Document ID: FERC-2013-0150-0001
Agency: ferc
Document Type: Proposed Rule
Title: Small Generator Interconnection Agreements and Procedures
Posted Date: 2013-02-01T05:00Z

[Federal Register Volume 78, Number 22 (Friday, February 1, 2013)]
[Proposed Rules]
[Pages 7523-7639]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-01366]

[[Page 7523]]

Vol. 78

Friday,

No. 22

February 1, 2013

Part III

Department of Energy

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Federal Energy Regulatory Commission

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18 CFR Part 35

Small Generator Interconnection Agreements and Procedures; Proposed 
Rule

  Federal Register / Vol. 78 , No. 22 / Friday, February 1, 2013 / 
Proposed Rules  

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 35

[Docket No. RM13-2-000]

Small Generator Interconnection Agreements and Procedures

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
proposing to revise the pro forma Small Generator Interconnection 
Procedures (SGIP) and pro forma Small Generator Interconnection 
Agreement (SGIA) originally set forth in Order No. 2006. The pro forma 
SGIP and SGIA establish the terms and conditions under which public 
utilities must provide interconnection service to Small Generating 
Facilities of no more than 20 megawatts (MW). In this Notice of 
Proposed Rulemaking (NOPR), the Commission proposes to modify the pro 
forma SGIP to: (1) Incorporate provisions that would provide an 
Interconnection Customer with the option of requesting from the 
Transmission Provider a pre-application report providing existing 
information about system conditions at a possible Point of 
Interconnection; (2) revise the 2 MW threshold for participation in the 
Fast Track Process included in section 2 of the pro forma SGIP; (3) 
revise the customer options meeting and the supplemental review 
following failure of the Fast Track screens so that the supplemental 
review is performed at the discretion of the Interconnection Customer 
and includes minimum load and other screens to determine if a Small 
Generating Facility may be interconnected safely and reliably; and (4) 
revise the pro forma SGIP Facilities Study Agreement to allow the 
Interconnection Customer the opportunity to provide written comments to 
the Transmission Provider on the upgrades required for interconnection. 
The Commission also proposes to clarify or correct certain sections of 
the pro forma SGIP and SGIA. The proposed reforms are intended to 
ensure that the time and cost to process small generator interconnect 
requests will be just and reasonable and not unduly discriminatory. To 
facilitate discussion of the proposed reforms, the Commission intends 
to hold a workshop at which stakeholders may discuss the proposals made 
in this NOPR. The workshop is to be held before the end of the comment 
period.

DATES: Comments are due June 3, 2013.

ADDRESSES: Comments, identified by docket number, may be filed in the 
following ways:
     Electronic Filing through http://www.ferc.gov. Documents 
created electronically using word processing software should be filed 
in native applications or print-to-PDF format and not in a scanned 
format.
     Mail/Hand Delivery: Those unable to file electronically 
may mail or hand-deliver comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE., 
Washington, DC 20426.
    Instructions: For detailed instructions on submitting comments and 
additional information on the rulemaking process, see the Comment 
Procedures Section of this document.

FOR FURTHER INFORMATION CONTACT:
Leslie Kerr (Technical Information), Office of Energy Policy and 
Innovation, Federal Energy Regulatory Commission, 888 First Street NE., 
Washington, DC 20426, (202) 502-8540, Leslie.Kerr@ferc.gov.
Monica Taba (Technical Information), Office of Electric Reliability, 
Federal Energy Regulatory Commission, 888 First Street NE., Washington, 
DC 20426, (202) 502-6789, Monica.Taba@ferc.gov.
Elizabeth Arnold (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street NE., Washington, 
DC 20426, (202) 502-8687, Elizabeth.Arnold@ferc.gov.

SUPPLEMENTARY INFORMATION: 

Notice of Proposed Rulemaking

Table of Contents

 
                                                         Paragraph Nos.
 
I. Introduction......................................                  1
II. Background.......................................                  6
    A. Order No. 2006................................                  6
    B. Solar Energy Industries Association Petition..                 12
III. Need for Reform.................................                 18
IV. Proposed Reforms.................................                 25
    A. Pre-Application Report........................                 26
    B. Threshold for Participation in the Fast Track                  30
     Process.........................................
    C. Customer Options Meeting and Supplemental                      33
     Review..........................................
    D. Review of Required Upgrades...................                 41
    E. Other Revisions...............................                 45
V. Workshop..........................................                 47
VI. Compliance Filings...............................                 50
VII. Procedural Matters..............................                 54
VIII. Information Collection Statement...............                 56
IX. Environmental Analysis...........................                 60
X. Regulatory Flexibility Act........................                 61
XI. Comment Procedures...............................                 63
XII. Document Availability...........................                 67
 

    Appendix A: List of Short Names of Commenters on the SEIA 
Petition (Docket No. RM12-10-000) and the Technical Conference 
(Docket No. AD12-17-000).
    Appendix B: Proposed Flow Chart for Interconnecting a Certified 
Small Generating Facility Using the ``Fast Track Process.''
    Appendix C: Proposed Revisions to the Pro Forma SGIP.
    Appendix D: Proposed Revisions to the Pro Forma SGIA.

Notice of Proposed Rulemaking

January 17, 2013.

I. Introduction

    1. The Commission is proposing to revise the pro forma Small 
Generator Interconnection Procedures (SGIP) and pro forma Small 
Generator

[[Page 7525]]

Interconnection Agreement (SGIA) originally set forth in Order No. 
2006.\1\ The pro forma SGIP and SGIA establish the terms and conditions 
under which public utilities \2\ must provide interconnection service 
to Small Generating Facilities \3\ of no more than 20 megawatts 
(MW).\4\
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    \1\ Standardization of Small Generator Interconnection 
Agreements and Procedures, Order No. 2006, FERC Stats. & Regs. ] 
31,180, order on reh 'g, Order No. 2006-A, FERC Stats. & Regs. ] 
31,196 (2005), order on clarification, Order No. 2006-B, FERC Stats. 
& Regs. ] 31,221 (2006) (Order No. 2006).
    \2\ For purposes of this Proposed 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). See 16 U.S.C. 824(e) (2006). A non-
public utility that seeks voluntary compliance with the reciprocity 
condition of an Open Access Transmission Tariff (OATT) may satisfy 
that condition by filing an OATT, which includes the pro forma SGIP 
and the pro forma SGIA.
    \3\ Capitalized terms used in this NOPR have the meanings 
specified in the Glossaries of Terms or the text of the SGIP or 
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.
    \4\ The pro forma SGIP and SGIA are used by a public utility to 
interconnect a Small Generating Facility with the utility's 
transmission facilities or with its jurisdictional distribution 
facilities for the purpose of selling electric energy at wholesale 
in interstate commerce.
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    2. Market changes, including the growth of small generator 
interconnection requests and the growth in solar photovoltaic (PV) 
installations, driven in part by state renewable energy goals and 
policies, necessitate a reevaluation of the SGIP and SGIA to ensure 
that they continue to facilitate Commission-jurisdictional 
interconnections in a just and reasonable and not unduly discriminatory 
manner.\5\ We note that the Commission has previously reviewed the 
Large Generator Interconnection Procedures (LGIP) after significant 
increases in large generator interconnection requests, mainly from wind 
generators, led to challenges in processing interconnection requests on 
a timely basis.\6\ The Commission proposes the reforms herein in the 
belief that failure to do so now could lead to unnecessary challenges 
for Small Generating Facilities in the future.\7\
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    \5\ Although not controlling as to interconnections subject to 
state jurisdiction, the Commission notes that one of the intended 
purposes for the small generator interconnection regulations set 
forth in Order No. 2006 was to serve as a guide for state 
interconnection procedures. See Order No. 2006, FERC Stats. & Regs. 
] 31,180 at P 4, 8.
    \6\ Docket No. AD08-2-000 explored methods to address then 
current queue management challenges in a manner consistent with 
Standardization of Generator Interconnection Agreements and 
Procedures, Order No. 2003, FERC Stats. & Regs. ] 31,146 (2003), 
order on reh'g, Order No. 2003-A, FERC Stats. & Regs. ] 31,160, 
order on reh'g, Order No. 2003-B, FERC Stats. & Regs. ] 31,171 
(2004), order on reh'g, Order No. 2003-C, FERC Stats. & Regs. ] 
31,190 (2005), aff'd sub nom. Nat'l Ass'n of Regulatory Util. 
Comm'rs v. FERC, 475 F.3d 1277 (D.C. Cir. 2007), cert. denied, 552 
U.S. 1230 (2008) (Order No. 2003).
    \7\ The Commission routinely evaluates the effectiveness of its 
regulations and policies in light of changing industry conditions to 
determine if changes in these regulations and policies are 
necessary. See, e.g., Integration of Variable Energy Resources, 
Order No. 764, 77 FR 41482 (July 13, 2012) FERC Stats. & Regs. ] 
31,331 (2012).
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    3. Specifically, the Commission proposes to modify the pro forma 
SGIP to: (1) Incorporate provisions that would provide an 
Interconnection Customer with the option of requesting from the 
Transmission Provider a pre-application report providing existing 
information about system conditions at a possible Point of 
Interconnection; (2) revise the 2 MW threshold for participation in the 
Fast Track Process included in section 2 of the pro forma SGIP; (3) 
revise the customer options meeting and the supplemental review 
following failure of the Fast Track screens so that the supplemental 
review is performed at the discretion of the Interconnection Customer 
and includes minimum load and other screens to determine if a Small 
Generating Facility may be interconnected safely and reliably; and (4) 
revise the pro forma SGIP Facilities Study Agreement to allow the 
Interconnection Customer the opportunity to provide written comments on 
the upgrades required for interconnection. The Commission also proposes 
to clarify or correct certain sections of the pro forma SGIP and SGIA.
    4. The proposals set forth in this Notice of Proposed Rulemaking 
(NOPR) are intended to ensure that the time and cost to process small 
generator interconnection requests will be just and reasonable and not 
unduly discriminatory as sections 205 and 206 of the FPA require.\8\ We 
expect the proposed reforms will reduce the time and cost to process 
small generator interconnection requests for Interconnection Customers 
and Transmission Providers, maintain reliability, increase energy 
supply, and remove barriers to the development of new energy sources. 
While the Commission proposes that all public utilities will be 
required to amend \9\ their Open Access Transmission Tariffs (OATT) to 
include a modified pro forma SGIP and SGIA,\10\ these reforms will 
likely impact public utility Transmission Providers with a significant 
penetration of distributed resources and a larger number of small 
generator interconnection requests.
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    \8\ 16 U.S.C. 824a and 824b (2006).
    \9\ Compliance procedures are discussed in Part VI below.
    \10\ See proposed revisions to the pro forma SGIP in Appendix C 
and proposed revisions to the pro forma SGIA in Appendix D.
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    5. The Commission believes there is sufficient justification for 
proposing the reforms discussed below. In light of the technical nature 
of these reforms, the Commission is directing its staff to hold a 
workshop at which stakeholders may discuss possible refinements to the 
proposals made in this NOPR before the end of the comment period.\11\ 
The Commission encourages interested stakeholders to participate 
actively in the workshop to assist the Commission in developing any 
appropriate improvements to the proposed reforms to the SGIP and SGIA.
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    \11\ Notice of the date and time of the workshop will be 
published separately in the Federal Register.
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II. Background

