) The amendment to implement the Final Rule on Small Generator 

Interconnection required by the preceding subsection must be filed no later than [insert 

date 60 days after publication in the FEDERAL REGISTER]. 

(iii) Any public utility that seeks a deviation from the standard interconnection 

procedures and agreement contained in Order No. 2003, FERC Stats. & Regs. & 31,146 

(Final Rule on Generator Interconnection) or the standard small generator interconnection 

procedures and agreement contained in Order No. 2006, FERC Stats. & Regs. ¶ _____ 

(Final Rule on Small Generator Interconnection), must demonstrate that the deviation is 

consistent with the principles of either Order No. 2003, FERC Stats. & Regs. & 31,146 

(Final Rule on Generator Interconnection) or Order No. 2006, FERC Stats. & Regs. 

¶ _____ (Final Rule on Small Generator Interconnection). 
Docket No. RM02-12-000 - 159 - 

(2) The non-public utility procedures for tariff reciprocity compliance described in 

paragraph (e) of this section are applicable to the standard interconnection procedures and 

agreements. 

(3) A public utility subject to the requirements of this paragraph pertaining to the 

Final Rule on Generator Interconnection may file a request for waiver of all or part of the 

requirements of this paragraph, for good cause shown. An application for waiver must be 

filed either: 

(i) No later than January 20, 2004, or 

(ii) No later than 60 days prior to the time the public utility would otherwise have 

to comply with the requirements of this paragraph. 

(4) A public utility subject to the requirements of this paragraph pertaining to the 

Final Rule on Small Generator Interconnection may file a request for waiver of all or part 

of the requirements of this paragraph, for good cause shown. An application for waiver 

must be filed either: 

 (i) No later than [insert date 60 days after publication in the FEDERAL 

REGISTER], or 

(ii) No later than 60 days prior to the time the public utility would otherwise have 

to comply with the requirements of this paragraph. 
Docket No. RM02-12-000 - 160 - 

The following Appendices will not be published in the Code of Federal Regulations. 
- 1 - 

Appendix A 

Commenter Acronyms1

AEP – American Electric Power System 

Alabama PSC – Alabama Public Service Commission 

Allegheny Energy – Allegheny Energy Supply Company, LLC and Allegheny Power 

Ameren – Ameren Services Company 

American Forest – American Forest & Paper Association and the Process Gas 

Consumers Group 

AMP-Ohio – American Municipal Power – Ohio, Inc. 

Avista – Avista Corp. and Puget Sound Energy, Inc. 

Baltimore G&E – Baltimore Gas and Electric Company 

BPA – Bonneville Power Administration, U.S. Department of Energy 

Bureau of Reclamation – Bureau of Reclamation, U.S. Department of Interior 

CA ISO – California ISO 

California Wind Energy – California Wind Energy Association 

Capstone – Capstone Turbine Corp. 

Central Iowa Coop – Central Iowa Power Cooperative and Corn Belt Power 

Cooperative 

Central Maine – Central Maine Power Company, New York State Electric & Gas 

Corporation, and Rochester Gas & Electric Corporation 

Cinergy – Cinergy Services, Inc. 

Consumers – Consumers Energy Company 

CPUC – California Public Utilities Commission 

CT DPUC – Connecticut Department of Public Utility Control 

Cummins – Cummins, Inc. 

EEI – Edison Electric Institute 

Empire District – Empire District Electric Co. 

Encorp – Encorp, Inc. 

Exelon – Exelon Generation Company, LLC, Commonwealth Edison Company, PECO 

Energy Company, and Sithe Energies, Inc. 

FERC DRS – Dispute Resolution Service, Federal Energy Regulatory Commission 

Florida PSC – Florida Public Service Commission 

Garwin McNeilus – Mr. Garwin McNeilus 

 1

 This list includes commenters who filed in response to the request for comments 

in the Notice of Proposed Rulemaking, the August 12, 2004 Request for Supplemental 

Comments, or both. Commenters who responded to the Request for Supplemental 

Comments are also listed separately at the end of this appendix. 
- 2 - 

Georgia PSC – Georgia Public Service Commission 

Georgia Transmission – Georgia Transmission Corporation 

Idaho Power – Idaho Power Company 

Iowa Utilities Board – Iowa Utilities Board 

ISO New England – ISO New England 

Joint Commenters – National Association of Regulatory Utility Commissioners, Small 

Generator Coalition (members listed below), American Public Power Association 

(who did not participate in the filing of supplemental comments), National Rural 

Electric Cooperative Association, and Edison Electric Institute 

LADWP – Los Angeles Department of Water and Power 

Massachusetts DTE – Massachusetts Department of Telecommunications and Energy 

MidAmerican – MidAmerican Energy Company 

Midwest ISO – Midwest Independent Transmission System Operator, Inc. 

Minnesota PUC – Minnesota Public Utilities Commission and the Minnesota 

Department of Commerce 

Mississippi PSC – Mississippi Public Service Commission 

NARUC – National Association of Regulatory Utility Commissioners 

National Grid – National Grid USA 

NEMA – National Electrical Manufacturers Association 

NEPOOL Participants – New England Power Pool Participants Committee 

Nevada Power – Nevada Power Company and Sierra Pacific Power Company 

NJ BPU – New Jersey Board of Public Utilities 

North Carolina Commission – North Carolina Utilities Commission and the Public 

Staff of the North Carolina Utilities Commission 

NorthWestern Energy – NorthWestern Energy 

NRECA – National Rural Electric Cooperative Association 

NYISO – New York Independent System Operator, Inc. 

NYPSC – New York State Public Service Commission 

NYTO – Central Hudson Gas and Electric Corp., Consolidated Edison Company of New 

York, Inc., Long Island Power Authority, New York Power Authority, New York 

State Electric and Gas Corp., Orange and Rockland Utilities, Inc., and Rochester 

Gas and Electric Corp. 

Ohio PUC – Public Utilities Commission of Ohio 

PacifiCorp – PacifiCorp 

PG&E – Pacific Gas and Electric Company 

PJM – PJM Interconnection, L.L.C. 

Plug Power – Plug Power, Inc. 

Progress Energy – Progress Energy, Inc., Carolina Power and Light Co., and Florida 

Power Corp. 

PSE&G – Public Service Electric and Gas Company 

Robert L. Carey – Mr. Robert L. Carey 
- 3 - 

RW Beck – R.W. Beck, Inc. 

Small Generator Coalition – American Council for an Energy Efficient Economy; 

American Solar Energy Society; American Wind Energy Association; BP Solar; 

Citizens Action Coalition of Indiana; Coffman Electrical Equipment; Cummins 

Power Generation; Elliott Energy Systems; Encorp; Environmental Law & Policy 

Center; Kyocera Solar, Inc.; MAN Turbomachinery, Inc.; Natural Resources 

Defense Council; Northeast-Midwest Institute; Northwest Energy Coalition; Pace 

Energy Program; Pennsylvania Energy Project; Plug Power, Inc.; Power 

Equipment Associates; PowerLight Corporation; RWE SCHOTT Solar, Inc.; 

Shepherd Advisors; Solar Energy Industries Association; Spire Solar, Inc.; U.S. 

Combined Heat and Power Association; and University of Oregon Solar Radiation 

Monitoring Laboratory. 

SMUD – Sacramento Municipal Utility District 

SoCal Edison – Southern California Edison Company 

Solar Turbines – Solar Turbines, Inc. 

Southern Company – Southern Company Services, Inc. 

SW TDU Group – Southwest Transmission Dependent Utility Group (Aguila Irrigation 

District, Ak-Chin Electric Utility Authority, Buckeye Water Conservation and 

Drainage District, Central Arizona Water Conservation District, Electrical District 

No. 3, Electrical District No. 4, Electrical District No. 5, Electrical District No. 6, 

Electrical District No. 7, Electrical District No. 8, Harquahala Valley Power 

District, Maricopa County Municipal Water District No. 1, McMullen Valley 

Water Conservation and Drainage District, City of Needles, Roosevelt Irrigation 

District, City of Safford, Tonopah Irrigation District, Wellton-Mohawk Irrigation 

and Drainage District) 

Tangibl – Tangibl, LLC 

TAPS – Transmission Access Policy Study Group 

TDU Systems – Transmission Dependent Utility Systems (Alabama Electric 

Cooperative, Inc.; Arkansas Electric Cooperative Corporation; Golden Spread 

Electric Cooperative; Kansas Electric Power Cooperative, Inc.; Old Dominion 

Electric Cooperative; and Seminole Electric Cooperative, Inc.) 

USCHPA – U.S. Combined Heat and Power Association 

Western – Western Area Power Administration 

Commenters Who Filed in Response to the Commission's 

Request for Supplemental Comments 

CT DPUC – Connecticut Department of Public Utility Control 

FERC DRS – Dispute Resolution Service, Federal Energy Regulatory Commission 

Joint Commenters – National Association of Regulatory Utility Commissioners, Small 
- 4 - 

Generator Coalition (members listed above), National Rural Electric Cooperative 

Association, and Edison Electric Institute (American Public Power Association did 

not participate in the filing of supplemental comments) 

Massachusetts DTE – Massachusetts Department of Telecommunications and Energy 

Minnesota PUC – Minnesota Public Utilities Commission and the Minnesota 

Department of Commerce 

National Grid – National Grid USA 

NJ BPU – New Jersey Board of Public Utilities 

North Carolina Commission – North Carolina Utilities Commission and the Public 

Staff of the North Carolina Utilities Commission 

NRECA – National Rural Electric Cooperative Association 

Ohio PUC – Public Utilities Commission of Ohio 

PJM – PJM Interconnection, L.L.C. 

Small Generator Coalition (members listed above) 

USCHPA – U.S. Combined Heat and Power Association 
Appendix B 

Flow Chart for Interconnecting a Small Generating 

Facility Using the "Study Process" 

Pre-Application Discussions 

Interconnection Customer submits 

Interconnection Request and feasibility study 

deposit 

Is the Interconnection Request 

complete? 

Yes 

Perform facilities study 

Perform system impact study 

Does the feasibility study show the 

interconnection affects safety and 

reliability? 

Is a feasibility study needed? 

Sign an Interconnection 

Agreement 

Scoping meeting 

Yes 

Interconnection 

Customer provides more 

information? 

Yes

No

Withdraw 

Interconnection 

Request 

No 

Does the Interconnection Customer agree to pay for any 

necessary Interconnection Facilities and Upgrades to the 

Transmission Provider's Transmission electric system?

Yes 

No

No

Yes 

No 
Appendix C 

Flow Chart for Interconnecting a Certified Small Generating 

Facility No Larger than 2 MW Using the "Fast Track Process" 

Pre-Application Discussions 

Interconnection Customer 

submits Interconnection 

Request and processing fee 

Is the Interconnection Request 

complete? 

Does the proposed 

interconnection pass the 

screens? 

Yes 

Is the Small Generating 

Facility certified and ≤ 2 

MW? 

Customer options 

meeting and 

supplemental review 

Does the Transmission 

Provider believe it can 

safely interconnect the 

Small Generating Facility?

Sign an 

Interconnection 

Agreement 

Yes 

Yes

No 

Interconnection Customer 

provides more information? 

Yes 

No 

Withdraw 

Interconnection Request 

Does the Interconnection Customer 

agree to pay for any necessary 

Interconnection Facilities and Upgrades 

to the Transmission Provider's 

Transmission electric system? 

No

No

No

Yes Yes

Evaluate the Interconnection 

Request under the Study 

Process (Appendix B) No 
Appendix D 

Flow Chart for Interconnecting a Certified Inverter-Based 

Small Generating Facility No Larger than 10 kW 

Using the "10 kW Inverter Process" 

Pre-Application Discussions 

Interconnection Customer 

submits Interconnection 

Request/procedures/terms and 

conditions document and 

submits processing fee 

Is the Interconnection Request 

complete? 

Does the proposed 

interconnection pass 

the screens? 

Yes 

Is the Small Generating Facility 

certified, inverter-based, and ≤

10 kW? 

Yes 

No 

Interconnection Customer 

provides more information? 

Yes 

No 

Withdraw 

Interconnection Request 

No

Yes 

Evaluate the Interconnection 

Request under the Study Process 

(Appendix B) or Fast Track 

Process (Appendix C) 

No 

The Interconnection Customer 

installs equipment and returns 

certificate of completion to the 

Transmission Provider 

The Transmission Provider 

notifies the Interconnection 

Customer that the 

interconnection is authorized 
Appendix E to the Small 

Generator Interconnection Final Rule

SMALL GENERATOR 

INTERCONNECTION PROCEDURES (SGIP) 

(For Generating Facilities No Larger Than 20 MW) 
 - i -

TABLE OF CONTENTS 

Page No. 

Section 1. Application..............................................................................................................- 1 - 

1.1 Applicability .......................................................................................................- 1 - 

1.2 Pre-Application...................................................................................................- 1 - 

1.3 Interconnection Request......................................................................................- 2 - 

1.4 Modification of the Interconnection Request .....................................................- 2 - 

1.5 Site Control .........................................................................................................- 2 - 

1.6 Queue Position....................................................................................................- 3 - 

1.7 Interconnection Requests Submitted Prior to the Effective Date of the SGIP ...- 3 - 

Section 2. Fast Track Process ................................................................................................- 3 - 

2.1 Applicability .......................................................................................................- 3 - 

2.2 Initial Review......................................................................................................- 3 - 

2.2.1 Screens ....................................................................................................- 3 - 

2.3 Customer Options Meeting.................................................................................- 6 - 

2.4 Supplemental Review .........................................................................................- 6 - 

Section 3. Study Process..........................................................................................................- 7 - 

3.1 Applicability .......................................................................................................- 7 - 

3.2 Scoping Meeting .................................................................................................- 7 - 

3.3 Feasibility Study .................................................................................................- 8 - 

3.4 System Impact Study ..........................................................................................- 9 - 

3.5 Facilities Study..................................................................................................- 10 - 

Section 4. Provisions that Apply to All Interconnection Requests....................................- 11 - 

4.1 Reasonable Efforts............................................................................................- 11 - 

4.2 Disputes.............................................................................................................- 11 -

4.3 Interconnection Metering..................................................................................- 12 - 

4.4 Commissioning .................................................................................................- 12 - 

4.5 Confidentiality ..................................................................................................- 12 - 

4.6 Comparability ...................................................................................................- 13 - 

4.7 Record Retention ..............................................................................................- 13 - 

4.8 Interconnection Agreement...............................................................................- 13 - 

4.9 Coordination with Affected Systems................................................................- 14 - 

4.10 Capacity of the Small Generating Facility........................................................- 14 - 

Attachment 1 – Glossary of Terms 

Attachment 2 – Small Generator Interconnection Request 

Attachment 3 – Certification Codes and Standards 

Attachment 4 – Certification of Small Generator Equipment Packages 

Attachment 5 – Application, Procedures, and Terms and Conditions for Interconnecting a 

Certified Inverter-Based Small Generating Facility No Larger than 10 kW ("10 kW Inverter 

Process") 

Attachment 6 – Feasibility Study Agreement 
 - ii -

Attachment 7 – System Impact Study Agreement 

Attachment 8 – Facilities Study Agreement 
Small Generator Interconnection Procedures (SGIP) - 1 - 

Section 1. Application 

1.1 Applicability

1.1.1 A request to interconnect a certified Small Generating Facility (See Attachments 

3 and 4 for description of certification criteria) no larger than 2 MW shall be 

evaluated under the section 2 Fast Track Process. A request to interconnect a 

certified inverter-based Small Generating Facility no larger than 10 kW shall be 

evaluated under the Attachment 5 10 kW Inverter Process. A request to 

interconnect a Small Generating Facility larger than 2 MW but no larger than 20 

MW or a Small Generating Facility that does not pass the Fast Track Process or 

the 10 kW Inverter Process, shall be evaluated under the section 3 Study Process. 

1.1.2 Capitalized terms used herein shall have the meanings specified in the Glossary of 

Terms in Attachment 1 or the body of these procedures. 

1.1.3 Neither these procedures nor the requirements included hereunder apply to Small 

Generating Facilities interconnected or approved for interconnection prior to 60 

Business Days after the effective date of these procedures. 

1.1.4 Prior to submitting its Interconnection Request (Attachment 2), the 

Interconnection Customer may ask the Transmission Provider's interconnection 

contact employee or office whether the proposed interconnection is subject to 

these procedures. The Transmission Provider shall respond within 15 Business 

Days. 

1.1.5 Infrastructure security of electric system equipment and operations and control 

hardware and software is essential to ensure day-to-day reliability and operational 

security. The Federal Energy Regulatory Commission expects all Transmission 

Providers, market participants, and Interconnection Customers interconnected 

with electric systems to comply with the recommendations offered by the 

President's Critical Infrastructure Protection Board and best practice 

recommendations from the electric reliability authority. All public utilities are 

expected to meet basic standards for electric system infrastructure and operational 

security, including physical, operational, and cyber-security practices. 

1.1.6 References in these procedures to interconnection agreement are to the Small 

Generator Interconnection Agreement (SGIA). 

1.2 Pre-Application

The Transmission Provider shall designate an employee or office from which information 

on the application process and on an Affected System can be obtained through informal 

requests from the Interconnection Customer presenting a proposed project for a specific 

site. The name, telephone number, and e-mail address of such contact employee or office 
Small Generator Interconnection Procedures (SGIP) - 2 - 

shall be made available on the Transmission Provider's Internet web site. Electric system 

information provided to the Interconnection Customer should include relevant system 

studies, interconnection studies, and other materials useful to an understanding of an 

interconnection at a particular point on the Transmission Provider's Transmission System, 

to the extent such provision does not violate confidentiality provisions of prior 

agreements or critical infrastructure requirements. The Transmission Provider shall 

comply with reasonable requests for such information. 

1.3 Interconnection Request

The Interconnection Customer shall submit its Interconnection Request to the 

Transmission Provider, together with the processing fee or deposit specified in the 

Interconnection Request. The Interconnection Request shall be date- and time-stamped 

upon receipt. The original date- and time-stamp applied to the Interconnection Request at 

the time of its original submission shall be accepted as the qualifying date- and timestamp for the purposes of any timetable in these procedures. The Interconnection 

Customer shall be notified of receipt by the Transmission Provider within three Business 

Days of receiving the Interconnection Request. The Transmission Provider shall notify 

the Interconnection Customer within ten Business Days of the receipt of the 

Interconnection Request as to whether the Interconnection Request is complete or 

incomplete. If the Interconnection Request is incomplete, the Transmission Provider 

shall provide along with the notice that the Interconnection Request is incomplete, a 

written list detailing all information that must be provided to complete the 

Interconnection Request. The Interconnection Customer will have ten Business Days 

after receipt of the notice to submit the listed information or to request an extension of 

time to provide such information. If the Interconnection Customer does not provide the 

listed information or a request for an extension of time within the deadline, the 

Interconnection Request will be deemed withdrawn. An Interconnection Request will be 

deemed complete upon submission of the listed information to the Transmission 

Provider. 

