[Federal Register Volume 67, Number 165 (Monday, August 26, 2002)]
[Proposed Rules]
[Pages 54749-54758]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-21613]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 35

[Docket No. RM02-12-000]


Standardization of Small Generator Interconnection Agreements and 
Procedures; Advance Notice of Proposed Rulemaking

Issued: August 16, 2002.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) seeks 
comments on standard small generator interconnection agreements and 
procedures that would be applicable to all public utilities that own, 
operate, or control transmission facilities under the Federal Power 
Act. The small generator agreements and procedures also would apply to 
any non-public utility that seeks voluntary compliance with 
jurisdictional transmission tariff reciprocity conditions. The 
Commission expects that this rulemaking will enhance competition in the 
energy market and increase the number of new generation resources that 
will participate in the market, thereby furthering customer choice of 
technologies and fuels, allowing more customer options in response to 
high generator prices, and facilitating the development of non-
polluting alternatives such as photovoltaics and small wind resources.

DATES: Written comments must be received by the Commission by November 
4, 2002.

ADDRESSES: Office of the Secretary, Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426.

FOR FURTHER INFORMATION CONTACT:   
Michael G. Henry (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 502-8532.
G. Patrick Rooney (Technical Information), Office of Market, Tariffs 
and Rates, Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 502-6205.
Bruce A. Poole (Technical Information), Office of Market, Tariffs and 
Rates, Federal Energy Regulatory Commission, 888 First Street, NE.,

[[Page 54750]]

 Washington, DC 20426, (202) 502-8468.
James S. Ballard (Technical Information), Office of Market, Tariffs and 
Rates, Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 502-8729.

SUPPLEMENTARY INFORMATION:

    Before Commissioners: Pat Wood, III, Chairman; William L. 
Massey, Linda Breathitt, and Nora Mead Brownell.

    1. The Federal Energy Regulatory Commission (Commission) proposes 
to adopt standard small generator interconnection agreements and 
procedures that would be applicable to all public utilities that own, 
operate, or control transmission facilities under the Federal Power 
Act, as discussed more fully below. The Commission requests comments on 
these contractual provisions and procedures. After considering these 
comments, the Commission will issue a notice of proposed rulemaking 
(NOPR).
    2. The rulemaking is in the public interest because small 
generators will enhance competition in the energy market. The 
Commission expects that, as a result of this rulemaking, an increasing 
number of new generation resources will participate in the market, 
thereby furthering customer choice of technologies and fuels, allowing 
more customer options in response to high generator prices, and 
facilitating development of non-polluting alternatives such as 
photovoltaics and small wind resources.

I. Background

    3. The Commission issued an Advance Notice of Proposed Rulemaking 
(ANOPR) on October 25, 2001 in Docket No. RM02-1-000 \1\ to develop 
standardized generator interconnection agreements and procedures for 
all sizes of generators. We also initiated a collaborative process in 
which interested members of the electric industry, government, and the 
public (collectively, stakeholders) had an opportunity to provide input 
into the drafting of an interconnection procedures (IP) document and a 
standard interconnection agreement (IA). Public meetings of these 
stakeholders culminated in the development of a consensus IA and IP, 
which were filed with the Commission on January 11, 2002.
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    \1\ Standardizing Generator Interconnection Agreements 
Procedures, Advance Notice of Proposed Rulemaking, FERC Stats. & 
Regs. ] 35,540 (2001).
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    4. On April 24, 2002, the Commission issued its Notice of Proposed 
Rulemaking (Interconnection NOPR),\2\ which included a standard IA and 
IP, proposed to be incorporated into existing and future open access 
transmission tariffs. The proposed IA and IP generally track the 
consensus documents filed with the Commission, but also resolved 
several important issues that remained in dispute after the stakeholder 
process.
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    \2\ Standardization of Generator Interconnection Agreements and 
Procedures, Notice of Proposed Rulemaking, FERC Stats. & Regs. ] 
32,560 (2002).
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    5. Section 14 of the IP contains expedited procedures for small 
generators (defined as generators of 20 megawatts (MW) or less). The 
Commission noted in the NOPR that it has jurisdiction over generator 
interconnections when a generator interconnects to a transmission 
provider's transmission system or makes wholesale sales in interstate 
commerce at either the transmission or distribution voltage level.\3\
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    \3\ Standardization of Generator Interconnection Agreements 
Procedures, FERC Stats. & Regs. ] 32,560 at 34,178 (2002).
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    6. The Commission's authority for these proposed rules is under 
sections 205 and 206 of the Federal Power Act.\4\ Thus, the recent 
Atlantic City Electric appellate decision \5\ is inapposite. In 
Atlantic City Electric, the court reasoned that the authority exercised 
by the Commission in Section 203 to require Commission approval prior 
to a utility's withdrawal from an ISO could not be reconciled with the 
voluntary nature of utilities' coordination and interconnection 
arrangements in section 202. The court also noted that the petitioners 
did not dispute Commission authority to take similar action under 
section 205. Because in this proceeding the Commission relies on 
sections 205 and 206 for the authority to require interconnection 
agreements and procedures, Atlantic City Electric has no bearing on the 
authority exercised here.
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    \4\ New York v. FERC, 122 S.Ct. 1212 (2002).
    \5\ Atlantic City Electric Co. v. FERC, No. 97-1097 (D.C. Cir. 
July 12, 2002).
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II. Discussion

    7. In their comments on the interconnection NOPR, supporters of 
small generators \6\ requested that the Commission adopt separate rules 
and procedures for interconnecting small generators. They argue that 
applying an IP and IA designed for larger generators to generators of 
20 MW or less (i.e., small generators) will hinder small generator 
development. Supporters seek streamlined procedures and requirements 
that allow small generators to avoid unnecessary delay caused by 
interconnection studies and queues established for larger generators 
and their greater impact on the grid. The Small Generator Commenters, 
in their comments on the Interconnection NOPR, recommend detailed, 
simplified procedures and agreements that allow for quick, inexpensive, 
and simple interconnection for small generators up to and including 2 
MW and a different procedure and agreement for units over 2 MW up to 
and including 20 MW.\7\
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    \6\ The Solar Energy Industries Association, the U.S. Fuel Cell 
Council, the American Solar Energy Society, the U.S. Combined Heat 
and Power Association, the International District Energy 
Association, and the American Wind Energy Association (collectively, 
the Small Generator Commenters).
    \7\ According to Small Generator Commenters, interconnection 
approval would be based on meeting national codes, standards and 
models for interconnected operations already used in Texas and the 
Pennsylvania-New Jersey-Maryland Interconnection (PJM) and which 
contain all the necessary reliability protections in simple, 
understandable, and effective terms. For generators meeting these 
criteria, very limited or no review would be required by the 
transmission provider.
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    8. Consistent with these requests, the Commission is persuaded that 
we should develop separate small generator standardized IAs and IPs 
(SGIAs and SGIPs) to provide the right incentives for both transmission 
providers and small generators. Accordingly, the Commission proposes to 
adopt SGIAs and SGIPs that would be applicable to all public utilities 
that own, operate, or control transmission facilities under the Federal 
Power Act. To that end, we now sever the interconnection of generators 
up to and including 20 MW from the proposed rulemaking in Docket No. 
RM02-1-000 and treat them separately here.\8\
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    \8\ Comments involving small generator issues that have a 
bearing on the final rule to be issued in Docket No. RM02-1-000 will 
still be considered in that proceeding.
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    9. The Commission is considering basing the SGIAs and SGIPs on 
those filed by the Small Generator Commenters. The Commission notes 
that while these SGIAs and SGIPs are not identical to the ERCOT and PJM 
models, certain of their features make them appropriate models for 
development of a separate rule.\9\ First, these proposals are based on 
existing agreements and procedures accepted by several states and 
benefit from the work undertaken in those fora to craft procedures and 
agreements acceptable to all parties. Second, the documents offer a 
reasonable balancing of burdens. In particular, if certain conditions 
are