A. Order No. 2006

    6. In Order No. 2006, the Commission established a pro forma SGIP 
and SGIA for the interconnection of generation resources no larger than 
20 MW. The pro forma SGIP describes how an Interconnection Customer's 
interconnection request (application) should be evaluated. The pro 
forma SGIP includes three alternative procedures for evaluating an 
interconnection request. They are the Study Process, which can be used 
by any generating facility with a capacity no larger than 20 MW, and 
two procedures that use ten technical screens to quickly identify 
safety or reliability issues associated with proposed interconnections: 
(1) The Fast Track Process for certified \12\ Small Generating 
Facilities no larger than 2 MW; and (2) the 10 kW Inverter Process for 
certified inverter-based \13\ Small

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Generating Facilities no larger than 10 kW.
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    \12\ See Attachments 3 and 4 of the Order No. 2006, FERC Stats. 
& Regs. ] 31,180 pro forma SGIP, which specify the codes, standards, 
and certification requirements that Small Generating Facilities must 
meet.
    \13\ An inverter is a device that converts the direct current 
(DC) voltage and current of a DC generator to alternating voltage 
and current. For example, the output of a solar panel is DC. The 
solar panel's output must be converted by an inverter to alternating 
current (AC) before it can be interconnected with a utility's AC 
electric system.
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    7. The Study Process in section 3 of the pro forma SGIP is used to 
evaluate small generator interconnection requests that do not qualify 
for either the Fast Track Process or the 10 kW Inverter Process. The 
Study Process is similar to the process under the LGIP set forth in 
Order No. 2003. The Study Process normally consists of a scoping 
meeting, a feasibility study, a system impact study, and a facilities 
study. These studies identify any adverse system impacts \14\ that must 
be addressed before the Small Generating Facility may be interconnected 
and any equipment modifications required to accommodate the 
interconnection. Once the Interconnection Customer agrees to fund any 
needed upgrades, an SGIA is executed that, among other things, 
formalizes responsibility for construction and payment for 
interconnection facilities and upgrades.\15\
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    \14\ 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.
    \15\ Order No. 2006, FERC Stats. & Regs. ] 31,180 at P 44.
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    8. Under the current Fast Track Process, in place of the scoping 
meeting and three interconnection studies performed under the Study 
Process, 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 
without further study. If the proposed interconnection fails the 
screens, but the Transmission Provider determines that the Small 
Generating Facility may be interconnected without affecting safety and 
reliability, the Transmission Provider provides the Interconnection 
Customer with an SGIA. However, if the Transmission Provider does not 
or cannot determine that the Small Generating Facility may be 
interconnected without affecting safety and reliability, the 
Transmission Provider offers the Interconnection Customer the 
opportunity to attend a customer options meeting to discuss how to 
proceed. In that meeting, the Transmission Provider must: (1) Offer to 
perform facility modifications or minor modifications to the 
Transmission Provider's system (e.g., changing meters, fuses, relay 
settings) and provide a non-binding good faith estimate of the cost to 
make such modifications; (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, paid for by the 
Interconnection Customer, and provide a non-binding good faith estimate 
of the cost of that review; or (3) obtain the Interconnection 
Customer's agreement to continue evaluating the interconnection request 
under the Study Process. If the Transmission Provider determines in the 
supplemental review that the Small Generating Facility can be 
interconnected safely and reliably and the Interconnection Customer 
agrees to pay for any upgrades called for in the supplemental review, 
the Transmission Provider and the Interconnection Customer execute an 
SGIA. If, after the supplemental review, the Transmission Provider 
still is unable to determine that the proposed interconnection would 
not degrade the safety and reliability of its electric system, the 
Interconnection Request is evaluated using the Study Process.
    9. The 10 kW Inverter Process is available for the interconnection 
of certified inverter-based generators no larger than 10 kW. The 10 kW 
Inverter Process includes a simplified application form, 
interconnection procedures, and a brief set of terms and conditions 
(rather than a separate interconnection agreement). The 10 kW Inverter 
Process uses the same technical screens as the Fast Track Process. If 
the results of the analysis using the technical screens indicate that 
the generator can be interconnected safely and reliably, the 
interconnection application is approved. To simplify the 10 kW Inverter 
Process, the Interconnection Customer agrees to the terms and 
conditions of the interconnection at the time the interconnection 
request is made.\16\
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    \16\ Id. P 46.
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    10. The technical screens used in the current 10 kW Inverter 
Process and the current Fast Track Process are included in section 
2.2.1 of the pro forma SGIP. The following is section 2.2.1.2 of the 
pro forma SGIP, which is referred to in this NOPR as the 15 Percent 
Screen: \17\
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    \17\ The 15 Percent Screen was derived by using a ``rule of 
thumb'' that minimum load is approximately 30 percent of peak load. 
To assure minimum loads were not exceeded by generation on a given 
line section, a 50 percent safety margin was applied. See Nat'l 
Renewable Energy Lab, Updating Interconnection Screens for PV System 
Integration 2 (Feb. 2012), http://www.nrel.gov/docs/fy12osti/54063.pdf.

    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 [percent] 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 
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distribution line.

    11. The Commission anticipated potential changes to its small 
generator interconnection regulations when it encouraged stakeholders 
to convene an informal meeting ``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.'' \18\ The Commission is unaware of any such meetings 
taking place to date.
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    \18\ Order No. 2006, FERC Stats. & Regs. ] 31,180 at P 118.
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B. Solar Energy Industries Association Petition

    12. On February 16, 2012, pursuant to sections 205 and 206 of the 
FPA and Rule 207 of the Commission's Rules of Practice and 
Procedure,\19\ and noting that the Commission encouraged stakeholders 
to submit proposed revisions to the regulations set forth in Order No. 
2006,\20\ the Solar Energy Industries Association (SEIA) filed a 
Petition to Initiate Rulemaking (Petition) requesting that the 
Commission revise the pro forma SGIA and SGIP set forth in Order No. 
2006. SEIA asserts that the pro forma SGIP and SGIA as applied to small 
solar generation are no longer just and reasonable, have become unduly 
discriminatory, and present unreasonable barriers to market entry.\21\ 
SEIA notes that its Petition applies exclusively to solar electric 
generation due to its unique characteristics.\22\
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    \19\ 18 CFR 385.207 (2012).
    \20\ SEIA Petition at 4 (citing Order No. 2006, FERC Stats. & 
Regs. ] 31,180 at P 118).
    \21\ SEIA Petition at 12.
    \22\ Id. at 4 (explaining that solar generation occurs only 
during daylight hours when peak load typically occurs, and solar 
photovoltaic technology utilizes inverters with built-in functions 
that protect the safety and reliability of the electric system).
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    13. SEIA requests that the Commission modify the SGIP in three 
ways. First, SEIA requests that the Commission maintain section 2.2.1.2 
of the pro forma SGIP (the 15 Percent Screen), but amend the pro forma 
SGIP to include a well-defined supplemental review that Transmission 
Providers must offer to provide Interconnection Customers in the event 
that a Small Generating Facility fails the 15 Percent Screen.\23\
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    \23\ On May 8, 2012, SEIA filed supplemental comments in Docket 
No. RM12-10-000, clarifying that it supports the supplemental review 
screens included in the revision to California Electric Rule 21, the 
California distribution level interconnection rules and regulations 
(Rule 21). These screens create thresholds for distributed 
generation penetration based on minimum load and establish criteria 
for power quality, voltage, safety and reliability.

