[Federal Register Volume 68, Number 160 (Tuesday, August 19, 2003)]
[Proposed Rules]
[Pages 49974-50014]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-20155]



[[Page 49973]]

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Part III





Department of Energy





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Federal Energy Regulatory Commission



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18 CFR Part 35



Standardization of Small Generator Interconnection Agreements and 
Procedures; Proposed Rules

  Federal Register / Vol. 68, No. 160 / Tuesday, August 19, 2003 / 
Proposed Rules  

[[Page 49974]]


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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

July 24, 2003.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
proposing to amend its regulations under the Federal Power Act (FPA) to 
require public utilities that own, operate, or control facilities for 
transmitting electric energy in interstate commerce to file revised 
Open Access Transmission Tariffs containing standard interconnection 
procedures and a standard interconnection agreement for small 
generators. Specifically, the Commission is proposing in this Notice of 
Proposed Rulemaking that such public utilities shall provide 
interconnection service to Small Generating Facilities (i.e., devices 
used for the production of electricity having a capacity of no more 
than 20 megawatts), including their own generation, under the 
procedures set forth in the proposed standard interconnection 
procedures and according to a standard interconnection agreement. Any 
non-public utility that seeks voluntary compliance with the reciprocity 
condition of a jurisdictional transmission tariff may satisfy this 
condition by adopting these procedures and this agreement.

DATES: Comments are due October 3, 2003. Comments should be double 
spaced and include an executive summary. In order to facilitate the 
evaluation of comments, commenters are encouraged to file their 
comments electronically in WordPerfect, MS Word, Portable Document 
Format (PDF), or ASCII format.

ADDRESSES: Comments may be filed electronically via the eFiling link on 
the Commission's Web site at http://www.ferc.gov. Commenters unable to 
file comments electronically must send an original and 14 copies of 
their comments to: Federal Energy Regulatory Commission, Office of the 
Secretary, 888 First Street NE., Washington, DC 20426. Comments should 
reference Docket No. RM02-12-000. Please refer to the Comment 
Procedures Section of the preamble for additional information on how to 
file comments.

FOR FURTHER INFORMATION CONTACT: Bruce Poole (Technical Information), 
Office of Market, Tariffs and Rates, Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426, (202) 502-
8468.
    Patrick Rooney (Technical Information), Office of Market, Tariffs 
and Rates, Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 502-6205.
    Kirk F. Randall (Technical Information), Office of Market, Tariffs 
and Rates, Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 502-8092.
    Michael G. Henry (Legal Information), Office of the General 
Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 502-8532.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction
    A. Background
    B. Generator Interconnections
    C. Large Generator Interconnection Rulemaking
    D. Small Generator Interconnection ANOPR, Process, and Comments
II. Discussion
    A. The Commission's Small Generator Interconnection Proposal
    1. Jurisdiction
    2. Summary of the Interconnection Process for Small Generating 
Facilities
    3. Maximum Capacity of a Small Generator (Proposed SGIP Section 
1, Proposed SGIA Article 1)
    4. Precertification of Small Generating Facilities No Larger 
than 2 MW (Proposed SGIP Section 3.1)
    5. Use of Screening Criteria (Proposed SGIP Sections 3.3 and 
4.3)
    a. Super-Expedited Screening Criteria (Appendix 1 to the 
Proposed SGIP)
    b. Expedited Screening Criteria (Appendix 2 to the Proposed 
SGIP)
    6. Dispute Resolution (Proposed SGIP Section 2.11 and Proposed 
SGIA Article 8)
    7. Queuing (Proposed SGIP Sections 4.4 and 4.7)
    8. Parties to the Proposed SGIA (Proposed SGIA Article 9)
    9. Affected Systems (Proposed SGIP Section 2.8)
    10. Pricing / Cost Recovery for Upgrades (Proposed SGIA Article 
5)
    11. Liability, Indemnity, Force Majeure, and Insurance (Proposed 
SGIA Articles 6.13, 6.14, and 6.16)
    12. Variations From the Final Rule on Compliance
    B. Summary of the Proposed SGIP and the Proposed SGIA
    1. Standard Small Generator Interconnection Procedures (Proposed 
SGIP)
    Section 1. Definitions
    Section 2. General Provisions
    Section 3. Super-Expedited Procedures for Interconnecting a 
Small Generating Facility No Larger than 2 MW to a Low-Voltage 
Transmission System
    Section 4. Procedures for Interconnecting a Small Generating 
Facility to a High-Voltage Transmission System and a Small 
Generating Facility Larger than 2 MW to a Low-Voltage Transmission 
System
    Charts
    Appendices
    2. Standard Small Generator Interconnection Agreement (Proposed 
SGIA)
    Article 1. Definitions
    Article 2. Scope and Limitations of Agreement
    Article 3. Inspection, Testing, Authorization, and Right of 
Access
    Article 4. Effective Date, Term, Termination, and Disconnection
    Article 5. Cost Responsibility, Milestones, Billing, and Payment
    Article 6. Miscellaneous
    Article 7. Confidentiality
    Article 8. Disputes
    Article 9. Signatures
    Appendices
III. Public Reporting Burden and Information Collection Statement
IV. Environmental Analysis
V. Regulatory Flexibility Act Certification
VI. Comment Procedures
VII. Document Availability
    Appendix A--Flow Chart of Super-Expedited Procedures for 
Interconnecting a Small Generating Facility No Larger than 2 MW to a 
Low-Voltage Transmission System
    Appendix B--Flow Chart of Procedures for Interconnecting a Small 
Generating Facility to a High-Voltage Transmission System and a 
Small Generating Facility Larger than 2 MW to a Low-Voltage 
Transmission System
    Appendix C--Standard Small Generator Interconnection Procedures 
(SGIP), including Standard Small Generator Interconnection Agreement 
(SGIA) 33

I. Introduction

    1. This Notice of Proposed Rulemaking (NOPR) proposes the addition 
of Standard Small Generator Interconnection Procedures (Proposed SGIP) 
and a Standard Small Generator Interconnection Agreement (Proposed 
SGIA) to the Open Access Transmission Tariffs (OATTs) of jurisdictional 
public utilities.\1\ The Commission expects that this rulemaking will 
reduce interconnection time and costs for Interconnection Customers and 
Transmission Providers, prevent undue discrimination, preserve 
reliability, increase energy supply, lower wholesale prices for 
customers by increasing the number and variety of new generation

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resources that will compete in the wholesale electricity market, and 
facilitate development of non-polluting alternative energy sources 
(such as photovoltaic, fuel cell, and wind generators).
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    \1\ Provisions of the Proposed SGIP are referred to as 
``Sections'' whereas provisions of the Proposed SGIA are referred to 
as ``Articles.''
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    2. The Proposed SGIP sets forth the procedures that Interconnection 
Customers and Transmission Providers would be required to follow during 
the interconnection process.\2\ Included in the Proposed SGIP are (1) 
the application form (referred to as the Interconnection Request), (2) 
Super-Expedited Procedures for interconnecting Precertified Small 
Generating Facilities no larger than 2 MW to a Low-Voltage Transmission 
System (i.e., less than 69 kilovolts), (3) Expedited Procedures for 
interconnecting Small Generating Facilities larger than 2 MW but no 
larger than 10 MW to a Low-Voltage Transmission System, (4) procedures 
for interconnecting Small Generating Facilities to a High-Voltage 
Transmission System (i.e., 69 kilovolts and above) and Small Generating 
Facilities larger than 10 MW interconnecting with a Low-Voltage 
Transmission System.
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    \2\ Unless otherwise defined in this Preamble, capitalized terms 
used in this NOPR have the meanings specified in Section 1 of the 
Proposed SGIP and Article 1 of the Proposed SGIA. The term 
Generating Facility means the specific device for which the 
Interconnection Customer has requested interconnection. The owner of 
the Generating Facility is referred to as the Interconnection 
Customer. The entity with which the Generating Facility is 
interconnecting is referred to as the Transmission Provider. The 
term Small Generator is intended to refer to any energy resource 
having a capacity of no more than 20 megawatts, or the owner of such 
a resource. Likewise, Large Generator refers to any energy resource 
having a capacity of more than 20 megawatts, or the owner of such a 
resource.
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    3. The Proposed SGIA sets forth the legal rights and obligations of 
each Party, addresses cost responsibility issues, establishes 
Milestones for the completion of the interconnection, and lays out a 
process for the resolution of disputes.
    4. In this NOPR, we propose standard procedures and a standard 
agreement to be used by a public utility to interconnect a Small 
Generator with the utility's transmission facilities or with its 
jurisdictional distribution facilities for the purpose of selling 
electric energy at wholesale in interstate commerce.