1.4 Modification of the Interconnection Request

Any modification to machine data or equipment configuration or to the interconnection 

site of the Small Generating Facility not agreed to in writing by the Transmission 

Provider and the Interconnection Customer may be deemed a withdrawal of the 

Interconnection Request and may require submission of a new Interconnection Request, 

unless proper notification of each Party by the other and a reasonable time to cure the 

problems created by the changes are undertaken. 

1.5 Site Control

Documentation of site control must be submitted with the Interconnection Request. Site 

control may be demonstrated through: 

1.8.1 Ownership of, a leasehold interest in, or a right to develop a site for the purpose of 

constructing the Small Generating Facility; 
Small Generator Interconnection Procedures (SGIP) - 3 - 

1.8.2 An option to purchase or acquire a leasehold site for such purpose; or 

1.8.3 An exclusivity or other business relationship between the Interconnection 

Customer and the entity having the right to sell, lease, or grant the Interconnection 

Customer the right to possess or occupy a site for such purpose. 

1.6 Queue Position

The Transmission Provider shall assign a Queue Position based upon the date- and timestamp of the Interconnection Request. The Queue Position of each Interconnection 

Request will be used to determine the cost responsibility for the Upgrades necessary to 

accommodate the interconnection. The Transmission Provider shall maintain a single 

queue per geographic region. At the Transmission Provider's option, Interconnection 

Requests may be studied serially or in clusters for the purpose of the system impact 

study. 

1.7 Interconnection Requests Submitted Prior to the Effective Date of the SGIP

Nothing in this SGIP affects an Interconnection Customer's Queue Position assigned 

before the effective date of this SGIP. The Parties agree to complete work on any 

interconnection study agreement executed prior the effective date of this SGIP in 

accordance with the terms and conditions of that interconnection study agreement. Any 

new studies or other additional work will be completed pursuant to this SGIP. 

Section 2. Fast Track Process 

2.1 Applicability

The Fast Track Process is available to an Interconnection Customer proposing to 

interconnect its Small Generating Facility with the Transmission Provider's Transmission 

System if the Small Generating Facility is no larger than 2 MW and if the Interconnection 

Customer's proposed Small Generating Facility meets the codes, standards, and 

certification requirements of Attachments 3 and 4 of these procedures, or the 

Transmission Provider has reviewed the design or tested the proposed Small Generating 

Facility and is satisfied that it is safe to operate. 

2.2 Initial Review

Within 15 Business Days after the Transmission Provider notifies the Interconnection 

Customer it has received a complete Interconnection Request, the Transmission Provider 

shall perform an initial review using the screens set forth below, shall notify the 

Interconnection Customer of the results, and include with the notification copies of the 

analysis and data underlying the Transmission Provider's determinations under the 

screens. 

 

2.2.1 Screens
Small Generator Interconnection Procedures (SGIP) - 4 - 

2.2.1.1 The proposed Small Generating Facility’s Point of Interconnection 

must be on a portion of the Transmission Provider’s Distribution 

System that is subject to the Tariff. 

2.2.1.2 For interconnection of a proposed Small Generating Facility to a 

radial distribution circuit, the aggregated generation, including the 

proposed Small Generating Facility, on the circuit shall not exceed 

15 % of the line section annual peak load as most recently 

measured at the substation. A line section is that portion of a 

Transmission Provider’s electric system connected to a customer 

bounded by automatic sectionalizing devices or the end of the 

distribution line. 

2.2.1.3 For interconnection of a proposed Small Generating Facility to the 

load side of spot network protectors, the proposed Small 

Generating Facility must utilize an inverter-based equipment 

package and, together with the aggregated other inverter-based 

generation, shall not exceed the smaller of 5 % of a spot network's 

maximum load or 50 kW1

. 

2.2.1.4 The proposed Small Generating Facility, in aggregation with other 

generation on the distribution circuit, shall not contribute more 

than 10 % to the distribution circuit's maximum fault current at the 

point on the high voltage (primary) level nearest the proposed 

point of change of ownership. 

2.2.1.5 The proposed Small Generating Facility, in aggregate with other 

generation on the distribution circuit, shall not cause any 

distribution protective devices and equipment (including, but not 

limited to, substation breakers, fuse cutouts, and line reclosers), or 

Interconnection Customer equipment on the system to exceed 87.5 

% of the short circuit interrupting capability; nor shall the 

interconnection proposed for a circuit that already exceeds 87.5 % 

of the short circuit interrupting capability. 

2.2.1.6 Using the table below, determine the type of interconnection to a 

primary distribution line. This screen includes a review of the type 

of electrical service provided to the Interconnecting Customer, 

including line configuration and the transformer connection to 

 1

 A spot Network is a type of distribution system found within modern commercial 

buildings to provide high reliability of service to a single customer. (Standard Handbook for 

Electrical Engineers, 11th edition, Donald Fink, McGraw Hill Book Company) 
Small Generator Interconnection Procedures (SGIP) - 5 - 

limit the potential for creating over-voltages on the Transmission 

Provider's electric power system due to a loss of ground during the 

operating time of any anti-islanding function. 

Primary Distribution Line 

Type 

Type of Interconnection to 

Primary Distribution Line 

Result/Criteria 

Three-phase, three wire 3-phase or single phase, 

phase-to-phase 

Pass screen 

Three-phase, four wire Effectively-grounded 3 

phase or Single-phase, lineto-neutral 

Pass screen 

2.2.1.7 If the proposed Small Generating Facility is to be interconnected 

on single-phase shared secondary, the aggregate generation 

capacity on the shared secondary, including the proposed Small 

Generating Facility, shall not exceed 20 kW. 

2.2.1.8 If the proposed Small Generating Facility is single-phase and is to 

be interconnected on a center tap neutral of a 240 volt service, its 

addition shall not create an imbalance between the two sides of the 

240 volt service of more than 20 % of the nameplate rating of the 

service transformer. 

2.2.1.9 The Small Generating Facility, in aggregate with other generation 

interconnected to the transmission side of a substation transformer 

feeding the circuit where the Small Generating Facility proposes to 

interconnect shall not exceed 10 MW in an area where there are 

known, or posted, transient stability limitations to generating units 

located in the general electrical vicinity (e.g., three or four 

transmission busses from the point of interconnection). 

2.2.1.10 No construction of facilities by the Transmission Provider on its 

own system shall be required to accommodate the Small 

Generating Facility. 

2.2.2 If the proposed interconnection passes the screens, the Interconnection Request 

shall be approved and the Transmission Provider will provide the Interconnection 

Customer an executable interconnection agreement within five Business Days 

after the determination. 

2.2.3 If the proposed interconnection fails the screens, but the Transmission Provider 

determines that the Small Generating Facility may nevertheless be interconnected 

consistent with safety, reliability, and power quality standards, the Transmission 
Small Generator Interconnection Procedures (SGIP) - 6 - 

Provider shall provide the Interconnection Customer an executable 

interconnection agreement within five Business Days after the determination. 

2.2.4 If the proposed interconnection fails the screens, but the Transmission Provider 

does not or cannot determine from the initial review that the Small Generating 

Facility may nevertheless be interconnected consistent with safety, reliability, and 

power quality standards unless the Interconnection Customer is willing to 

consider minor modifications or further study, the Transmission Provider shall 

provide the Interconnection Customer with the opportunity to attend a customer 

options meeting. 

2.3 Customer Options Meeting

If the Transmission Provider determines the Interconnection Request cannot be approved 

without minor modifications at minimal cost; or a supplemental study or other additional 

studies or actions; or at significant cost to address safety, reliability, or power quality 

problems, within the five Business Day period after the determination, the Transmission 

Provider shall notify the Interconnection Customer and provide copies of all data and 

analyses underlying its conclusion. Within ten Business Days of the Transmission 

Provider's determination, the Transmission Provider shall offer to convene a customer 

options meeting with the Transmission Provider to review possible Interconnection 

Customer facility modifications or the screen analysis and related results, to determine 

what further steps are needed to permit the Small Generating Facility to be connected 

safely and reliably. At the time of notification of the Transmission Provider's 

determination, or at the customer options meeting, the Transmission Provider shall: 

2.3.1 Offer to perform facility modifications or minor modifications to the 

Transmission Provider's electric system(e.g., changing meters, fuses, relay 

settings) and provide a non-binding good faith estimate of the limited cost to 

make such modifications to the Transmission Provider's electric system; or 

2.3.2 Offer to perform a supplemental review if the Transmission Provider concludes 

that the supplemental review might determine that the Small Generating Facility 

could continue to qualify for interconnection pursuant to the Fast Track Process, 

and provide a non-binding good faith estimate of the costs of such review; or 

2.3.3 Obtain the Interconnection Customer's agreement to continue evaluating the 

Interconnection Request under the section 3 Study Process. 

2.4 Supplemental Review

If the Interconnection Customer agrees to a supplemental review, the Interconnection 

Customer shall agree in writing within 15 Business Days of the offer, and submit a 

deposit for the estimated costs. The Interconnection Customer shall be responsible for 

the Transmission Provider's actual costs for conducting the supplemental review. The 

Interconnection Customer must pay any review costs that exceed the deposit within 20 
Small Generator Interconnection Procedures (SGIP) - 7 - 

Business Days of receipt of the invoice or resolution of any dispute. If the deposit 

exceeds the invoiced costs, the Transmission Provider will return such excess within 20 

Business Days of the invoice without interest. 

2.4.1 Within ten Business Days following receipt of the deposit for a supplemental 

review, the Transmission Provider will determine if the Small Generating Facility 

can be interconnected safely and reliably. 

2.4.1.1 If so, the Transmission Provider shall forward an executable an 

interconnection agreement to the Interconnection Customer within 

five Business Days. 

2.4.1.2 If so, and Interconnection Customer facility modifications are 

required to allow the Small Generating Facility to be 

interconnected consistent with safety, reliability, and power quality 

standards under these procedures, the Transmission Provider shall 

forward an executable interconnection agreement to the 

Interconnection Customer within five Business Days after 

confirmation that the Interconnection Customer has agreed to make 

the necessary changes at the Interconnection Customer's cost. 

2.4.1.3 If so, and minor modifications to the Transmission Provider's 

electric system are required to allow the Small Generating Facility 

to be interconnected consistent with safety, reliability, and power 

quality standards under the Fast Track Process, the Transmission 

Provider shall forward an executable interconnection agreement to 

the Interconnection Customer within ten Business Days that 

requires the Interconnection Customer to pay the costs of such 

system modifications prior to interconnection. 

2.4.1.4 If not, the Interconnection Request will continue to be evaluated 

under the section 3 Study Process.

Section 3. Study Process 

3.1 Applicability

The Study Process shall be used by an Interconnection Customer proposing to 

interconnect its Small Generating Facility with the Transmission Provider's Transmission 

System if the Small Generating Facility (1) is larger than 2 MW but no larger than 20 

MW, (2) is not certified, or (3) is certified but did not pass the Fast Track Process or the 

10 kW Inverter Process. 

3.2 Scoping Meeting
Small Generator Interconnection Procedures (SGIP) - 8 - 

3.2.1 A scoping meeting will be held within ten Business Days after the Interconnection 

Request is deemed complete, or as otherwise mutually agreed to by the Parties. 

The Transmission Provider and the Interconnection Customer will bring to the 

meeting personnel, including system engineers and other resources as may be 

reasonably required to accomplish the purpose of the meeting. 

3.2.2 The purpose of the scoping meeting is to discuss the Interconnection Request and 

review existing studies relevant to the Interconnection Request. The Parties shall 

further discuss whether the Transmission Provider should perform a feasibility 

study or proceed directly to a system impact study, or a facilities study, or an 

interconnection agreement. If the Parties agree that a feasibility study should be 

performed, the Transmission Provider shall provide the Interconnection 

Customer, as soon as possible, but not later than five Business Days after the 

scoping meeting, a feasibility study agreement (Attachment 6) including an 

outline of the scope of the study and a non-binding good faith estimate of the cost 

to perform the study. 

3.2.3 The scoping meeting may be omitted by mutual agreement. In order to remain in 

consideration for interconnection, an Interconnection Customer who has 

requested a feasibility study must return the executed feasibility study agreement 

within 15 Business Days. If the Parties agree not to perform a feasibility study, 

the Transmission Provider shall provide the Interconnection Customer, no later 

than five Business Days after the scoping meeting, a system impact study 

agreement (Attachment 7) including an outline of the scope of the study and a 

non-binding good faith estimate of the cost to perform the study. 

3.3 Feasibility Study

3.3.1 The feasibility study shall identify any potential adverse system impacts that 

would result from the interconnection of the Small Generating Facility. 

3.3.2 A deposit of the lesser of 50 percent of the good faith estimated feasibility study 

costs or earnest money of $1,000 may be required from the Interconnection 

Customer. 

3.3.3 The scope of and cost responsibilities for the feasibility study are described in the 

attached feasibility study agreement. 

3.3.4 If the feasibility study shows no potential for adverse system impacts, the 

Transmission Provider shall send the Interconnection Customer a facilities study 

agreement, including an outline of the scope of the study and a non-binding good 

faith estimate of the cost to perform the study. If no additional facilities are 
Small Generator Interconnection Procedures (SGIP) - 9 - 

required, the Transmission Provider shall send the Interconnection Customer an 

executable interconnection agreement within five Business Days. 

3.3.5 If the feasibility study shows the potential for adverse system impacts, the review 

process shall proceed to the appropriate system impact study(s). 

3.4 System Impact Study

3.4.1 A system impact study shall identify and detail the electric system impacts that 

would result if the proposed Small Generating Facility were interconnected 

without project modifications or electric system modifications, focusing on the 

adverse system impacts identified in the feasibility study, or to study potential 

impacts, including but not limited to those identified in the scoping meeting. A 

system impact study shall evaluate the impact of the proposed interconnection on 

the reliability of the electric system. 

3.4.2 If no transmission system impact study is required, but potential electric power 

Distribution System adverse system impacts are identified in the scoping meeting 

or shown in the feasibility study, a distribution system impact study must be 

performed. The Transmission Provider shall send the Interconnection Customer a 

distribution system impact study agreement within 15 Business Days of 

transmittal of the feasibility study report, including an outline of the scope of the 

study and a non-binding good faith estimate of the cost to perform the study, or 

following the scoping meeting if no feasibility study is to be performed. 

3.4.3 In instances where the feasibility study or the distribution system impact study

shows potential for transmission system adverse system impacts, within five 

Business Days following transmittal of the feasibility study report, the 

Transmission Provider shall send the Interconnection Customer a transmission 

system impact study agreement, including an outline of the scope of the study and 

a non-binding good faith estimate of the cost to perform the study, if such a study 

is required. 

3.4.4 If a transmission system impact study is not required, but electric power 

Distribution System adverse system impacts are shown by the feasibility study to 

be possible and no distribution system impact study has been conducted, the 

Transmission Provider shall send the Interconnection Customer a distribution 

system impact study agreement. 

3.4.5 If the feasibility study shows no potential for transmission system or Distribution 

System adverse system impacts, the Transmission Provider shall send the 

Interconnection Customer either a facilities study agreement (Attachment 8), 

including an outline of the scope of the study and a non-binding good faith 
Small Generator Interconnection Procedures (SGIP) - 10 - 

estimate of the cost to perform the study, or an executable interconnection 

agreement, as applicable. 

3.4.6 In order to remain under consideration for interconnection, the Interconnection 

Customer must return executed system impact study agreements, if applicable, 

within 30 Business Days. 

3.4.7 A deposit of the good faith estimated costs for each system impact study may be 

required from the Interconnection Customer. 

3.4.8 The scope of and cost responsibilities for a system impact study are described in 

the attached system impact study agreement. 

3.4.9 Where transmission systems and Distribution Systems have separate owners, such 

as is the case with transmission-dependent utilities ("TDUs") – whether investorowned or not – the Interconnection Customer may apply to the nearest 

Transmission Provider (Transmission Owner, Regional Transmission Operator, or 

Independent Transmission Provider) providing transmission service to the TDU to 

request project coordination. Affected Systems shall participate in the study and 

provide all information necessary to prepare the study. 

3.5 Facilities Study

3.5.1 Once the required system impact study(s) is completed, a system impact study 

report shall be prepared and transmitted to the Interconnection Customer along 

with a facilities study agreement within five Business Days, including an outline 

of the scope of the study and a non-binding good faith estimate of the cost to 

perform the facilities study. In the case where one or both impact studies are 

determined to be unnecessary, a notice of the fact shall be transmitted to the 

Interconnection Customer within the same timeframe. 

3.5.2 In order to remain under consideration for interconnection, or, as appropriate, in 

the Transmission Provider's interconnection queue, the Interconnection Customer 

must return the executed facilities study agreement or a request for an extension 

of time within 30 Business Days. 

3.5.3 The facilities study shall specify and estimate the cost of the equipment, 

engineering, procurement and construction work (including overheads) needed to 

implement the conclusions of the system impact study(s). 

3.5.4 Design for any required Interconnection Facilities and/or Upgrades shall be 

performed under the facilities study agreement. The Transmission Provider may 

contract with consultants to perform activities required under the facilities study 

agreement. The Interconnection Customer and the Transmission Provider may 
Small Generator Interconnection Procedures (SGIP) - 11 - 

agree to allow the Interconnection Customer to separately arrange for the design 

of some of the Interconnection Facilities. In such cases, facilities design will be 

reviewed and/or modified prior to acceptance by the Transmission Provider, 

under the provisions of the facilities study agreement. If the Parties agree to 

separately arrange for design and construction, and provided security and 

confidentiality requirements can be met, the Transmission Provider shall make 

sufficient information available to the Interconnection Customer in accordance 

with confidentiality and critical infrastructure requirements to permit the 

Interconnection Customer to obtain an independent design and cost estimate for 

any necessary facilities. 

3.5.5 A deposit of the good faith estimated costs for the facilities study may be required 

from the Interconnection Customer. 

3.5.6 The scope of and cost responsibilities for the facilities study are described in the 

attached facilities study agreement. 

3.5.7 Upon completion of the facilities study, and with the agreement of the 

Interconnection Customer to pay for Interconnection Facilities and Upgrades 

identified in the facilities study, the Transmission Provider shall provide the 

Interconnection Customer an executable interconnection agreement within five 

Business Days. 

Section 4. Provisions that Apply to All Interconnection Requests 

4.1 Reasonable Efforts

The Transmission Provider shall make reasonable efforts to meet all time frames 

provided in these procedures unless the Transmission Provider and the Interconnection 

Customer agree to a different schedule. If the Transmission Provider cannot meet a 

deadline provided herein, it shall notify the Interconnection Customer, explain the reason 

for the failure to meet the deadline, and provide an estimated time by which it will 

complete the applicable interconnection procedure in the process. 