[[Page 54751]]

met that show ``no impact'' \10\ on the transmission grid, the burden 
is placed on the transmission provider to justify any refusal to permit 
the interconnection or require specific system upgrades. Should the 
small generator not meet the ``no impact'' threshold test, simple 
studies can be completed by the transmission provider to determine 
required system upgrades. Third, these conditions have proven helpful 
in the Electric Reliability Council of Texas (ERCOT) and PJM. A similar 
threshold used in PJM's Small Resource Interconnection tariff 
provisions for generators up to and including 10MW is working well.\11\ 
Given the features of these SGIAs and SGIPs and their track record, we 
conclude that they should be used in an advance NOPR process for small 
generator interconnections.
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    \9\ The SGIP and SGIA for generators up to and including 2 MW is 
based on the documents adopted and approved by the Texas Public 
Utility Commission. The other SGIP and SGIA is based on the PJM 
model, which has been applied in the PJM member states, which 
include Delaware, Maryland, New Jersey, and Pennsylvania.
    \10\ A presumption of ``no impact'' will normally be made if the 
following conditions are met: (1) The project's export of 
electricity (net of on-site load) would not exceed, cumulatively 
with all prior small resources on the system, (a) 15% of the peak 
load on a radial system feeder or (b) 25% of the minimum load on a 
network link, and (2) the project's capability does not exceed 25% 
of the maximum short circuit potential.
    \11\ Since this program was initiated in 1999, PJM has 
interconnected some 19 small generators. PJM engineers state that 
the program seems to work well and 99% of the time they can work the 
small generator out of queue order and expedite interconnection with 
no problems. Transmission providers have not filed major complaints 
and an informal survey of regulators (Maryland Public Service 
Commission, Pennsylvania Public Utility Commission, Delaware Public 
Service Commission, and New Jersey Board of Public Utilities) 
revealed only support for this process.
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    10. The Commission, therefore, offers these SGIAs and SGIPs as 
models, and concludes that the procedures and terms of these proposals 
balance interconnection procedures with reliability and grid impact. 
But we are open to any proposals that may better meet the goals of this 
rulemaking. We find these SGIAs and SGIPS a valuable and efficient 
starting point from which to initiate further discussion and build 
consensus between the parties. Accordingly, these SGIPs and SGIAs, 
which already represent the efforts of industry participants, will 
provide a solid foundation as a proposal that will be developed into a 
subsequent NOPR. The proposals are attached to this ANOPR as Attachment 
A (for units up to and including 2 MW) and Attachment B (for units over 
2 MW up to and including 20 MW).
    11. The Commission strongly encourages interested persons to pursue 
consensus on these SGIPs and SGIAs. To this end the Commission proposes 
to convene one or more conferences to enable the parties to discuss and 
reach agreement on the proposed SGIAs and SGIPs. The initial meeting 
will be open to all interested parties. The meeting will take place 
September 9 and 10, 2002, at 10 a.m., at the Federal Energy Regulatory 
Commission, 888 First St. NE., Washington, DC. The expectations for 
this meeting will be for the participants to form working groups for 
the purpose of developing consensus SGIAs and SGIPs for small 
generators up to and including 2MW and also for small generators over 2 
MW up to and including 20 MW.\12\ In addition, the Commission has 
established a dedicated web page to facilitate the consensus-building 
and collaborative process at smallgen.intranets.com. The Commission 
will issue a NOPR before the end of the year, with the expectation that 
a final rule will be issued in March 2003.
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    \12\ We note that the procedures in Attachments A and B differ 
in the manner in which they are incorporated into the transmission 
provider's open access transmission tariff (OATT). The procedures in 
Attachment A would be appended to the interconnection procedures 
proposed in the rulemaking in Docket No. RM02-1-000, and the 
procedures in Attachment B would be added directly to the text of a 
transmission provider's OATT. We encourage parties to reach 
consensus on which method is preferred.
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    12. Commenters advocating standard small generator agreements and 
procedures other than the models in Attachments A and B must specify in 
detail how their proposals differ from the foregoing and are superior 
to the proposals herein. Any approaches suggested by commenters must 
serve the public interest by promoting competition and economic 
efficiency. We are particularly interested in efforts to incorporate 
into our proposed SGIAs and SGIPs the draft distributed generation 
interconnection procedures and agreement recently released by the 
National Association of Regulatory Utility Commissioners.
    13. By November 4, 2002, the comment deadline, participants will 
file their SGIP and SGIA documents reflecting as much consensus as 
possible as well as specific language proposals and pros and cons for 
any unresolved issues. Parties disagreeing with particular provisions 
must offer alternative provisions and a full explanation of and 
justification for the change. Any consensus reached among all 
interested persons will be considered by the Commission as it prepares 
the subsequent NOPR, to the extent consistent with the Commission's 
statutory responsibilities.

III. Comment Procedures

    14. The Commission invites interested persons to submit comments, 
data, views and other information concerning matters set out in this 
notice.
    15. To facilitate the Commission's review of the comments, 
commenters are requested to provide an executive summary of their 
positions. Commenters are requested to identify each specific issue 
posed by the ANOPR that their discussion addresses and to use 
appropriate headings that clearly identify the relevant SGIA and SGIP 
sections. Additional issues the commenters wish to raise should be 
identified separately. The commenters should double-space their 
comments.
    16. Comments may be filed on paper or electronically via the 
Internet and must be received by the Commission by November 4, 2002. 
Comments should include an executive summary. Those filing 
electronically do not need to make a paper filing. For paper filings, 
the original and 14 copies of initial and reply comments should be 
submitted to the Office of the Secretary, Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426 and should 
refer to Docket No. RM02-12-000.
    17. Documents filed electronically via the Internet can be prepared 
in a variety of formats, including WordPerfect, MS Word, Portable 
Document Format, Real Text Format, or ASCII format, as listed on the 
Commission's web site at http://ferc.gov, under the e-Filing link. The 
e-Filing link provides instructions for how to Login and complete an 
electronic filing. First time users will have to establish a user name 
and password. The Commission will send an automatic acknowledgment to 
the sender's E-Mail address upon receipt of comments. User assistance 
for electronic filing is available at 202-208-0258 or by E-Mail to 
[email protected]. Comments should not be submitted to the E-Mail 
address.
    18. All comments will be placed in the Commission's public files 
and will be available for inspection in the Commission's Public 
Reference Room at 888 First Street, NE., Washington, DC 20426, during 
regular business hours. Additionally, all comments may be viewed, 
printed, or downloaded remotely via the Internet through either FERC's 
Homepage using the Federal Energy Regulatory Records Information System 
(FERRIS) link or the dedicated Small Generator web page.