A. Background

    5. This NOPR responds to business and technology changes in the 
electric industry. Where the electric industry was once primarily the 
domain of large, vertically integrated utilities generating power at 
large centralized plants, advances in technology have created a 
burgeoning market for small power plants that may offer economic, 
reliability, or environmental benefits.
    6. With these developments in mind, the Commission continues to 
work to encourage fully competitive bulk power markets. The effort took 
its first significant step with Order No. 888,\3\ which required public 
utilities to provide other entities comparable access to their 
transmission systems, and continued with Order No. 2000,\4\ which began 
the process of developing Regional Transmission Organizations (RTOs). 
The Commission has taken numerous actions to establish and protect 
robust, seamless, and competitive wholesale electricity markets.\5\ 
Concurrent with the issuance of this NOPR, the Commission is issuing a 
Final Rule establishing standard interconnection procedures and a 
standard agreement for large generators to further encourage fully 
competitive bulk power markets and much-needed investment in 
generation.\6\
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    \3\ Promoting Wholesale Competition Through Open Access Non-
Discriminatory Transmission Services by Public Utilities; Recovery 
of Stranded Costs by Public Utilities and Transmitting Utilities, 
Order No. 888, 61 FR 21540 (May 10, 1996), FERC Stats. and Regs. 
]31,036 (1996), order on reh'g, Order No. 888-A, 62 FR 12274 (Mar. 
14, 1997), FERC Stats. & Regs. ]31,048 (1997), order on reh'g, Order 
No. 888-B, 81 FERC ]61,248 (1997), order on reh'g, Order No. 888-C , 
82 FERC ]61,046 (1998), aff'd in relevant part sub nom. Transmission 
Access Policy Study Group v. FERC, 225 F.3d 667 (D.C. Cir. 2000), 
aff'd sub nom. New York v. FERC, 535 U.S. 1 (2002).
    \4\ Regional Transmission Organizations, Order No. 2000, 65 FR 
810 (Jan. 6, 2000), FERC Stats. & Regs. ]31,089 (1999), order on 
reh'g, Order No. 2000-A, 65 FR 12088 (Mar. 8, 2000), FERC Stats. & 
Regs. ]31,092 (2000), aff'd sub nom. Public Util. Dist. No. 1 v. 
FERC, 272 F.3d 607 (D.C. Cir. 2001).
    \5\ E.g., Remedying Undue Discrimination Through Open Access 
Transmission Service and Standard Electricity Market Design, Notice 
of Proposed Rulemaking, 67 FR 55452 (Aug. 29, 2002), FERC Stats. & 
Regs. ]32,563 (2002).
    \6\ Standardization of Generator Interconnection Agreements and 
Procedures, Final Rule, Docket No. RM02-1-000 (issued concurrently 
with this NOPR).
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    7. The Commission continues to seek the establishment of robust 
competitive wholesale electric markets.\7\ A recent Commission White 
Paper stated the Commission's intent to focus on the formation of RTOs 
and Independent System Operators (ISOs) and on ensuring that RTOs and 
ISOs have good wholesale market rules in place.\8\ It proposed to 
require all public utilities to join an RTO or ISO. Further, the White 
Paper stated that all RTOs and ISOs would, with limited exceptions, be 
required to implement a wholesale market platform consisting of 
elements that must be in place for well-functioning wholesale markets: 
(1) Regional independent grid operation, (2) a regional transmission 
planning process, (3) fair cost allocation for existing and new 
transmission, (4) market monitoring and market power mitigation, (5) 
spot markets to meet real-time energy needs, (6) transparency and 
efficiency in congestion management, (7) firm transmission rights; and 
(8) a regional approach to ensuring resource adequacy. Also, an RTO or 
ISO may propose participant funding for transmission upgrades for a 
generator interconnection, and, for a transitional period not to exceed 
a year, a region may use participant funding as soon as an independent 
entity has been approved by the Commission and the affected states.
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    \7\ E.g., Remedying Undue Discrimination Through Open Access 
Transmission Service and Standard Electricity Market Design, Notice 
of Proposed Rulemaking, 67 FR 55542 (Aug. 29, 2002), FERC Stats. & 
Regs. ]32,563 (2002).
    \8\ White Paper: Wholesale Power Market Platform, Docket No. 
RM01-12-000 (Apr. 28, 2003) (White Paper).
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B. Generator Interconnections

    8. While the subject of generator interconnection arose in the 
Order No. 888 rulemaking, no explicit reference to it appeared in the 
OATT. Nevertheless, interconnection is a critical component of open 
access transmission service, and the Commission must ensure that 
interconnection service is provided under just and reasonable terms and 
conditions.
    9. Entities seeking to interconnect generators have been hindered 
by the lack of standard interconnection procedures and agreements. 
Standard interconnection procedures limit opportunities for public 
utilities that own both generation and transmission to favor their own 
generation and help produce just and reasonable interconnection charges 
for generators. A standard interconnection agreement reduces market 
entry costs for generators and offers them access to regional energy 
markets on standard terms.
    10. As discussed below, after the Commission initiated its 
interconnection NOPR in Docket No. RM02-1-000, Standardization of 
Generator Interconnection Agreements and Procedures, it became apparent 
that the rule as proposed might not sufficiently encourage the 
development of small generators, and that there needed to be a separate 
interconnection agreement and set of procedures designed specifically 
for small generators.
    11. The effort to generically address Small Generator 
interconnection issues presents numerous challenges. The electric 
industry is faced with the

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competing needs for, on the one hand, maintaining electric system 
reliability and, on the other hand, encouraging increased generation, 
including generation using innovative technologies. To encourage small 
generators to participate in the interstate wholesale market, the 
interconnection process should be affordable and the terms and 
conditions should be clear, but these goals must not compromise the 
reliability of the electric system.

C. Large Generator Interconnection Rulemaking

    12. The Commission issued an Advance Notice of Proposed Rulemaking 
(ANOPR) in Docket No. RM02-1-000 \9\ (Large Generator Interconnection 
ANOPR) that was originally intended to develop standard generator 
interconnection procedures and a standard agreement for generators of 
all sizes. The Commission also initiated a collaborative process in 
which members of the electric industry and government (collectively, 
stakeholders) could draft standard interconnection procedures and 
interconnection agreement documents. Public meetings of these 
stakeholders culminated in the development of a Large Generator 
Interconnection Procedures (Consensus LGIP) and a Large Generator 
Interconnection Agreement (Consensus LGIA), which were filed with the 
Commission.\10\
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    \9\ Standardizing Generator Interconnection Agreements and 
Procedures; Advance Notice of Proposed Rulemaking, 66 FR 55140 (Nov. 
1, 2001), FERC Stats. & Regs. ] 35,540 (2002). The previously cited 
rulemaking is referred to here as the Large Generator 
Interconnection rulemaking, to distinguish it from the Small 
Generator Interconnection rule proposed here.
    \10\ While these consensus documents reflected significant 
agreement, they also identified disputed provisions and left a 
number of issues unresolved.
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    13. The Commission then issued a Large Generator Interconnection 
NOPR.\11\ The Commission proposed standard interconnection procedures 
for generators, which is referred to here as the Proposed LGIP. It also 
proposed a standard interconnection agreement for all generators, which 
is referred to here as the Proposed LGIA. Both would be incorporated 
into existing and future OATTs. The Proposed LGIP and Proposed LGIA 
generally followed the consensus documents filed with the Commission, 
but the Commission also resolved, for purposes of the NOPR, several 
issues that were left unresolved in the consensus documents. A Large 
Generator Interconnection Final Rule is being issued concurrently with 
the issuance of this NOPR.
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    \11\ Large Generator Interconnection NOPR, IV FERC Stats. & 
Regs. ] 32,560 (2002).
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D. Small Generator Interconnection ANOPR, Process, and Comments