4.2 Disputes

4.2.1 The Parties agree to attempt to resolve all disputes arising out of the interconnection 

process according to the provisions of this article. 

4.2.2 In the event of a dispute, either Party shall provide the other Party with a written Notice 

of Dispute. Such Notice shall describe in detail the nature of the dispute. 
Small Generator Interconnection Procedures (SGIP) - 12 - 

4.2.3 If the dispute has not been resolved within two Business Days after receipt of the Notice, 

either Party may contact FERC's Dispute Resolution Service (DRS) for assistance in 

resolving the dispute. 

4.2.4 The DRS will assist the Parties in either resolving their dispute or in selecting an 

appropriate dispute resolution venue (e.g., mediation, settlement judge, early neutral 

evaluation, or technical expert) to assist the Parties in resolving their dispute. DRS can 

be reached at 1-877-337-2237 or via the internet at http://www.ferc.gov/legal/adr.asp. 

4.2.5 Each Party agrees to conduct all negotiations in good faith and will be responsible for 

one-half of any costs paid to neutral third-parties. 

4.2.6 If neither Party elects to seek assistance from the DRS, or if the attempted dispute 

resolution fails, then either Party may exercise whatever rights and remedies it may have 

in equity or law consistent with the terms of this Agreement. 

4.3 Interconnection Metering

Any metering necessitated by the use of the Small Generating Facility shall be installed at 

the Interconnection Customer's expense in accordance with Federal Energy Regulatory 

Commission, state, or local regulatory requirements or the Transmission Provider's 

specifications. 

4.4 Commissioning

Commissioning tests of the Interconnection Customer's installed equipment shall be 

performed pursuant to applicable codes and standards. The Transmission Provider must 

be given at least five Business Days written notice, or as otherwise mutually agreed to by 

the Parties, of the tests and may be present to witness the commissioning tests. 

4.5. Confidentiality

4.5.1 Confidential information shall mean any confidential and/or proprietary 

information provided by one Party to the other Party that is clearly marked or 

otherwise designated "Confidential." For purposes of this Agreement all design, 

operating specifications, and metering data provided by the Interconnection 

Customer shall be deemed confidential information regardless of whether it is 

clearly marked or otherwise designated as such. 

4.5.2 Confidential Information does not include information previously in the public 

domain, required to be publicly submitted or divulged by Governmental 

Authorities (after notice to the other Party and after exhausting any opportunity to 

oppose such publication or release), or necessary to be divulged in an action to 

enforce this Agreement. Each Party receiving Confidential Information shall hold 

such information in confidence and shall not disclose it to any third party nor to 
Small Generator Interconnection Procedures (SGIP) - 13 - 

the public without the prior written authorization from the Party providing that 

information, except to fulfill obligations under this Agreement, or to fulfill legal 

or regulatory requirements. 

 4.5.2.1 Each Party shall employ at least the same standard of care to protect 

Confidential Information obtained from the other Party as it employs to 

protect its own Confidential Information. 

 4.5.2.2 Each Party is entitled to equitable relief, by injunction or otherwise, to 

enforce its rights under this provision to prevent the release of 

Confidential Information without bond or proof of damages, and may seek 

other remedies available at law or in equity for breach of this provision. 

4.5.3 Notwithstanding anything in this article to the contrary, and pursuant to 18 CFR § 

1b.20, if FERC, during the course of an investigation or otherwise, requests 

information from one of the Parties that is otherwise required to be maintained in 

confidence pursuant to this Agreement, the Party shall provide the requested 

information to FERC, within the time provided for in the request for information. 

In providing the information to FERC, the Party may, consistent with 18 CFR § 

388.112, request that the information be treated as confidential and non-public by 

FERC and that the information be withheld from public disclosure. Parties are 

prohibited from notifying the other Party to this Agreement prior to the release of 

the Confidential Information to FERC. The Party shall notify the other Party to 

this Agreement when it is notified by FERC that a request to release Confidential 

Information has been received by FERC, at which time either of the Parties may 

respond before such information would be made public, pursuant to 18 CFR § 

388.112. Requests from a state regulatory body conducting a confidential 

investigation shall be treated in a similar manner if consistent with the applicable 

state rules and regulations. 

4.6 Comparability

The Transmission Provider shall receive, process and analyze all Interconnection 

Requests in a timely manner as set forth in this document. The Transmission Provider 

shall use the same reasonable efforts in processing and analyzing Interconnection 

Requests from all Interconnection Customers, whether the Small Generating Facility is 

owned or operated by the Transmission Provider, its subsidiaries or affiliates, or others. 

4.7 Record Retention

The Transmission Provider shall maintain for three years records, subject to audit, of all 

Interconnection Requests received under these procedures, the times required to complete 

Interconnection Request approvals and disapprovals, and justification for the actions 

taken on the Interconnection Requests.

4.8 Interconnection Agreement
Small Generator Interconnection Procedures (SGIP) - 14 - 

After receiving an interconnection agreement from the Transmission Provider, the 

Interconnection Customer shall have 30 Business Days or another mutually agreeable 

timeframe to sign and return the interconnection agreement, or request that the 

Transmission Provider file an unexecuted interconnection agreement with the Federal 

Energy Regulatory Commission. If the Interconnection Customer does not sign the 

interconnection agreement, or ask that it be filed unexecuted by the Transmission 

Provider within 30 Business Days, the Interconnection Request shall be deemed 

withdrawn. After the interconnection agreement is signed by the Parties, the 

interconnection of the Small Generating Facility shall proceed under the provisions of the 

interconnection agreement. 

4.9 Coordination with Affected Systems

The Transmission Provider shall coordinate the conduct of any studies required to 

determine the impact of the Interconnection Request on Affected Systems with Affected 

System operators and, if possible, include those results (if available) in its applicable 

interconnection study within the time frame specified in these procedures. The 

Transmission Provider will include such Affected System operators in all meetings held 

with the Interconnection Customer as required by these procedures. The Interconnection 

Customer will cooperate with the Transmission Provider in all matters related to the 

conduct of studies and the determination of modifications to Affected Systems. A 

Transmission Provider which may be an Affected System shall cooperate with the 

Transmission Provider with whom interconnection has been requested in all matters 

related to the conduct of studies and the determination of modifications to Affected 

Systems. 

4.10 Capacity of the Small Generating Facility

4.10.1 If the Interconnection Request is for an increase in capacity for an existing Small 

Generating Facility, the Interconnection Request shall be evaluated on the basis of 

the new total capacity of the Small Generating Facility. 

4.10.2 If the Interconnection Request is for a Small Generating Facility that includes 

multiple energy production devices at a site for which the Interconnection 

Customer seeks a single Point of Interconnection, the Interconnection Request 

shall be evaluated on the basis of the aggregate capacity of the multiple devices. 

4.10.3 The Interconnection Request shall be evaluated using the maximum rated capacity 

of the Small Generating Facility. 
SGIP Glossary of Terms - 1 - 

Attachment 1 

Glossary of Terms 

10 kW Inverter Process – The procedure for evaluating an Interconnection Request for a 

certified inverter-based Small Generating Facility no larger than 10 kW that uses the section 2 

screens. The application process uses an all-in-one document that includes a simplified 

Interconnection Request, simplified procedures, and a brief set of terms and conditions. See 

SGIP Attachment 5. 

Affected System – An electric system other than the Transmission Provider's Transmission 

System that may be affected by the proposed interconnection. 

Business Day – Monday through Friday, excluding Federal Holidays. 

Distribution System – The Transmission Provider's facilities and equipment used to transmit 

electricity to ultimate usage points such as homes and industries directly from nearby generators 

or from interchanges with higher voltage transmission networks which transport bulk power over 

longer distances. The voltage levels at which Distribution Systems operate differ among areas. 

Distribution Upgrades – The additions, modifications, and upgrades to the Transmission 

Provider's Distribution System at or beyond the Point of Interconnection to facilitate 

interconnection of the Small Generating Facility and render the transmission service necessary to 

effect the Interconnection Customer's wholesale sale of electricity in interstate commerce. 

Distribution Upgrades do not include Interconnection Facilities. 

Fast Track Process – The procedure for evaluating an Interconnection Request for a certified 

Small Generating Facility no larger than 2 MW that includes the section 2 screens, customer 

options meeting, and optional supplemental review. 

Interconnection Customer – Any entity, including the Transmission Provider, the Transmission 

Owner or any of the affiliates or subsidiaries of either, that proposes to interconnect its Small 

Generating Facility with the Transmission Provider's Transmission System. 

Interconnection Facilities – The Transmission Provider's Interconnection Facilities and the 

Interconnection Customer's Interconnection Facilities. Collectively, Interconnection Facilities 

include all facilities and equipment between the Small Generating Facility and the Point of 

Interconnection, including any modification, additions or upgrades that are necessary to 

physically and electrically interconnect the Small Generating Facility to the Transmission 

Provider's Transmission System. Interconnection Facilities are sole use facilities and shall not 

include Distribution Upgrades or Network Upgrades. 

Interconnection Request – The Interconnection Customer's request, in accordance with the 

Tariff, to interconnect a new Small Generating Facility, or to increase the capacity of, or make a 

Material Modification to the operating characteristics of, an existing Small Generating Facility 

that is interconnected with the Transmission Provider’s Transmission System. 
SGIP Glossary of Terms - 2 - 

Material Modification – A modification that has a material impact on the cost or timing of any 

Interconnection Request with a later queue priority date. 

Network Upgrades – Additions, modifications, and upgrades to the Transmission Provider's 

Transmission System required at or beyond the point at which the Small Generating Facility 

interconnects with the Transmission Provider’s Transmission System to accommodate the 

interconnection with the Small Generating Facility to the Transmission Provider’s Transmission 

System. Network Upgrades do not include Distribution Upgrades. 

Party or Parties – The Transmission Provider, Transmission Owner, Interconnection Customer 

or any combination of the above. 

Point of Interconnection – The point where the Interconnection Facilities connect with the 

Transmission Provider's Transmission System. 

Queue Position – The order of a valid Interconnection Request, relative to all other pending 

valid Interconnection Requests, that is established based upon the date and time of receipt of the 

valid Interconnection Request by the Transmission Provider. 

Small Generating Facility – The Interconnection Customer's device for the production of 

electricity identified in the Interconnection Request, but shall not include the Interconnection 

Customer's Interconnection Facilities. 

Study Process – The procedure for evaluating an Interconnection Request that includes the 

section 3 scoping meeting, feasibility study, system impact study, and facilities study. 

Transmission Owner – The entity that owns, leases or otherwise possesses an interest in the 

portion of the Transmission System at the Point of Interconnection and may be a Party to the 

Small Generator Interconnection Agreement to the extent necessary. 

Transmission Provider – The public utility (or its designated agent) that owns, controls, or 

operates transmission or distribution facilities used for the transmission of electricity in interstate 

commerce and provides transmission service under the Tariff. The term Transmission Provider 

should be read to include the Transmission Owner when the Transmission Owner is separate 

from the Transmission Provider. 

Transmission System – The facilities owned, controlled or operated by the Transmission 

Provider or the Transmission Owner that are used to provide transmission service under the 

Tariff. 

Upgrades – The required additions and modifications to the Transmission Provider's 

Transmission System at or beyond the Point of Interconnection. Upgrades may be Network 

Upgrades or Distribution Upgrades. Upgrades do not include Interconnection Facilities.
Small Generator Interconnection Request - 1 - 

Attachment 2 

SMALL GENERATOR INTERCONNECTION REQUEST 

(Application Form) 

Transmission Provider: _______________________________________________________________ 

Designated Contact Person: ______

Address: ______

Telephone Number: _____________________________________________________________ 

Fax: _____

E-Mail Address: _____

An Interconnection Request is considered complete when it provides all applicable and correct 

information required below. 

Preamble and Instructions 

An Interconnection Customer who requests a Federal Energy Regulatory Commission jurisdictional 

interconnection must submit this Interconnection Request by hand delivery, mail, e-mail, or fax to the 

Transmission Provider.

Processing Fee or Deposit: 

If the Interconnection Request is submitted under the Fast Track Process, the non-refundable processing 

fee is $500. 

If the Interconnection Request is submitted under the Study Process, whether a new submission or an 

Interconnection Request that did not pass the Fast Track Process, the Interconnection Customer shall 

submit to the Transmission Provider a deposit not to exceed $1,000 towards the cost of the feasibility 

study. 

Interconnection Customer Information 

Legal Name of the Interconnection Customer (or, if an individual, individual's name) 

Name: 

Contact Person: 

Mailing Address: 

City: State: Zip: 
Small Generator Interconnection Request - 2 - 

Facility Location (if different from above): 

Telephone (Day): ______________________ Telephone (Evening): _____________________ 

Fax: _______________________________ E-Mail Address: __________________________________ 

Alternative Contact Information (if different from the Interconnection Customer) 

Contact Name: ___________________________________

Title: ____________________________________________________________________ ______

Address: ___________________________________

 ___________________________________

Telephone (Day): ______________________ Telephone (Evening): ______________________ 

Fax: _____________________________________ E-Mail Address: _________________________ 

Application is for: ______New Small Generating Facility 

 ______Capacity addition to Existing Small Generating Facility 

If capacity addition to existing facility, please describe: 

Will the Small Generating Facility be used for any of the following? 

Net Metering? Yes ___ No ___ 

To Supply Power to the Interconnection Customer? Yes ___No ___ 

To Supply Power to Others? Yes ____ No ____ 

For installations at locations with existing electric service to which the proposed Small Generating 

Facility will interconnect, provide: 

 

(Local Electric Service Provider*) (Existing Account Number*) 

[*To be provided by the Interconnection Customer if the local electric service provider is different from 

the Transmission Provider] 

Contact Name: __________________________________

Title: __________________________________

Address: __________________________________
Small Generator Interconnection Request - 3 - 

 __________________________________

Telephone (Day): _____________________________ Telephone (Evening): ______________________ 

Fax: _________________________________________ E-Mail Address: _________________________ 

Requested Point of Interconnection: _____________

Interconnection Customer's Requested In-Service Date: 

Small Generating Facility Information

Data apply only to the Small Generating Facility, not the Interconnection Facilities. 

Energy Source: ___ Solar ___ Wind ___ Hydro ___ Hydro Type (e.g. Run-of-River):_____________ 

 Diesel ___ Natural Gas ___ Fuel Oil ___ Other (state type) ___________________________ 

Prime Mover: Fuel Cell Recip Engine Gas Turb Steam Turb 

 Microturbine PV Other 

Type of Generator: ____Synchronous ____Induction ____ Inverter 

Generator Nameplate Rating: ________kW (Typical) Generator Nameplate kVAR: _______ 

Interconnection Customer or Customer-Site Load: _________________kW (if none, so state) 

Typical Reactive Load (if known): _________________ 

Maximum Physical Export Capability Requested: ______________ kW 

List components of the Small Generating Facility equipment package that are currently certified: 

Equipment Type Certifying Entity 

1. 

2. 

3. 

4. 

5. 

Is the prime mover compatible with the certified protective relay package? ____Yes ____No 

Generator (or solar collector) 

Manufacturer, Model Name & Number: 

Version Number: 

Nameplate Output Power Rating in kW: (Summer) _____________ (Winter) ______________ 

Nameplate Output Power Rating in kVA: (Summer) _____________ (Winter) ______________ 
Small Generator Interconnection Request - 4 - 

Individual Generator Power Factor 

Rated Power Factor: Leading: _____________Lagging: _______________ 

Total Number of Generators in wind farm to be interconnected pursuant to this 

Interconnection Request: __________ Elevation: ______ ___Single phase ___Three phase 

Inverter Manufacturer, Model Name & Number (if used): _____________________________________ 

List of adjustable set points for the protective equipment or software: __________________________ 

Note: A completed Power Systems Load Flow data sheet must be supplied with the Interconnection 

Request.

Small Generating Facility Characteristic Data (for inverter-based machines)

Max design fault contribution current: Instantaneous or RMS? 

Harmonics Characteristics: 

Start-up requirements: 

Small Generating Facility Characteristic Data (for rotating machines)

RPM Frequency: _____________ 

(*) Neutral Grounding Resistor (If Applicable): ____________ 

Synchronous Generators:

Direct Axis Synchronous Reactance, Xd: _______ P.U. 

Direct Axis Transient Reactance, X' d: ___________P.U. 

Direct Axis Subtransient Reactance, X" d: ______________P.U. 

Negative Sequence Reactance, X2: _________ P.U. 

Zero Sequence Reactance, X0: ____________ P.U. 

KVA Base: __________________________ 

Field Volts: ______________ 

Field Amperes: ______________ 

Induction Generators:

Motoring Power (kW): ______________ 

I2

2

t or K (Heating Time Constant): ______________ 

Rotor Resistance, Rr: ______________ 
Small Generator Interconnection Request - 5 - 

Stator Resistance, Rs: ______________ 

Stator Reactance, Xs: ______________ 

Rotor Reactance, Xr: ______________ 

Magnetizing Reactance, Xm: ______________ 

Short Circuit Reactance, Xd'': ______________ 

Exciting Current: ______________ 

Temperature Rise: ______________ 

Frame Size: ______________ 

Design Letter: ______________ 

Reactive Power Required In Vars (No Load): ______________ 

Reactive Power Required In Vars (Full Load): ______________ 

Total Rotating Inertia, H: _____________ Per Unit on kVA Base 

Note: Please contact the Transmission Provider prior to submitting the Interconnection Request to 

determine if the specified information above is required.

Excitation and Governor System Data for Synchronous Generators Only

Provide appropriate IEEE model block diagram of excitation system, governor system and power system 

stabilizer (PSS) in accordance with the regional reliability council criteria. A PSS may be determined to 

be required by applicable studies. A copy of the manufacturer's block diagram may not be substituted. 

Interconnection Facilities Information

Will a transformer be used between the generator and the point of common coupling? ___Yes ___No 

Will the transformer be provided by the Interconnection Customer? ____Yes ____No 

Transformer Data (If Applicable, for Interconnection Customer-Owned Transformer):

Is the transformer: ____single phase _____three phase? Size: ___________kVA 

Transformer Impedance: _______% on __________kVA Base 

If Three Phase: 

Transformer Primary: _____ Volts _____ Delta _____Wye _____ Wye Grounded 

Transformer Secondary: _____ Volts _____ Delta _____Wye _____ Wye Grounded 

Transformer Tertiary: _____ Volts _____ Delta _____Wye _____ Wye Grounded 

Transformer Fuse Data (If Applicable, for Interconnection Customer-Owned Fuse):

(Attach copy of fuse manufacturer's Minimum Melt and Total Clearing Time-Current Curves) 

Manufacturer: __________________ Type: _______________ Size: ________Speed: ______________ 

Interconnecting Circuit Breaker (if applicable):

Manufacturer: ____________________________ Type: __________ 
Small Generator Interconnection Request - 6 - 

Load Rating (Amps): _______ Interrupting Rating (Amps): ________ Trip Speed (Cycles): __________ 

Interconnection Protective Relays (If Applicable):

 If Microprocessor-Controlled: 

List of Functions and Adjustable Setpoints for the protective equipment or software: 

Setpoint Function Minimum Maximum 

1. 