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[[Page 7527]]

    14. Second, SEIA requests that the Commission eliminate the 2 MW 
threshold for participation in the Fast Track Process or, in the 
alternative, increase the threshold to 10 MW.\24\
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    \24\ SEIA Petition at 16-17.
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    15. Finally, SEIA encourages the Commission to modify the SGIP to 
provide, at the request and cost of the Interconnection Customer, an 
expedited, independent third-party expert technical review of proposed 
upgrades required for interconnection to evaluate whether there are 
simpler, less costly options to insure a safe and reliable 
interconnection. SEIA also encourages the Commission to clearly 
articulate that Transmission Providers are required to give such 
independent third-party reviews ``substantial weight'' or 
consideration.\25\
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    \25\ Id. at 17-18.
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    16. On February 28, 2012, the Commission issued a Notice of 
Petition for Rulemaking in Docket No. RM12-10-000, seeking public 
comment on SEIA's Petition. The Commission received twenty-three timely 
comments, two protests, two out-of-time comments, and four answers and 
reply comments.\26\
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    \26\ See Appendix A: List of Short Names of Commenters on the 
SEIA Petition (Docket No. RM12-10-000) and the Technical Conference 
(Docket No. AD12-17-000).
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    17. On June 13, 2012, the Commission issued a Notice of Technical 
Conference in Docket No. RM12-10-000 and in Docket No. AD12-17-000. On 
July 17, 2012, the Commission convened a technical conference at its 
headquarters. The Commission received nine post-technical conference 
comments, including clarifying comments from SEIA.

III. Need for Reform

    18. The Commission preliminarily finds that the reforms proposed in 
this NOPR are needed to ensure that the rates, terms, and conditions of 
interconnection service for Small Generating Facilities are just and 
reasonable and not unduly discriminatory or preferential.
    19. Since the issuance of Order No. 2006, many aspects of the 
energy industry have changed. For example, when Order No. 2006 was 
issued in 2005, only 79 MW of grid-connected PV were installed.\27\ By 
2011, grid-connected PV had reached approximately 4,000 MW.\28\ 
Similarly, installed wind generation with a capacity of 20 MW or less 
has increased in the contiguous United States from 1,185 MW in 2005 to 
2,961 MW in 2012.\29\
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    \27\ See Nat'l Renewable Energy Lab, Updating Small Generator 
Interconnection Procedures for New Market Conditions 7 (Dec. 2012), 
http://www.nrel.gov/docs/fy13osti/56790.pdf.
    \28\ Id. at 8.
    \29\ SNL Financial, Power Plant Summary (2013).
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    20. Recent Commission filings have referenced higher volumes of 
small generator interconnection requests.\30\ Additionally, state 
renewable portfolio standards are driving small generator 
interconnection requests and influencing state policies. As of November 
2012, 29 states and the District of Columbia had renewable portfolio 
standards, with an additional eight states having renewable portfolio 
goals.\31\ Some state renewable portfolio standards include increasing 
the percentage of renewable energy resources over time, which will lead 
to increasing penetrations of these energy resources. For example, the 
California renewable portfolio standard is 20 percent by December 31, 
2013, 25 percent by December 31, 2016, and 33 percent by 2020.\32\ 
Similarly, the Massachusetts renewable portfolio standard is 15 percent 
by 2020 and an additional 1 percent each year thereafter.\33\
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    \30\ See, e.g., Cal. Indep. Sys. Operator Corp., 133 FERC ] 
61,223, at P 3 (2010) (stating that an increasing volume of small 
generator Interconnection Requests had created inefficiencies); 
Pacific Gas & Elec. Co., 135 FERC ] 61,094, at P 4 (2011) (stating 
that increased small generator Interconnection Requests resulted in 
a backlog of 170 requests over three years); PJM Interconnection, 
LLC, 139 FERC ] 61,079, at P 12 (2012) (stating that smaller 
projects comprised 66 percent of recent queue volume).
    \31\ See Dep't of Energy, Summary Maps, http://www.dsireusa.org/summarymaps/index.cfm?ee=1&RE=1.
    \32\ See Dep't of Energy, California Incentives/Policies for 
Renewables & Efficiency: Renewables Portfolio Standard, http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=CA25R&re=1ⅇ=1.
    \33\ See Dep't of Energy, Massachusetts Incentives/Policies for 
Renewables & Efficiency: Renewables Portfolio Standard, http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=MA05R&re=1ⅇ=1.
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    21. Some states have also adopted goals and policies to promote 
growth in distributed generation. For example, Arizona, Colorado, and 
Illinois have implemented distributed generation ``carve-outs'' in 
which a percentage of the total state renewable portfolio standard must 
come from distributed generation.\34\ At the July 17, 2012 technical 
conference, the increase in distributed generation since the issuance 
of Order No. 2006 was noted.\35\
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    \34\ See Dep't of Energy, Summary Maps, http://www.dsireusa.org/summarymaps/index.cfm?ee=1&RE=1.
    \35\ July 17, 2012 Technical Conference Transcript at 26, lines 
22-24.
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    22. The growth in PV installations in particular has been cited by 
SEIA and IREC as evidence that there is a need to reform certain 
aspects of the SGIP,\36\ while the California Utilities, NRECA and APPA 
state that this growth is evidence that Order No. 2006 has been and 
continues to be successful at facilitating interconnection of Small 
Generating Facilities.\37\ These positions are not mutually exclusive. 
The success of Order No. 2006 in facilitating small generator 
interconnections could be a factor in penetration levels reaching 15 
percent on certain line sections, which causes subsequent projects to 
fail the 15 Percent Screen. If this is the case, the 15 Percent Screen 
should be re-examined to determine if revisions to the screen can be 
made that will continue to allow projects to participate in the less 
costly and time-consuming Fast Track Process while maintaining the 
safety and reliability of the Transmission Provider's system.
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    \36\ SEIA Petition at 6; IREC March 27, 2012 Comments at 7-8.
    \37\ California Utilities Post-Technical Conference Comments at 
3-4; NRECA and APPA March 27, 2012 Protest at 7.
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    23. Moreover, the Commission intended the pro forma SGIP and SGIA 
to apply to interconnections made subject to a jurisdictional OATT for 
the purposes of jurisdictional wholesale sales while also serving as a 
model for state interconnection rules.\38\ In its comments on the 
Petition, the NJBPU stated support for keeping the pro forma SGIP 
current with technological advances and newly developed solutions for 
interconnecting small generators.\39\ The California PUC recommends 
that the Commission consider adopting a supplemental review, including 
a 100 percent of minimum load screen similar to the one in Rule 21, for 
projects that fail the initial 15 Percent Screen and consider 
increasing the 2 MW threshold for participation in the Fast Track 
Process.\40\ Comments such as these indicate that the Commission's 
actions to update its SGIP may assist states in their own efforts to 
reevaluate state interconnection rules.
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    \38\ Order No. 2006, FERC Stats. & Regs. ] 31,180 at P 8.
    \39\ NJBPU March 27, 2012 Comments at 2-3.
    \40\ California PUC April 9, 2012 Comments at 4, 9.
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    24. The Commission acknowledges that the need for reform may not be 
uniform across the country and is proposing reforms that, in

[[Page 7528]]

implementation, should balance the interests of Small Generating 
Facilities and public utility Transmission Providers.

IV. Proposed Reforms

    25. The Commission is proposing four reforms that are designed to 
address interconnection issues confronting Small Generating Facilities 
and public utility Transmission Providers and that will allow for the 
more efficient interconnection of small generation resources to the 
benefit of customers. The Commission also proposes to clarify or 
correct certain sections of the pro forma SGIP and SGIA. Together these 
proposals would reform certain aspects of the SGIP and SGIA that may 
present barriers to the interconnection of Small Generating Facilities 
and keep the cost of interconnecting these resources from becoming 
unjust, unreasonable or unduly discriminatory.