    14. Although the Proposed LGIP and Proposed LGIA provided for the 
expedited treatment of Small Generating Facilities, some commenters 
argued that the Commission should adopt separate standard 
interconnection procedures and agreements that address the unique 
concerns of Small Generators.\12\ Small Generator Commenters proposed 
simplified standard procedures and agreements that would allow quicker, 
less costly, and simpler interconnection for Small Generating 
Facilities no larger than 2 MW, and different procedures and agreements 
for units larger than 2 MW but no larger than 20 MW. Persuaded that 
different procedures and agreements for Small Generators are needed, we 
severed consideration of Small Generating Facilities from the Large 
Generator Interconnection rulemaking and issued its Small Generator 
Interconnection ANOPR in August 2002.\13\
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    \12\ Those commenters included The Solar Energy Industries 
Association, the U.S. Fuel Cell Council, the American Solar Energy 
Society, the U.S. Combined Heat and Power Association, the 
International District Energy Association, and the American Wind 
Energy Association (collectively, Small Generator Commenters).
    \13\ Standardization of Small Generator Interconnection 
Agreements and Procedures; Advance Notice of Proposed Rulemaking, 67 
FR 54749 (Aug. 26, 2002), FERC Stats. & Regs. ] 35,544 (2002).
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    15. The Small Generator Interconnection ANOPR proposed two small 
generator interconnection procedures and two small generator 
interconnection agreements, with the distinction between the two sets 
of documents being the size of the Small Generator. These documents 
(hereafter, respectively, ANOPR SGIPs and ANOPR SGIAs) were offered by 
the Small Generator Commenters in their comments to the Large Generator 
Interconnection NOPR. We encouraged interested parties to pursue 
consensus on the ANOPR SGIPs and ANOPR SGIAs. To that end, the 
Commission convened a series of public meetings designed to enable the 
parties to discuss and reach as much agreement as possible.
    16. The public meetings culminated in the negotiating parties \14\ 
preparing two sets of standard small generator interconnection 
procedures and agreements (Coalition SGIPs and Coalition SGIAs, 
respectively) and submitting them to the Commission in November 2002. 
While the Coalition members reached consensus on some issues, 
significant disagreements remained. The documents nonetheless helped 
inform the Commission of the various challenges that confront both the 
owners of Small Generators and Transmission Providers. Public comments 
on the Small Generator Interconnection ANOPR were filed in December 
2002.
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    \14\ The negotiating parties included representatives of small 
generators, the National Association of Regulatory Utility 
Commissioners, and transmission and distribution providers 
(collectively, ``Coalition'').
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II. Discussion

    17. The results of the negotiations during the Small Generator 
Interconnection ANOPR process, the ANOPR comments, and the technical 
conference on queuing form the basis for the Proposed SGIP and Proposed 
SGIA that are included in this NOPR.
    18. Coalition members drafted two Coalition SGIAs, one for Small 
Generating Facilities no larger than 2 MW, and a second for Small 
Generating Facilities larger than 2 MW but no larger than 20 MW. 
Likewise, they developed two sets of Coalition SGIPs. Although there 
was significant overlap between the two Coalition SGIAs as well as the 
two Coalition SGIPs, the Coalition members did not consolidate these 
four documents. To simplify the interconnection process and eliminate 
duplication, this NOPR offers a single Proposed SGIP and a single 
Proposed SGIA. The former incorporates different procedures for the 
processing of Interconnection Requests for Small Generating Facilities 
of various sizes.
    19. Coalition members were often unable to reach consensus on an 
issue and the Commission needed to resolve the issue for the purpose of 
this NOPR. The Commission carefully evaluated the positions the 
Coalition members presented in the November 2002 consensus document as 
well as the ANOPR comments filed the following month. The Commission 
also acknowledges that NARUC has developed a model small generator 
interconnection procedures and agreement that is similar in many ways 
to the proposal contained in this NOPR. The NARUC model and its 
comments were very helpful in the development of this proposal.
    20. Also, where appropriate, we are proposing some provisions and 
definitions identical or similar to those in the Large Generator 
Interconnection Final Rule (and the OATT) to ensure as much consistency 
as is reasonable between the large and small generator

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tariff provisions.\15\ We invite comment on this approach, and ask 
interested parties to address whether Large Generators and Small 
Generators should be treated differently with respect to those parts of 
the Proposed SGIP and Proposed SGIA that follow the Final Rule LGIP and 
Final Rule LGIA.
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    \15\ See, e.g., Articles 4.1, 5.1.2, 5.1.2.1, 5.2, 6.1-6.9, 
6.12-6.20, 7, and 8 of the Proposed SGIA.
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    21. The Coalition presents various procedures to determine whether 
certain Small Generators may interconnect safely with a Transmission 
Provider's Transmission System. In the Coalition's proposed SGIPs, some 
procedures would evaluate requests to interconnect Small Generators to 
a Transmission Provider's Distribution System, while others would 
evaluate requests to interconnect with its Transmission System. The 
Commission here proposes instead to use the voltage level of the 
Transmission Provider's Transmission System at which the 
interconnection is to be made as one basis for determining which 
procedure may be employed \16\--Low-Voltage procedures would apply to 
interconnections made at voltage levels below 69 kV, and High-Voltage 
procedures would apply to interconnections made at voltage levels of 69 
kV and above. The Commission believes that this will assist the Parties 
by making clear which procedure applies to a particular Interconnection 
Request.
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    \16\ The other basis is generator size.
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A. The Commission's Small Generator Interconnection Proposal

    22. This NOPR includes a Proposed SGIP and a Proposed SGIA. The 
Proposed SGIP describes the process for evaluating the proposed 
interconnection. After the process is successfully completed, the 
Parties would then execute the Proposed SGIA, which sets forth the 
contractual rights and obligations of the Parties. To explain the 
contents of the Proposed SGIA and Proposed SGIP, we next present: (1) A 
discussion of our legal authority over a Small Generator's 
interconnection to a public utility's Transmission System, (2) a 
summary of the proposed interconnection process,\17\ and (3) a 
discussion of significant issues that arose during the Small Generator 
Interconnection ANOPR process and how we propose to resolve them.
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    \17\ To aid the reader, the Appendices contain flow charts that 
depict the interconnection process. Appendix 1 depicts the Super-
Expedited Procedures for interconnecting Small Generating Facilities 
no larger than 2 MW to a Low-Voltage Transmission System. Appendix 2 
depicts the procedures for interconnecting Small Generating 
Facilities to a High-Voltage Transmission System and Small 
Generating Facilities larger than 2 MW to a Low-Voltage Transmission 
System.
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1. Jurisdiction
    23. At the outset, it is important to clarify several terms when 
discussing the question of jurisdiction. ``Local distribution'' is a 
legal term; under FPA section 201(b)(1), the Commission lacks 
jurisdiction over local distribution facilities.\18\ ``Distribution'' 
is an unfortunately vague term, but it is usually used to refer to 
lower-voltage lines that are not networked and that carry power in one 
direction. Some lower-voltage facilities are ``local distribution'' 
facilities not under our jurisdiction, but some are used for 
jurisdictional service such as carrying power to a wholesale power 
customer for resale and are included in a public utility's OATT 
(although in some instances, there is a separate OATT rate for using 
them, sometimes called a Wholesale Distribution Rate).
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    \18\ 16 U.S.C. 824(b)(1) (2000).
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    24. This NOPR proposes to apply the NOPR SGIA and NOPR SGIP in a 
manner consistent with the Large Generator Interconnection Final Rule. 
This is different from the authority proposed in the Small Generator 
Interconnection ANOPR, where, consistent with the jurisdiction proposed 
in the Large Generator Interconnection NOPR, we proposed to assert 
jurisdiction when the owner of a generator seeks to interconnect with a 
distribution facility to make a wholesale sale of electricity in 
interstate commerce.\19\ Several commenters to the Small Generator 
Interconnection ANOPR object to the Commission asserting jurisdiction 
over interconnections to distribution facilities, both legally and as a 
matter of policy.\20\ They argue, among other things, that the FPA 
reserves jurisdiction over local distribution facilities to the States 
and that the Commission lacks sufficient staff and expertise to 
regulate numerous Small Generator interconnections to Distribution 
Systems. These matters, they say, are best left to the States. Most of 
these commenters do not distinguish between distribution facilities 
owned by jurisdictional public utilities and those owned by non-public 
utilities.
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    \19\ Standardization of Generator Interconnection Agreements and 
Procedures, Notice of Proposed Rulemaking, 67 FR 22250 (May 2, 
2002), FERC Stats. & Regs. ] 32,560 at 34,178 n.22 (2002).
    \20\ E.g., Baltimore Gas & Electric Co., Commonwealth of 
Massachusetts Department of Telecommunications and Energy, 
Connecticut Department of Public Utility Control, Edison Electric 
Institute, FirstEnergy, NARUC, Public Service Commission of 
Wisconsin, and Southern Company Services Inc.
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    25. The proposed rule proposes to apply to interconnections to the 
facilities of a public utility's Transmission System that, at the time 
the interconnection is requested, may be used either to transmit 
electric energy in interstate commerce or to sell electric energy at 
wholesale in interstate commerce pursuant to a Commission-filed 
OATT.\21\ In other words, the standard interconnection procedures and 
contract terms would apply when an Interconnection Customer that plans 
to engage in a sale for resale in interstate commerce or to transmit 
electric energy in interstate commerce requests interconnection to 
facilities owned, controlled, or operated by the Transmission Provider 
or the Transmission Owner, or both, that are used to provide 
transmission service under an OATT that is on file at the Commission at 
the time the Interconnection Request is made. Therefore, the NOPR 
proposes to apply to a request to interconnect to a public utility's 
facilities used for transmission in interstate commerce. It also would 
apply to a request to interconnect to a public utility's 
``distribution'' facilities used to transmit electric energy in 
interstate commerce on behalf of a wholesale purchaser pursuant to a 
Commission-filed OATT. But in such a case where the ``distribution'' 
facilities have a dual use, i.e., the facilities are used for both 
wholesale sales and retail sales, the NOPR would apply to 
interconnections to these facilities only for the purpose of making 
sales of electric energy for resale in interstate commerce.\22\
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    \21\ For purposes of this paragraph, the term ``Commission-filed 
OATT'' means a tariff that is on file at, and has been approved by, 
the Commission.
    \22\ The Commission will exercise exclusive jurisdiction only 
over the Commission-jurisdictional service. See Laguna Irrigation 
District, 95 FERC ] 61,305 at 62,039 (2001) aff'd sub nom. Pacific 
Gas & Electric Co. v. FERC, 44 Fed. Appx. 170 (9th Cir. 2002); Tex-
La Electric Cooperative of Texas, Inc., 67 FERC ] 61,019 at 61,055-
56, final order, 69 FERC ] 61,269 (1994) (both noting that the 
Commission asserts jurisdiction over the service when the facilities 
are not purely ``transmission'' facilities). Accordingly, the 
Commission will continue to exercise exclusive jurisdiction over the 
rates, terms, and conditions of the Commission-jurisdictional 
service provided over the dual use ``distribution'' facility, but 
the Commission will not assert jurisdiction over all uses of that 
facility, because the regulation of ``local distribution'' of 
electricity to end users is reserved to the States.
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    26. For those Small Generator interconnections that would not be 
subject to the Final Rule SGIP and Final Rule SGIA, the Commission will 
make the Final Rule documents available as a guideline. The 
standardization of small generator terms and conditions would