2. 

3. 

4. 

5. 

6. 

If Discrete Components:

(Enclose Copy of any Proposed Time-Overcurrent Coordination Curves) 

Manufacturer: Type: Style/Catalog No.: Proposed Setting: 

Manufacturer: Type: Style/Catalog No.: Proposed Setting: 

Manufacturer: Type: Style/Catalog No.: Proposed Setting: 

Manufacturer: Type: Style/Catalog No.: Proposed Setting: 

Manufacturer: Type: Style/Catalog No.: Proposed Setting: 

Current Transformer Data (If Applicable):

(Enclose Copy of Manufacturer's Excitation and Ratio Correction Curves) 

Manufacturer: 

Type: Accuracy Class: Proposed Ratio Connection: ____ 

Manufacturer: 

Type: Accuracy Class: Proposed Ratio Connection: ____ 

Potential Transformer Data (If Applicable):

Manufacturer: 
Small Generator Interconnection Request - 7 - 

Type: Accuracy Class: Proposed Ratio Connection: ____ 

Manufacturer: 

Type: Accuracy Class: Proposed Ratio Connection: ____ 

General Information

Enclose copy of site electrical one-line diagram showing the configuration of all Small Generating 

Facility equipment, current and potential circuits, and protection and control schemes. This one-line 

diagram must be signed and stamped by a licensed Professional Engineer if the Small Generating Facility 

is larger than 50 kW. Is One-Line Diagram Enclosed? ____Yes ____No 

Enclose copy of any site documentation that indicates the precise physical location of the proposed Small 

Generating Facility (e.g., USGS topographic map or other diagram or documentation). 

Proposed location of protective interface equipment on property (include address if different from the 

Interconnection Customer's address) ___________________________________________________

Enclose copy of any site documentation that describes and details the operation of the protection and 

control schemes. Is Available Documentation Enclosed? ___Yes ____No 

Enclose copies of schematic drawings for all protection and control circuits, relay current circuits, relay 

potential circuits, and alarm/monitoring circuits (if applicable). 

Are Schematic Drawings Enclosed? ___Yes ____No 

Applicant Signature

I hereby certify that, to the best of my knowledge, all the information provided in this Interconnection 

Request is true and correct. 

For Interconnection Customer: ____________________________________ Date: ____________ 
Small Generator Certification Codes and Standards - 1 - 

Attachment 3 

Certification Codes and Standards 

IEEE1547 Standard for Interconnecting Distributed Resources with Electric Power Systems 

(including use of IEEE 1547.1 testing protocols to establish conformity) 

UL 1741 Inverters, Converters, and Controllers for Use in Independent Power Systems 

IEEE Std 929-2000 IEEE Recommended Practice for Utility Interface of Photovoltaic (PV) 

Systems 

NFPA 70 (2002), National Electrical Code 

IEEE Std C37.90.1-1989 (R1994), IEEE Standard Surge Withstand Capability (SWC) Tests for 

Protective Relays and Relay Systems 

IEEE Std C37.90.2 (1995), IEEE Standard Withstand Capability of Relay Systems to Radiated 

Electromagnetic Interference from Transceivers 

IEEE Std C37.108-1989 (R2002), IEEE Guide for the Protection of Network Transformers 

IEEE Std C57.12.44-2000, IEEE Standard Requirements for Secondary Network Protectors 

IEEE Std C62.41.2-2002, IEEE Recommended Practice on Characterization of Surges in Low 

Voltage (1000V and Less) AC Power Circuits 

IEEE Std C62.45-1992 (R2002), IEEE Recommended Practice on Surge Testing for Equipment 

Connected to Low-Voltage (1000V and Less) AC Power Circuits 

ANSI C84.1-1995 Electric Power Systems and Equipment – Voltage Ratings (60 Hertz) 

IEEE Std 100-2000, IEEE Standard Dictionary of Electrical and Electronic Terms 

NEMA MG 1-1998, Motors and Small Resources, Revision 3 

IEEE Std 519-1992, IEEE Recommended Practices and Requirements for Harmonic Control in 

Electrical Power Systems 

NEMA MG 1-2003 (Rev 2004), Motors and Generators, Revision 1 
Small Generator Certification Process - 1 - 

Attachment 4 

Certification of Small Generator Equipment Packages 

1.0 Small Generating Facility equipment proposed for use separately or packaged with other 

equipment in an interconnection system shall be considered certified for interconnected 

operation if (1) it has been tested in accordance with industry standards for continuous 

utility interactive operation in compliance with the appropriate codes and standards 

referenced below by any Nationally Recognized Testing Laboratory (NRTL) recognized 

by the United States Occupational Safety and Health Administration to test and certify 

interconnection equipment pursuant to the relevant codes and standards listed in SGIP 

Attachment 3, (2) it has been labeled and is publicly listed by such NRTL at the time of 

the interconnection application, and (3) such NRTL makes readily available for 

verification all test standards and procedures it utilized in performing such equipment 

certification, and, with consumer approval, the test data itself. The NRTL may make 

such information available on its website and by encouraging such information to be 

included in the manufacturer’s literature accompanying the equipment. 

2.0 The Interconnection Customer must verify that the intended use of the equipment falls 

within the use or uses for which the equipment was tested, labeled, and listed by the 

NRTL. 

3.0 Certified equipment shall not require further type-test review, testing, or additional 

equipment to meet the requirements of this interconnection procedure; however, nothing 

herein shall preclude the need for an on-site commissioning test by the parties to the 

interconnection nor follow-up production testing by the NRTL. 

4.0 If the certified equipment package includes only interface components (switchgear, 

inverters, or other interface devices), then an Interconnection Customer must show that 

the generator or other electric source being utilized with the equipment package is 

compatible with the equipment package and is consistent with the testing and listing 

specified for this type of interconnection equipment. 

5.0 Provided the generator or electric source, when combined with the equipment package, is 

within the range of capabilities for which it was tested by the NRTL, and does not violate 

the interface components' labeling and listing performed by the NRTL, no further design 

review, testing or additional equipment on the customer side of the point of common 

coupling shall be required to meet the requirements of this interconnection procedure. 

6.0 An equipment package does not include equipment provided by the utility. 

7.0 Any equipment package approved and listed in a state by that state’s regulatory body for 

interconnected operation in that state prior to the effective date of these small generator 
Small Generator Certification Process - 2 - 

interconnection procedures shall be considered certified under these procedures for use in 

that state. 

 
Small Generator 10 kW Inverter Process - 1 - 

Attachment 5 

Application, Procedures, and Terms and Conditions for Interconnecting 

a Certified Inverter-Based Small Generating Facility No 

Larger than 10 kW ("10 kW Inverter Process") 

1.0 The Interconnection Customer ("Customer") completes the Interconnection Request 

("Application") and submits it to the Transmission Provider ("Company"). 

2.0 The Company acknowledges to the Customer receipt of the Application within three 

Business Days of receipt. 

3.0 The Company evaluates the Application for completeness and notifies the Customer 

within ten Business Days of receipt that the Application is or is not complete and, if not, 

advises what material is missing. 

4.0 The Company verifies that the Small Generating Facility can be interconnected safely 

and reliably using the screens contained in the Fast Track Process in the Small Generator 

Interconnection Procedures (SGIP). The Company has 15 Business Days to complete 

this process. Unless the Company determines and demonstrates that the Small 

Generating Facility cannot be interconnected safely and reliably, the Company approves 

the Application and returns it to the Customer. Note to Customer: Please check with the 

Company before submitting the Application if disconnection equipment is required. 

5.0 After installation, the Customer returns the Certificate of Completion to the Company. 

Prior to parallel operation, the Company may inspect the Small Generating Facility for 

compliance with standards which may include a witness test, and may schedule 

appropriate metering replacement, if necessary. 

6.0 The Company notifies the Customer in writing that interconnection of the Small 

Generating Facility is authorized. If the witness test is not satisfactory, the Company has 

the right to disconnect the Small Generating Facility. The Customer has no right to 

operate in parallel until a witness test has been performed, or previously waived on the 

Application. The Company is obligated to complete this witness test within ten Business 

Days of the receipt of the Certificate of Completion. If the Company does not inspect 

within ten Business Days or by mutual agreement of the Parties, the witness test is 

deemed waived. 

7.0 Contact Information – The Customer must provide the contact information for the legal 

applicant (i.e., the Interconnection Customer). If another entity is responsible for 

interfacing with the Company, that contact information must be provided on the 

Application. 
Small Generator 10 kW Inverter Process - 2 - 

8.0 Ownership Information – Enter the legal names of the owner(s) of the Small Generating 

Facility. Include the percentage ownership (if any) by any utility or public utility holding 

company, or by any entity owned by either. 

9.0 UL1741 Listed – This standard ("Inverters, Converters, and Controllers for Use in 

Independent Power Systems") addresses the electrical interconnection design of various 

forms of generating equipment. Many manufacturers submit their equipment to a 

Nationally Recognized Testing Laboratory (NRTL) that verifies compliance with 

UL1741. This "listing" is then marked on the equipment and supporting documentation. 
Small Generator 10 kW Inverter Process - 3 - 

Application for Interconnecting a Certified Inverter-Based Small Generating 

Facility No Larger than 10kW 

This Application is considered complete when it provides all applicable and correct information required 

below. Additional information to evaluate the Application may be required. 

Processing Fee

A non-refundable processing fee of $100 must accompany this Application. 

Interconnection Customer

Name: _______________________________________________________________________ 

Contact Person: 

Address: 

City: State: Zip: 

Telephone (Day): (Evening): 

Fax: E-Mail Address: 

Contact (if different from Interconnection Customer) 

Name: 

Address: 

City: State: Zip: 

Telephone (Day): (Evening): 

Fax: E-Mail Address: 

Owner of the facility (include % ownership by any electric utility): 

Small Generating Facility Information

Location (if different from above): 

Electric Service Company: 

Account Number: 
Small Generator 10 kW Inverter Process - 4 - 

Inverter Manufacturer: Model 

Nameplate Rating: (kW) (kVA) (AC Volts) 

 Single Phase _______ Three Phase 

System Design Capacity: _________ (kW) _______ (kVA) 

Prime Mover: Photovoltaic Reciprocating Engine Fuel Cell 

 Turbine Other 

Energy Source: Solar Wind Hydro Diesel Natural Gas 

 Fuel Oil Other (describe) _______________________________ 

Is the equipment UL1741 Listed? Yes No 

If Yes, attach manufacturer’s cut-sheet showing UL1741 listing 

Estimated Installation Date: _____________ Estimated In-Service Date: ____________ 

The 10 kW Inverter Process is available only for inverter-based Small Generating Facilities no larger than 

10 kW that meet the codes, standards, and certification requirements of Attachments 3 and 4 of the Small 

Generator Interconnection Procedures (SGIP), or the Transmission Provider has reviewed the design or 

tested the proposed Small Generating Facility and is satisfied that it is safe to operate. 

List components of the Small Generating Facility equipment package that are currently certified: 

Equipment Type Certifying Entity 

1. 

2. 

3. 

4. 

5. 

Interconnection Customer Signature 

I hereby certify that, to the best of my knowledge, the information provided in this Application is true. I 

agree to abide by the Terms and Conditions for Interconnecting an Inverter-Based Small Generating 

Facility No Larger than 10kW and return the Certificate of Completion when the Small Generating 

Facility has been installed. 

Signed: ___________________________________________________________________ 

Title: Date: 

Contingent Approval to Interconnect the Small Generating Facility

(For Company use only) 

Interconnection of the Small Generating Facility is approved contingent upon the Terms and Conditions

for Interconnecting an Inverter-Based Small Generating Facility No Larger than 10kW and return of the 

Certificate of Completion. 
Small Generator 10 kW Inverter Process - 5 - 

Company Signature: __________________________________________________ 

Title: Date: 

Application ID number: __________________ 

Company waives inspection/witness test? Yes___No___ 
Small Generator 10 kW Inverter Process - 6 - 

Small Generating Facility Certificate of Completion 

Is the Small Generating Facility owner-installed? Yes______ No ______ 

Interconnection Customer: _____________________________________________________________ 

Contact Person: 

Address: 

Location of the Small Generating Facility (if different from above): 

___________________________________________________________________________________ 

City: State: Zip Code: 

Telephone (Day): (Evening): 

Fax: E-Mail Address: 

Electrician: 

Name: 

Address: 

City: State: Zip Code: 

Telephone (Day): (Evening): 

Fax: E-Mail Address: 

License number: ____________________________________ 

Date Approval to Install Facility granted by the Company: ___________________ 

Application ID number: ______________________________ 

Inspection: 

The Small Generating Facility has been installed and inspected in compliance with the local 

building/electrical code of 

Signed (Local electrical wiring inspector, or attach signed electrical inspection): 

______________________________________________________________________________ 

Print Name: 

Date: ___________ 
Small Generator 10 kW Inverter Process - 7 - 

As a condition of interconnection, you are required to send/fax a copy of this form along with a copy of 

the signed electrical permit to (insert Company information below): 

 Name: _______________________________________________ 

 Company: ____________________________________________ 

 Address:______________________________________________ 

 _____________________________________________________ 

 

City, State ZIP: ________________________________________ 

 Fax: 

Approval to Energize the Small Generating Facility (For Company use only) 

Energizing the Small Generating Facility is approved contingent upon the Terms and Conditions for 

Interconnecting an Inverter-Based Small Generating Facility No Larger than 10kW 

Company Signature: 

Title: Date: 
Small Generator 10 kW Inverter Process - 8 - 

Terms and Conditions for Interconnecting an Inverter-Based 

Small Generating Facility No Larger than 10kW 

1.0 Construction of the Facility

The Interconnection Customer (the "Customer") may proceed to construct (including operational 

testing not to exceed two hours) the Small Generating Facility when the Transmission Provider 

(the "Company") approves the Interconnection Request (the "Application") and returns it to the 

Customer. 

2.0 Interconnection and Operation

The Customer may operate Small Generating Facility and interconnect with the Company’s 

electric system once all of the following have occurred: 

2.1 Upon completing construction, the Customer will cause the Small Generating Facility to 

be inspected or otherwise certified by the appropriate local electrical wiring inspector 

with jurisdiction, and 

2.2 The Customer returns the Certificate of Completion to the Company, and 

2.3 The Company has either: 

2.3.1 Completed its inspection of the Small Generating Facility to ensure that all 

equipment has been appropriately installed and that all electrical connections 

have been made in accordance with applicable codes. All inspections must be 

conducted by the Company, at its own expense, within ten Business Days after 

receipt of the Certificate of Completion and shall take place at a time agreeable to 

the Parties. The Company shall provide a written statement that the Small 

Generating Facility has passed inspection or shall notify the Customer of what 

steps it must take to pass inspection as soon as practicable after the inspection 

takes place; or 

2.3.2 If the Company does not schedule an inspection of the Small Generating Facility 

within ten business days after receiving the Certificate of Completion, the 

witness test is deemed waived (unless the Parties agree otherwise); or 

2.3.3 The Company waives the right to inspect the Small Generating Facility. 

2.4 The Company has the right to disconnect the Small Generating Facility in the event of 

improper installation or failure to return the Certificate of Completion. 

2.5 Revenue quality metering equipment must be installed and tested in accordance with 

applicable ANSI standards. 

3.0 Safe Operations and Maintenance 
Small Generator 10 kW Inverter Process - 9 - 

The Customer shall be fully responsible to operate, maintain, and repair the Small Generating 

Facility as required to ensure that it complies at all times with the interconnection standards to 

which it has been certified. 

4.0 Access

The Company shall have access to the disconnect switch (if the disconnect switch is required) and 

metering equipment of the Small Generating Facility at all times. The Company shall provide 

reasonable notice to the Customer when possible prior to using its right of access. 

5.0 Disconnection

The Company may temporarily disconnect the Small Generating Facility upon the following 

conditions: 

5.1 For scheduled outages upon reasonable notice. 

5.2 For unscheduled outages or emergency conditions. 

5.3 If the Small Generating Facility does not operate in the manner consistent with these 

Terms and Conditions. 

5.4 The Company shall inform the Customer in advance of any scheduled disconnection, or 

as is reasonable after an unscheduled disconnection. 

6.0 Indemnification

The Parties shall at all times indemnify, defend, and save the other Party harmless from, any and 

all damages, losses, claims, including claims and actions relating to injury to or death of any 

person or damage to property, demand, suits, recoveries, costs and expenses, court costs, attorney 

fees, and all other obligations by or to third parties, arising out of or resulting from the other 

Party's action or inactions of its obligations under this agreement on behalf of the indemnifying 

Party, except in cases of gross negligence or intentional wrongdoing by the indemnified Party. 

7. 0 Insurance 

The Parties each agree to maintain commercially reasonable amounts of insurance. 

8.0 Limitation of Liability

Each party’s liability to the other party for any loss, cost, claim, injury, liability, or expense, 

including reasonable attorney’s fees, relating to or arising from any act or omission in its 

performance of this Agreement, shall be limited to the amount of direct damage actually incurred. 

In no event shall either party be liable to the other party for any indirect, incidental, special, 

consequential, or punitive damages of any kind whatsoever, except as allowed under paragraph 

6.0. 

9.0 Termination

The agreement to operate in parallel may be terminated under the following conditions: 

9.1 By the Customer

By providing written notice to the Company. 
Small Generator 10 kW Inverter Process - 10 - 

9.2 By the Company

If the Small Generating Facility fails to operate for any consecutive 12 month 

period or the Customer fails to remedy a violation of these Terms and 

Conditions. 

9.3 Permanent Disconnection 

In the event this Agreement is terminated, the Company shall have the right to 

disconnect its facilities or direct the Customer to disconnect its Small Generating 

Facility.

9.4 Survival Rights

This Agreement shall continue in effect after termination to the extent necessary 

to allow or require either Party to fulfill rights or obligations that arose under the 

Agreement. 

10.0 Assignment/Transfer of Ownership of the Facility 

This Agreement shall survive the transfer of ownership of the Small Generating Facility to a new 

owner when the new owner agrees in writing to comply with the terms of this Agreement and so 

notifies the Company.
SGIP Feasibility Study Agreement - 1 -

Attachment 6 

Feasibility Study Agreement 

THIS AGREEMENT is made and entered into this_____day of______________ 

20___ by and between_____________________________________________________, 

a____________________________organized and existing under the laws of the State of 

__________________________________________, ("Interconnection Customer,") and 

_____________________________________________________, a________________ 

existing under the laws of the State of________________________________________, 

("Transmission Provider"). Interconnection Customer and Transmission Provider each may be 

referred to as a "Party," or collectively as the "Parties." 