A. Pre-Application Report

    26. The Commission proposes to provide the Interconnection Customer 
with the option of requesting a pre-application report from the 
Transmission Provider for a fee of $300. The Commission believes the 
pre-application report will promote transparency and efficiency in the 
interconnection process. In most cases, a pre-application report would 
increase the amount of information available to Interconnection 
Customers regarding system conditions at a particular Point of 
Interconnection and help the Interconnection Customer make a more 
efficient decision on siting its generating facility. Currently, only 
limited information is available to the Interconnection Customer under 
section 1.2 of the pro forma SGIP (relevant system studies, 
interconnection studies and other materials useful to an understanding 
of an interconnection at a particular point on the system), often 
leading developers to submit multiple requests for interconnection for 
a single project to determine which Point of Interconnection is the 
most advantageous. A pre-application report would enable 
Interconnection Customers to better evaluate possible Points of 
Interconnection before submitting a formal interconnection request, 
reducing the volume of interconnection requests and increasing the 
efficiency of the interconnection process for both the Transmission 
Provider and the Interconnection Customer.
    27. The proposed revision includes new sections 1.2.2 through 1.2.4 
of the SGIP and specifies the timeframes for providing the pre-
application report, the $300 payment requirement from the 
Interconnection Customer to the Transmission Provider for producing the 
pre-application report, and the information that the report should 
contain. The pre-application report, as proposed, would only include 
information already available to the Transmission Provider. The 
proposed fee is the same as the amount required for the Rule 21 pre-
application report.
    28. To request a pre-application report, the developer must provide 
sufficient information to clearly identify the proposed Point of 
Interconnection. After a request is received, a utility must provide 
the report within ten business days. The utility is only required to 
provide existing information; the utility is not required to obtain new 
information prior to preparing the pre-application report. To the 
extent information is available, the Transmission Provider is required 
to provide information regarding:
    a. Total capacity and available capacity of the facilities that 
serve the Point of Interconnection;
    b. Existing and queued generation at the facilities likely serving 
the Point of Interconnection;
    c. Voltage of the facilities that serve the Point of 
Interconnection;
    d. Circuit distance between the proposed Point of Interconnection 
and the substation likely to serve the Point of Interconnection 
(Substation);
    e. Number and rating of protective devices and number and type of 
voltage regulating devices between the proposed Point of 
Interconnection and the Substation;
    f. Number of phases available at the proposed Point of 
Interconnection;
    g. Limiting conductor ratings from the proposed Point of 
Interconnection to the Substation;
    h. Peak and minimum load data; and
    i. Existing or known constraints associated with the Point of 
Interconnection.
    29. Several commenters express support for this proposal as a way 
to improve the interconnection process by making it less costly and 
more transparent, timely, and predictable.\41\ The California Utilities 
argue that this approach will provide more accurate information for 
Interconnection Customers and will be less costly than publishing 
minimum load data as originally proposed by SEIA.\42\ IREC notes that 
in its experience, generation developers may submit multiple 
interconnection requests in an effort to find the most cost effective 
Point of Interconnection. IREC asserts that it is inefficient for 
utilities to process interconnection requests that are unlikely to 
result in interconnections and that this raises project development 
costs for generators.\43\ IREC states that a pre-application report 
would allow developers to request specific system information about a 
proposed Point of Interconnection.\44\
---------------------------------------------------------------------------

    \41\ California Utilities Post-Technical Conference Comments at 
6-7; IREC Post-Technical Conference Comments at 4-8; and Clean 
Coalition Post-Technical Conference Comments at 9.
    \42\ California Utilities Post-Technical Conference Comments at 
6-7.
    \43\ IREC Post-Technical Conference Comments at 5.
    \44\ Id. at 7 (referencing IREC's Proposed SGIP Redline at Sec.  
1.2.2).
---------------------------------------------------------------------------

B. Threshold for Participation in the Fast Track Process

    30. The Commission proposes to revise the 2 MW threshold for 
participation in the Fast Track Process. The Commission proposes to 
base Fast Track eligibility on individual system and generator 
characteristics, up to a limit of 5 MW. These characteristics include 
interconnection voltage level, the circuit distance of the 
interconnection from the substation, and generator capacity as the 
basis for determining whether an Interconnection Customer is eligible 
to be evaluated under the Fast Track Process. This approach to base 
Fast Track eligibility on individual system and generator 
characteristics is similar to the proposal submitted by IREC,\45\ as 
shown in the table below.
---------------------------------------------------------------------------

    \45\ Id. at 9-10.

------------------------------------------------------------------------
                                 Fast track     Fast track  eligibility
                                eligibility      on  >= 600 ampere line
        Line voltage           regardless of     and <= 2.5 miles  from
                                  location             substation
------------------------------------------------------------------------
< 5 kilovolt (kV)...........  <= 1 MW........  <= 2 MW
>= 5 kV and < 15 kV.........  <= 2 MW........  <= 3 MW

[[Page 7529]]

 
>= 15 kV and < 30 kV........  <= 3 MW........  <= 4 MW
>= 30 kV....................  <= 4 MW........  <= 5 MW
------------------------------------------------------------------------

    31. The Commission has designed this proposal in recognition that, 
as IREC comments,\46\ a fixed size limit for the Fast Track may be 
unduly conservative in some cases and not conservative enough in others 
due to variations in distribution line voltage. Commenters point to 
voltage at the Point of Interconnection as a possible determinant of 
Fast Track eligibility.\47\ Other factors mentioned by commenters 
include the size of the generator and the location of the 
interconnection on the circuit.\48\ Voltage and generator size were 
factors in the different Fast Track thresholds that were agreed upon in 
the Rule 21 settlement process.\49\ Pacific Gas and Electric states 
that it has eliminated the 2 MW limit entirely within its systems, and 
instead utilizes soft cap guidelines specific to the voltage of the 
Point of Interconnection. Pacific Gas and Electric asserts that it 
chose the advisory caps because they represent rough estimates of the 
MW size that would violate the 15 Percent Screen on a fully loaded 
circuit if no other projects interconnect to that circuit.\50\ San 
Diego Gas & Electric supports the varied Rule 21 Fast Track eligibility 
limits, which it claims ``recognize the variability among electrical 
systems.'' \51\
---------------------------------------------------------------------------

    \46\ Id. at 9.
    \47\ See July 17, 2012 Technical Conference Transcript at 35, 
lines 8-11 (San Diego Gas & Electric stating that higher voltages 
may allow for higher penetrations of distributed generation); see 
also id. at 105, lines 14-16 (EEI commenting that a Fast Track 
threshold based on voltage would be more accurate than the current 2 
MW threshold).
    \48\ See id. at 35, lines 1-4 (San Diego Gas & Electric 
asserting that size and location of the Small Generating Facility 
may impact the amount of generation that may be interconnected 
safely and reliably); id. at 59 lines 10-16 (same). See also id. at 
38, lines 19-21 (IREC stating that locations within 2.5 miles of the 
relevant substation on 600 Ampere line allow for higher penetrations 
of distributed generation).
    \49\ See California PUC Motion to Lodge, Attachment B ``Revised 
Rule 21 Tariff'' at 26.
    \50\ Pacific Gas and Electric March 27, 2012 Comments at 4 
(citing Pacific Gas and Electric Company, 135 FERC ] 61,094 (2011)).
    \51\ San Diego Gas & Electric March 27, 2012 Comments at 8-9.
---------------------------------------------------------------------------

    32. The Commission notes that CAISO has a 5 MW threshold for 
participation in its Fast Track Process.\52\ In its proposal to 
increase its Fast Track threshold from 2 MW to 5 MW, CAISO stated that, 
from an engineering standpoint, the increase is relatively small and 
would cause no greater impact on the safety and reliability of the 
CAISO-controlled transmission grid.\53\ The Commission acknowledges, 
however, that there are a wide range of operating practices and 
electric system configurations. The Commission believes that in the 
instant proceeding, the proposed revision to the Fast Track threshold 
is appropriately based on individual system and generator 
characteristics that allow it to accommodate a variety of operating 
practices and electric system configurations while also maintaining 
safety and reliability. Thus, this proposal attempts to balance 
Interconnection Customers' need for a faster, less costly 
interconnection process with Transmission Providers' need to ensure the 
safety and reliability of their systems.
---------------------------------------------------------------------------

    \52\ Cal. Indep. Sys. Operator Corp., 133 FERC ] 61,223 (2010).
    \53\ Id. P 35.
---------------------------------------------------------------------------

C. Customer Options Meeting and Supplemental Review

    33. The Commission proposes to revise the customer options meeting 
and the supplemental review for those Interconnection Customers whose 
projects fail any of the ten Fast Track screens, including the 15 
Percent Screen.\54\ As noted in the Background section above, if the 
proposed Small Generating Facility passes the initial review screens in 
section 2.2.1 of the pro forma SGIP, the Transmission Provider will 
offer the Interconnection Customer an SGIA without requiring any 
supplemental review. If the proposed Small Generating Facility fails 
any of the screens, but the Transmission Provider determines that the 
Small Generating Facility may be interconnected without affecting 
safety and reliability, the Transmission Provider provides the 
Interconnection Customer with an SGIA. If the Transmission Provider 
cannot determine that the Small Generating Facility may be 
interconnected without affecting safety and reliability, the 
Transmission Provider must offer the Interconnection Customer the 
opportunity to attend a customer options meeting as set forth in 
section 2.3 of the pro forma SGIP to discuss how to proceed. The 
Commission proposes that, in that meeting, the Transmission Provider 
must: (1) Offer to perform facility modifications or minor 
modifications to the Transmission Provider's system (e.g., changing 
meters, fuses, relay settings) and provide a non-binding good faith 
estimate of the cost to make such modifications, and if the 
Interconnection Customer agrees to pay for those minor modifications, 
the Transmission Provider will provide the Interconnection Customer an 
SGIA within 5 business days of the customer options meeting; (2) offer 
to perform a supplemental review of the proposed interconnection, paid 
for by the Interconnection Customer in the amount of $2,500; \55\ or 
(3) obtain the Interconnection Customer's agreement to continue 
evaluating the interconnection request under the Study Process.
---------------------------------------------------------------------------

    \54\ The current and proposed supplemental review is available 
to Interconnection Customers whose projects are being evaluated 
under the Fast Track Process. If a project is being evaluated under 
the 10 kW Inverter Process and it fails the screens in section 2.2.1 
of the pro forma SGIP, it may then be evaluated under the Fast Track 
Process or the Study Process. If it is evaluated under the Fast 
Track Process, the supplemental review would be available to the 
project. (See Order No. 2006, FERC Stats. & Regs. ] 31,180 Appendix 
D, ``Flow Chart for Interconnecting a Certified Inverter-Based Small 
Generating Facility No Larger than 10 kW Using the ``10 kW Inverter 
Process''.)
    \55\ The proposed $2,500 fee for the supplemental review is the 
same as the amount required for the Rule 21 supplemental review.
---------------------------------------------------------------------------