IV. Document Availability

    19. The Commission provides all interested persons an opportunity 
to view and/or print the contents of this document via the Internet 
through FERC's Home Page (http://www.ferc.gov) and in FERC's Public 
Reference Room

[[Page 54752]]

during normal business hours (8:30 a.m. to 5 p.m. Eastern time) at 888 
First Street, NE., Room 2A, Washington, DC 20426. This document will be 
published in the Federal Register.
    20. From FERC's Home Page on the Internet, this information is 
available in FERRIS. The full text of this document is available on 
FERRIS in PDF and WordPerfect format for viewing, printing, and/or 
downloading. To access this document in FERRIS, type the docket number 
excluding the last three digits of this document in the docket number 
field.
    21. User assistance is available for FERRIS and the FERC's website 
during normal business hours from our Help line at (202) 208-2222 or 
the Public Reference Room at (202) 208-1371 Press 0, TTY (202) 208-
1659. E-Mail the Public Reference Room at 
[email protected].

    By direction of the Commission.
Linwood A. Watson, Jr.,
Deputy Secretary.

Attachment A--Expedited Interconnection Procedures--Small Generators 
(Up to and Including 2 MW) (To be Included With Section 14.2.3 of the 
Interconnection Procedures Under Consideration in FERC Docket RM02-1-
000)

1. Application and Definitions

    a. This expedited interconnection procedure is available for small 
generators up to and including 2 MW in size that will participate in a 
FERC regulated market, sell power for resale in interstate commerce or 
are interconnected to a FERC regulated transmission line. These 
procedures apply only to generators that meet certain national 
standards addressing technical requirements for continuous 
interconnected operation of small generators. In addition the generator 
must meet certain criteria regarding the relationship between the size 
of the generator and the size of the circuit to which they will 
interconnect. Small generators meeting these standards are entitled to 
a presumption of approval of the interconnection without additional 
testing, fees, or other requirements imposed by the interconnecting 
Transmission Provider or any Affected System utility.
    Although generators meeting all the standards herein are entitled 
to a presumption of approval, the presumption is rebuttable. Should the 
Transmission Provider or Affected System petition the FERC to require 
additional testing because of special circumstances and received 
Commission approval, the generator would then have to undergo 
additional testing and interconnection study at the generator's 
expense.
    b. Definitions: Unless otherwise defined herein, terms shall have 
the meanings specified in Article 1 of the Standard Generator 
Interconnection Procedures issued in FERC Docket No. RM02-1-000.

2. National Codes and Standards

    Small generators must comply with all national codes and standards 
applicable to the ongoing interconnected operation of a small generator 
with the electricity grid.

3. Technical Requirements

    Under the national codes and standards applicable to small 
interconnected generators, a generator may not energize or re-energize 
a circuit unless grid voltage is present and within normal operating 
bounds. A small generator must immediately and automatically disconnect 
from the grid and cease interconnected operations any time the grid is 
de-energized or outside of normal operating bounds. The codes and 
standards also dictate acceptable operating conditions for the small 
generators including, but not limited to, voltage, frequency and 
harmonics.

4. Threshold for Determination of the Presumption of No Grid Impact

    For interconnections on radial circuits the small generator (in 
aggregate with other generation on the circuit) may not exceed 15 
percent of the total measured peak load or design capacity of the 
circuit (as most recently measured at the substation). For 
interconnections on networked circuits, the small generator (in 
aggregate with other generation on the circuit) may not exceed 25 
percent of the minimum measured load on the circuit. A small generator 
may not contribute more than 25 percent of the maximum short circuit 
current at the point of interconnection.

5. Analysis of Interconnection--Limited Interconnection Studies--Costs

    If a small generator meets all of the criteria in Sections 1-4, the 
impact and facilities studies are waived. A limited feasibility study 
may be conducted to determine compliance with the load and short 
circuit contributions in Section 4. This study must be completed in 15 
days after acceptance of a valid interconnection request. Costs to the 
generator are waived if short circuit calculations have recently been 
performed in the area of the interconnection or if the short circuit 
and load thresholds are sufficiently greater than the generator 
capacity that no calculations are needed.

6. Disputes

    If a dispute arises during the application of these procedures, 
either the generator or Transmission Provider may seek immediate 
resolution through FERC's alternative dispute resolution process. At 
the generator's option, dispute resolution will be binding. Alternative 
dispute resolution may include any dispute resolution services made 
available by the FERC including those that occur by telephone.
    Should a Transmission Provider desire a waiver from these 
procedures that would otherwise apply to the small generator 
interconnection, the Transmission Provider must seek such wavier from 
FERC within 15 days of the receipt of a valid small generator 
interconnection request. The Transmission Provider shall have the 
burden to show, in a clear and convincing manner, why the application 
of these rules would result in an unsafe or unreliable interconnection 
or that the interconnection would interfere with the quality of 
electric service to other customers.

7. Capacity and Energy; Metering

    Small generators are entitled to participate in any available 
energy and capacity markets and receive the appropriate compensation 
due to participants in those markets. Metering shall be installed as 
needed to participate in the various markets.

Standard Agreement for Interconnection and Parallel Operation of Small 
Generation Systems (Pre-Certified Systems up to and Including 2 MW)

    This Interconnection Agreement (``Agreement'') is made and 
entered into this --------day of ------------------, 19----, by ----
----------------, (``Transmission Provider''), and------------------
--(``Generator''), a [specify whether corporation, and if so name 
state, municipal corporation, cooperative corporation, or other], 
each hereinafter sometimes referred to individually as ``Party'' or 
both referred to collectively as the ``Parties''. In consideration 
of the mutual covenants set forth herein, the Parties agree as 
follows:
    1. Definitions
    Unless otherwise defined herein, terms in this Agreement shall 
have the meanings specified in Article 1 of the STANDARD GENERATOR 
INTERCONNECTION AND OPERATING AGREEMENT (IA) issued in FERC Docket 
No. RM02-1-000.
    2. Scope of Agreement--This Agreement is applicable to 
conditions under which the Transmission Provider and the Generator 
agree that one or more generating facility or facilities up to and 
including two (2) MW to be interconnected to the Transmission 
Provider's system, as described in Exhibit A.

[[Page 54753]]