RECITALS

WHEREAS, Interconnection Customer is proposing to develop a Small Generating Facility or 

generating capacity addition to an existing Small Generating Facility consistent with the 

Interconnection Request completed by Interconnection Customer 

on_________________________; and 

WHEREAS, Interconnection Customer desires to interconnect the Small Generating Facility 

with the Transmission Provider's Transmission System; and 

WHEREAS, Interconnection Customer has requested the Transmission Provider to perform a 

feasibility study to assess the feasibility of interconnecting the proposed Small Generating 

Facility with the Transmission Provider's Transmission System, and of any Affected Systems; 

NOW, THEREFORE, in consideration of and subject to the mutual covenants contained herein 

the Parties agreed as follows: 

1.0 When used in this Agreement, with initial capitalization, the terms specified shall have 

the meanings indicated or the meanings specified in the standard Small Generator 

Interconnection Procedures. 

2.0 The Interconnection Customer elects and the Transmission Provider shall cause to be 

performed an interconnection feasibility study consistent the standard Small Generator 

Interconnection Procedures in accordance with the Open Access Transmission Tariff. 

3.0 The scope of the feasibility study shall be subject to the assumptions set forth in 

Attachment A to this Agreement. 

4.0 The feasibility study shall be based on the technical information provided by the 

Interconnection Customer in the Interconnection Request, as may be modified as the 

result of the scoping meeting. The Transmission Provider reserves the right to request 
SGIP Feasibility Study Agreement - 2 -

additional technical information from the Interconnection Customer as may reasonably 

become necessary consistent with Good Utility Practice during the course of the 

feasibility study and as designated in accordance with the standard Small Generator 

Interconnection Procedures. If the Interconnection Customer modifies its Interconnection 

Request, the time to complete the feasibility study may be extended by agreement of the 

Parties. 

5.0 In performing the study, the Transmission Provider shall rely, to the extent reasonably 

practicable, on existing studies of recent vintage. The Interconnection Customer shall not 

be charged for such existing studies; however, the Interconnection Customer shall be 

responsible for charges associated with any new study or modifications to existing studies 

that are reasonably necessary to perform the feasibility study. 

6.0 The feasibility study report shall provide the following analyses for the purpose of 

identifying any potential adverse system impacts that would result from the 

interconnection of the Small Generating Facility as proposed: 

6.1 Initial identification of any circuit breaker short circuit capability limits exceeded 

as a result of the interconnection; 

6.2 Initial identification of any thermal overload or voltage limit violations resulting 

from the interconnection; 

6.3 Initial review of grounding requirements and electric system protection; and 

6.4 Description and non-bonding estimated cost of facilities required to interconnect 

the proposed Small Generating Facility and to address the identified short circuit 

and power flow issues. 

7.0 The feasibility study shall model the impact of the Small Generating Facility regardless 

of purpose in order to avoid the further expense and interruption of operation for 

reexamination of feasibility and impacts if the Interconnection Customer later changes 

the purpose for which the Small Generating Facility is being installed. 

8.0 The study shall include the feasibility of any interconnection at a proposed project site 

where there could be multiple potential Points of Interconnection, as requested by the 

Interconnection Customer and at the Interconnection Customer's cost. 

9.0 A deposit of the lesser of 50 percent of good faith estimated feasibility study costs or 

earnest money of $1,000 may be required from the Interconnection Customer. 

10.0 Once the feasibility study is completed, a feasibility study report shall be prepared and 

transmitted to the Interconnection Customer. Barring unusual circumstances, the 

feasibility study must be completed and the feasibility study report transmitted within 30 
SGIP Feasibility Study Agreement - 3 -

Business Days of the Interconnection Customer's agreement to conduct a feasibility 

study. 

11.0 Any study fees shall be based on the Transmission Provider's actual costs and will be 

invoiced to the Interconnection Customer after the study is completed and delivered and 

will include a summary of professional time. 

12.0 The Interconnection Customer must pay any study costs that exceed the deposit without 

interest within 30 calendar days on receipt of the invoice or resolution of any dispute. If 

the deposit exceeds the invoiced fees, the Transmission Provider shall refund such excess 

within 30 calendar days of the invoice without interest. 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their 

duly authorized officers or agents on the day and year first above written. 

[Insert name of Transmission Provider] [Insert name of Interconnection Customer]

___________________________________ _________________________________ 

Signed______________________________ Signed___________________________ 

Name (Printed): Name (Printed): 

___________________________________ ________________________________ 

Title_______________________________ Title____________________________ 
SGIP Feasibility Study Agreement - 4 -

Attachment A to 

Feasibility Study Agreement

Assumptions Used in Conducting the Feasibility Study

The feasibility study will be based upon the information set forth in the Interconnection Request 

and agreed upon in the scoping meeting held on _____________________: 

1) Designation of Point of Interconnection and configuration to be studied. 

2) Designation of alternative Points of Interconnection and configuration. 

1) and 2) are to be completed by the Interconnection Customer. Other assumptions (listed 

below) are to be provided by the Interconnection Customer and the Transmission Provider. 
SGIP System Impact Study Agreement - 1 -

Attachment 7 

System Impact Study Agreement

THIS AGREEMENT is made and entered into this_____day of______________ 

20___ by and between_____________________________________________________, 

a____________________________organized and existing under the laws of the State of 

__________________________________________, ("Interconnection Customer,") and 

_____________________________________________________, a________________ 

existing under the laws of the State of________________________________________, 

("Transmission Provider"). Interconnection Customer and Transmission Provider each may be 

referred to as a "Party," or collectively as the "Parties." 

RECITALS

WHEREAS, the Interconnection Customer is proposing to develop a Small Generating Facility 

or generating capacity addition to an existing Small Generating Facility consistent with the 

Interconnection Request completed by the Interconnection Customer 

on________________________; and 

WHEREAS, the Interconnection Customer desires to interconnect the Small Generating Facility 

with the Transmission Provider's Transmission System; 

WHEREAS, the Transmission Provider has completed a feasibility study and provided the 

results of said study to the Interconnection Customer (This recital to be omitted if the Parties 

have agreed to forego the feasibility study.); and 

WHEREAS, the Interconnection Customer has requested the Transmission Provider to perform 

a system impact study(s) to assess the impact of interconnecting the Small Generating Facility 

with the Transmission Provider's Transmission System, and of any Affected Systems; 

NOW, THEREFORE, in consideration of and subject to the mutual covenants contained herein 

the Parties agreed as follows: 

1.0 When used in this Agreement, with initial capitalization, the terms specified shall have 

the meanings indicated or the meanings specified in the standard Small Generator 

Interconnection Procedures. 

2.0 The Interconnection Customer elects and the Transmission Provider shall cause to be 

performed a system impact study(s) consistent with the standard Small Generator 

Interconnection Procedures in accordance with the Open Access Transmission Tariff. 

3.0 The scope of a system impact study shall be subject to the assumptions set forth in 

Attachment A to this Agreement. 
SGIP System Impact Study Agreement - 2 -

4.0 A system impact study will be based upon the results of the feasibility study and the 

technical information provided by Interconnection Customer in the Interconnection 

Request. The Transmission Provider reserves the right to request additional technical 

information from the Interconnection Customer as may reasonably become necessary 

consistent with Good Utility Practice during the course of the system impact study. If the 

Interconnection Customer modifies its designated Point of Interconnection, 

Interconnection Request, or the technical information provided therein is modified, the 

time to complete the system impact study may be extended. 

5.0 A system impact study shall consist of a short circuit analysis, a stability analysis, a 

power flow analysis, voltage drop and flicker studies, protection and set point 

coordination studies, and grounding reviews, as necessary. A system impact study shall 

state the assumptions upon which it is based, state the results of the analyses, and provide 

the requirement or potential impediments to providing the requested interconnection 

service, including a preliminary indication of the cost and length of time that would be 

necessary to correct any problems identified in those analyses and implement the 

interconnection. A system impact study shall provide a list of facilities that are required 

as a result of the Interconnection Request and non-binding good faith estimates of cost 

responsibility and time to construct. 

6.0 A distribution system impact study shall incorporate a distribution load flow study, an 

analysis of equipment interrupting ratings, protection coordination study, voltage drop 

and flicker studies, protection and set point coordination studies, grounding reviews, and 

the impact on electric system operation, as necessary. 

7.0 Affected Systems may participate in the preparation of a system impact study, with a 

division of costs among such entities as they may agree. All Affected Systems shall be 

afforded an opportunity to review and comment upon a system impact study that covers 

potential adverse system impacts on their electric systems, and the Transmission Provider 

has 20 additional Business Days to complete a system impact study requiring review by 

Affected Systems. 

8.0 If the Transmission Provider uses a queuing procedure for sorting or prioritizing projects 

and their associated cost responsibilities for any required Network Upgrades, the system 

impact study shall consider all generating facilities (and with respect to paragraph 8.3 

below, any identified Upgrades associated with such higher queued interconnection) that, 

on the date the system impact study is commenced – 

8.1 Are directly interconnected with the Transmission Provider's electric 

system; or 

8.2 Are interconnected with Affected Systems and may have an impact on the 

proposed interconnection; and 
SGIP System Impact Study Agreement - 3 -

8.3 Have a pending higher queued Interconnection Request to interconnect 

with the Transmission Provider's electric system. 

9.0 A distribution system impact study, if required, shall be completed and the results 

transmitted to the Interconnection Customer within 30 Business Days after this 

Agreement is signed by the Parties. A transmission system impact study, if required, 

shall be completed and the results transmitted to the Interconnection Customer within 45 

Business Days after this Agreement is signed by the Parties, or in accordance with the 

Transmission Provider's queuing procedures. 

10.0 A deposit of the equivalent of the good faith estimated cost of a distribution system 

impact study and the one half the good faith estimated cost of a transmission system 

impact study may be required from the Interconnection Customer. 

11.0 Any study fees shall be based on the Transmission Provider's actual costs and will be 

invoiced to the Interconnection Customer after the study is completed and delivered and 

will include a summary of professional time. 

12.0 The Interconnection Customer must pay any study costs that exceed the deposit without 

interest within 30 calendar days on receipt of the invoice or resolution of any dispute. If 

the deposit exceeds the invoiced fees, the Transmission Provider shall refund such excess 

within 30 calendar days of the invoice without interest. 

IN WITNESS THEREOF, the Parties have caused this Agreement to be duly executed by their 

duly authorized officers or agents on the day and year first above written. 

[Insert name of Transmission Provider] [Insert name of Interconnection Customer]

___________________________________ _________________________________ 

Signed______________________________ Signed___________________________ 

Name (Printed): Name (Printed): 

___________________________________ ________________________________ 

Title_______________________________ Title____________________________ 
SGIP System Impact Study Agreement - 4 -

Attachment A to System 

Impact Study Agreement 

Assumptions Used in Conducting the System Impact Study

The system impact study shall be based upon the results of the feasibility study, subject to any 

modifications in accordance with the standard Small Generator Interconnection Procedures, and 

the following assumptions: 

1) Designation of Point of Interconnection and configuration to be studied. 

2) Designation of alternative Points of Interconnection and configuration. 

1) and 2) are to be completed by the Interconnection Customer. Other assumptions (listed 

below) are to be provided by the Interconnection Customer and the Transmission Provider. 
SGIP Facilities Study Agreement - 1 -

Attachment 8 

Facilities Study Agreement

THIS AGREEMENT is made and entered into this_____day of______________ 

20___ by and between_____________________________________________________, 

a____________________________organized and existing under the laws of the State of 

__________________________________________, ("Interconnection Customer,") and 

_____________________________________________________, a________________ 

existing under the laws of the State of________________________________________, 

("Transmission Provider"). Interconnection Customer and Transmission Provider each may be 

referred to as a "Party," or collectively as the "Parties." 

RECITALS

WHEREAS, the Interconnection Customer is proposing to develop a Small Generating Facility 

or generating capacity addition to an existing Small Generating Facility consistent with the 

Interconnection Request completed by the Interconnection Customer 

on______________________; and 

WHEREAS, the Interconnection Customer desires to interconnect the Small Generating Facility 

with the Transmission Provider's Transmission System; 

WHEREAS, the Transmission Provider has completed a system impact study and provided the 

results of said study to the Interconnection Customer; and 

WHEREAS, the Interconnection Customer has requested the Transmission Provider to perform 

a facilities study to specify and estimate the cost of the equipment, engineering, procurement and 

construction work needed to implement the conclusions of the system impact study in 

accordance with Good Utility Practice to physically and electrically connect the Small 

Generating Facility with the Transmission Provider's Transmission System. 

NOW, THEREFORE, in consideration of and subject to the mutual covenants contained herein 

the Parties agreed as follows: 

1.0 When used in this Agreement, with initial capitalization, the terms specified shall have 

the meanings indicated or the meanings specified in the standard Small Generator 

Interconnection Procedures. 

2.0 The Interconnection Customer elects and the Transmission Provider shall cause a 

facilities study consistent with the standard Small Generator Interconnection Procedures 

to be performed in accordance with the Open Access Transmission Tariff. 

3.0 The scope of the facilities study shall be subject to data provided in Attachment A to this 
SGIP Facilities Study Agreement - 2 -

Agreement. 

4.0 The facilities study shall specify and estimate the cost of the equipment, engineering, 

procurement and construction work (including overheads) needed to implement the 

conclusions of the system impact study(s). The facilities study shall also identify (1) the 

electrical switching configuration of the equipment, including, without limitation, 

transformer, switchgear, meters, and other station equipment, (2) the nature and estimated 

cost of the Transmission Provider's Interconnection Facilities and Upgrades necessary to 

accomplish the interconnection, and (3) an estimate of the time required to complete the 

construction and installation of such facilities. 

5.0 The Transmission Provider may propose to group facilities required for more than one 

Interconnection Customer in order to minimize facilities costs through economies of 

scale, but any Interconnection Customer may require the installation of facilities required 

for its own Small Generating Facility if it is willing to pay the costs of those facilities. 

6.0 A deposit of the good faith estimated facilities study costs may be required from the 

Interconnection Customer. 

7.0 In cases where Upgrades are required, the facilities study must be completed within 45 

Business Days of the receipt of this Agreement. In cases where no Upgrades are 

necessary, and the required facilities are limited to Interconnection Facilities, the 

facilities study must be completed within 30 Business Days. 

8.0 Once the facilities study is completed, a facilities study report shall be prepared and 

transmitted to the Interconnection Customer. Barring unusual circumstances, the 

facilities study must be completed and the facilities study report transmitted within 30 

Business Days of the Interconnection Customer's agreement to conduct a facilities study. 

9.0 Any study fees shall be based on the Transmission Provider's actual costs and will be 

invoiced to the Interconnection Customer after the study is completed and delivered and 

will include a summary of professional time. 

10.0 The Interconnection Customer must pay any study costs that exceed the deposit without 

interest within 30 calendar days on receipt of the invoice or resolution of any dispute. If 

the deposit exceeds the invoiced fees, the Transmission Provider shall refund such excess 

within 30 calendar days of the invoice without interest. 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their 

duly authorized officers or agents on the day and year first above written. 

[Insert name of Transmission Provider] [Insert name of Interconnection Customer]
SGIP Facilities Study Agreement - 3 -

___________________________________ _________________________________ 

Signed______________________________ Signed___________________________ 

Name (Printed): Name (Printed): 

___________________________________ ________________________________ 

Title_______________________________ Title____________________________ 
SGIP Facilities Study Agreement - 4 -

Attachment A to 

Facilities Study Agreement

Data to Be Provided by the Interconnection Customer 

with the Facilities Study Agreement

Provide location plan and simplified one-line diagram of the plant and station facilities. For 

staged projects, please indicate future generation, transmission circuits, etc. 

On the one-line diagram, indicate the generation capacity attached at each metering 

location. (Maximum load on CT/PT) 

On the one-line diagram, indicate the location of auxiliary power. (Minimum load on 

CT/PT) Amps 

One set of metering is required for each generation connection to the new ring bus or existing 

Transmission Provider station. Number of generation connections: _____________ 

Will an alternate source of auxiliary power be available during CT/PT maintenance? 

 Yes No ______ 

Will a transfer bus on the generation side of the metering require that each meter set be designed 

for the total plant generation? Yes No _____ 

(Please indicate on the one-line diagram). 

What type of control system or PLC will be located at the Small Generating Facility? 

______________________________________________________________________________ 

______________________________________________________________________________ 

What protocol does the control system or PLC use? 

______________________________________________________________________________ 

______________________________________________________________________________ 

Please provide a 7.5-minute quadrangle map of the site. Indicate the plant, station, transmission 

line, and property lines. 

Physical dimensions of the proposed interconnection station: 
SGIP Facilities Study Agreement - 5 -

______________________________________________________________________________ 

Bus length from generation to interconnection station: 

______________________________________________________________________________ 

Line length from interconnection station to Transmission Provider's Transmission System. 

______________________________________________________________________________ 

Tower number observed in the field. (Painted on tower leg)*: 

______________________________________________________________________________ 

Number of third party easements required for transmission lines*: 

______________________________________________________________________________ 

 * To be completed in coordination with Transmission Provider. 

Is the Small Generating Facility located in Transmission Provider’s service area? 

 Yes No If No, please provide name of local provider: 

______________________________________________________________________________ 

Please provide the following proposed schedule dates: 

 Begin Construction Date:____________________________ 

 Generator step-up transformers Date:____________________________ 

 receive back feed power 

 Generation Testing Date:____________________________ 

 Commercial Operation Date:____________________________ 
Appendix F to the Small 

Generator Interconnection Final Rule 

SMALL GENERATOR 

INTERCONNECTION AGREEMENT (SGIA) 

(For Generating Facilities No Larger Than 20 MW) 
- i -

TABLE OF CONTENTS

Page No. 