    34. In order to clarify the outcome of the customer options 
meeting, the Commission proposes to modify section 2.3.1 of the pro 
forma SGIP to require the Transmission Provider to provide an 
interconnection agreement to the Interconnection Customer within 5 
business days of the customer options meeting if the Interconnection 
Customer agrees to pay for minor modifications on the Transmission 
Provider's system. In addition, the Commission proposes to modify 
section 2.3.2 of the pro forma SGIP so that the supplemental review is 
performed at the discretion of the Interconnection Customer.
    35. Further, the Commission proposes that the supplemental review 
consist of three additional screens: (1) The 100 percent of minimum 
load screen (using

[[Page 7530]]

daytime minimum load for small solar generators (20 MW or less) and 
absolute minimum load for all other Small Generating Facilities) 
(Minimum Load Screen); (2) the power quality and voltage screen; and 
(3) the safety and reliability screen.\56\ If the proposed 
interconnection fails any of the supplemental review screens, the 
Transmission Provider will notify the Interconnection Customer that a 
Study Process under section 3 of the pro forma SGIP is required.\57\
---------------------------------------------------------------------------

    \56\ These screens are similar to the California Rule 21 screens 
or tests. See California PUC Motion to Lodge, Attachment B ``Revised 
Rule 21 Tariff,'' Section G.2 ``Supplemental Review Screens'' 
detailing the following screens:
    (1) Penetration Test: ``Where 12 months of line section minimum 
load data is available, can be calculated, can be estimated from 
existing data, or determined from a power flow model, is the 
aggregate Generating Facility capacity on the Line Section less than 
100 [percent] of the minimum load for all line sections bounded by 
automatic sectionalizing devices upstream of the Generating 
Facility?'' Note that the ``type of generation will be taken into 
account when calculating, estimating or determining circuit or Line 
Section minimum load relevant for the application of this screen. 
Solar generation systems with no battery storage use daytime minimum 
load (i.e. 10 a.m. to 4 p.m. for fixed panel systems and 8 a.m. to 6 
p.m. for PV systems utilizing tracking systems), while all other 
generation uses absolute minimum load.''
    (2) Power Quality and Voltage Tests: (a) ``Can it be determined 
within the Supplemental Review that the voltage regulation on the 
line section can be maintained in compliance with Commission Rule 2 
and/or Conservation Voltage Regulation voltage requirements under 
all system conditions?'' (b) ``Can it be determined within the 
Supplemental Review that the voltage fluctuation is within 
acceptable limits as defined by [Institute of Electrical and 
Electronics Engineers] IEEE 1453 or utility practice similar to IEEE 
1453?'' (c) ``Can it be determined within the Supplemental Review 
that the harmonic levels meet IEEE 519 limits at the Point of Common 
Coupling (PCC)?''
    (3) Safety and Reliability Tests: ``Does the location of the 
proposed Generating Facility or the aggregate generation capacity on 
the Line Section create impacts to safety or reliability that cannot 
be adequately addressed without Detailed Study?''
    \57\ See supra P 7 for a description of the Study Process.
---------------------------------------------------------------------------

    36. The Minimum Load Screen is designed to ensure that power flow 
from the circuit into the substation and its impact on equipment 
loading, operation, and protection systems is minimal. The Minimum Load 
Screen asks whether the aggregate generation facility capacity on a 
line section is less than 100 percent of the minimum load measured 
during the period relevant for the generator type for all line sections 
bounded by automatic sectionalizing devices upstream of the generation 
facility. If minimum load data are not readily available,\58\ however, 
the screen allows Transmission Providers the flexibility to calculate, 
estimate, or otherwise determine minimum load. The Commission proposes 
that, if this is not possible, the Transmission Provider must notify 
the Interconnection Customer of this in writing and include the 
reason(s) it is not possible.
---------------------------------------------------------------------------

    \58\ Commenters express concern that minimum load data are not 
commonly tracked by utilities. See July 17, 2012 Technical 
Conference Transcript at 127, lines 16-19; EEI Post-Technical 
Conference Comments at 15; SEIA Post-Technical Conference Comments 
at 3.
---------------------------------------------------------------------------

    37. The second screen, related to voltage and power quality, is 
designed to ensure that voltage regulation, fluctuation, and harmonic 
levels are kept within their limits in compliance with reliability 
standards, IEEE standards, and other applicable standards. The third 
screen, related to safety and reliability, ensures that a Small 
Generating Facility would not negatively impact safety and reliability. 
This screen is intended to provide Transmission Providers with the 
flexibility to identify some of the specific issues that may arise due 
to a Small Generating Facility's unique variations.
    38. This proposed reform is intended to decrease interconnection 
costs in areas where the penetration of Small Generating Facilities is 
causing Interconnection Customers to fail the 15 Percent Screen. 
Moreover, the additional screens proposed to be included in the 
supplemental review are designed to protect the safety and reliability 
of the Transmission Provider's system while allowing those Small 
Generating Facilities that pass the proposed supplemental review to 
interconnect more efficiently and cost-effectively.
    39. Some commenters argue that that 15 Percent Screen continues to 
be effective.\59\ Others suggest revisions to the pro forma 
supplemental review in the event a project fails the Fast Track 
screens, similar to California Rule 21.\60\ The Commission believes 
that the Rule 21 approach, after which our proposal is modeled, is a 
reasonable middle ground and proposes to leave the 15 Percent Screen in 
place while providing an alternative to the 15 Percent Screen as part 
of the supplemental review that enables penetration levels to exceed 15 
percent on a case-by-case basis if the Transmission Provider determines 
that doing so will not create safety or reliability problems.
---------------------------------------------------------------------------

    \59\ See SoCal Edison March 27, 2012 Comments at 6; EEI Post-
Technical Conference Comments at 11-13.
    \60\ Clean Coalition Post-Technical Conference Comments at 3-4; 
IREC Post-Technical Conference Comments at 14; SEIA May 8, 2012 
Comments at 1; California PUC April 9, 2012 Comments at 4; EEI Post-
Technical Conference Comments at 11, fn. 10 (``Whereas the 100 
percent minimum load threshold may be appropriate in the context of 
a supplemental review process such as the California Rule 21 
proceeding.'').
---------------------------------------------------------------------------

    40. While SoCal Edison argues that the existing pro forma SGIP 
supplemental review offers utilities the flexibility to reevaluate 
projects that fail the Fast Track screens, including accounting for the 
unique characteristics of solar generation,\61\ we note that section 
2.4 of the current pro forma SGIP does not define the parameters or the 
timeline and provides little guidance for conducting the supplemental 
review if a Small Generating Facility fails the Fast Track screens in 
section 2 of the SGIP. The Commission believes that this lack of 
definition and transparency could negatively impact the interconnection 
process. A well-defined supplemental review will provide greater 
transparency with regard to what transpires in the supplemental review, 
as well as mitigate confusion and delays in the interconnection 
timeline. It will also allow interconnection requests to be more 
expeditiously reviewed while maintaining safety, reliability, and power 
quality standards.
---------------------------------------------------------------------------

    \61\ SoCal Edison March 27, 2012 Comments at 5.
---------------------------------------------------------------------------

D. Review of Required Upgrades

    41. The Commission proposes to revise the pro forma SGIP to give 
the Interconnection Customer an opportunity to review and comment on 
the upgrades required for interconnection proposed by the Transmission 
Provider, similar to the opportunity for review and comment afforded 
the Interconnection Customer under the LGIP.
    42. The Commission believes that, because the Transmission Provider 
is responsible for the safety and reliability of its system, the 
Transmission Provider should make the final decision regarding required 
upgrades for interconnection. However, the Commission is concerned that 
the pro forma SGIP (including the pro forma Facilities Study Agreement) 
may result in unjust and unreasonable interconnection costs as a result 
of failing to provide an opportunity for the Interconnection Customer 
to review and comment on the required upgrades. Therefore, the 
Commission proposes to revise the pro forma SGIP to include provisions 
similar to those in sections 8.3 and 8.4 of the pro forma LGIP.
    43. In the LGIP, the Interconnection Customer has the opportunity 
to provide written comments on the draft facilities study report, which 
includes the proposed upgrades required for interconnection. The 
Transmission Provider must include these comments

[[Page 7531]]

in the final report and may alter the study based on the comments. In 
addition, upon request of the Interconnection Customer, the 
Transmission Provider must provide the Interconnection Customer with 
``supporting documentation, workpapers, and databases or data'' 
developed in the preparation of the facilities study. The LGIP also 
provides for a meeting between the Interconnection Customer and the 
Transmission Provider within ten business days of the Interconnection 
Customer receiving the draft facilities study report.
    44. The Commission believes that incorporating these pro forma LGIP 
provisions into the pro forma SGIP will encourage a dialogue between 
the Transmission Provider and the Interconnection Customer about 
required interconnection upgrades and will provide Interconnection 
Customers (or a third party designated by the Interconnection Customer) 
with a meaningful opportunity to review and comment on interconnection 
upgrade requirements.