    3. Establishment of Point(s) of Interconnection--Transmission 
Provider and Generator agree to interconnect the Facility at the 
locations specified in this Agreement and in accordance with Federal 
Energy Regulatory Commission Rules relating to Interconnection of 
Small Generation systems.
    4. Responsibilities of Transmission Provider and Generator--Each 
Party will, at its own cost and expense, operate, maintain, repair, 
and inspect, and shall be fully responsible for, Facility or 
Facilities which it now or hereafter may own unless otherwise 
specified on Exhibit A. Generator shall conduct operations of its 
facility(s) in compliance with all aspects of the Rules, and 
Transmission Provider shall conduct operations on its utility system 
in compliance with all aspects of the Rules, or as further described 
and mutually agreed to in the applicable Facility Schedule. 
Maintenance of Generator and associated interconnection equipment 
shall be performed in accordance with the applicable manufacturer's 
recommended maintenance schedule. The Parties agree to cause their 
Facilities or systems to be constructed in accordance with 
applicable specifications equal to or greater than those provided by 
the National Electrical Safety Code, the American National Standards 
Institute, IEEE and Underwriter's Laboratory in effect at the time 
of construction. Each Party covenants and agrees to design, install, 
maintain, and operate, or cause the design, installation, 
maintenance, and operation of its transmission and distribution 
system and related Facilities and Units so as to reasonably minimize 
the likelihood of a disturbance, originating in the system of one 
Party, affecting or impairing the system of the other Party, or 
other systems with which a Party is interconnected.
    Transmission Provider will notify Generator if there is evidence 
that the operation of Generator's equipment causes disruption or 
deterioration of service to other customers served from the same 
grid or if the generator operation causes damage to Transmission 
Provider's or Affected Systems. Generator will notify Transmission 
Provider of any emergency or hazardous condition or occurrence with 
the Generator's Unit(s) which could affect safe operation of the 
system.
    5. Limitation of Liability and Indemnification
    The Parties shall at all times indemnify, defend, and save the 
other Party harmless from, any and all damages, losses, claims, 
including claims and actions relating to injury to or death of any 
person or damage to property, demand, suits, recoveries, costs and 
expenses, court costs, attorney fees, and all other obligations by 
or to third parties, arising out of or resulting from the other 
Party's performance of obligations under this Agreement on behalf of 
the indemnifying Party, except in cases of negligence or intentional 
wrongdoing by the indemnifying Party.
    6. Right of Access, Equipment Installation, Removal & 
Inspection--Upon reasonable notice, the Transmission Provider may 
send a qualified person to the premises of the Generator at or 
immediately before the time the Facility first produces energy to 
inspect the interconnection, and observe the Facility's 
commissioning (including any testing), startup, and operation for a 
period of up to no more than three days after initial startup of the 
unit.
    Following the initial inspection process described above, at 
reasonable hours, and upon reasonable notice, or at any time without 
notice in the event of an emergency or hazardous condition, 
Transmission Provider shall have access to Generator's premises for 
any reasonable purpose in connection with the performance of the 
obligations imposed on it by this Agreement or if necessary to meet 
its legal obligation to provide service to its customers.
    7. Disconnection of Unit--Generator retains the option to 
disconnect from Transmission Provider's utility system. Generator 
will notify the Transmission Provider of its intent to disconnect by 
giving the Transmission Provider at least thirty days' prior written 
notice. Such disconnection shall not be a termination of the 
agreement unless Generator exercises rights under Section 7.
    Generator shall disconnect Facility from Transmission Provider's 
system upon the effective date of any termination under Section 7.
    Subject to Commission Rule, for routine maintenance and repairs 
on Transmission Provider's utility system, Transmission Provider 
shall provide Generator with seven business days' notice of service 
interruption. Transmission Provider shall have the right to suspend 
service in cases where continuance of service to Generator will 
endanger persons or property. During the forced outage of the 
Transmission Provider's utility system serving Generator, 
Transmission Provider shall have the right to suspend service to 
effect immediate repairs on Transmission Provider's utility system, 
but the Transmission Provider shall use its best efforts to provide 
the Generator with reasonable prior notice.
    8. Effective Term and Termination Rights-- This Agreement 
becomes effective when executed by both parties and shall continue 
in effect until terminated. The agreement may be terminated for the 
following reasons:
    (a) Generator may terminate this Agreement at any time, by 
giving the Transmission Provider sixty days' written notice;
    (b) Transmission Provider may terminate upon failure by the 
Generator to generate energy from the Facility in parallel with the 
Transmission Provider's system within twelve months after completion 
of the interconnection;
    (c) Either party may terminate by giving the other party at 
least sixty days prior written notice that the other Party is in 
default of any of the material terms and conditions of the 
Agreement, so long as the notice specifies the basis for termination 
and there is reasonable opportunity to cure the default; or
    (d) Transmission Provider may terminate by giving Generator at 
least sixty days notice in the event that there is a material change 
in an applicable rule or statute.
    9. Governing Law and Regulatory Authority--The validity, 
interpretation and performance of this Agreement and each of its 
provisions shall be governed by the laws of the State where the 
Point of Interconnection is located, without regard to its conflicts 
of law principles. This Agreement is subject to all Applicable Laws 
and Regulations. Each Party expressly reserves the right to seek 
changes in, appeal, or otherwise contest any laws, orders, rules, or 
regulations of a Governmental Authority.
    10. Amendment--This Agreement may be amended only upon mutual 
agreement of the Parties, which amendment will not be effective 
until reduced to writing and executed by the Parties.
    11. Entirety of Agreement and Prior Agreements Superseded--This 
Agreement, including all attached Exhibits and Facility Schedules, 
which are expressly made a part hereof for all purposes, constitutes 
the entire agreement and understanding between the Parties with 
regard to the interconnection of the facilities of the Parties at 
the Points of Interconnection expressly provided for in this 
Agreement. The Parties are not bound by or liable for any statement, 
representation, promise, inducement, understanding, or undertaking 
of any kind or nature (whether written or oral) with regard to the 
subject matter hereof not set forth or provided for herein. This 
Agreement replaces all prior agreements and undertakings, oral or 
written, between the Parties with regard to the subject matter 
hereof, including without limitation [specify any prior agreements 
being superseded], and all such agreements and undertakings are 
agreed by the Parties to no longer be of any force or effect. It is 
expressly acknowledged that the Parties may have other agreements 
covering other services not expressly provided for herein, which 
agreements are unaffected by this Agreement.
    12. Notices--Notices given under this Agreement are deemed to 
have been duly delivered if hand delivered or sent by United States 
certified mail, return receipt requested, postage prepaid, to:

    (a) If to Transmission Provider:

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    (b) If to Generator:

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    The above-listed names, titles, and addresses of either Party 
may be changed by written notification to the other, notwithstanding 
Section 10.
    13. Invoicing and Payment--Invoicing and payment terms for 
services associated with this agreement shall be consistent with 
applicable Rules of the Commission.
    14. No Third-Party Beneficiaries--This Agreement is not intended 
to and does not create rights, remedies, or benefits of any 
character whatsoever in favor of any persons, corporations, 
associations, or entities other than the Parties, and the 
obligations herein assumed are solely for the use and benefit of the 
Parties, their successors in interest and, where permitted, their 
assigns.
    15. No Waiver--The failure of a Party to this Agreement to 
insist, on any occasion,

[[Page 54754]]

upon strict performance of any provision of this Agreement will not 
be considered to waive the obligations, rights, or duties imposed 
upon the Parties.
    16. Headings--The descriptive headings of the various articles 
and sections of this Agreement have been inserted for convenience of 
reference only and are to be afforded no significance in the 
interpretation or construction of this Agreement.
    17. Multiple Counterparts--This Agreement may be executed in two 
or more counterparts, each of which is deemed an original but all 
constitute one and the same instrument.
    In witness whereof, the Parties have caused this Agreement to be 
signed by their respective duly authorized representatives.

[Transmission Provider NAME]

BY:--------------------------------------------------------------------
TITLE:-----------------------------------------------------------------
DATE:------------------------------------------------------------------

BY:--------------------------------------------------------------------
[Transmission owner NAME (if different from Transmission Provider)]

BY:--------------------------------------------------------------------
TITLE:-----------------------------------------------------------------
DATE:------------------------------------------------------------------

[Generator NAME]

BY:--------------------------------------------------------------------
TITLE:-----------------------------------------------------------------
DATE:------------------------------------------------------------------

Exhibit A to the Agreement

FACILITY SCHEDULE NO.------

    [The following information is to be specified for each Point of 
Interconnection, if applicable.]
    1. Name:
    2. Facility location:
    3. Delivery voltage:
    4. Metering (voltage, location, losses adjustment due to 
metering location, and other):
    5. Normal Operation of Interconnection:
    6. One line diagram attached (check one):------ Yes /------ No
    7. Facilities to be furnished by Transmission Provider (usually 
none):
    8. Facilities to be furnished by Generator (usually contained 
with pre-certified generator):
    9. Cost Responsibility (if any):
    10. Control area interchange----------
    11. Supplemental terms and conditions attached (check one):----
-- Yes /------ No

Exhibit B to the Agreement--Small Generator Interconnection 
Application (For Use With Generators up to and Including 2 MW)

    An applicant (Generator Owner) makes application to---------- 
(Transmission Provider) to install and operate a generating facility 
up to and including 2 MW interconnected with the ---------- utility 
system. This application, unless otherwise established at the 
scoping meeting between Generator Owner and Transmission Provider, 
will be considered as application for a feasibility study for 
generators under Federal Energy Regulatory Commission rules for 
expedited treatment of generators up to and including 2 MW in 
capacity.