[[Page 49978]]

benefit all customers nationwide by encouraging the development of 
small generation, including generation using innovative technologies.
    27. Finally, the Commission proposes to apply the reciprocity 
requirements in Order No. 888 to this proceeding. Under the reciprocity 
provision in section 6 of the OATT, if the public utility seeks 
transmission service from a non-public utility to which it provides 
open access transmission service, the non-public utility that owns, 
controls, or operates transmission facilities must provide comparable 
transmission service that it is capable of providing on its own system. 
A non-public utility that has adopted a ``safe harbor'' Tariff to 
comply with a reciprocity condition may add to its Tariff an 
interconnection agreement and interconnection procedures that 
substantially conform or are superior to the Final Rule SGIP and Final 
Rule SGIA if it wishes to continue to qualify for safe harbor 
treatment. A non-public utility that owns, controls, or operates 
transmission and that has not filed with the Commission a safe harbor 
Tariff and seeks transmission service from a public utility must either 
satisfy its reciprocity obligation under a bilateral agreement or seek 
a waiver of the OATT reciprocity condition from the public utility.
2. Summary of the Interconnection Process for Small Generating 
Facilities
    28. To interconnect its Generating Facility with a Transmission 
Provider's Transmission System, an Interconnection Customer must first 
submit an Interconnection Request to the Transmission Provider. When 
the Transmission Provider deems the Interconnection Request complete, 
the Interconnection Request would be placed in the Transmission 
Provider's queue with other pending interconnection requests.
    29. The Proposed SGIP divides Interconnection Requests into two 
groups according to whether the interconnection is to a High-Voltage 
Transmission System (69 kV or above) or a Low-Voltage Transmission 
System (below 69 kV). Interconnections to Low-Voltage Transmission 
Systems would be further divided into three groups depending on the 
size of the Small Generator being interconnected: (1) Small Generating 
Facilities larger than 10 MW but no larger than 20 MW, (2) Small 
Generating Facilities larger than 2 MW but no larger than 10 MW, and 
(3) Small Generating Facilities no larger than 2 MW.
    30. The review of the proposed interconnection of a Small Generator 
with a High-Voltage Transmission System or a Small Generator larger 
than 10 MW with a Low-Voltage Transmission System would proceed as 
follows. Once the Interconnection Request is deemed complete, the 
Parties would conduct a Scoping Meeting to review the Interconnection 
Request and also review existing studies of the Transmission Provider's 
Transmission System that are relevant to the Interconnection Request. 
Interconnection Studies, including the Interconnection Feasibility 
Study, Interconnection System Impact Study, and Interconnection 
Facilities Study, would next be performed to evaluate the proposed 
interconnection.\23\ These studies identify any Adverse System Impact 
\24\ to the Transmission Provider's Transmission System that may occur 
as a result of the interconnection, and the Transmission System 
modifications that need to be made to address them. The Interconnection 
Customer pays for the Transmission Provider's actual costs of 
performing each study, and the Proposed SGIP includes time periods 
within which the studies must be completed. If the Interconnection 
Customer agrees to pay for any necessary modifications, the 
Transmission Provider must proffer an SGIA to the Interconnection 
Customer.
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    \23\ The Interconnection Feasibility Study evaluates on a 
preliminary basis the impact of the proposed interconnection to the 
Transmission Provider's Transmission System. The Interconnection 
System Impact Study evaluates in detail the impact of the proposed 
interconnection on the safety and reliability of Transmission 
Provider's Transmission System and, if applicable, Affected Systems. 
The Interconnection Facilities Study determines the required 
modifications to the Transmission Provider's Transmission System, 
including the detailed costs and scheduled completion dates for such 
modifications, that would be required to accommodate the 
Interconnection Request.
    \24\ An Adverse System Impact means that technical or 
operational limits on conductors or equipment have been exceeded, 
which may compromise the safety or reliability of the electric power 
system.
---------------------------------------------------------------------------

    31. Although the activities performed in the Small Generator 
process are the same as those in the Large Generator Interconnection 
Final Rule, the time lines proposed here are shorter. Accordingly, a 
Small Generator is likely to be interconnected more quickly under the 
Proposed SGIP than under the Final Rule LGIP.
    32. For Small Generating Facilities larger than 2 MW but no larger 
than 10 MW interconnecting with a Transmission Provider's Low-Voltage 
Transmission System, the proposed interconnection would be evaluated 
using the Proposed SGIP's Expedited Screening Criteria. If the proposed 
interconnection passes the screening criteria and the Transmission 
Provider agrees that the Generating Facility can be safely 
interconnected with its Low-Voltage Transmission System, the former 
shall proffer an SGIA to the Interconnection Customer. However, if the 
Transmission Provider believes that the Generating Facility cannot be 
safely interconnected, irrespective of whether the proposed 
interconnection passes or fails the Expedited Screening Criteria, the 
Parties would follow the same procedures for Small Generating 
Facilities larger than 10 MW interconnecting with Low-Voltage 
Transmission Systems; i.e., conduct a Scoping Meeting and perform 
Interconnection Studies. The Transmission Provider, after consulting 
with the Interconnection Customer, may determine whether a particular 
Generating Facility in this class of Small Generators may be 
interconnected absent a Scoping Meeting and Interconnection Studies. 
This is because, although the proposed interconnection may pass the 
Expedited Screening Criteria, it may nonetheless cause an Adverse 
System Impact, depending upon where the Small Generator is physically 
located on the Transmission Provider's Transmission System. Since this 
cannot be reflected in the screening criteria, the Transmission 
Provider may evaluate the proposed interconnection in greater detail 
and, if it is concerned about an Adverse System Impact to its 
Transmission System, require that a Scoping Meeting be held and 
Interconnection Studies be conducted.
    33. However, in order to encourage the Parties to use the Expedited 
Screening Criteria to the fullest extent possible, the Commission 
proposes that, if the Interconnection Feasibility Study conducted under 
these conditions indicates no Adverse System Impact, the Transmission 
Provider must bear the cost of the Interconnection Feasibility Study. 
If an Adverse System Impact is identified, however, the Interconnection 
Customer must pay for the cost of the Interconnection Feasibility 
Study.
    34. Interconnections of Precertified Small Generating Facilities no 
larger than 2 MW with the Transmission Provider's Low-Voltage 
Transmission System would be evaluated under the Proposed SGIP's Super-
Expedited Procedures. A Precertified Small Generator is one that has 
been certified by a national testing laboratory as having met 
applicable consensus industry and safety standards. If a proposed 
interconnection passes all the Super-Expedited Screening Criteria, the 
Transmission Provider would proffer an SGIA to the Interconnection 
Customer. If the proposed interconnection fails the