E. Other Revisions

    45. The Commission proposes to clarify or correct certain sections 
of the pro forma SGIP and SGIA. First, in section 3.3.5 of the pro 
forma SGIA, we propose to replace the first word of the section 
(``This'') with ``The.'' Second, the Commission proposes to revise 
section 1.1.1 of the pro forma SGIP to require that if an 
Interconnection Customer wishes to interconnect its Small Generating 
Facility using Network Resource Interconnection Service, it must do so 
under the LGIP and execute the Large Generator Interconnection 
Agreement. This requirement was included in Order No. 2003 \62\ but was 
not made clear in the pro forma SGIP. To facilitate this clarification, 
we propose to add the definitions of Network Resource and Network 
Resource Interconnection Service to Attachment 1, Glossary of Terms, of 
the pro forma SGIP.
---------------------------------------------------------------------------

    \62\ Order No. 2003, FERC Stats. & Regs. ] 31,146 at P 140.
---------------------------------------------------------------------------

    46. The Commission also proposes to modify section 1.5.4 of the pro 
forma SGIA to address a reliability concern resulting from recently 
identified issues in Germany and the United States (U.S.). The German 
issue is related to over-frequency resulting from imbalances between 
generation and load.\63\ The specific cause of over-frequency in 
Germany is not yet an issue in the U.S., although over-frequency events 
have occurred in the U.S.\64\ The North American Electric Reliability 
Corporation (NERC) has identified a related bulk electric system 
reliability concern as part of its Frequency Response Initiative \65\ 
where residential and commercial scale PV systems could trip during 
under-frequency conditions. This could become a matter of concern at 
high penetrations of PV resources. While the German government has 
ordered the retrofit of thousands of PV systems at significant cost to 
address its frequency issue,\66\ the Commission proposes to prevent 
such problems with frequency now to mitigate this risk. The proposed 
revisions to section 1.5.4 of the pro forma SGIA will require the 
Interconnection Customer to design, install, maintain, and operate its 
Small Generating Facility, in accordance with the latest version of the 
applicable standards,\67\ to prevent automatic disconnection during an 
over- or under-frequency event and to ensure that rates remain just and 
reasonable.
---------------------------------------------------------------------------

    \63\ In Germany, large amounts of distributed PV installations 
are set to trip at frequency 50.2 Hz or higher. An over-frequency 
(50.2 Hz and higher) event can cause the PV generation equipment 
connected to the low-voltage network to shut down. Such a sudden 
drop in generation could seriously disrupt the system.
    \64\ See FERC & NERC, Arizona-Southern California Outages on 
September 8, 2011: Causes and Recommendations (2011), http://www.nerc.com/files/AZOutage_Report_01MAY12.pdf.
    \65\ NERC, Frequency Response Initiative Report: The Reliability 
Role of Frequency Response 52 (2012), http://www.nerc.com/docs/standards/dt/FRI_Report_w-appendices_10-15-12.pdf.
    \66\ See VDE, Study on the 50.2 Hz Problem (2012), http://www.vde.com/en/fnn/Documents/FNN_50-2-Hz_Praesentation_2011-09_engl.pdf.
    \67\ See, e.g., IEEE Standard 1547 for Interconnecting 
Distributed Resources with Electric Power Systems and Underwriters 
Laboratories Inc. Standard 1741 for Safety for Inverters, 
Converters, and Controllers for Use in Independent Power Systems.
---------------------------------------------------------------------------

V. Workshop

    47. Commenters \68\ suggest that the Commission convene a 
stakeholder working group or similar process as contemplated in Order 
No. 2006 \69\ to review and make recommendations on the proposals in 
the SEIA Petition and issues raised at the July 17, 2012 technical 
conference. In light of the technical nature of the reforms proposed 
above, the Commission agrees that the rulemaking process could benefit 
from stakeholder discussions of the NOPR proposals and other related 
issues. Therefore, during the comment period, the Commission will hold 
a workshop so that members of the public, electric industry 
participants, and federal and state agencies may discuss the proposals 
in this NOPR and possible refinements to these proposals before the end 
of the comment period.
---------------------------------------------------------------------------

    \68\ NRECA Post-Technical Conference Comments at 2; EEI Post-
Technical Conference Comments at 1-2; and California Utilities Post-
Technical Conference Comments at 7.
    \69\ Order No. 2006, FERC Stats. & Regs. ] 31,180 at P 118.
---------------------------------------------------------------------------

    48. The workshop will be facilitated by Commission staff and will 
focus on the technical details of the NOPR proposals and other related 
issues. Some of the specific items that Commission staff anticipates 
addressing include:
    a. Whether the characteristics proposed for Fast Track Process 
eligibility should be modified to protect system safety and 
reliability.
    b. The specific content of the proposed supplemental review 
screens. For example,
    i. Whether twelve months of minimum load data is appropriate for 
use in the Minimum Load Screen, or whether additional data, if 
available, should be required to be considered.
    ii. The reasons that minimum load data are not available to 
Transmission Providers and what the Commission could do to encourage 
data availability where appropriate.
    c. The content of the pre-application report.
    d. Whether the fees proposed in the NOPR ($300 for the pre-
application report and $2,500 for the supplemental review) are 
appropriate.
    e. Whether storage devices could fall within the definition of 
Small Generating Facility included in Attachment 1 to the SGIP and 
Attachment 1 to the SGIA as devices that produce electricity.
    We will schedule the workshop so that comments on this Proposed 
Rule may reflect any reactions to the workshop discussions.
    49. Within April 2, 2013 the Commission will announce the workshop 
in a separate notice. Comments related to the workshop will be due at 
the same time as comments on this NOPR (see the Comment Procedures 
section below).

VI. Compliance Filings

    50. To comply with the requirements of this Proposed Rule, the 
Commission proposes to require each public utility Transmission 
Provider to submit a compliance filing within six months of the 
effective date of the Final Rule in this proceeding revising its SGIP 
and SGIA or other document(s) subject to the Commission's jurisdiction 
as necessary to demonstrate that it meets

[[Page 7532]]

the requirements set forth in this Proposed Rule.\70\
---------------------------------------------------------------------------

    \70\ See Appendix C and Appendix D for the proposed pro forma 
SGIP and SGIA provisions consistent with this Proposed Rule.
---------------------------------------------------------------------------

    51. In some cases, public utility Transmission Providers may have 
provisions in their existing SGIPs and SGIAs that the Commission has 
deemed to be consistent with or superior to the pro forma SGIP and 
SGIA. Where these provisions are being modified by the Final Rule, 
public utility Transmission Providers must either comply with the Final 
Rule or demonstrate that these previously-approved variations continue 
to be consistent with or superior to the pro forma SGIP and SGIA as 
modified by the Final Rule.
    52. The Commission will assess whether each compliance filing 
satisfies the proposed requirements and principles stated above and 
issue additional orders as necessary to ensure that each public utility 
Transmission Provider meets the requirements of this Proposed Rule.
    53. The Commission proposes that Transmission Providers that are 
not public utilities will have to adopt the requirements of this 
Proposed Rule as a condition of maintaining the status of their safe 
harbor tariff or otherwise satisfying the reciprocity requirement of 
Order No. 888.\71\
---------------------------------------------------------------------------

    \71\ Promoting Wholesale Competition Through Open Access Non-
Discriminatory Transmission on Services by Public Utilities; 
Recovery of Stranded Costs by Public Utilities and Transmitting 
Utilities, Order No. 888, FERC Stats. & Regs. ] 31,036, at 31,760-
763 (1996).
---------------------------------------------------------------------------

VII. Procedural Matters

    54. On October 8, 2012, the California PUC submitted a motion to 
lodge California PUC Decision (D.) 12-09-018, the revised Rule 21, and 
the Assigned Commissioner's Amended Scoping memo and Ruling Requesting 
Comments (Amended Scoping Memo).\72\ In its motion, the California PUC 
states that its recently approved Rule 21 reforms are central to the 
issues raised in SEIA's Petition and should be lodged into the record 
of this proceeding.\73\ No comments were filed in response to the 
motion.
---------------------------------------------------------------------------

    \72\ California PUC Motion to Lodge at 1.
    \73\ Id. at 1-3.
---------------------------------------------------------------------------

    55. We will grant the California PUC's motion to lodge California 
PUC Decision (D.) 12-09-018, revised Rule 21, and the Amended Scoping 
Memo into the record of this proceeding because the documents have 
provided information that assisted us in our decision-making process.