Section 1, Applicant Information

Name:------------------------------------------------------------------
Mailing Address:-------------------------------------------------------
City:------------------------------------------------------------------
State:-----------------------------------------------------------------
Zip Code:--------------------------------------------------------------
Facility Location (if different from above):
-----------------------------------------------------------------------
Telephone (Daytime):
    Area Code ------
    Number ------
    (Evening) Area Code ------
    Number ------
Account No. (if applicable):-------------------------------------------
Pole Number:-----------------------------------------------------------
Energy Service Provider Name:------------------------------------------

Section 2, Generator Qualifications

(Informational only) Is the generator a Qualifying Facility as 
defined under Subpart B, Section 201 of the Federal Energy 
Regulatory Commission's regulations per the Public Utility 
Regulatory Policies Act of 1978?
    ------ Yes
    ------ No
Is Generator powered from a Renewable Qualifying Energy Source:
    ------ Yes
    ------ No
Type Qualifying Energy Source (if applicable):
    ------ Solar
    ------ Wind
    ------ Hydro
    ------ Other
Other generator energy source:
    ------ Diesel, Natural Gas
    ------ Diesel, Fuel Oil
Other:-----------------------------------------------------------------
    (State type)
Will excess power be exported?
    ------ Yes
    ------ No
Site Load: ------ kW (Typical)
Maximum Export: ------ kW.

Section 3, Generator Technical Information

Type of Generator:
    ------ Synchronous
    ------ Induction
    ------ DC Generator or Solar with Inverter
Generator (or solar collector) Manufacturer, Model Name & Number: --
----

(A copy of Generator Nameplate and Manufacturer's Specification 
Sheet may be substituted)
Output Power Rating in kW:
    ------
    ------ Single phase
    ------ Three phase
Inverter Manufacturer, Model Name & Number (if used):------------------
Adjustable Setpoints---------------------------------------------------

(A copy of Inverter Manufacturer's Specification Sheet may be 
substituted)

Generator Characteristic Data (For Rotating Machines)

(Not needed if Generator Nameplate and Manufacture's Specification 
Sheet is provided)

Direct Axis Synchronous Reactance, Xd: -------- P.U.
Direct Axis Transient Reactance, X'd: -------- P.U.
Direct Axis Subtransient Reactance, X'd: -------- P.U.
Negative Sequence Reactance: -------- P.U.
Zero Sequence Reactance: -------- P.U.
KVA Base:--------------------------------------------------------------

Section 4, Interconnecting Equipment Technical Data

Will an interposing transformer be used between the generator and 
the point of interconnection?
    ------ Yes
    ------ No

Transformer Data (if Applicable, for Customer Owned Transformer)

(A copy of transformer Nameplate and Manufacturer's Test Report may 
be substituted)

Size: ------ KVA.
Transformer Primary:
    ------ Volts
    ------ Delta
    ------ Wye ------ Wye Grounded
Transformer Secondary:
    ------ Volts
    ------ Delta
    ------ Wye
    ------ Wye Grounded
Transformer Impedance: ------ % on ------ KVA Base

Transformer Fuse Data (if Applicable, for Customer Owned Fuse)

(Attach copy of fuse manufacturer's Minimum Melt & Total Clearing 
Time-Current Curves)
Manufacturer:
    ------ Type:
    ------ Size:
    ------ Speed:
    ------

Interconnecting Circuit Breaker (if Applicable)

(A copy of breaker's Nameplate and Specification Sheet may be 
substituted)

Manufacturer:
    ------ Type:
    ------ Load Rating: (Amps)
    ------ Interrupting Rating: (Amps)
    ------ Trip Speed: (Cycles) ------

Circuit Breaker Protective Relays (if Applicable)

(Enclose copy of any proposed Time-Overcurrent Coordination Curves)

Manufacturer: -------- Type: -------- Style/Catalog No.: -------- 
Proposed Setting: --------
Manufacturer: -------- Type: -------- Style/Catalog No.: -------- 
Proposed Setting: --------
Manufacturer: -------- Type: -------- Style/Catalog No.: -------- 
Proposed Setting: --------
Manufacturer: -------- Type: -------- Style/Catalog No.: -------- 
Proposed Setting: --------
Manufacturer: -------- Type: -------- Style/Catalog No.: -------- 
Proposed Setting: --------

Current Transformer Data (if Applicable)

(Enclose copy of Manufacturer's Excitation & Ratio Correction 
Curves)

Manufacturer: -------- Type: -------- Accuracy Class: -------- 
Proposed Ratio Connection: -------- /5

[[Page 54755]]

Manufacturer: ------ Type: ------ Accuracy Class: ------ Proposed 
Ratio Connection: ------/5

Section 5, General Technical Information

Enclose copy of site One-Line Diagram showing configuration and 
interconnection of all equipment, current and potential circuits and 
protection and control schemes. Is One-Line Diagram Enclosed?: ----
-- Yes
Enclose copy of any site documentation that describes and details 
the operation of the protection and control schemes. Is Any 
Available Documentation Enclosed?: ------ Yes
Enclose copies of schematic drawings for all protection and control 
circuits, relay current circuits, relay potential circuits, and 
alarm/monitoring circuits (if applicable). Are Schematic Drawings 
Enclosed? ------Yes

Section 6, Installation Details

Installing Electrician:------------------------------------------------
Firm:------------------------------------------------------------------
License No.:-----------------------------------------------------------
Mailing Address:-------------------------------------------------------
City:------------------------------------------------------------------
State:-----------------------------------------------------------------
Zip Code:--------------------------------------------------------------
Telephone: Area Code:------Number: ------
Installation Date:-----------------------------------------------------
Interconnection Date:--------------------------------------------------

Supply certification that the generating system has been installed 
and inspected in compliance with the local Building/Electrical code 
of the municipality of --------

Signed (Inspector):----------------------------------------------------
Date:------------------------------------------------------------------

(In lieu of signature of Inspector, a copy of the final inspection 
certificate may be attached)

Section 7, Generator/Equipment Certification

Generating systems must be compliant with IEEE, NEC, ANSI, and UL 
standards. By signing below, the Applicant certifies that the 
installed generating equipment meets the appropriate preceding 
requirement(s) and can supply documentation that confirms 
compliance.

Signed (Applicant):----------------------------------------------------
Date:------------------------------------------------------------------

Section 8, Applicant Signature

I hereby certify that, to the best of my knowledge, all the 
information provided in the Interconnection Application is true and 
correct. I also agree to install a Warning Label provided by 
(utility) on or near my service meter location.

Signature of Applicant:------------------------------------------------
Date:------------------------------------------------------------------
Send the completed application to: -------- (Utility Address)
This section for use by --------(utility) Only

Section 9, Approval or Non-Approval

(Utility):
    --------Has Approved
    --------Has Not Approved this Interconnection Application.

Name:------------------------------------------------------------------
Date:------------------------------------------------------------------
Signature:-------------------------------------------------------------
Reason for Not Approving:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Approval to connect to the Company system indicates only that the 
minimum requirements for a safe proper interconnection have been 
satisfied. Such approval does not imply that the Generator Owner's 
facility meets all federal, state and local standards or 
regulations.