Article 1. Scope and Limitations of Agreement. ...................................................................- 1 - 

1.5 Responsibilities of the Parties.............................................................................- 2 - 

1.6 Parallel Operation Obligations............................................................................- 2 - 

1.7 Metering..............................................................................................................- 3 -

1.8 Reactive Power ...................................................................................................- 3 - 

Article 2. Inspection, Testing, Authorization, and Right of Access.....................................- 4 - 

2.1 Equipment Testing and Inspection......................................................................- 4 - 

2.2 Authorization Required Prior to Parallel Operation. ..........................................- 4 - 

2.3 Right of Access...................................................................................................- 4 - 

Article 3. Effective Date, Term, Termination, and Disconnection......................................- 5 - 

3.1 Effective Date .....................................................................................................- 5 - 

3.2 Term of Agreement.............................................................................................- 5 - 

3.3 Termination.........................................................................................................- 5 - 

3.4 Temporary Disconnection...................................................................................- 6 - 

3.4.1 Emergency Conditions............................................................................- 6 - 

3.4.2 Routine Maintenance, Construction, and Repair ....................................- 6 - 

3.4.3 Forced Outages .......................................................................................- 7 - 

3.4.4 Adverse Operating Effects......................................................................- 7 - 

3.4.5 Modification of the Small Generating Facility .......................................- 7 - 

3.4.6 Reconnection...........................................................................................- 7 - 

Article 4. Cost Responsibility for Interconnection Facilities and Distribution 

Upgrades........................................................................................................................- 7 - 

4.1 Interconnection Facilities....................................................................................- 7 - 

4.2 Distribution Upgrades.........................................................................................- 8 - 

Article 5. Cost Responsibility for Network Upgrades ..........................................................- 8 - 

5.1 Applicability .......................................................................................................- 8 - 

5.2 Network Upgrades ..............................................................................................- 8 - 

5.2.1 Repayment of Amounts Advanced for Network Upgrades ....................- 8 - 

5.3 Special Provisions for Affected Systems............................................................- 9 - 

5.4 Rights Under Other Agreements.........................................................................- 9 - 

Article 6. Billing, Payment, Milestones, and Financial Security .......................................- 10 - 

6.1 Billing and Payment Procedures and Final Accounting ...................................- 10 - 

6.2 Milestones.........................................................................................................- 10 - 

6.3 Financial Security Arrangements......................................................................- 11 - 

Article 7. Assignment, Liability, Indemnity, Force Majeure, Consequential 

Damages, and Default.................................................................................................- 11 - 
- ii -

7.1 Assignment .......................................................................................................- 11 - 

7.2 Limitation of Liability.......................................................................................- 12 - 

7.3 Indemnity ..........................................................................................................- 12 - 

7.4 Consequential Damages....................................................................................- 13 - 

7.5 Force Majeure. ..................................................................................................- 13 - 

7.6 Default...............................................................................................................- 13 - 

Article 8. Insurance................................................................................................................- 14 - 

Article 9. Confidentiality.......................................................................................................- 15 - 

Article 10. Disputes................................................................................................................- 16 - 

Article 11. Taxes.....................................................................................................................- 16 - 

Article 12. Miscellaneous.......................................................................................................- 16 - 

12.1 Governing Law, Regulatory Authority, and Rules ...........................................- 16 - 

12.2 Amendment.......................................................................................................- 17 - 

12.3 No Third-Party Beneficiaries............................................................................- 17 - 

12.4 Waiver...............................................................................................................- 17 - 

12.5 Entire Agreement..............................................................................................- 17 - 

12.6 Multiple Counterparts. ......................................................................................- 17 - 

12.7 No Partnership ..................................................................................................- 17 - 

12.8 Severability .......................................................................................................- 18 - 

12.9 Security Arrangements......................................................................................- 18 - 

12.10 Environmental Releases....................................................................................- 18 - 

12.11 Subcontractors...................................................................................................- 18 - 

12.12 Reservation of Rights........................................................................................- 19 - 

Article 13. Notices ..................................................................................................................- 19 - 

13.1 General..............................................................................................................- 19 - 

13.2 Billing and Payment..........................................................................................- 20 - 

13.3 Alternative Forms of Notice .............................................................................- 20 - 

13.4 Designated Operating Representative...............................................................- 20 - 

13.5 Changes to the Notice Information...................................................................- 21 - 

Article 14. Signatures.............................................................................................................- 21 - 

Attachment 1 – Glossary of Terms 

Attachment 2 – Description and Costs of the Small Generating Facility, Interconnection 

Facilities, and Metering Equipment 

Attachment 3 – One-line Diagram Depicting the Small Generating Facility, Interconnection 

Facilities, Metering Equipment, and Upgrades 

Attachment 4 – Milestones 

Attachment 5 – Additional Operating Requirements for the Transmission Provider's 

Transmission System and Affected Systems Needed to Support the Interconnection Customer’s 

Needs 

Attachment 6 – Transmission Provider's Description of its Upgrades and Best Estimate of 
- iii -

Upgrade Costs 
Small Generator Interconnection Agreement (SGIA) - 1 -

This Interconnection Agreement ("Agreement") is made and entered into this ________ day of 

________________, 20__, by ___________________________________________________ 

("Transmission Provider"), and _________________________________________________ 

("Interconnection Customer") each hereinafter sometimes referred to individually as "Party" or 

both referred to collectively as the "Parties." 

Transmission Provider Information 

Transmission Provider: ______________________________________________ 

Attention: _________________________________________________________ 

Address: __________________________________________________________ 

City: _______________________________ State: ______________ Zip: ______ 

Phone: ________________ Fax: _________________ 

Interconnection Customer Information 

Interconnection Customer: ____________________________________________ 

Attention: _________________________________________________________ 

Address: __________________________________________________________ 

City: _______________________________ State: ______________ Zip: ______ 

Phone: ________________ Fax: _________________ 

Interconnection Customer Application No: _____________ 

In consideration of the mutual covenants set forth herein, the Parties agree as follows: 

Article 1. Scope and Limitations of Agreement 

1.1 This Agreement shall be used for all Interconnection Requests submitted under the Small 

Generator Interconnection Procedures (SGIP) except for those submitted under the 10 

kW Inverter Process contained in SGIP Attachment 5. 

1.2 This Agreement governs the terms and conditions under which the Interconnection 

Customer’s Small Generating Facility will interconnect with, and operate in parallel with, 

the Transmission Provider's Transmission System. 

1.3 This Agreement does not constitute an agreement to purchase or deliver the 

Interconnection Customer's power. The purchase or delivery of power and other services 

that the Interconnection Customer may require will be covered under separate 

agreements. The Interconnection Customer will be responsible for separately making all 

necessary arrangements (including scheduling) for delivery of electricity with the 

applicable Transmission Provider. 

1.4 Nothing in this Agreement is intended to affect any other agreement between the 

Transmission Provider and the Interconnection Customer. 
Small Generator Interconnection Agreement (SGIA) - 2 -

1.5 Responsibilities of the Parties

 1.5.1 The Parties shall perform all obligations of this Agreement in accordance with all 

Applicable Laws and Regulations, Operating Requirements, and Good Utility 

Practice. 

 1.5.2 The Interconnection Customer shall construct, interconnect, operate and maintain 

its Small Generating Facility and construct, operate, and maintain its 

Interconnection Facilities in accordance with the applicable manufacturer's 

recommended maintenance schedule, in accordance with this Agreement, and 

with Good Utility Practice. 

 1.5.3 The Transmission Provider shall construct, operate, and maintain its Transmission 

System and Interconnection Facilities in accordance with this Agreement, and 

with Good Utility Practice. 

1.5.4 The Interconnection Customer agrees to construct its facilities or systems in 

accordance with applicable specifications that meet or exceed those provided by 

the National Electrical Safety Code, the American National Standards Institute, 

IEEE, Underwriter's Laboratory, and Operating Requirements in effect at the time 

of construction and other applicable national and state codes and standards. The 

Interconnection Customer agrees to design, install, maintain, and operate its Small 

Generating Facility so as to reasonably minimize the likelihood of a disturbance 

adversely affecting or impairing the system or equipment of the Transmission 

Provider or Affected Systems. 

1.5.5 Each Party shall operate, maintain, repair, and inspect, and shall be fully 

responsible for the facilities that it now or subsequently may own unless 

otherwise specified in the Attachments to this Agreement. Each Party shall be 

responsible for the safe installation, maintenance, repair and condition of their 

respective lines and appurtenances on their respective sides of the point of change 

of ownership. The Transmission Provider and the Interconnection Customer, as 

appropriate, shall provide Interconnection Facilities that adequately protect the 

Transmission Provider's Transmission System, personnel, and other persons from 

damage and injury. The allocation of responsibility for the design, installation, 

operation, maintenance and ownership of Interconnection Facilities shall be 

delineated in the Attachments to this Agreement. 

1.5.6 The Transmission Provider shall coordinate with all Affected Systems to support 

the interconnection. 

1.6 Parallel Operation Obligations

Once the Small Generating Facility has been authorized to commence parallel operation, 

the Interconnection Customer shall abide by all rules and procedures pertaining to the 
Small Generator Interconnection Agreement (SGIA) - 3 -

parallel operation of the Small Generating Facility in the applicable control area, 

including, but not limited to; 1) the rules and procedures concerning the operation of 

generation set forth in the Tariff or by the system operator for the Transmission 

Provider's Transmission System and; 2) the Operating Requirements set forth in 

Attachment 5 of this Agreement. 

1.7 Metering

The Interconnection Customer shall be responsible for the Transmission Provider's 

reasonable and necessary cost for the purchase, installation, operation, maintenance, 

testing, repair, and replacement of metering and data acquisition equipment specified in 

Attachments 2 and 3 of this Agreement. The Interconnection Customer's metering (and 

data acquisition, as required) equipment shall conform to applicable industry rules and 

Operating Requirements. 

1.8 Reactive Power

1.8.1 The Interconnection Customer shall design its Small Generating Facility to 

maintain a composite power delivery at continuous rated power output at the 

Point of Interconnection at a power factor within the range of 0.95 leading to 0.95 

lagging, unless the Transmission Provider has established different requirements 

that apply to all similarly situated generators in the control area on a comparable 

basis. The requirements of this paragraph shall not apply to wind generators. 

1.8.2 The Transmission Provider is required to pay the Interconnection Customer for 

reactive power that the Interconnection Customer provides or absorbs from the 

Small Generating Facility when the Transmission Provider requests the 

Interconnection Customer to operate its Small Generating Facility outside the 

range specified in article 1.8.1. In addition, if the Transmission Provider pays its 

own or affiliated generators for reactive power service within the specified range, 

it must also pay the Interconnection Customer. 

1.8.3 Payments shall be in accordance with the Interconnection Customer's applicable 

rate schedule then in effect unless the provision of such service(s) is subject to a 

regional transmission organization or independent system operator FERCapproved rate schedule. To the extent that no rate schedule is in effect at the time 

the Interconnection Customer is required to provide or absorb reactive power 

under this Agreement, the Parties agree to expeditiously file such rate schedule 

and agree to support any request for waiver of the Commission's prior notice 

requirement in order to compensate the Interconnection Customer from the time 

service commenced. 

1.9 Capitalized terms used herein shall have the meanings specified in the Glossary of Terms 

in Attachment 1 or the body of this Agreement. 
Small Generator Interconnection Agreement (SGIA) - 4 -

Article 2. Inspection, Testing, Authorization, and Right of Access 

2.1 Equipment Testing and Inspection

2.1.1 The Interconnection Customer shall test and inspect its Small Generating Facility 

and Interconnection Facilities prior to interconnection. The Interconnection 

Customer shall notify the Transmission Provider of such activities no fewer than 

five Business Days (or as may be agreed to by the Parties) prior to such testing 

and inspection. Testing and inspection shall occur on a Business Day. The 

Transmission Provider may, at its own expense, send qualified personnel to the 

Small Generating Facility site to inspect the interconnection and observe the 

testing. The Interconnection Customer shall provide the Transmission Provider a 

written test report when such testing and inspection is completed. 

2.1.2 The Transmission Provider shall provide the Interconnection Customer written 

acknowledgment that it has received the Interconnection Customer's written test 

report. Such written acknowledgment shall not be deemed to be or construed as 

any representation, assurance, guarantee, or warranty by the Transmission 

Provider of the safety, durability, suitability, or reliability of the Small Generating 

Facility or any associated control, protective, and safety devices owned or 

controlled by the Interconnection Customer or the quality of power produced by 

the Small Generating Facility. 

2.2 Authorization Required Prior to Parallel Operation

2.2.1 The Transmission Provider shall use Reasonable Efforts to list applicable parallel 

operation requirements in Attachment 5 of this Agreement. Additionally, the 

Transmission Provider shall notify the Interconnection Customer of any changes 

to these requirements as soon as they are known. The Transmission Provider 

shall make Reasonable Efforts to cooperate with the Interconnection Customer in 

meeting requirements necessary for the Interconnection Customer to commence 

parallel operations by the in-service date. 

2.2.2 The Interconnection Customer shall not operate its Small Generating Facility in 

parallel with the Transmission Provider's Transmission System without prior 

written authorization of the Transmission Provider. The Transmission Provider 

will provide such authorization once the Transmission Provider receives 

notification that the Interconnection Customer has complied with all applicable 

parallel operation requirements. Such authorization shall not be unreasonably 

withheld, conditioned, or delayed. 

2.3 Right of Access

2.3.1 Upon reasonable notice, the Transmission Provider may send a qualified person to 

the premises of the Interconnection Customer at or immediately before the time 
Small Generator Interconnection Agreement (SGIA) - 5 -

the Small Generating Facility first produces energy to inspect the interconnection, 

and observe the commissioning of the Small Generating Facility (including any 

required testing), startup, and operation for a period of up to three Business Days 

after initial start-up of the unit. In addition, the Interconnection Customer shall 

notify the Transmission Provider at least five Business Days prior to conducting 

any on-site verification testing of the Small Generating Facility. 

2.3.2 Following the initial inspection process described above, at reasonable hours, and 

upon reasonable notice, or at any time without notice in the event of an 

emergency or hazardous condition, the Transmission Provider shall have access to 

the Interconnection Customer's premises for any reasonable purpose in connection 

with the performance of the obligations imposed on it by this Agreement or if 

necessary to meet its legal obligation to provide service to its customers. 

 2.3.3 Each Party shall be responsible for its own costs associated with following this 

article. 

Article 3. Effective Date, Term, Termination, and Disconnection

3.1 Effective Date

This Agreement shall become effective upon execution by the Parties subject to 

acceptance by FERC (if applicable), or if filed unexecuted, upon the date specified by the 

FERC. The Transmission Provider shall promptly file this Agreement with the FERC 

upon execution, if required. 

3.2 Term of Agreement

This Agreement shall become effective on the Effective Date and shall remain in effect 

for a period of ten years from the Effective Date or such other longer period as the 

Interconnection Customer may request and shall be automatically renewed for each 

successive one-year period thereafter, unless terminated earlier in accordance with article 

3.3 of this Agreement. 

3.3 Termination

No termination shall become effective until the Parties have complied with all Applicable 

Laws and Regulations applicable to such termination, including the filing with FERC of a 

notice of termination of this Agreement (if required), which notice has been accepted for 

filing by FERC. 

3.3.1 The Interconnection Customer may terminate this Agreement at any time by 

giving the Transmission Provider 20 Business Days written notice. 

3.3.2 Either Party may terminate this Agreement after Default pursuant to article 7.6. 

3.3.3 Upon termination of this Agreement, the Small Generating Facility will be 
Small Generator Interconnection Agreement (SGIA) - 6 -

disconnected from the Transmission Provider's Transmission System. The 

termination of this Agreement shall not relieve either Party of its liabilities and 

obligations, owed or continuing at the time of the termination. 

3.3.4 This provisions of this article shall survive termination or expiration of this 

Agreement. 

3.4 Temporary Disconnection

Temporary disconnection shall continue only for so long as reasonably necessary under 

Good Utility Practice. 

3.4.1 Emergency Conditions -- "Emergency Condition" shall mean a condition or 

situation: (1) that in the judgment of the Party making the claim is imminently 

likely to endanger life or property; or (2) that, in the case of the Transmission 

Provider, is imminently likely (as determined in a non-discriminatory manner) to 

cause a material adverse effect on the security of, or damage to the Transmission 

System, the Transmission Provider's Interconnection Facilities or the 

Transmission Systems of others to which the Transmission System is directly 

connected; or (3) that, in the case of the Interconnection Customer, is imminently 

likely (as determined in a non-discriminatory manner) to cause a material adverse 

effect on the security of, or damage to, the Small Generating Facility or the 

Interconnection Customer's Interconnection Facilities. Under Emergency 

Conditions, the Transmission Provider may immediately suspend interconnection 

service and temporarily disconnect the Small Generating Facility. The 

Transmission Provider shall notify the Interconnection Customer promptly when 

it becomes aware of an Emergency Condition that may reasonably be expected to 

affect the Interconnection Customer's operation of the Small Generating Facility. 

The Interconnection Customer shall notify the Transmission Provider promptly 

when it becomes aware of an Emergency Condition that may reasonably be 

expected to affect the Transmission Provider's Transmission System or other 

Affected Systems. To the extent information is known, the notification shall 

describe the Emergency Condition, the extent of the damage or deficiency, the 

expected effect on the operation of both Parties' facilities and operations, its 

anticipated duration, and the necessary corrective action. 

3.4.2 Routine Maintenance, Construction, and Repair

The Transmission Provider may interrupt interconnection service or curtail the 

output of the Small Generating Facility and temporarily disconnect the Small 

Generating Facility from the Transmission Provider's Transmission System when 

necessary for routine maintenance, construction, and repairs on the Transmission 

Provider's Transmission System. The Transmission Provider shall provide the 

Interconnection Customer with five Business Days notice prior to such 

interruption. The Transmission Provider shall use Reasonable Efforts to 

coordinate such reduction or temporary disconnection with the Interconnection 

Customer. 
Small Generator Interconnection Agreement (SGIA) - 7 -

3.4.3 Forced Outages

During any forced outage, the Transmission Provider may suspend 

interconnection service to effect immediate repairs on the Transmission Provider's 

Transmission System. The Transmission Provider shall use Reasonable Efforts to 

provide the Interconnection Customer with prior notice. If prior notice is not 

given, the Transmission Provider shall, upon request, provide the Interconnection 

Customer written documentation after the fact explaining the circumstances of the 

disconnection. 

3.4.4 Adverse Operating Effects

The Transmission Provider shall notify the Interconnection Customer as soon as 

practicable if, based on Good Utility Practice, operation of the Small Generating 

Facility may cause disruption or deterioration of service to other customers served 

from the same electric system, or if operating the Small Generating Facility could 

cause damage to the Transmission Provider's Transmission System or Affected 

Systems. Supporting documentation used to reach the decision to disconnect shall 

be provided to the Interconnection Customer upon request. If, after notice, the 

Interconnection Customer fails to remedy the adverse operating effect within a 

reasonable time, the Transmission Provider may disconnect the Small Generating 

Facility. The Transmission Provider shall provide the Interconnection Customer 

with five Business Day notice of such disconnection, unless the provisions of 

article 3.4.1 apply. 

3.4.5 Modification of the Small Generating Facility

The Interconnection Customer must receive written authorization from the 

Transmission Provider before making any change to the Small Generating Facility 

that may have a material impact on the safety or reliability of the Transmission 

System. Such authorization shall not be unreasonably withheld. Modifications 

shall be done in accordance with Good Utility Practice. If the Interconnection 

Customer makes such modification without the Transmission Provider's prior 

written authorization, the latter shall have the right to temporarily disconnect the 

Small Generating Facility. 

3.4.6 Reconnection

The Parties shall cooperate with each other to restore the Small Generating 

Facility, Interconnection Facilities, and the Transmission Provider's Transmission 

System to their normal operating state as soon as reasonably practicable following 

a temporary disconnection. 