[[Page 49979]]

Super-Expedited screening criteria: (1) The Transmission Provider could 
permit the interconnection anyway, after evaluating other factors such 
as the physical location of the Generating Facility on its Transmission 
System, or (2) the Interconnection Customer could ask the Transmission 
Provider to perform an Additional Review, to be paid for by the 
Interconnection Customer.
    35. The Additional Review is an expedited engineering evaluation 
limited to six hours of engineering time that is intended to identify 
minor modifications to Transmission Provider's Transmission System that 
may permit the Generating Facility to interconnect safely and reliably. 
If the Additional Review indicates that minor modifications to 
Transmission Provider's Transmission System can indeed be made that 
would permit the Generating Facility to interconnect safely and 
reliably, and the Interconnection Customer agrees to pay for the 
modifications, the Transmission Provider would provide the 
Interconnection Customer an SGIA. If the Additional Review does not 
indicate that the Generating Facility can be interconnected safely and 
reliably, the Parties would follow the procedures for Small Generating 
Facilities larger than 2 MW but no larger than 10 MW interconnecting 
with Low-Voltage Transmission Systems.
    36. Once the steps called for in the Interconnection Procedures are 
completed, the Transmission Provider would provide a best estimate of 
costs to be paid by the Interconnection Customer to effect the 
interconnection, and the Parties would negotiate Milestones for 
completing the interconnection, all of which would be incorporated into 
the SGIA. The SGIA would become effective upon execution by the 
Parties, subject to acceptance by the Commission, if necessary.\25\
---------------------------------------------------------------------------

    \25\ Under Order No. 2001, if an executed interconnection 
agreement conforms with a Commission-approved standard form of 
interconnection agreement, the utility does not have to file it with 
the Commission but must report it in the Electric Quarterly Reports. 
See Revised Public Utility Filing Requirements, Order No. 2001, 67 
FR 31043 (2002), FERC Stats. & Regs. ] 31,127 at P 178 (2002); reh'g 
denied, Order 2001-A, 100 FERC ] 61,074 (2002); reconsideration and 
clarification denied, Order No. 2001-B, 100 FERC ] 61,342 (2002); 
further order, Order No. 200-C, 101 FERC ] 61,314 (2002). An 
interconnection agreement must be filed only if it contains terms 
and conditions that deviate from the utility's generic, Commission-
approved interconnection agreement or is filed in unexecuted form.
---------------------------------------------------------------------------

    37. The Commission next discusses several issues that either 
divided the parties seeking to reach consensus during the Small 
Generator ANOPR process or on which the Commission departs from the 
consensus position.
3. Maximum Capacity of a Small Generator (Proposed SGIP Section 1, 
Proposed SGIA Article 1)
    38. Consistent with the Large Generator Interconnection Final Rule 
and the Small Generator Interconnection ANOPR, Small Generating 
Facilities no larger than 20 MW are considered Small Generating 
Facilities under the Proposed SGIA and Proposed SGIP. The Commission 
proposes to treat as a single Generating Facility the aggregated 
generation at a site for which an Interconnection Customer seeks a 
single Point of Interconnection.
    39. The Commission recognizes that 10 MW is used as the threshold 
for small generators in Texas, California, New York and Ohio. In 
addition, several entities, such as the PJM Interconnection, Electric 
Reliability Council of Texas, and the California Independent System 
Operator use 10 MW as the threshold because generators under 10 MW are 
considered less likely to affect reliability and safety. In this NOPR, 
the Commission likewise proposes special procedures for generators no 
larger than 10 MW. The Commission, however, proposes to adopt the 
higher 20 MW threshold, which is used by the Midwest Independent System 
Operator, in this rulemaking because it would encourage the development 
of a greater number of Small Generators and promote the development of 
innovative small generation technologies.
    40. Regarding Interconnection Requests that propose to increase the 
capacity at an existing Generating Facility, the Commission proposes 
that the new total capacity would determine how the Interconnection 
Request should be evaluated. For example, if an Interconnection 
Customer seeks to increase the capacity of an existing Generating 
Facility from 2 MW to 5 MW by the addition of a second generator, the 
Interconnection Request would be evaluated as if it were for a 5 MW 
Generating Facility. Likewise, the Commission proposes that if an 
Interconnection Customer seeks to increase the size of an existing 
Generating Facility from 10 MW to 25 MW, the Interconnection Request 
would be evaluated as if it were a request for a 25 MW Generating 
Facility. In this case, the Interconnection Request would not be 
eligible for evaluation under the Proposed SGIP, but rather the Final 
Rule LGIP. We also invite comment on whether single projects with 
multiple points of interconnection (as might occur for a windfarm or an 
industrial cogeneration project serving multiple facilities) should be 
treated as separate projects or as a single project for queuing and 
Interconnection Study purposes.
    41. Some Interconnection Requests could specify a level of capacity 
below the maximum capacity of the Generating Facility. We seek comment 
on how such Interconnection Requests should be addressed. For example, 
should an interconnection request for a device with a maximum capacity 
of 22 MW but seeking an interconnection for only 20 MW (and agreeing to 
restrict delivery to the Transmission Provider's Transmission System 
below that level) be evaluated under the Final Rule SGIP or the Final 
Rule LGIP?
4. Precertification of Small Generating Facilities No Larger than 2 MW 
(Proposed SGIP Section 3.1)
    42. A small number of states have procedures to precertify Small 
Generator equipment that meet specified operational and safety 
standards in order to expedite interconnections.\26\ Precertification 
eliminates the need for the Transmission Provider to study the 
equipment for safety and reliability purposes.
---------------------------------------------------------------------------

    \26\ The New York Department of Public Service, for example, 
maintains a list of approved equipment on its Web site.
---------------------------------------------------------------------------

    43. Precertification of the Interconnection Customer's equipment 
does not mean that the Generating Facility can be immediately 
interconnected to the Transmission Provider's Transmission System. 
Before a Precertified Generating Facility may be interconnected, it 
must first be determined that the interconnection would have no Adverse 
System Impact on the Transmission Provider's Transmission System. The 
purpose of Precertification is to ensure the safety of the Generating 
Facility itself, not the safety or reliability of the Generating 
Facility's interconnection to the Transmission Provider's Transmission 
System.
    44. Although precertification presumably has expedited the 
development of small generation in states where such programs exist, 
there is no national precertification program. Manufacturers tell us 
that they face the cost and delay associated with having their 
equipment evaluated in each state. Moreover, many states lack 
procedures for evaluating equipment. In these states, generator 
equipment is evaluated on a case-by-case basis by the Transmission 
Provider in the course of

[[Page 49980]]