Section 10, Internal Notifications

Send Applicant Warning Label for installing on/ near service meter:
    ------Yes
Notify Billing Dept. of Interconnected Generation:
    ------Yes
Notify District Engineering of Interconnected Generation:
    ------Yes
Notify System Protection of Interconnected Generation:
    ------Yes

Attachment B.--Small Resource Interconnection Procedures; Draft Open 
Access Transmission Tariff Provisions

Original Sheet No.------

[TRANSMISSION OWNER]

FERC Open Access Transmission Tariff

Small Resource Interconnection Procedures

    Requests for the interconnection of new generation resources 
over 2 MW up to and including 20 MegaWatts (MW)(``small resource'') 
shall be processed, pursuant to this Section ------ of the Tariff, 
through expedited procedures. These provisions describe procedures 
for such ``small resource'' additions.
    Such small resources may participate in [TRANSMISSION OWNER's] 
energy and capacity markets and may, therefore, be used by load 
serving entities to meet capacity obligations imposed under all 
applicable Agreements. These procedures apply to generation 
resources which, when connected to the system, are expected to 
remain connected to the system for the normal life span of such a 
generation resource. These procedures do not apply to small 
resources that are specifically being connected to the system 
temporarily, with the expectation that they will later be removed.

Section 1.01--Application and Information Availability

    The Interconnection Customer desiring the interconnection of a 
new capacity resource over 2 MW up to and including 20 MW must 
submit a completed Feasibility Study Request. No deposit or other 
advance payment is required from small resources, but all 
information required by the Feasibility Study Request related to the 
generating project site, point of interconnection, and generating 
unit size and configuration must be provided. To assist 
Interconnection Customers in avoiding Feasibility Study Requests 
where there is no likely feasibility, [TRANSMISSION OWNER] will 
designate an employee or office from which basic information 
concerning system capacities and usage can be obtained through 
informal requests. [TRANSMISSION OWNER] will further post on its 
web-site a list of prior system studies, interconnection studies, 
and other relevant materials useful to an understanding of the 
feasibility of an interconnection at particular points in its 
system. Interconnection Customers may request access to or copies of 
studies or analyses that may be useful to assess in advance the 
feasibility of an interconnection at particular points of 
[TRANSMISSION OWNER's] system to the extent necessary to supplement 
information available from the designated employee or office. 
[TRANSMISSION OWNER] shall comply with reasonable requests for 
access to or copies of such studies. Interconnection Customer shall 
comply with reasonable restrictions on its use of such studies, 
including preserving their confidentiality and limiting their use to 
the purpose for which they were requested.

Section 1.02--Site Control

    Documentation of site control must be submitted for small 
resource additions with the completed Feasibility Study Request. 
Site control may be demonstrated through an exclusive option to 
purchase the property on which the generation project is to be 
developed, a property deed, or a range of tax or corporate documents 
that identify property ownership. Site control must either be in the 
name of the party submitting the generation interconnection request 
or documentation must be provided establishing a sufficient business 
relationship between the project developer and the party having site 
control.

Section 1.03--Scoping Meeting

    Once it has been established that the requirements related to 
the submission of the Feasibility Study Request have been met, an 
initial Scoping Meeting will be held within ten days of the receipt 
of the completed Feasibility Study Request. [TRANSMISSION OWNER] 
will be represented at such Scoping Meeting by system engineers of 
sufficient rank and experience to provide a judgment within three 
working days after the scoping meeting of whether a Feasibility 
Study is required or not. This judgement will be based on the size 
of the proposed resource in MW, the intended mode of operation of 
the proposed small resource (in parallel with the system or not), 
and the load and short-circuit conditions on the line to which 
interconnection is proposed. If it is obvious that the project is 
feasible as proposed, no feasibility study will be conducted. In 
that event, the small resource generation interconnection request 
will be entered into the then current generation interconnection 
queue for connection priority only. The analysis process will not be 
subject to any queue required of Interconnection Customer applicants 
larger than 20 MW.

Section 1.04--Feasibility Study

    Where required, Feasibility Study analyses for small resources 
can generally be expedited by examining a limited contingency set 
that focuses on the impact of the small capacity addition on 
contingency limits in the vicinity of the capacity resource.

[[Page 54756]]

Generally, small capacity additions will have very limited and 
isolated impacts on system facilities. If criteria violations are 
observed, further AC testing is required. Short circuit calculations 
are performed for small resource additions to ensure that circuit 
breaker capabilities are not exceeded. Barring unusual 
circumstances, a Feasibility Study must be completed within fifteen 
working days of the Scoping Meeting.

Section 1.05--Feasibility Study Cost and Report

    It is presumed that a Feasibility Study can be completed 
utilizing prior existing interconnection and system studies, design 
documents, and standard utility operating assumptions, listed on the 
web-site per Section 1.01 above, and at no cost to the 
Interconnection Customer. In the event that a Feasibility Study 
requires analysis or system study that is not available, 
[TRANSMISSION OWNER] must so indicate, must perform the study, and 
must pay half of the costs of such study, with Interconnection 
Customer paying the other half of such costs. In the event an 
existing study or analysis critical to a Feasibility Study was 
nonetheless omitted from the list on the web-site of [TRANSMISSION 
OWNER], the Interconnection Customer shall not be required to pay 
any portion of the Feasibility Study. Once the Feasibility Study is 
completed, a Feasibility Study report will be prepared and 
transmitted to the Interconnection Customer along with an Impact 
Study Agreement within five additional working days. If no Criteria 
Violations are identified by the Feasibility Study no Impact Study 
will be required. Any study costs that Interconnection Customers are 
expected to pay will be invoiced to the Interconnection Customer 
after the study is completed and delivered, and will include 
itemization of professional time (at specified reasonable hourly 
rates) and materials required. Disputes over study costs will be 
submitted to binding arbitration. Interconnection Customers must pay 
Study Costs within 30 days of receipt of the invoice or resolution 
of any dispute.

Section 1.06--Impact Study

    If Criteria Violations are identified in the Feasibility Study, 
an Impact Study will be required. In order to remain in the 
interconnection queue, the Interconnection Customer must return an 
executed Impact Study Agreement within 30 days, along with documents 
demonstrating that an initial air permit application has been filed, 
if required. The requirement for a deposit associated with the 
Impact Study Agreement is waived; however, the Interconnection 
Customer is responsible for all costs associated with the 
performance of the Impact Study related to the request. Any Impact 
Study required should be completed within fifteen working days of 
the receipt of the Impact Study Agreement. In cases where no network 
impacts are identified and there are no other projects in the 
vicinity of the small resource addition, the Impact Study shall not 
be required and the project will proceed directly to the Facilities 
Study.

Section 1.07--Criteria for Impact Study

    As with the Feasibility Study, expedited analysis procedures 
will be utilized, where appropriate, in the course of the Impact 
Study. Load deliverability will only be evaluated for sub-areas 
where margins are known to be limited. In most cases, the addition 
of small capacity resources will improve local deliverability 
margins. However, if sub-area margins are known to be limited, the 
impact of the new resource will be evaluated based on its impact on 
the contingencies limiting emergency imports to the sub-area. In 
most cases, small capacity additions will have no impact on 
generator deliverability in an area. As a general rule, if the 
proposed small resource interconnection, considered cumulatively 
with all prior small resource interconnections, will not lead to 
exported power in excess of 15% of the peak day load on a radial 
feeder line or in excess of 25% of the minimum expected load on a 
network line, net of minimum on-site load supplied by the small 
resource, and if the small resource will not exceed 25% of the 
maximum short circuit potential at the point of interconnection, 
then there is a presumption of no impact. In that instance, 
[TRANSMISSION OWNER] must bear the burden and cost of demonstrating 
any impact requiring mitigation by additional network facilities. If 
violations are observed, more detailed testing using AC tools is 
required to determine levels of impact at the cost of the 
Interconnection Customer. Stability analysis is generally not 
performed for small capacity additions. New capacity resources over 
2 MW up to and including 20 MW will only be evaluated if they are 
connected at a location where stability margins associated with 
existing resources are small. Short circuit calculations are 
performed during the Impact Study for small resource additions, 
taking into consideration all elements of the regional plan, to 
ensure that circuit breaker capabilities are not exceeded.