Article 4. Cost Responsibility for Interconnection Facilities and Distribution Upgrades

4.1 Interconnection Facilities
Small Generator Interconnection Agreement (SGIA) - 8 -

 4.1.1 The Interconnection Customer shall pay for the cost of the Interconnection 

Facilities itemized in Attachment 2 of this Agreement. The Transmission 

Provider shall provide a best estimate cost, including overheads, for the purchase 

and construction of its Interconnection Facilities and provide a detailed 

itemization of such costs. Costs associated with Interconnection Facilities may be 

shared with other entities that may benefit from such facilities by agreement of 

the Interconnection Customer, such other entities, and the Transmission Provider. 

4.1.2 The Interconnection Customer shall be responsible for its share of all reasonable 

expenses, including overheads, associated with (1) owning, operating, 

maintaining, repairing, and replacing its own Interconnection Facilities, and (2) 

operating, maintaining, repairing, and replacing the Transmission Provider's 

Interconnection Facilities. 

4.2 Distribution Upgrades

The Transmission Provider shall design, procure, construct, install, and own the 

Distribution Upgrades described in Attachment 6 of this Agreement. If the Transmission 

Provider and the Interconnection Customer agree, the Interconnection Customer may 

construct Distribution Upgrades that are located on land owned by the Interconnection 

Customer. The actual cost of the Distribution Upgrades, including overheads, shall be 

directly assigned to the Interconnection Customer. 

Article 5. Cost Responsibility for Network Upgrades 

5.1 Applicability

No portion of this article 5 shall apply unless the interconnection of the Small Generating 

Facility requires Network Upgrades. 

5.2 Network Upgrades

The Transmission Provider or the Transmission Owner shall design, procure, construct, 

install, and own the Network Upgrades described in Attachment 6 of this Agreement. If 

the Transmission Provider and the Interconnection Customer agree, the Interconnection 

Customer may construct Network Upgrades that are located on land owned by the 

Interconnection Customer. Unless the Transmission Provider elects to pay for Network 

Upgrades, the actual cost of the Network Upgrades, including overheads, shall be borne 

initially by the Interconnection Customer. 

 5.2.1 Repayment of Amounts Advanced for Network Upgrades

The Interconnection Customer shall be entitled to a cash repayment, equal to the 

total amount paid to the Transmission Provider and Affected System operator, if 

any, for Network Upgrades, including any tax gross-up or other tax-related 

payments associated with the Network Upgrades, and not otherwise refunded to 

the Interconnection Customer, to be paid to the Interconnection Customer on a 

dollar-for-dollar basis for the non-usage sensitive portion of transmission charges, 
Small Generator Interconnection Agreement (SGIA) - 9 -

as payments are made under the Transmission Provider's Tariff and Affected 

System's Tariff for transmission services with respect to the Small Generating 

Facility. Any repayment shall include interest calculated in accordance with the 

methodology set forth in FERC=s regulations at 18 C.F.R. '35.19a(a)(2)(iii) from 

the date of any payment for Network Upgrades through the date on which the 

Interconnection Customer receives a repayment of such payment pursuant to this 

subparagraph. The Interconnection Customer may assign such repayment rights 

to any person. 

 5.2.1.1 Notwithstanding the foregoing, the Interconnection Customer, the 

Transmission Provider, and Affected System operator may adopt 

any alternative payment schedule that is mutually agreeable so 

long as the Transmission Provider and Affected System operator 

take one of the following actions no later than five years from the 

Commercial Operation Date: (1) return to the Interconnection 

Customer any amounts advanced for Network Upgrades not 

previously repaid, or (2) declare in writing that the Transmission 

Provider or Affected System operator will continue to provide 

payments to the Interconnection Customer on a dollar-for-dollar 

basis for the non-usage sensitive portion of transmission charges, 

or develop an alternative schedule that is mutually agreeable and 

provides for the return of all amounts advanced for Network 

Upgrades not previously repaid; however, full reimbursement shall 

not extend beyond twenty (20) years from the commercial 

operation date. 

 5.2.1.2 If the Small Generating Facility fails to achieve commercial 

operation, but it or another generating facility is later constructed 

and requires use of the Network Upgrades, the Transmission 

Provider and Affected System operator shall at that time reimburse 

the Interconnection Customer for the amounts advanced for the 

Network Upgrades. Before any such reimbursement can occur, the 

Interconnection Customer, or the entity that ultimately constructs 

the generating facility, if different, is responsible for identifying 

the entity to which reimbursement must be made. 

5.3 Special Provisions for Affected Systems

Unless the Transmission Provider provides, under this Agreement, for the repayment of 

amounts advanced to Affected System operator for Network Upgrades, the 

Interconnection Customer and Affected System operator shall enter into an agreement 

that provides for such repayment. The agreement shall specify the terms governing 

payments to be made by the Interconnection Customer to Affected System operator as 

well as the repayment by Affected System operator. 

5.4 Rights Under Other Agreements
Small Generator Interconnection Agreement (SGIA) - 10 -

Notwithstanding any other provision of this Agreement, nothing herein shall be construed 

as relinquishing or foreclosing any rights, including but not limited to firm transmission 

rights, capacity rights, transmission congestion rights, or transmission credits, that the 

Interconnection Customer shall be entitled to, now or in the future, under any other 

agreement or tariff as a result of, or otherwise associated with, the transmission capacity, 

if any, created by the Network Upgrades, including the right to obtain cash 

reimbursements or transmission credits for transmission service that is not associated 

with the Small Generating Facility. 

Article 6. Billing, Payment, Milestones, and Financial Security 

6.1 Billing and Payment Procedures and Final Accounting

 6.1.1 The Transmission Provider shall bill the Interconnection Customer for the design, 

engineering, construction, and procurement costs of Interconnection Facilities and 

Upgrades contemplated by this Agreement on a monthly basis, or as otherwise 

agreed by the Parties. The Interconnection Customer shall pay each bill within 30 

calendar days of receipt, or as otherwise agreed to by the Parties. 

 6.1.2 Within three months of completing the construction and installation of the 

Transmission Provider's Interconnection Facilities and/or Upgrades described in 

the Attachments to this Agreement, the Transmission Provider shall provide the 

Interconnection Customer with a final accounting report of any difference 

between (1) the Interconnection Customer's cost responsibility for the actual cost 

of such facilities or Upgrades, and (2) the Interconnection Customer's previous 

aggregate payments to the Transmission Provider for such facilities or Upgrades. 

If the Interconnection Customer's cost responsibility exceeds its previous 

aggregate payments, the Transmission Provider shall invoice the Interconnection 

Customer for the amount due and the Interconnection Customer shall make 

payment to the Transmission Provider within 30 calendar days. If the 

Interconnection Customer's previous aggregate payments exceed its cost 

responsibility under this Agreement, the Transmission Provider shall refund to the 

Interconnection Customer an amount equal to the difference within 30 calendar 

days of the final accounting report. 

6.2 Milestones

The Parties shall agree on milestones for which each Party is responsible and list them in 

Attachment 4 of this Agreement. A Party's obligations under this provision may be 

extended by agreement. If a Party anticipates that it will be unable to meet a milestone 

for any reason other than a Force Majeure Event, it shall immediately notify the other 

Party of the reason(s) for not meeting the milestone and (1) propose the earliest 

reasonable alternate date by which it can attain this and future milestones, and (2) 

requesting appropriate amendments to Attachment 4. The Party affected by the failure to 

meet a milestone shall not unreasonably withhold agreement to such an amendment 
Small Generator Interconnection Agreement (SGIA) - 11 -

unless it will suffer significant uncompensated economic or operational harm from the 

delay, (2) attainment of the same milestone has previously been delayed, or (3) it has 

reason to believe that the delay in meeting the milestone is intentional or unwarranted 

notwithstanding the circumstances explained by the Party proposing the amendment. 

6.3 Financial Security Arrangements

At least 20 Business Days prior to the commencement of the design, procurement, 

installation, or construction of a discrete portion of the Transmission Provider's 

Interconnection Facilities and Upgrades, the Interconnection Customer shall provide the 

Transmission Provider, at the Interconnection Customer's option, a guarantee, a surety 

bond, letter of credit or other form of security that is reasonably acceptable to the 

Transmission Provider and is consistent with the Uniform Commercial Code of the 

jurisdiction where the Point of Interconnection is located. Such security for payment 

shall be in an amount sufficient to cover the costs for constructing, designing, procuring, 

and installing the applicable portion of the Transmission Provider's Interconnection 

Facilities and Upgrades and shall be reduced on a dollar-for-dollar basis for payments 

made to the Transmission Provider under this Agreement during its term. In addition: 

6.3.1 The guarantee must be made by an entity that meets the creditworthiness 

requirements of the Transmission Provider, and contain terms and 

conditions that guarantee payment of any amount that may be due from 

the Interconnection Customer, up to an agreed-to maximum amount. 

6.3.2 The letter of credit or surety bond must be issued by a financial institution 

or insured reasonably acceptable to the Transmission Provider and must 

specify a reasonable expiration date. 

Article 7. Assignment, Liability, Indemnity, Force Majeure, Consequential Damages, and 

Default 

7.1 Assignment

This Agreement may be assigned by either Party upon 15 Business Days prior written 

notice and opportunity to object by the other Party; provided that: 

7.1.1 Either Party may assign this Agreement without the consent of the other Party to 

any affiliate of the assigning Party with an equal or greater credit rating and with 

the legal authority and operational ability to satisfy the obligations of the 

assigning Party under this Agreement; 

7.1.2 The Interconnection Customer shall have the right to assign this Agreement, 

without the consent of the Transmission Provider, for collateral security purposes 

to aid in providing financing for the Small Generating Facility, provided that the 

Interconnection Customer will promptly notify the Transmission Provider of any 

such assignment. 
Small Generator Interconnection Agreement (SGIA) - 12 -

7.1.3 Any attempted assignment that violates this article is void and ineffective. 

Assignment shall not relieve a Party of its obligations, nor shall a Party's 

obligations be enlarged, in whole or in part, by reason thereof. An assignee is 

responsible for meeting the same financial, credit, and insurance obligations as 

the Interconnection Customer. Where required, consent to assignment will not be 

unreasonably withheld, conditioned or delayed. 

7.2 Limitation of Liability

Each Party's liability to the other Party for any loss, cost, claim, injury, liability, or 

expense, including reasonable attorney's fees, relating to or arising from any act or 

omission in its performance of this Agreement, shall be limited to the amount of direct 

damage actually incurred. In no event shall either Party be liable to the other Party for 

any indirect, special, consequential, or punitive damages, except as authorized by this 

Agreement. 

7.3 Indemnity

7.3.1 This provision protects each Party from liability incurred to third parties as a 

result of carrying out the provisions of this Agreement. Liability under this 

provision is exempt from the general limitations on liability found in article 7.2. 

7.3.2 The Parties shall at all times indemnify, defend, and hold the other Party harmless 

from, any and all damages, losses, claims, including claims and actions relating to 

injury to or death of any person or damage to property, demand, suits, recoveries, 

costs and expenses, court costs, attorney fees, and all other obligations by or to 

third parties, arising out of or resulting from the other Party's action or failure to 

meet its obligations under this Agreement on behalf of the indemnifying Party, 

except in cases of gross negligence or intentional wrongdoing by the indemnified 

Party. 

7.3.3 If an indemnified person is entitled to indemnification under this article as a result 

of a claim by a third party, and the indemnifying Party fails, after notice and 

reasonable opportunity to proceed under this article, to assume the defense of 

such claim, such indemnified person may at the expense of the indemnifying 

Party contest, settle or consent to the entry of any judgment with respect to, or pay 

in full, such claim. 

7.3.4 If an indemnifying party is obligated to indemnify and hold any indemnified 

person harmless under this article, the amount owing to the indemnified person 

shall be the amount of such indemnified person's actual loss, net of any insurance 

or other recovery. 

7.3.5 Promptly after receipt by an indemnified person of any claim or notice of the 

commencement of any action or administrative or legal proceeding or 
Small Generator Interconnection Agreement (SGIA) - 13 -

investigation as to which the indemnity provided for in this article may apply, the 

indemnified person shall notify the indemnifying party of such fact. Any failure 

of or delay in such notification shall not affect a Party's indemnification 

obligation unless such failure or delay is materially prejudicial to the 

indemnifying party. 

7.4 Consequential Damages

Other than as expressly provided for in this Agreement, neither Party shall be liable under 

any provision of this Agreement for any losses, damages, costs or expenses for any 

special, indirect, incidental, consequential, or punitive damages, including but not limited 

to loss of profit or revenue, loss of the use of equipment, cost of capital, cost of 

temporary equipment or services, whether based in whole or in part in contract, in tort, 

including negligence, strict liability, or any other theory of liability; provided, however, 

that damages for which a Party may be liable to the other Party under another agreement 

will not be considered to be special, indirect, incidental, or consequential damages 

hereunder. 

7.5 Force Majeure

7.5.1 As used in this article, a Force Majeure Event shall mean "any act of God, labor 

disturbance, act of the public enemy, war, insurrection, riot, fire, storm or flood, 

explosion, breakage or accident to machinery or equipment, any order, regulation 

or restriction imposed by governmental, military or lawfully established civilian 

authorities, or any other cause beyond a Party’s control. A Force Majeure Event 

does not include an act of negligence or intentional wrongdoing." 

7.5.2 If a Force Majeure Event prevents a Party from fulfilling any obligations under 

this Agreement, the Party affected by the Force Majeure Event (Affected Party) 

shall promptly notify the other Party, either in writing or via the telephone, of the 

existence of the Force Majeure Event. The notification must specify in 

reasonable detail the circumstances of the Force Majeure Event, its expected 

duration, and the steps that the Affected Party is taking to mitigate the effects of 

the event on its performance. The Affected Party shall keep the other Party 

informed on a continuing basis of developments relating to the Force Majeure 

Event until the event ends. The Affected Party will be entitled to suspend or 

modify its performance of obligations under this Agreement (other than the 

obligation to make payments) only to the extent that the effect of the Force 

Majeure Event cannot be mitigated by the use of Reasonable Efforts. The 

Affected Party will use Reasonable Efforts to resume its performance as soon as 

possible. 

7.6 Default

7.6.1 No Default shall exist where such failure to discharge an obligation (other than 

the payment of money) is the result of a Force Majeure Event as defined in this 
Small Generator Interconnection Agreement (SGIA) - 14 -

Agreement or the result of an act or omission of the other Party. Upon a Default, 

the non-defaulting Party shall give written notice of such Default to the defaulting 

Party. Except as provided in article 7.6.2, the defaulting Party shall have 60 

calendar days from receipt of the Default notice within which to cure such 

Default; provided however, if such Default is not capable of cure within 60 

calendar days, the defaulting Party shall commence such cure within 20 calendar 

days after notice and continuously and diligently complete such cure within six 

months from receipt of the Default notice; and, if cured within such time, the 

Default specified in such notice shall cease to exist. 

7.6.2 If a Default is not cured as provided in this article, or if a Default is not capable of 

being cured within the period provided for herein, the non-defaulting Party shall 

have the right to terminate this Agreement by written notice at any time until cure 

occurs, and be relieved of any further obligation hereunder and, whether or not 

that Party terminates this Agreement, to recover from the defaulting Party all 

amounts due hereunder, plus all other damages and remedies to which it is 

entitled at law or in equity. The provisions of this article will survive termination 

of this Agreement. 

Article 8. Insurance 

8.1 The Interconnection Customer shall, at its own expense, maintain in force general 

liability insurance without any exclusion for liabilities related to the interconnection 

undertaken pursuant to this Agreement. The amount of such insurance shall be sufficient 

to insure against all reasonably foreseeable direct liabilities given the size and nature of 

the generating equipment being interconnected, the interconnection itself, and the 

characteristics of the system to which the interconnection is made. The Interconnection 

Customer shall obtain additional insurance only if necessary as a function of owning and 

operating a generating facility. Such insurance shall be obtained from an insurance 

provider authorized to do business in the State where the interconnection is located. 

Certification that such insurance is in effect shall be provided upon request of the 

Transmission Provider, except that the Interconnection Customer shall show proof of 

insurance to the Transmission Provider no later than ten Business Days prior to the 

anticipated commercial operation date. An Interconnection Customer of sufficient creditworthiness may propose to self-insure for such liabilities, and such a proposal shall not be 

unreasonably rejected. 

8.2 The Transmission Provider agrees to maintain general liability insurance or selfinsurance consistent with the Transmission Provider’s commercial practice. Such 

insurance or self-insurance shall not exclude coverage for the Transmission Provider's 

liabilities undertaken pursuant to this Agreement. 

8.3 The Parties further agree to notify each other whenever an accident or incident occurs 

resulting in any injuries or damages that are included within the scope of coverage of 
Small Generator Interconnection Agreement (SGIA) - 15 -

such insurance, whether or not such coverage is sought. 

Article 9. Confidentiality 

9.1 Confidential Information shall mean any confidential and/or proprietary information 

provided by one Party to the other Party that is clearly marked or otherwise designated 

"Confidential." For purposes of this Agreement all design, operating specifications, and 

metering data provided by the Interconnection Customer shall be deemed Confidential 

Information regardless of whether it is clearly marked or otherwise designated as such. 

9.2 Confidential Information does not include information previously in the public domain, 

required to be publicly submitted or divulged by Governmental Authorities (after notice 

to the other Party and after exhausting any opportunity to oppose such publication or 

release), or necessary to be divulged in an action to enforce this Agreement. Each Party 

receiving Confidential Information shall hold such information in confidence and shall 

not disclose it to any third party nor to the public without the prior written authorization 

from the Party providing that information, except to fulfill obligations under this 

Agreement, or to fulfill legal or regulatory requirements. 

 9.2.1 Each Party shall employ at least the same standard of care to protect Confidential 

Information obtained from the other Party as it employs to protect its own 

Confidential Information. 

 9.2.2 Each Party is entitled to equitable relief, by injunction or otherwise, to enforce its 

rights under this provision to prevent the release of Confidential Information 

without bond or proof of damages, and may seek other remedies available at law 

or in equity for breach of this provision. 

9.3 Notwithstanding anything in this article to the contrary, and pursuant to 18 CFR § 1b.20, 

if FERC, during the course of an investigation or otherwise, requests information from 

one of the Parties that is otherwise required to be maintained in confidence pursuant to 

this Agreement, the Party shall provide the requested information to FERC, within the 

time provided for in the request for information. In providing the information to FERC, 

the Party may, consistent with 18 CFR § 388.112, request that the information be treated 

as confidential and non-public by FERC and that the information be withheld from public 

disclosure. Parties are prohibited from notifying the other Party to this Agreement prior 

to the release of the Confidential Information to FERC. The Party shall notify the other 

Party to this Agreement when it is notified by FERC that a request to release Confidential 

Information has been received by FERC, at which time either of the Parties may respond 

before such information would be made public, pursuant to 18 CFR § 388.112. Requests 

from a state regulatory body conducting a confidential investigation shall be treated in a 

similar manner if consistent with the applicable state rules and regulations. 
Small Generator Interconnection Agreement (SGIA) - 16 -

Article 10. Disputes

10.1 The Parties agree to attempt to resolve all disputes arising out of the interconnection 

process according to the provisions of this article. 