evaluating each Interconnection Request.
    45. The Coalition proposes a single, uniform, nationwide 
precertification process for Small Generating Facilities no larger than 
2 MW that would encourage the development of small generation while 
ensuring the safety of the electric system. The Coalition proposes that 
the Commission itself certify equipment and maintain a registry of 
equipment that has been certified.
    46. This NOPR does not propose to adopt the Coalition's proposal in 
its entirety. In the Proposed SGIP, a Precertified Generating Facility 
is defined as one that has been tested by a nationally recognized 
testing laboratory to consensus industry standards in order to ensure 
that it will operate in a safe manner. The Commission in this NOPR 
concludes that certifying equipment and maintaining a registry should 
be done by an industry-recognized testing organization, not this 
agency. Accordingly, rather than establish and maintain a list of 
precertified equipment, as proposed by the Coalition, the Commission 
encourages cooperation and information sharing among the States and 
industry participants regarding the precertification of generating 
equipment. This would eliminate duplication of effort and encourage 
small generation development, while advancing the movement toward a 
nationwide set of precertification standards.
    47. The Commission recognizes that the IEEE Standards Board 
approved IEEE Standard 1547 for Interconnecting Distributed Resources 
with Electric Power Systems on June 12, 2003 to create uniform 
standards to interconnect distributed generation for safe and reliable 
operation. Together with other technical industry documents, IEEE 1547 
could serve as the basis for a national standard for precertification. 
The Coalition proposed other documents that might be relevant to 
equipment precertification. The Commission requests comments about what 
role, if any, the Commission should have in assessing which entity or 
entities could perform this precertification function.
5. Use of Screening Criteria (Proposed SGIP Sections 3.3 and 4.3)
    48. Screening criteria simplify the process of evaluating the 
interconnection of certain Small Generating Facilities to the 
Transmission Provider's Transmission System. Their purpose is to 
identify quickly those proposed interconnections that can be 
implemented with minimal or no impact on the Transmission Provider's 
Transmission System and can, therefore, be completed quickly. An 
example of a Super-Expedited Screening Criterion is that the capacity 
of a Small Generator proposed for a radial circuit shall not exceed 
five percent of that circuit's annual peak load.
    49. The Coalition developed four screening criteria: (1) Primary 
screening criteria, (2) secondary screening criteria, (3) distribution 
impact screening criteria, and (4) transmission impact screening 
criteria. The first three only apply to proposed interconnections with 
the Transmission Provider's Distribution System. Not all parties in the 
ANOPR process supported the use of all four Coalition screening 
criteria, especially the last two.
    50. The Proposed SGIP includes two screening criteria to evaluate 
proposed interconnections with a Transmission Provider's Low-Voltage 
Transmission System (i.e., below 69 kV): (1) Super-Expedited Screening 
Criteria for the smallest generating facilities, and (2) Expedited 
Screening Criteria for somewhat larger but still small generating 
facilities. Although both screening criteria use similar evaluation 
standards, the latter are easier to satisfy than the former. The 
Commission does not propose screening criteria for: (1) Small 
Generating Facilities of any size interconnecting with the Transmission 
Provider's High-Voltage Transmission System and (2) Small Generating 
Facilities larger than 10 MW interconnecting with the Transmission 
Provider's Low-Voltage Transmission System. Because of the potential 
for an Adverse System Impact, such requests to interconnect are best 
evaluated using the Scoping Meeting and Interconnection Studies.
    51. A proposed interconnection that fails the Super-Expedited 
Screening Criteria may still qualify for interconnection by being 
evaluated using the Additional Review and three sequential 
Interconnection Studies: the Interconnection Feasibility Study, the 
Interconnection System Impact Study, and the Interconnection Facilities 
Study. A proposed interconnection that fails the Expedited Screening 
Criteria may still qualify for interconnection by being evaluated using 
three sequential studies: the Interconnection Feasibility Study, the 
Interconnection System Impact Study, and the Interconnection Facilities 
Study.
a. Super-Expedited Screening Criteria (Appendix 1 to the Proposed SGIP)
    52. The Super-Expedited Screening Criteria \27\ are designed to 
evaluate proposed interconnections for Precertified Small Generating 
Facilities no larger than 2 MW that are to be interconnected with the 
Transmission Provider's Low-Voltage Transmission System. If the 
proposed interconnection passes the Super-Expedited Screening Criteria, 
the Interconnection Customer and Transmission Provider would sign an 
Interconnection Agreement without any further review. However, if the 
proposed interconnection does not pass, the Interconnection Customer 
can request an Additional Review to be followed by, if necessary, an 
Interconnection Feasibility Study, Interconnection System Impact Study, 
and Interconnection Facilities Study.
---------------------------------------------------------------------------

    \27\ The Coalition SGIP referred to Super-Expedited Screening 
Criteria as the Primary Screening Criteria.
---------------------------------------------------------------------------

b. Expedited Screening Criteria (Appendix 2 to the Proposed SGIP)
    53. The Expedited Screening Criteria \28\ are used to evaluate the 
proposed interconnection of Small Generating Facilities larger than 2 
MW but no larger than 10 MW with the Transmission Provider's Low-
Voltage Transmission System. If the proposed interconnection passes the 
Expedited Screening Criteria and the Transmission Provider believes 
that it can interconnect the Generating Facility safely and reliably, 
the Interconnection Customer would sign an Interconnection Agreement 
without any further review. However, if the Generating Facility does 
not pass the Expedited Screening Criteria, or if the Transmission 
Provider believes that the interconnection will undermine the safety 
and reliability of its Transmission System even though the proposed 
interconnection passes the Expedited Screening Criteria, the Parties 
would conduct a Scoping Meeting to determine the appropriate 
Interconnection Studies to be performed. However, as stated above, in 
order to encourage the Parties to use the Expedited Screening Criteria 
to the fullest extent possible, the Commission proposes that, if a 
subsequent Interconnection Feasibility Study indicates no Adverse 
System Impact, the Transmission Provider must bear the cost of the 
Interconnection Feasibility Study. If an Adverse System Impact is 
identified, however, the Interconnection Customer would have

[[Page 49981]]

to pay for the Interconnection Feasibility Study.
---------------------------------------------------------------------------

    \28\ The Coalition SGIP referred to Expedited Screening Criteria 
as the Impact Screening Criteria.
---------------------------------------------------------------------------

6. Dispute Resolution (Proposed SGIP Section 2.11 and Proposed SGIA 
Article 8)
    54. In the Small Generator Interconnection ANOPR, the Commission 
proposed that the Parties use the Commission's alternative dispute 
resolution service or any other informal services available to them to 
resolve disputes. The Commission also proposed that the outcome of the 
dispute resolution process would be binding if the Interconnection 
Customer so chooses.
    55. The Coalition SGIAs and SGIPs propose using Technical Masters 
to help resolve disputes between the Parties. According to the 
Coalition proposal, these Technical Masters would be certified by the 
Commission and provided by the Commission to the Parties at minimal or 
no cost. The Coalition proposal identifies Technical Masters as 
``engineers with expertise in electric power transmission and 
distribution interconnection requirements who are qualified and 
independent.''\29\
---------------------------------------------------------------------------

    \29\ Coalition SGIP, Attachment A Procedures Section 6, and 
Attachment B Procedures Section 1.11 (Nov. 12, 2002).
---------------------------------------------------------------------------

    56. Several commenters \30\ to the ANOPR take exception to the 
Commission's proposal that arbitration be binding if the 
Interconnection Customer so chooses. They argue that the Parties should 
be able to retain their rights of appeal when using the arbitration 
process.
---------------------------------------------------------------------------

    \30\ E.g., Bonneville Power Administration, Avista Corp., 
Central Maine Power Company, Public Service Company of New Mexico, 
and Public Service Electric and Gas Company.
---------------------------------------------------------------------------

    57. The Proposed SGIP and Proposed SGIA would adopt the dispute 
resolution process in the Large Generator Interconnection Final Rule. 
The Commission endorses the use of Technical Masters and agrees that 
they must have the requisite expertise to review, and where possible, 
resolve technical issues raised by the Parties. The proposed Dispute 
Resolution procedures satisfy these requirements.\31\ The Commission, 
however, declines to adopt the Coalition's proposal that it certify 
Technical Masters. Instead, the Commission proposes to maintain on its 
Web site a list of Technical Masters who may be called upon by the 
Parties in the event of a technical dispute. However, the Commission 
will neither evaluate nor certify persons that wish to be placed on the 
list.
---------------------------------------------------------------------------

    \31\ ``[A]rbitrators shall be knowledgeable in electric utility 
matters, including electric transmission and bulk power issues, and 
shall not have any current or past substantial business or financial 
relationships with any party to the arbitration (except prior 
arbitration).'' Article 27.2 of the LGIA in Standardization of 
Generator Interconnection Agreements and Procedures, Final Rule, 
Docket No. RM02-1-000 (issued concurrently with this NOPRA).
---------------------------------------------------------------------------