VIII. Information Collection Statement

    56. The following collections of information contained in this 
Proposed Rule are subject to review by the Office of Management and 
Budget (OMB) under section 3507(d) of the Paperwork Reduction Act of 
1995.\74\ OMB's regulations require approval of certain information 
collection requirements imposed by agency rules.\75\ Upon approval of a 
collection of information, OMB will assign an OMB control number and 
expiration date. Respondents subject to the filing requirements of this 
rule will not be penalized for failing to respond to these collections 
of information unless the collections of information display a valid 
OMB control number. The Commission solicits comments on the 
Commission's need for this information, whether the information will 
have practical utility, the accuracy of the burden estimates, ways to 
enhance the quality, utility, and clarity of the information to be 
collected or retained, and any suggested methods for minimizing 
respondents' burden, including the use of automated information 
techniques.
---------------------------------------------------------------------------

    \74\ 44 U.S.C. 3507(d) (2006).
    \75\ 5 CFR 1320.11 (2012).
    \76\ The number of responses represents the average number of 
responses per respondent.
    \77\ We assume each request for a pre-application report 
corresponds with one Interconnection Customer.
---------------------------------------------------------------------------

    57. Additionally, the Commission encourages comments regarding the 
time burden expected to be required to comply with the proposed rule.
    Burden Estimate: The additional estimated public reporting burdens 
for the proposed reporting requirements in this rule are as follows:

 
----------------------------------------------------------------------------------------------------------------
                                                                     Number of       Hours per     Total annual
           Data collection              Number of  respondents    responses \76\     response          hours
FERC 516A                             [1].......................             [2]             [3]     [1 x 2 x 3]
----------------------------------------------------------------------------------------------------------------
Conforming SGIP and SGIA changes to   142 Transmission Providers               1               6             852
 incorporate proposed revisions.
 First year only.
(18 CFR 35.28(f) (2012))............
Pre-Application Report (18 CFR        800 Interconnection                      1             0.5             400
 35.28(f) (2012)).                     Customers \77\.
                                      142 Transmission Providers            5.63               2            1600
Supplemental Review (18 CFR 35.28(f)  500 Interconnection                      1             0.5             250
 (2012)).                              Customers.
                                      142 Transmission Providers            3.52              20          10,000
Review of Required Upgrades (18 CFR   250 Interconnection                      1               1             250
 35.28(f) (2012)).                     Customers.
                                      142 Transmission Providers            1.76               2             500
                                     ---------------------------------------------------------------------------
Totals:
    First Year......................  ..........................  ..............  ..............          13,852
    Year Two and Ongoing............  ..........................  ..............  ..............          13,000
----------------------------------------------------------------------------------------------------------------

    The Commission seeks comment on the change in the existing burden 
that would result from the following three proposed revisions that are 
not included in the table above. First, the Commission believes that 
the proposed revision of the 2 MW threshold for participation in the 
Fast Track Process will result in a net decrease in the public 
reporting burden because some Small Generating Facilities will be 
evaluated under the Fast Track Process rather than the Study Process. 
The Commission estimates that 100 Interconnection Customers annually 
may be able to participate in the Fast Track Process rather than the 
Study Process under the proposed rule. Second, the Commission proposes 
to revise section 2.3.2 so that the Transmission Provider is no longer 
required to provide a good faith estimate of the cost of performing the 
supplemental review to the Interconnection Customer. The Commission 
believes that this may result in a reduction in burden for the

[[Page 7533]]

Transmission Provider. Third, the Commission proposes to revise section 
1.1.1 of the pro forma SGIP to require that if an Interconnection 
Customer wishes to interconnect its Small Generating Facility using 
Network Resource Interconnection Service, it must do so under the LGIP 
and execute the Large Generator Interconnection Agreement. While this 
addition to the pro forma SGIP should prevent Interconnection Customers 
from following the SGIP where not appropriate, thereby reducing the 
amount of work, the Commission is unsure if it will lead to any 
substantive burden reduction.
    Cost to Comply: The Commission has projected the cost of compliance 
to be $817,268 in the initial year and $767,000 in subsequent years.
    Total Annual Hours for Collection in initial year (13,852 hours) @ 
$59/hour \78\ = $817,268.
---------------------------------------------------------------------------

    \78\ This figure is the average of the salary plus benefits for 
an attorney, consultant (engineer), engineer, and administrative 
staff. The wages are derived from the Bureau of Labor and Statistics 
at http://bls.gov/oes/current/naics3_221000.htm and the benefits 
figure from http://www.bls.gov/news.release/ecec.nr0.htm.
---------------------------------------------------------------------------

    Total Annual Hours for Collection in subsequent years (13,000 
hours) @ $59/hour = $767,000.
    Title: FERC-516A, Standardization of Small Generator 
Interconnection Agreements and Procedures.
    Action: Revision of Currently Approved Collection of Information.
    OMB Control No. 1902-0203.
    Respondents for this Rulemaking: Businesses or other for profit 
and/or not-for-profit institutions.
    Frequency of Information: As indicated in the table.
    Necessity of Information: The Commission is proposing changes to 
the pro forma SGIP and SGIA in order to more efficiently and cost-
effectively interconnect generators no larger than 20 MW (small 
generators) to Commission-jurisdictional transmission systems. The 
purpose of this Proposed Rule is to revise the pro forma SGIP and SGIA 
so small generators can be reliably and efficiently integrated into the 
electric grid and to ensure that Commission-jurisdictional services are 
provided at rates, terms and conditions that are just and reasonable 
and not unduly discriminatory. This Proposed Rule seeks to achieve this 
goal by amending the pro forma SGIP and SGIA to: (1) Incorporate 
provisions that would provide an Interconnection Customer with the 
option of requesting from the Transmission Provider a pre-application 
report providing existing information about system conditions at a 
possible Point of Interconnection; (2) revise the 2 MW threshold for 
participation in the Fast Track Process included in section 2 of the 
pro forma SGIP; (3) revise the customer options meeting and the 
supplemental review following failure of the Fast Track screens so that 
the supplemental review is performed at the discretion of the 
Interconnection Customer and includes minimum load and other screens to 
determine if a Small Generating Facility may be interconnected safely 
and reliably; and (4) revise the pro forma SGIP Facilities Study 
Agreement to allow the Interconnection Customer the opportunity to 
provide written comments to the Transmission Provider on the upgrades 
required for interconnection. The Commission also proposes to clarify 
or correct certain sections of the pro forma SGIP and SGIA.
    Internal Review: The Commission has reviewed the proposed changes 
and has determined that the changes are necessary. These requirements 
conform to the Commission's need for efficient information collection, 
communication, and management within the energy industry. The 
Commission has assured itself, by means of internal review, that there 
is specific, objective support for the burden estimates associated with 
the information collection requirements.
    58. Interested persons may obtain information on the reporting 
requirements by contacting the following: Federal Energy Regulatory 
Commission, 888 First Street NE., Washington, DC 20426 [Attention: 
Ellen Brown, Office of the Executive Director], email: 
DataClearance@ferc.gov, Phone: (202) 502-8663, fax: (202) 273-0873.
    59. Comments on the collections of information and the associated 
burden estimates in the proposed rule should be sent to the Commission 
in this docket and may also be sent to the Office of Information and 
Regulatory Affairs, Office of Management and Budget, 725 17th Street, 
NW., Washington, DC 20503 [Attention: Desk Officer for the Federal 
Energy Regulatory Commission], at the following email address: oira_submission@omb.eop.gov. Please reference OMB Control No. 1902-0203 and 
the docket number of this proposed rulemaking in your submission.

IX. Environmental Analysis

    60. The Commission is required to prepare an Environmental 
Assessment or an Environmental Impact Statement for any action that may 
have a significant adverse effect on the human environment.\79\ The 
Commission has categorically excluded certain actions from these 
requirements as not having a significant effect on the human 
environment.\80\ The actions proposed here fall within categorical 
exclusions in the Commission's regulations for rules that are 
clarifying, corrective, or procedural, for information gathering, 
analysis, and dissemination, and for sales, exchange, and 
transportation of natural gas that requires no construction of 
facilities.\81\ Therefore, an environmental assessment is unnecessary 
and has not been prepared as part of this NOPR.
---------------------------------------------------------------------------

    \79\ Regulations Implementing the National Environmental Policy 
Act of 1969, Order No. 486, FERC Stats. & Regs. ] 30,783 (1987).
    \80\ 18 CFR 380.4 (2012).
    \81\ See 18 CFR 380.4(a)(2)(ii) (2012).
---------------------------------------------------------------------------

X. Regulatory Flexibility Act

    61. The Regulatory Flexibility Act of 1980 (RFA) \82\ generally 
requires a description and analysis of proposed rules that will have 
significant economic impact on a substantial number of small entities. 
The RFA mandates consideration of regulatory alternatives that 
accomplish the stated objectives of a proposed rule and that minimize 
any significant economic impact on a substantial number of small 
entities. The Small Business Administration's Office of Size Standards 
develops the numerical definition of a small business.\83\ The Small 
Business Administration has established a size standard for electric 
utilities, stating that a firm is small if, including its affiliates, 
it is primarily engaged in the transmission, generation and/or 
distribution of electric energy for sale and its total electric output 
for the preceding twelve months did not exceed four million megawatt 
hours (MWh).\84\ The Commission estimates that the total number of 
Transmission Providers that, absent waiver, would have to modify their 
current SGIPs and SGIAs is 142. Of these, an estimated 11 Transmission 
Providers dispose of 4 million MWh or less per year. The Commission 
estimates that the average total cost for each of these entities is 
$5,381.\85\ The Commission does not consider this to be a significant 
economic impact. The estimated total number of Interconnection 
Customers that may be subject to the requirements of this proposed rule 
is 800.\86\ Of these, all are

[[Page 7534]]

considered small. The Commission estimates that the total annual cost 
for each entity is $1,984.\87\ The Commission does not consider this to 
be a significant economic impact. Further, the Commission expects that 
Interconnection Customers that are able to participate in the Fast 
Track Process rather than the Study Process will benefit from the 
proposed revisions to the pro forma SGIP.
---------------------------------------------------------------------------

    \82\ 5 U.S.C. 601-612 (2006).
    \83\ 13 CFR 121.101 (2012).
    \84\ 13 CFR 121.201, Sector 22, Utilities & n.1.
    \85\ This number is derived by multiplying the hourly figure for 
Transmission Providers in the Burden Estimate table (12,952) by the 
cost per hour ($59) divided by the number of Transmission Providers. 
12,952 hrs * $59/hr/142 = $5,381.
    \86\ We assume that 800 Commission-jurisdictional 
interconnection requests will be made annually. For the purposes of 
this proposed rule, each of these requests is assumed to be made by 
a separate Interconnection Customer.
    \87\ This number is derived by multiplying the hourly figure for 
Interconnection Customers in the Burden Estimate table (900) plus an 
additional 750 hours associated with reviewing the draft facilities 
study report by the cost per hour ($59); plus the $300 fee per pre-
application report multiplied by 800 Interconnection Customers; plus 
the $2,500 fee per supplemental review multiplied by 500 
Interconnection Customers; all divided by the total number of 
Interconnection Customers (800). ((1,650 hrs * $59/hr) + ($300 * 
800) + ($2,500 * 500))/800 = $1,984.
---------------------------------------------------------------------------

    62. Based on the above, the Commission certifies that the new or 
revised requirements set forth in the proposed rule will not have a 
significant economic impact on a substantial number of small entities. 
Accordingly, no regulatory flexibility analysis is required.