Section 1.08--Facilities Study Agreement

    Once the Impact Study is completed, or if the Impact Study is 
not necessary, an Impact Study report or notice of the fact that no 
report is unnecessary will be prepared and transmitted to the 
Interconnection Customer along with a Facilities Study Agreement 
within five working days. In order to remain in the interconnection 
queue, the Interconnection Customer must return the executed 
Facilities Study Agreement within 30 days. If no transmission system 
facilities are required, the Facilities Study will not be required 
and the project will proceed directly to the execution of an Small 
Resource Interconnection Agreement. If a Facilities Study is 
required, the cost will be borne by the Interconnection Customer.

Section 1.09--Facilities Study Preparation

    Transmission facilities design for any required Attachment 
Facilities and/or Network Upgrades will be performed through the 
execution of a Facilities Study Agreement between the 
Interconnection Customer and [TRANSMISSION OWNER]. The [TRANSMISSION 
OWNER] may contract with consultants, including the transmission 
owners, or contractors acting on their behalf, to perform the bulk 
of the activities required under the Facilities Study Agreement. In 
some cases, the Interconnection Customer and the [TRANSMISSION 
OWNER] may reach agreement allowing the Interconnection Customer to 
separately arrange for the design of some of the required 
transmission facilities. In such cases, facilities design will be 
reviewed, under the Facilities Study Agreement, by the transmission 
owner. Facilities design for small capacity additions will be 
expedited to the extent possible. In most cases, few or no network 
upgrades will be required for small capacity additions. Attachment 
facilities for some small capacity additions may, in part, be 
elements of a ``turn key'' installation. In such instances, the 
design of ``turn key'' attachments will be reviewed by the 
transmission owners or their contractors. In cases where system or 
network upgrades are required for small resource additions, the 
Facilities Study must be completed within ninety days of the receipt 
of the Facilities Study Agreement. In cases where no system or 
network upgrades are necessary, the Facilities Study must be 
completed in fifteen working days.

Section 1.10--Costs of Facilities

    Where additional facilities are required to permit the 
interconnection of a small resource, and offer no benefit to the 
system capacity, the small resource interconnection applicant will 
bear the entire cost of such facilities.

Section 1.11--Small Resource Interconnection Agreement

    A Small Resource Interconnection Agreement must be executed and 
filed with the FERC prior to undertaking the actual interconnection. 
The Small Resource Interconnection Agreement identifies the 
Interconnection Customer's obligations to pay for transmission 
facilities required to facilitate the interconnection and the 
Capacity Interconnection Rights which are awarded to the capacity 
resource. If a new capacity resource over 2 MW up to and including 
20 MW can be quickly connected to the system, and put in service 
immediately, a modified Small Resource Interconnection Agreement 
will be executed. If such a connection is expedited through the 
Impact Study phase ahead of larger projects already in the 
interconnection queue, an Small Resource Interconnection Agreement 
will be executed granting interim Capacity Interconnection Rights. 
These interim rights will allow the connection to be implemented and 
the resource to participate in the capacity market until studies 
have been completed for earlier queued resources and all related 
obligations have been defined. At such time, the interim rights 
awarded the smaller capacity addition will become dependent on the 
construction of any required transmission facilities and the 
satisfaction of any financial obligations for those facilities. If, 
once those obligations are defined, the smaller capacity addition 
desires to retain the interim Capacity Interconnection Rights, a new 
Small Resource Interconnection Agreement will be executed.

[[Page 54757]]

Small Resource Interconnection Agreement Between [TRANSMISSION OWNER] 
and

-----------------------------------------------------------------------

[Small Generator]

Interconnection Service Agreement Between [Transmission Owner] and

-----------------------------------------------------------------------

[Interconnection Customer]