    58. With respect to the Interconnection Customer's ability to elect 
that arbitration be binding, we propose to adopt the language contained 
in the Large Generator Interconnection Final Rule, which provides that 
external arbitration would be binding on the Parties. However, the 
Arbitrator's final decision must be filed with the Commission if it 
affects jurisdictional rates, terms and conditions of service, 
Interconnection Facilities, or Upgrades. Parties may comment on this 
proposal and explain whether and why large and small generators should 
be treated differently.
7. Queuing (Proposed SGIP Sections 4.4 and 4.7)
    59. The Commission proposes that each Transmission Provider 
maintain a single queue per geographic area. A queue sequentially lists 
Interconnection Requests based upon the date and time they are 
complete. The Queue Position of each Interconnection Request determines 
the order of performing Interconnection Studies for each generator, if 
required, and the Interconnection Customer's cost responsibility for 
any Upgrades to the Transmitting Provider's Transmission System 
necessary to accommodate the Interconnection Request.
    60. Queuing was discussed at a January 21, 2003 Technical 
Conference convened by Commission staff. Some conference participants 
suggested that the Commission require the use of a single queue for 
each geographic area, with Interconnection Requests being evaluated in 
the order in which they are received. Such an approach, it was argued, 
is fair, makes the queue easier to administer, and allows more 
efficient processing of Interconnection Requests, including the use of 
clustering and other study techniques. Clustering of studies allows a 
Transmission Provider to study multiple Interconnection Requests at the 
same time. Clustering may reduce study costs and allow multiple 
Interconnection Customers to share the cost of Upgrades. Other 
conference participants suggested creating multiple queues based on 
generator size. This approach, they argued, would prevent small 
generator interconnections, with their comparatively short study times, 
from being unreasonably delayed by large generators ahead of them in 
the queue.
    61. While we here propose that each Transmission Provider maintain 
a single queue per geographic area, a Small Generator's Queue Position 
does not necessarily determine how long it takes to actually 
interconnect. In the Proposed SGIP, if a proposed interconnection 
passes either the Super-Expedited Screening Procedures or the Expedited 
Screening Procedures, the Interconnection Customer would have no cost 
responsibility for Upgrades. Accordingly, the Small Generator could be 
interconnected very quickly, regardless of its Queue Position.
    62. If the proposed interconnection does not pass either the Super-
Expedited Screening Procedures or the Expedited Screening Procedures, 
Interconnection Studies will be required to evaluate the proposal. And, 
if Upgrades are required, Queue Position may affect the Interconnection 
Customer's cost responsibility for the Upgrades. This is because 
Upgrades for interconnections higher in the queue may affect the need 
for Upgrades for interconnections lower in the queue. This would impact 
the cost of the interconnection for a particular Small Generator. 
However, as such costs for Small Generating Facilities may be 
relatively small or localized, we would permit the Interconnection 
Customer to ask to be interconnected out of queue order if it agrees to 
pay the full cost of the required Upgrades.
8. Parties to the Proposed SGIA (Proposed SGIA Article 9)
    63. In general, the Commission does not address issues in this NOPR 
that were treated in the Large Generator Interconnection Final Rule 
unless parties propose that Small Generating Facilities be treated 
differently. However, in the Small Generator ANOPR process, parties 
raised this issue repeatedly, and for this reason the Commission 
includes a discussion of the issue.
    64. Representatives of Interconnection Customers and 
representatives of Transmission Providers could not agree on whether 
the Transmission Owner should be a signatory to the SGIA, if the 
Transmission Provider and the Transmission Owner are different 
entities. The Commission proposes here the same approach taken in the 
Final Rule LGIA; that is, if the Transmission Owner is not also the 
Transmission Provider, both parties should sign the SGIA. We believe 
that this would better define the relationship among the Parties in one 
document, protect the Interconnection Customer and, therefore, 
facilitate the development of new generation resources. In an RTO or

[[Page 49982]]

ISO where the Transmission Provider is not the Transmission Owner, the 
RTO's or ISO's compliance filing would be able to propose a modified 
interconnection agreement that provides different respective rights and 
obligations in the region. In other cases, we do not believe that the 
three party agreement would create an undue burden for either entity. 
Accordingly, the Commission proposes to require that both the 
Transmission Owner and the Transmission Provider, if applicable, sign 
the SGIA.
9. Affected Systems (Proposed SGIP Section 2.8)
    65. The Coalition's proposal acknowledges that the interconnection 
of a Small Generator with a Transmission Provider's Transmission System 
may directly or indirectly affect other electric systems. 
Interconnection Customers generally prefer that the Transmission 
Provider be responsible for coordinating and performing all necessary 
Interconnection Studies and equipment Upgrades with the owner or 
operator of the Affected System.\32\ Interconnection Customers also 
prefer that their interconnections not be made conditional on the 
completion of these studies and Upgrades. Transmission Providers, 
however, maintain that while they would use their best efforts to 
coordinate and complete necessary Affected System Interconnection 
Studies and Upgrades in time for the interconnection of a Small 
Generator, they cannot compel the owner/operator of the Affected System 
to perform within the specified time lines.
---------------------------------------------------------------------------

    \32\ The Proposed SGIA and the Proposed SGIP define Affected 
System as ``an electric system other than the Transmission 
Provider's Transmission System that may be affected by the proposed 
interconnection.''
---------------------------------------------------------------------------

    66. The Commission proposes to continue treating interconnection 
and delivery as separate aspects of transmission service and allowing 
Interconnection Customers to request interconnection separately from 
the delivery component of transmission service. In the vast majority of 
circumstances, interconnection alone is unlikely to affect the 
reliability of another electric system, especially if the generator 
being interconnected is a Small Generator. However, in those rare 
instances in which the mere interconnection itself may cause a 
reliability or safety problem on an Affected System, the Commission 
proposes to adopt the approach of Order No. 888 for Upgrades required 
to protect Affected Systems from reliability problems due to delivery 
service.\33\ Under Order No. 888, the Transmission Provider is required 
to assist the customer in coordinating with the Affected System any 
Upgrades needed to protect the reliability of that system.\34\ Also, we 
will allow the Transmission Provider to coordinate completion of 
Network Upgrades to its own Transmission System with the completion of 
the necessary Affected System Upgrades.\35\
---------------------------------------------------------------------------

    \33\ See section 21 of the OATT. See also Tampa Electric Co., 
103 FERC ] 61,047 (2003), and Nevada Power, 97 FERC ] 61,227 (2001), 
reh'g denied, 99 FERC ] 61,347 (2002); but see American Electric 
Power Service Corporation, 102 FERC ] 61,336 (2003).
    \34\ Section 21.1 of the OATT states that: ``The Transmission 
Provider will undertake reasonable efforts to assist the 
Transmission Customer in obtaining such arrangements, including 
without limitation, provide any information or data required by such 
other electric system pursuant to Good Utility Practice.''
    \35\ Section 21.2 of the OATT states that: ``Transmission 
Provider shall have the right to coordinate construction on its own 
system with the construction required by others. The Transmission 
Provider, after consultation with the Transmission Customer and 
representatives of such other systems, may defer construction of its 
new transmission facilities, if the new transmission facilities on 
another system cannot be completed in a timely manner.''
---------------------------------------------------------------------------

    67. Under Order No. 888, economic losses (i.e., extra generating 
costs from having to redispatch generation) do not justify delaying the 
provision of the delivery component of transmission service, and the 
Commission proposes to adopt the same standard here for 
interconnections. As mentioned in the OATT, the Commission's Dispute 
Resolution Service is available should the Interconnection Customer 
wish to challenge the Transmission Provider's decision to delay 
construction pending completion of the Affected System's Upgrades.\36\
---------------------------------------------------------------------------

    \36\ See Section 21.2 of the OATT.
---------------------------------------------------------------------------

    68. We also note that NERC Planning Standards already provide that 
Transmission Providers should work together to minimize effects on each 
other's systems. Whenever a Transmission Provider adds its own new 
generation to its Transmission System, it may cause reliability or 
safety effects on other systems that require coordination with the 
Affected Systems. A Transmission Provider must offer any 
Interconnection Customer service that is comparable to the service it 
provides for interconnections of its own generation.
    69. The Commission notes that the proposed treatment of Affected 
Systems is comparable to that contained in the Large Generator 
Interconnection Final Rule and requests comments on if and why this 
approach should be modified for Small Generator interconnections.
10. Pricing/Cost Recovery for Upgrades (Proposed SGIA Article 5)
    70. The Commission's current interconnection pricing policy for 
Transmission Systems that are operated by non-independent entities is 
to allocate the costs of the new facilities based on whether they are 
at or beyond the Point of Interconnection. Those transmission 
facilities that are at or beyond the Point of Interconnection are 
considered Network Upgrades, and are initially paid for by the 
Interconnection Customer. The costs are then refunded to the 
Interconnection Customer by the Transmission Provider in the form of 
transmission credits (with interest), with the result being that the 
costs of the Network Upgrades are rolled into the prices paid by all 
transmission customers.\37\ Interconnection Facilities (meaning 
facilities on the Generating Facility's side of the Point of 
Interconnection) are considered sole use facilities and, accordingly, 
are directly assigned to and paid for by the Interconnection 
Customer.\38\ Consistent with the Large Generator Interconnection Final 
Rule, we propose to retain this current pricing policy for Small 
Generating Facilities interconnecting with a Transmission System 
operated by a non-independent entity. The Commission seeks comments on 
whether this approach is appropriate for Small Generator 
interconnections. We also invite commenters to recount their recent 
experiences with interconnecting distributed generators to the 
Distribution System, in particular the process for determining whether 
Distribution Upgrades were necessary, and the cost assignment of those 
Upgrades.
---------------------------------------------------------------------------