XI. Comment Procedures

    63. The Commission invites interested persons to submit comments on 
the matters and issues proposed in this notice to be adopted, including 
any related matters or alternative proposals that commenters may wish 
to discuss. Comments are due June 3, 2013. Comments must refer to 
Docket No. RM13-2-000, and must include the commenter's name, the 
organization they represent, if applicable, and their address in their 
comments.
    64. The Commission encourages comments to be filed electronically 
via the eFiling link on the Commission's web site at http://www.ferc.gov. The Commission accepts most standard word processing 
formats. Documents created electronically using word processing 
software should be filed in native applications or print-to-PDF format 
and not in a scanned format. Commenters filing electronically do not 
need to make a paper filing.
    65. Commenters that are not able to file comments electronically 
must send an original of their comments to: Federal Energy Regulatory 
Commission, Secretary of the Commission, 888 First Street NE., 
Washington, DC 20426.
    66. All comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters on this proposal are 
not required to serve copies of their comments on other commenters.

XII. Document Availability

    67. In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
Internet through the Commission's Home Page (http://www.ferc.gov) and 
in the Commission's Public Reference Room during normal business hours 
(8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street NE., Room 2A, 
Washington, DC 20426.
    68. From the Commission's Home Page on the Internet, this 
information is available on eLibrary. The full text of this document is 
available on eLibrary in PDF and Microsoft Word format for viewing, 
printing, and/or downloading. To access this document in eLibrary, type 
the docket number excluding the last three digits of this document in 
the docket number field.
    69. User assistance is available for eLibrary and the Commission's 
Web site during normal business hours from the Commission's Online 
Support at 202-502-6652 (toll free at 1-866-208-3676) or email at 
ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at 
public.referenceroom@ferc.gov.

List of Subjects in 18 CFR Part 35

    Electric power rates, Electric utilities, and Reporting and 
recordkeeping requirements.

    By direction of the Commission. Chairman Wellinghoff is not 
participating. Commissioner Clark is recused.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
    In consideration of the foregoing, the Commission proposes to 
revise Part 35, Chapter I, Title 18 of the Code of Federal Regulations 
as follows.

PART 35--FILING OF RATE SCHEDULES

0
1. The authority citation for Part 35 continues to read as follows:

    Authority:  16 U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42 
U.S.C. 7101-7352.
0
2. Revise Sec.  35.28(f) to read as follows:

Sec.  35.28  Non-discriminatory open access transmission tariff.

* * * * *
    (f) * * *
    (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), as amended by the Commission 
in Order No. 661, FERC Stats. & Regs. ] 31,186 (Final Rule on 
Interconnection for Wind Energy), and the standard small generator 
interconnection procedures and agreement contained in Order No. 2006, 
FERC Stats. & Regs. ] 31,180 (Final Rule on Small Generator 
Interconnection), as amended by the Commission in Order No. ----, FERC 
Stats. & Regs. ] ---- (Final Rule on Small Generator Interconnection 
Agreements and Procedures), 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), Order No. 2006, FERC Stats. & Regs. ] 31,180 (Final 
Rule on Small Generator Interconnection), and Order No. ----, FERC 
Stats. & Regs. ] ---- (Final Rule on Small Generator Interconnection 
Agreements and Procedures).
    (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 August 12, 2005.
    (iii) The amendment to implement the Final Rule on Interconnection 
for Wind Energy required by the preceding subsection must be filed no 
later than December 30, 2005.
    (iv) The amendment to implement the Final Rule on Small Generator 
Interconnection Procedures required by the preceding subsection must be 
filed no later than April 2, 2013.
    (v) 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), 
as amended by the Commission in Order No. 661, FERC Stats. & Regs. ] 
31,186 (Final Rule on Interconnection for Wind Energy), or the standard 
small generator interconnection procedures and agreement contained in 
Order No. 2006, FERC Stats. & Regs. ] 31,180 (Final Rule on Small 
Generator Interconnection), as amended by the Commission in Order No. 
----, FERC Stats. & Regs. ] ---- (Final Rule on Small Generator 
Interconnection Agreements and Procedures), must demonstrate that the

[[Page 7535]]

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. ] 31,180 (Final Rule on Small 
Generator Interconnection).
* * * * *

    Note: Appendix A will not be published in the Code of Federal 
Regulations.

Appendix A: List of Short Names of Commenters on the SEIA Petition 
(Docket No. RM12-10-000) and the Technical Conference (Docket No. AD12-
17-000)

----------------------------------------------------------------------------------------------------------------
                  Short name or acronym                                          Commenter
----------------------------------------------------------------------------------------------------------------
AEP.....................................................  American Electric Power Service Corporation.
Amonix..................................................  Amonix.
Borrego.................................................  Borrego Solar Systems.
California ISO..........................................  California Independent System Operator Corporation.
California PUC..........................................  California Public Utilities Commission.
California Utilities....................................  Pacific Gas and Electric Company, San Diego Gas &
                                                           Electric Company, and Southern California Edison
                                                           Company.
Clean Coalition.........................................  Clean Coalition.
Detroit Edison..........................................  Detroit Edison Company.
Duke....................................................  Duke Energy Corporation.
EEI.....................................................  Edison Electric Institute.
Environmental Defense Fund..............................  Environmental Defense Fund.
enXco...................................................  enXco Development Corporation.
IREC....................................................  Interstate Renewable Energy Council.
NARUC...................................................  National Association of Regulatory Utility
                                                           Commissioners.
NRECA and APPA..........................................  National Rural Electric Cooperative Association and
                                                           American Public Power Association.
NV Energy...............................................  Nevada Power Company and Sierra Pacific Power Company.
NJBPU...................................................  New Jersey Board of Public Utilities.
NRG.....................................................  NRG Companies.
Pacific Gas and Electric................................  Pacific Gas and Electric Company.
Pepco...................................................  Pepco Holdings Inc., Atlantic City Electric Company,
                                                           Delmarva Power & Light Company, and Potomac Electric
                                                           Power Company.
PJM.....................................................  PJM Interconnection, LLC.
Public Interest Organizations...........................  Center for Rural Affairs, Climate + Energy Project,
                                                           Conservation Law Foundation, Energy Future Coalition,
                                                           Environmental Law & Policy Center, Fresh Energy,
                                                           National Audubon Society, Natural Resources Defense
                                                           Council, Northwest Energy Coalition, Pace Energy and
                                                           Climate Center, Southern Environmental Law Center,
                                                           Sustainable FERC Project, Sierra Club, Union of
                                                           Concerned Scientists, and the Wilderness Society.
Recurrent Energy........................................  Recurrent Energy.
San Diego Gas & Electric................................  San Diego Gas & Electric Company.
SEIA....................................................  Solar Energy Industries Association.
SolarCity...............................................  SolarCity Corporation.
SoCal Edison............................................  Southern California Edison Company.
SunEdison...............................................  SunEdison LLC.
SunPower................................................  SunPower Corporation.
Suntech.................................................  Suntech America.
USCHPA..................................................  United States Clean Heat & Power Association.
----------------------------------------------------------------------------------------------------------------

[[Page 7536]]

    Note: Appendix B will not be published in the Code of Federal 
Regulations.

Appendix B
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    Note: Appendix C will not be published in the Code of Federal 
Regulations.

Appendix C to the Proposed Small Generator Interconnection Rule
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                                     - ii -
 

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Attachment 1
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Attachment 2
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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

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 Web site 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 interconnection 
procedures shall be considered certified under these procedures for 
use in that state.

ATTACHMENT 5

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Attachment A to Feasibility Study Agreement
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Attachment A to System Impact Study Agreement
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Attachment 8
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Attachment A to Facilities Study Agreement
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    Note: Appendix D will not be published in the Code of Federal

Appendix D to the Proposed Small Generator Interconnection Rule
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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 
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 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

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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

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maintenance expenses associated with such Upgrades. The Transmission 
Provider shall functionalize Upgrade costs and annual expenses as 
either transmission or distribution related.

[FR Doc. 2013-01366 Filed 1-31-13; 8:45 am]
BILLING CODE 6717-01-P