    1.0  This Small Resource Interconnection Agreement (``SRIA''), 
dated as of [DATE], including the Specifications attached hereto and 
incorporated herein, is entered into by and between. ------ L.C. 
(``Transmission Owner'') and [------] (``Interconnection 
Customer''), who proposes to interconnect a generating unit over 2 
MW up to and including 20 Megawatts to Transmission Owner's system.
    2.0  Attached are Specifications for each generating unit that 
Interconnection Customer proposes to interconnect to Transmission 
Owner's Transmission System. Interconnection Customer represents and 
warrants that, upon completion of the construction of its 
facilities, it will own or control the generating facilities 
identified in section 1.0 of the Specifications attached hereto and 
made a part hereof. In the event that Interconnection Customer will 
not own the generating facilities, Interconnection Customer 
represents and warrants that it is authorized by the owners of such 
generating facilities to enter into this SRIA and to represent such 
control.
    3.0  Interconnection Customer has requested an Small Resource 
Interconnection Agreement under the Transmission Owner's Open Access 
Transmission Tariff (``Tariff''), and Transmission Owner has 
determined that Interconnection Customer is eligible under the 
Tariff to obtain this SRIA.
    4.0  In accord with Section ------ of the Tariff, 
Interconnection Customer, on or before the effective date of this 
SRIA, shall provide Transmission Owner with a letter of credit from 
an agreed provider or other form of security reasonably acceptable 
to Transmission Owner in the amount of $[------] naming Transmission 
Owner [and Regional Transmission Organization, if applicable] (``the 
RTO'') as beneficiaries. Should Interconnection Customer fail to 
provide security in the amount or form required in the first 
sentence of this section within thirty days of the date of this 
agreement, this SRIA shall be terminated. Interconnection Customer 
acknowledges that it will be responsible for the actual costs of the 
facilities described in the Specifications, whether greater or 
lesser than the amount of the payment security provided under this 
section.
    5.0  This SRIA shall be effective on [DATE], and shall terminate 
on such date as mutually agreed upon by the parties, unless earlier 
terminated in accordance with the Tariff.
    6.0  In addition to the milestones stated in Section ------ of 
the Tariff, during the term of this SRIA, Interconnection Customer 
shall ensure that its generation project meets each of the following 
development milestones:
    a.
    b.
    c.
    d.
    Interconnection Customer shall demonstrate the occurrence of 
each of the foregoing milestones to Transmission Owner's reasonable 
satisfaction. Transmission Owner may reasonably extend any such 
milestone dates, in the event of delays that Interconnection 
Customer (I) did not cause and (ii) could not have remedied through 
the exercise of due diligence.
    7.0  Transmission Owner agrees to provide for the 
interconnection to the Transmission System in the Transmission Owner 
Control Area of Interconnection Customer's generation facilities 
identified in the Specifications in accordance with Part----of the 
Tariff, and this SRIA, as they may be amended from time to time. 
Subject to Transmission Owner obtaining regulatory approval of 
appropriate provisions of the Tariff, interconnection of 
Interconnection Customer's generation facilities to the Transmission 
System under this SRIA may be subject to subsequent execution by the 
Interconnection Customer of an agreement or agreements with affected 
RTO(s) or Transmission Owner to establish terms governing matters, 
such as (but not limited to) construction of facilities, maintenance 
standards, parallel operation of generating facilities, insurance 
requirements, indemnification and liabilities, that, in accordance 
with state laws and good utility practice [as such term is defined 
in the [Operating Agreement or Tariff]], are ordinarily included in 
agreements between parties that are physically interconnecting their 
electric facilities.
    8.0  Interconnection Customer agrees to abide by all rules and 
procedures pertaining to generation in the Transmission Owner 
Control Area, including but not limited to the rules and procedures 
concerning the dispatch of generation set forth in the Operating 
Agreement and the Tariff.
    9.0  In analyzing and preparing the Facilities Study, and in 
designing and constructing the Attachment Facilities, Local Upgrades 
and/or Transmission Upgrades described in the Specifications 
attached to this SRIA, Transmission Owner, the RTO(s), and any other 
subcontractors employed by Transmission Owner have had to, and shall 
have to, rely on information provided by Interconnection Customer 
and possibly by third parties and may not have control over the 
accuracy of such information. Accordingly, neither Transmission 
Owner, the RTO(s), nor any other subcontractors employed by 
Transmission Owner makes any warranties, express or implied, whether 
arising by operation of law, course of performance or dealing, 
custom, usage in the trade or profession, or otherwise, including 
without limitation implied warranties of merchantability and fitness 
for a particular purpose, with regard to the accuracy, content, or 
conclusions of the Facilities Study or of the attachment facilities, 
the local upgrades and/or the transmission upgrades; provided, 
however, that Transmission Owner warrants that the transmission 
facilities described in the Specifications will be designed, 
constructed and operated in accordance with good utility practice. 
Interconnection Customer acknowledges that it has not relied on any 
representations or warranties not specifically set forth herein and 
that no such representations or warranties have formed the basis of 
its bargain hereunder.
    10.0  a. Interconnection Customer shall be responsible for and 
shall pay upon demand all actual and reasonable costs associated 
with the interconnection of the generation facilities as specified 
in the Tariff. These costs may include, but are not limited to, an 
Attachment Facilities Charge, a Local Upgrades Charge, a Network 
Upgrades Charge and an Other Supporting Facilities Charge, as 
documented to be necessary and appropriate by a Facilities Study 
conducted in accordance with the Tariff. A description of the 
facilities required and an estimate of the cost of these facilities 
are included in Section 3.0 the Specifications to this SRIA.
    b. The RTO shall provide Transmission Owner a monthly statement 
of the RTO's prior month's expenditures for the design, engineering 
and construction of, and/or for other charges related to, the 
facilities contemplated by this SRIA. Transmission Owner shall bill 
Interconnection Customer, on behalf of the RTO, for the RTO's 
expenditures each month. Interconnection Customer shall pay each 
bill within 15 days after receipt thereof. Upon receipt of each of 
Interconnection Customer's payments of such bills, Transmission 
Owner shall reimburse the RTO.
    c. Within 45 days after the RTO completes construction and 
installation of the transmission facilities described in the 
Specifications, Transmission Owner shall provide Interconnection 
Customer with an accounting of, and the appropriate party shall make 
any payment to the other that is necessary to resolve, any 
difference between (1) Interconnection Customer's responsibility 
under this SRIA and the Tariff for the actual cost of such 
facilities, and (2) Interconnection Customer's previous aggregate 
payments to Transmission Owner and the RTO for such facilities. 
Notwithstanding the foregoing, however, Transmission Owner shall not 
be obligated to make any payment that the preceding sentence 
requires it to make unless and until the RTO has returned to it the 
portion of Interconnection Customer's previous payments that 
Transmission Owner owes under that sentence.
    11.0  No third party beneficiary rights are created under this 
SRIA; provided, however, that payment obligations imposed on 
Interconnection Customer hereunder are agreed and acknowledged to be 
for the benefit of the RTO actually performing the services 
associated with the interconnection of the generating facilities and 
any associated upgrades of other facilities. Interconnection 
Customer expressly agrees that the company(ies) responsible for such 
upgrades shall be entitled to take such legal recourse as that 
entity deems appropriate against Interconnection Customer for the 
payment of any charges for the upgrades authorized under this SRIA 
or the Tariff for which Interconnection Customer fails, in whole or 
in part, to pay as provided in this SRIA, the Tariff and/or the 
Operating Agreement.
    12.0  No waiver by either party of one or more defaults by the 
other in performance of

[[Page 54758]]

any of the provisions of this SRIA shall operate or be construed as 
a waiver of any other or further default or defaults, whether of a 
like or different character.
    13.0  This SRIA or any part thereof, may not be amended, 
modified, assigned, or waived other than by a writing signed by all 
parties hereto.
    14.0  This SRIA shall be binding upon the parties hereto, their 
heirs, executors, administrators, successors, and assigns.
    1.15  This SRIA shall not be construed as an application for 
service under any part of the Tariff.
    16.0  In the event of a dispute arising between the parties 
under this SRIA, the dispute shall be submitted for informal 
resolution assistance to the RTO or ISO, if applicable, and other 
wise to the Federal Energy Regulatory Commission under the 
Alternative Dispute Resolution procedures conducted by the staff. If 
the dispute cannot be settled by such informal means, it shall be 
submitted for binding arbitration under the rules of the American 
Arbitration Association.
    17.0  Any notice or request made to or by either party regarding 
this SRIA shall be made to the representative of the other party as 
indicated below.

Transmission Owner

TRANSMISSION OWNER

[CONTACT NAME/ADDRESS]

Interconnection Customer

SMALL GENERATOR

[CONTACT NAME/ADDRESS]

    18.0  All portions of the Tariff and the Operating Agreement 
pertinent to the subject of this SRIA are incorporated herein and 
made a part hereof.
    19.0  This SRIA is entered into pursuant to Part----of the 
Tariff.
    20.0  Neither party shall be liable for consequential, 
incidental, special, punitive, exemplary or indirect damages, lost 
profits or other business interruption damages, by statute, in tort 
or contract, under any indemnity provision or otherwise with respect 
to any claim, controversy or dispute arising under this SRIA.
    In witness whereof, Transmission Owner and Interconnection 
Customer have caused this SRIA to be executed by their respective 
authorized officials.

Transmission Owner

By:------------Name
Title------------------------------------------------------------------
Date-------------------------------------------------------------------

Interconnection Customer

By:------------Name
Title------------------------------------------------------------------
Date-------------------------------------------------------------------

Specifications for Interconnection Service Agreement Between 
TRANSMISSION OWNER and--------

    1.0  Description of generating units to be interconnected with 
the Transmission System in the TRANSMISSION OWNER Control Area:
    a. Name of generating units.
    b. Location of generating unit site.
    c. Size in megawatts of generating units.
    d. Description of the equipment configuration.
    2.0  Capacity Interconnection Rights:
    Pursuant to Section----of----of the Operating Agreement, 
Interconnection Customer shall have Capacity Interconnection Rights 
at the location specified in Section 1.0a above in the amount----of 
megawatts.
    3.0  Facilities to be constructed by the RTO:------
    4.0  Interconnection Customer shall be subject to the charges 
detailed below:------
    4.1  Attachment Facilities Charge:------
    4.2  Local Upgrades Charge:------
    4.3  Network Upgrades Charge:------
    4.4  Guaranty amount required:------
    4.5  Guaranty Reduction Schedule:------

[FR Doc. 02-21613 Filed 8-23-02; 8:45 am]
BILLING CODE 6717-01-P