10.2 In the event of a dispute, either Party shall provide the other Party with a written Notice 

of Dispute. Such Notice shall describe in detail the nature of the dispute. 

10.3 If the dispute has not been resolved within two Business Days after receipt of the Notice, 

either Party may contact FERC's Dispute Resolution Service (DRS) for assistance in 

resolving the dispute. 

10.4 The DRS will assist the Parties in either resolving their dispute or in selecting an 

appropriate dispute resolution venue (e.g., mediation, settlement judge, early neutral 

evaluation, or technical expert) to assist the Parties in resolving their dispute. DRS can 

be reached at 1-877-337-2237 or via the internet at http://www.ferc.gov/legal/adr.asp. 

10.5 Each Party agrees to conduct all negotiations in good faith and will be responsible for 

one-half of any costs paid to neutral third-parties. 

10.6 If neither Party elects to seek assistance from the DRS, or if the attempted dispute 

resolution fails, then either Party may exercise whatever rights and remedies it may have 

in equity or law consistent with the terms of this Agreement. 

Article 11. Taxes 

11.1 The Parties agree to follow all applicable tax laws and regulations, consistent with FERC 

policy and Internal Revenue Service requirements. 

11.2 Each Party shall cooperate with the other to maintain the other Party's tax status. Nothing 

in this Agreement is intended to adversely affect the Transmission Provider's tax exempt 

status with respect to the issuance of bonds including, but not limited to, local furnishing 

bonds. 

Article 12. Miscellaneous 

12.1 Governing Law, Regulatory Authority, and Rules

The validity, interpretation and enforcement of this Agreement and each of its provisions 

shall be governed by the laws of the state of __________________ (where the Point of 

Interconnection is located), without regard to its conflicts of law principles. This 

Agreement is subject to all Applicable Laws and Regulations. Each Party expressly 

reserves the right to seek changes in, appeal, or otherwise contest any laws, orders, or 

regulations of a Governmental Authority. 
Small Generator Interconnection Agreement (SGIA) - 17 -

12.2 Amendment

The Parties may amend this Agreement by a written instrument duly executed by both 

Parties. 

12.3 No Third-Party Beneficiaries

This Agreement is not intended to and does not create rights, remedies, or benefits of any 

character whatsoever in favor of any persons, corporations, associations, or entities other 

than the Parties, and the obligations herein assumed are solely for the use and benefit of 

the Parties, their successors in interest and where permitted, their assigns. 

12.4 Waiver

12.4.1 The failure of a Party to this Agreement to insist, on any occasion, upon strict 

performance of any provision of this Agreement will not be considered a waiver 

of any obligation, right, or duty of, or imposed upon, such Party. 

12.4.2 Any waiver at any time by either Party of its rights with respect to this Agreement 

shall not be deemed a continuing waiver or a waiver with respect to any other 

failure to comply with any other obligation, right, duty of this Agreement. 

Termination or default of this Agreement for any reason by Interconnection 

Customer shall not constitute a waiver of the Interconnection Customer's legal 

rights to obtain an interconnection from the Transmission Provider. Any waiver 

of this Agreement shall, if requested, be provided in writing. 

12.5 Entire Agreement

This Agreement, including all Attachments, constitutes the entire agreement between the 

Parties with reference to the subject matter hereof, and supersedes all prior and 

contemporaneous understandings or agreements, oral or written, between the Parties with 

respect to the subject matter of this Agreement. There are no other agreements, 

representations, warranties, or covenants which constitute any part of the consideration 

for, or any condition to, either Party's compliance with its obligations under this 

Agreement. 

12.6 Multiple Counterparts

This Agreement may be executed in two or more counterparts, each of which is deemed 

an original but all constitute one and the same instrument. 

12.7 No Partnership

This Agreement shall not be interpreted or construed to create an association, joint 

venture, agency relationship, or partnership between the Parties or to impose any 

partnership obligation or partnership liability upon either Party. Neither Party shall have 

any right, power or authority to enter into any agreement or undertaking for, or act on 

behalf of, or to act as or be an agent or representative of, or to otherwise bind, the other 

Party. 
Small Generator Interconnection Agreement (SGIA) - 18 -

12.8 Severability

If any provision or portion of this Agreement shall for any reason be held or adjudged to 

be invalid or illegal or unenforceable by any court of competent jurisdiction or other 

Governmental Authority, (1) such portion or provision shall be deemed separate and 

independent, (2) the Parties shall negotiate in good faith to restore insofar as practicable 

the benefits to each Party that were affected by such ruling, and (3) the remainder of this 

Agreement shall remain in full force and effect. 

12.9 Security Arrangements

Infrastructure security of electric system equipment and operations and control hardware 

and software is essential to ensure day-to-day reliability and operational security. FERC 

expects all Transmission Providers, market participants, and Interconnection Customers 

interconnected to electric systems to comply with the recommendations offered by the 

President's Critical Infrastructure Protection Board and, eventually, best practice 

recommendations from the electric reliability authority. All public utilities are expected 

to meet basic standards for system infrastructure and operational security, including 

physical, operational, and cyber-security practices. 

12.10 Environmental Releases

Each Party shall notify the other Party, first orally and then in writing, of the release of 

any hazardous substances, any asbestos or lead abatement activities, or any type of 

remediation activities related to the Small Generating Facility or the Interconnection 

Facilities, each of which may reasonably be expected to affect the other Party. The 

notifying Party shall (1) provide the notice as soon as practicable, provided such Party 

makes a good faith effort to provide the notice no later than 24 hours after such Party 

becomes aware of the occurrence, and (2) promptly furnish to the other Party copies of 

any publicly available reports filed with any governmental authorities addressing such 

events. 

12.11 Subcontractors

Nothing in this Agreement shall prevent a Party from utilizing the services of any 

subcontractor as it deems appropriate to perform its obligations under this Agreement; 

provided, however, that each Party shall require its subcontractors to comply with all 

applicable terms and conditions of this Agreement in providing such services and each 

Party shall remain primarily liable to the other Party for the performance of such 

subcontractor. 

 12.11.1 The creation of any subcontract relationship shall not relieve the 

hiring Party of any of its obligations under this Agreement. The 

hiring Party shall be fully responsible to the other Party for the acts 

or omissions of any subcontractor the hiring Party hires as if no 

subcontract had been made; provided, however, that in no event 

shall the Transmission Provider be liable for the actions or 

inactions of the Interconnection Customer or its subcontractors 
Small Generator Interconnection Agreement (SGIA) - 19 -

with respect to obligations of the Interconnection Customer under 

this Agreement. Any applicable obligation imposed by this 

Agreement upon the hiring Party shall be equally binding upon, 

and shall be construed as having application to, any subcontractor 

of such Party. 

 12.11.2 The obligations under this article will not be limited in any way by 

any limitation of subcontractor’s insurance. 

12.12 Reservation of Rights

The Transmission Provider shall have the right to make a unilateral filing with FERC to 

modify this Agreement with respect to any rates, terms and conditions, charges, 

classifications of service, rule or regulation under section 205 or any other applicable 

provision of the Federal Power Act and FERC's rules and regulations thereunder, and the 

Interconnection Customer shall have the right to make a unilateral filing with FERC to 

modify this Agreement under any applicable provision of the Federal Power Act and 

FERC's rules and regulations; provided that each Party shall have the right to protest any 

such filing by the other Party and to participate fully in any proceeding before FERC in 

which such modifications may be considered. Nothing in this Agreement shall limit the 

rights of the Parties or of FERC under sections 205 or 206 of the Federal Power Act and 

FERC's rules and regulations, except to the extent that the Parties otherwise agree as 

provided herein. 

Article 13. Notices 

13.1 General 

Unless otherwise provided in this Agreement, any written notice, demand, or request 

required or authorized in connection with this Agreement ("Notice") shall be deemed 

properly given if delivered in person, delivered by recognized national currier service, or 

sent by first class mail, postage prepaid, to the person specified below: 

If to the Interconnection Customer: 

Interconnection Customer: ____________________________________________ 

Attention: _________________________________ 

Address: __________________________________________________________ 

City: _______________________________ State:______________ Zip:_______ 

Phone: ________________ Fax: _________________ 

If to the Transmission Provider: 

Transmission Provider: _____________________________________________ 

Attention: _________________________________ 

Address: __________________________________________________________ 

City: _______________________________ State:______________ Zip:_______ 

Phone: ________________ Fax: _________________ 
Small Generator Interconnection Agreement (SGIA) - 20 -

13.2 Billing and Payment

 Billings and payments shall be sent to the addresses set out below: 

 Interconnection Customer: ____________________________________________ 

Attention: _________________________________ 

Address: __________________________________________________________ 

City: _______________________________ State:______________ Zip:_______ 

Transmission Provider: _____________________________________________ 

Attention: _________________________________ 

Address: __________________________________________________________ 

City: _______________________________ State:______________ Zip:_______ 

13.3 Alternative Forms of Notice

Any notice or request required or permitted to be given by either Party to the other and 

not required by this Agreement to be given in writing may be so given by telephone, 

facsimile or e-mail to the telephone numbers and e-mail addresses set out below: 

 If to the Interconnection Customer: 

Interconnection Customer: ____________________________________________ 

Attention: _________________________________ 

Address: __________________________________________________________ 

City: _______________________________ State:______________ Zip:_______ 

Phone: ________________ Fax: _________________ 

If to the Transmission Provider: 

Transmission Provider: _____________________________________________ 

Attention: _________________________________ 

Address: __________________________________________________________ 

City: _______________________________ State:______________ Zip:_______ 

Phone: ________________ Fax: _________________ 

13.4 Designated Operating Representative

The Parties may also designate operating representatives to conduct the communications 

which may be necessary or convenient for the administration of this Agreement. This 

person will also serve as the point of contact with respect to operations and maintenance 

of the Party’s facilities. 

Interconnection Customer’s Operating Representative: 

Interconnection Customer: ____________________________________________ 

Attention: _________________________________ 
Small Generator Interconnection Agreement (SGIA) - 21 -

Address: __________________________________________________________ 

City: _______________________________ State:______________ Zip:_______ 

Phone: ________________ Fax: _________________ 

Transmission Provider’s Operating Representative: 

Transmission Provider: _____________________________________________ 

Attention: _________________________________ 

Address: __________________________________________________________ 

City: _______________________________ State:______________ Zip:_______ 

Phone: ________________ Fax: _________________ 

13.5 Changes to the Notice Information

Either Party may change this information by giving five Business Days written notice 

prior to the effective date of the change. 

Article 14. Signatures 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their 

respective duly authorized representatives. 

For the Transmission Provider

Name: ___________________________________________ 

Title: ___________________________________________ 

Date: ___________________ 

For the Interconnection Customer

Name: ___________________________________________ 

Title: ___________________________________________ 

Date: ___________________ 
Glossary of Terms - 1 -

Attachment 1 

Glossary of Terms

Affected System – An electric system other than the Transmission Provider's Transmission 

System that may be affected by the proposed interconnection. 

Applicable Laws and Regulations – All duly promulgated applicable federal, state and local 

laws, regulations, rules, ordinances, codes, decrees, judgments, directives, or judicial or 

administrative orders, permits and other duly authorized actions of any Governmental Authority. 

Business Day – Monday through Friday, excluding Federal Holidays. 

Default – The failure of a breaching Party to cure its Breach under the Small Generator 

Interconnection Agreement. 

Distribution System – The Transmission Provider's facilities and equipment used to transmit 

electricity to ultimate usage points such as homes and industries directly from nearby generators 

or from interchanges with higher voltage transmission networks which transport bulk power over 

longer distances. The voltage levels at which Distribution Systems operate differ among areas. 

Distribution Upgrades – The additions, modifications, and upgrades to the Transmission 

Provider's Distribution System at or beyond the Point of Interconnection to facilitate 

interconnection of the Small Generating Facility and render the transmission service necessary to 

effect the Interconnection Customer's wholesale sale of electricity in interstate commerce. 

Distribution Upgrades do not include Interconnection Facilities. 

Good Utility Practice – Any of the practices, methods and acts engaged in or approved by a 

significant portion of the electric industry during the relevant time period, or any of the practices, 

methods and acts which, in the exercise of reasonable judgment in light of the facts known at the 

time the decision was made, could have been expected to accomplish the desired result at a 

reasonable cost consistent with good business practices, reliability, safety and expedition. Good 

Utility Practice is not intended to be limited to the optimum practice, method, or act to the 

exclusion of all others, but rather to be acceptable practices, methods, or acts generally accepted 

in the region. 

Governmental Authority – Any federal, state, local or other governmental regulatory or 

administrative agency, court, commission, department, board, or other governmental subdivision, 

legislature, rulemaking board, tribunal, or other governmental authority having jurisdiction over 

the Parties, their respective facilities, or the respective services they provide, and exercising or 

entitled to exercise any administrative, executive, police, or taxing authority or power; provided, 

however, that such term does not include the Interconnection Customer, the Interconnection 

Provider, or any Affiliate thereof. 

Interconnection Customer – Any entity, including the Transmission Provider, the Transmission 

Owner or any of the affiliates or subsidiaries of either, that proposes to interconnect its Small 
Glossary of Terms - 2 -

Generating Facility with the Transmission Provider's Transmission System. 

Interconnection Facilities – The Transmission Provider's Interconnection Facilities and the 

Interconnection Customer's Interconnection Facilities. Collectively, Interconnection Facilities 

include all facilities and equipment between the Small Generating Facility and the Point of 

Interconnection, including any modification, additions or upgrades that are necessary to 

physically and electrically interconnect the Small Generating Facility to the Transmission 

Provider's Transmission System. Interconnection Facilities are sole use facilities and shall not 

include Distribution Upgrades or Network Upgrades. 

Interconnection Request – The Interconnection Customer's request, in accordance with the 

Tariff, to interconnect a new Small Generating Facility, or to increase the capacity of, or make a 

Material Modification to the operating characteristics of, an existing Small Generating Facility 

that is interconnected with the Transmission Provider’s Transmission System. 

Material Modification – A modification that has a material impact on the cost or timing of any 

Interconnection Request with a later queue priority date. 

Network Upgrades – Additions, modifications, and upgrades to the Transmission Provider's 

Transmission System required at or beyond the point at which the Small Generating Facility 

interconnects with the Transmission Provider’s Transmission System to accommodate the 

interconnection of the Small Generating Facility with the Transmission Provider’s Transmission 

System. Network Upgrades do not include Distribution Upgrades. 

Operating Requirements – Any operating and technical requirements that may be applicable 

due to Regional Transmission Organization, Independent System Operator, control area, or the 

Transmission Provider's requirements, including those set forth in the Small Generator 

Interconnection Agreement. 

Party or Parties – The Transmission Provider, Transmission Owner, Interconnection Customer 

or any combination of the above. 

Point of Interconnection – The point where the Interconnection Facilities connect with the 

Transmission Provider's Transmission System. 

Reasonable Efforts – With respect to an action required to be attempted or taken by a Party 

under the Small Generator Interconnection Agreement, efforts that are timely and consistent with 

Good Utility Practice and are otherwise substantially equivalent to those a Party would use to 

protect its own interests. 

Small Generating Facility – The Interconnection Customer's device for the production of 

electricity identified in the Interconnection Request, but shall not include the Interconnection 

Customer's Interconnection Facilities. 

Tariff – The Transmission Provider or Affected System's Tariff through which open access 

transmission service and Interconnection Service are offered, as filed with the FERC, and as 
Glossary of Terms - 3 -

amended or supplemented from time to time, or any successor tariff. 

Transmission Owner – The entity that owns, leases or otherwise possesses an interest in the 

portion of the Transmission System at the Point of Interconnection and may be a Party to the 

Small Generator Interconnection Agreement to the extent necessary. 

Transmission Provider – The public utility (or its designated agent) that owns, controls, or 

operates transmission or distribution facilities used for the transmission of electricity in interstate 

commerce and provides transmission service under the Tariff. The term Transmission Provider 

should be read to include the Transmission Owner when the Transmission Owner is separate 

from the Transmission Provider. 

Transmission System – The facilities owned, controlled or operated by the Transmission 

Provider or the Transmission Owner that are used to provide transmission service under the 

Tariff. 

Upgrades – The required additions and modifications to the Transmission Provider's 

Transmission System at or beyond the Point of Interconnection. Upgrades may be Network 

Upgrades or Distribution Upgrades. Upgrades do not include Interconnection Facilities.
Attachment 2 

Description and Costs of the Small Generating Facility, 

Interconnection Facilities, and Metering Equipment 

Equipment, including the Small Generating Facility, Interconnection Facilities, and metering 

equipment shall be itemized and identified as being owned by the Interconnection Customer, the 

Transmission Provider, or the Transmission Owner. The Transmission Provider will provide a 

best estimate itemized cost, including overheads, of its Interconnection Facilities and metering 

equipment, and a best estimate itemized cost of the annual operation and maintenance expenses 

associated with its Interconnection Facilities and metering equipment.
Attachment 3 

One-line Diagram Depicting the Small Generating Facility, Interconnection 

Facilities, Metering Equipment, and Upgrades 
Attachment 4 

Milestones 

In-Service Date: ___________________ 

Critical milestones and responsibility as agreed to by the Parties: 

 Milestone/Date Responsible Party

(1) _______________________________________ ______________________ 

(2) _______________________________________ ______________________ 

(3) _______________________________________ ______________________ 

(4) _______________________________________ ______________________ 

(5) _______________________________________ ______________________ 

(6) _______________________________________ ______________________ 

(7) _______________________________________ ______________________ 

(8) _______________________________________ ______________________ 

(9) _______________________________________ ______________________ 

(10) _______________________________________ ______________________ 

Agreed to by: 

For the Transmission Provider__________________________ Date______________ 

For the Transmission Owner (If Applicable) ________________________ Date_____________ 

For the Interconnection Customer________________________ Date______________ 
Attachment 5 

Additional Operating Requirements for the Transmission Provider's 

Transmission System and Affected Systems Needed to Support 

the Interconnection Customer's Needs 

The Transmission Provider shall also provide requirements that must be met by the 

Interconnection Customer prior to initiating parallel operation with the Transmission Provider's 

Transmission System. 
Attachment 6 

Transmission Provider's Description of its Upgrades 

and Best Estimate of Upgrade Costs

The Transmission Provider shall describe Upgrades and provide an itemized best estimate of the 

cost, including overheads, of the Upgrades and annual operation and maintenance expenses 

associated with such Upgrades. The Transmission Provider shall functionalize Upgrade costs 

and annual expenses as either transmission or distribution related.