    \37\ See Consumer Energy Co., 95 FERC ] 61,233, reh'g denied, 96 
FERC ] 61,132 (2001).
    \38\ See Public Service Company of Colorado, 59 FERC ] 61,311 
(1992), reh'g denied, 62 FERC ] 61,013 (1993).
---------------------------------------------------------------------------

    71. For the Transmission Provider, such as an RTO or ISO, that is 
an independent entity, our current policy, and the policy that we 
adopted in the Large Generator Interconnection Final Rule, is to allow 
flexibility regarding the interconnection pricing policy that an 
independent entity may propose to adopt, subject to Commission 
approval. Also in that Final Rule, we permitted a Regional State 
Committee to establish criteria that an independent entity would use to 
determine which transmission system upgrades, including those required 
for generator interconnections, should be subject to incremental 
pricing (``participant funding'') and which should not. The

[[Page 49983]]

Large Generator Interconnection Final Rule also permitted, for a period 
of transition to the start of RTO or ISO operations, not to exceed a 
year, participant funding to be used for Network Upgrades for a 
generator interconnection as soon as an independent entity has been 
approved by the Commission and the affected states. The Commission 
proposes to adopt the same policies for Small Generating Facilities 
that interconnect with a Transmission System operated by an independent 
entity. We seek comments on whether this approach is appropriate for 
Small Generating Facilities which interconnect to a Transmission 
System.
    72. Because a Small Generating Facility may interconnect to a 
Transmission Provider's jurisdictional distribution facility for the 
purpose of making a sale of electricity at wholesale in interstate 
commerce, this NOPR also addresses cost recovery for Distribution 
Upgrades at or beyond the Point of Interconnection.\39\ Consistent with 
the Large Generator Interconnection Final Rule, we here propose that 
the costs of Distribution Upgrades would be directly assigned to the 
Interconnection Customer. This is because Distribution Upgrades do not 
generally benefit all users. Distribution facilities generally deliver 
electricity to particular localities, and do not serve a bulk delivery 
service for the entire system as is the case for transmission 
facilities. Accordingly, it is not appropriate that all users share the 
cost of Distribution Upgrades. Rather, the Interconnection Customer 
itself should be solely responsible for the cost of Distribution 
Upgrades.
---------------------------------------------------------------------------

    \39\ The costs of all Interconnection Facilities, whether owned 
by the Small Generator or the Transmission provider, are directly 
assigned to the Interconnection Customer.
---------------------------------------------------------------------------

11. Liability, Indemnity, Force Majeure, and Insurance (Proposed SGIA 
Articles 6.13, 6.14, and 6.16)
    73. In the Large Generator Interconnection Final Rule, the 
Commission adopted indemnification and Force Majeure provisions 
different from those applied to transmission service that appear in the 
OATT, and added a new provision limiting liability for consequential 
damages. This NOPR proposes a similar approach. The Commission asks 
commenters to address whether Small Generators should be treated 
differently from Large Generators with respect to liability, indemnity, 
and Force Majeure.\40\
---------------------------------------------------------------------------

    \40\ The White Paper proposed that the Final Rule in Docket No. 
RM01-12-000 would limit the Liability of Regional Transmission 
Organizations, Independent System Operators, and transmission owners 
that belong to RTOs and ISO.
---------------------------------------------------------------------------

    74. Consistent with the Large Generator Interconnection Final Rule 
that is being issued concurrently with the issuance of this NOPR, we 
are including a provision in the proposed SGIA requiring the Parties to 
maintain minimum insurance coverage. However, we are not proposing 
specific coverage amounts in this NOPR. We request comments on whether 
the Small Generator Interconnection Final Rule should also include an 
insurance provision, and, if so, whether the provision should differ 
from the one contained in the Final Rule LGIA, what kind of insurance 
should be required, and at what level of coverage. Commenters should 
address how best to balance any need for insurance against the costs of 
insurance since such costs may discourage Small Generating Facilities 
from participating in the wholesale market.
    75. The Commission also asks commenters to address two other issues 
regarding this proposed provision: first, should required insurance 
coverage coincide with the size of the facility? For example, a 20 MW 
generator would be subject to higher coverage amounts than a 10 MW 
generator, which itself would be subject to higher coverage amounts 
than a 5 MW generator. Similarly, should there be a megawatt cutoff 
that would exempt certain Small Generators (e.g., those below a certain 
size) from some or all of the minimum insurance requirements. Second, 
should coverage types and amounts vary according to the type of 
generator so that, for example, solar or wind facilities would require 
different insurance coverages than gas-fired facilities.
12. Variations From the Final Rule on Compliance.
    76. Regarding variations allowed from the Final Rule SGIP and Final 
Rule SGIA, consistent with the approach adopted in the Large Generator 
Interconnection Final Rule, we propose to apply a regional differences 
rationale to accommodate variations from the Final Rule during 
compliance, but with certain restrictions. We propose that a non-
independent transmission provider (such as a Transmission Provider that 
owns generators or has Affiliates that own generators) and an RTO or 
ISO should be treated differently because an independent RTO or ISO 
does not raise the same level of concern regarding undue 
discrimination. Accordingly, we propose to allow an RTO or ISO greater 
flexibility than that allowed under the regional differences rationale 
to propose variations from the Final Rule provisions, as further 
discussed below.
    77. Because we intend to supplement rather than supplant any 
standardization work that regional reliability groups already have 
undertaken regarding interconnection, we propose to permit a 
Transmission Provider, on compliance, to offer variations based on 
existing regional reliability requirements as part of its regional 
differences justification. Because we seek greater standardization of 
interconnection terms and conditions, we propose to permit a non-
independent Transmission Provider to use the regional differences 
justification only due to established regional reliability standards.
    78. For other proposed deviations from the Final Rule SGIP and 
Final Rule SGIA not made in response to established regional 
reliability requirements, we propose that a non-independent 
transmission provider justify variations in non-price terms and 
conditions of the Final Rule SGIP and Final Rule SGIA using the 
approach taken in Order No. 888, which allows them to propose 
variations on compliance that are ``consistent with or superior to'' 
the OATT.
    79. To clarify, if on compliance a non-RTO or ISO Transmission 
Provider offers a variation from the Final Rule SGIP and Final Rule 
SGIA and the variation is in response to established (i.e., approved by 
the Applicable Reliability Council) reliability requirements, then it 
would have to justify its variation using the regional difference 
rationale. If the variation is for any other reason, the non-RTO or ISO 
Transmission Provider must present its justification for the variation 
using the ``consistent with or superior to'' rationale that the 
Commission applies to variations from the OATT in Order No. 888.
    80. With respect to an RTO or ISO, at the time its compliance 
filing is made, as discussed above, we propose to allow it to seek 
``independent entity variations'' from the Final Rule pricing and non-
pricing provisions. This is a balanced approach that recognizes that an 
RTO or ISO has different operating characteristics depending on its 
size and location and is less likely to act in an unduly discriminatory 
manner than a Transmission Provider that is a market participant. The 
RTO or ISO therefore would have greater flexibility to customize its 
interconnection procedures and agreements to fit regional needs.
    81. Last, we invite comment on whether the proposed rule as drafted 
makes adequate provision to meet the

[[Page 49984]]

needs of the breadth of small generation technologies and fuel types 
(within the scope of those matters which are within the responsibility 
of this agency).

B. Summary of the Proposed SGIP and the Proposed SGIA

1. Standard Small Generator Interconnection Procedures (Proposed SGIP)
    82. The Proposed SGIP sets forth the procedures that 
Interconnection Customers and Transmission Providers would be required 
to follow during the interconnection process, culminating in the 
signing of an interconnection agreement by the Parties.
    83. Section 1. Definitions--Section 1 of the Proposed SGIP and 
Article 1 of the Proposed SGIA contain defined terms. For the sake of 
consistency, the proposed SGIP and proposed SGIA contain one common set 
of terms.
    84. Section 2. General Provisions--Proposed Section 2 contains 
directions on which sections of the Proposed SGIP govern the 
interconnection of various sizes of Small Generating Facilities. Site 
Control, Material Modifications to a proposed Generating Facility, the 
coordination of studies between the Transmission Provider and Affected 
Systems, and the use of a single Point of Interconnection for multiple 
generators are also addressed. The Transmission Provider shall maintain 
records of all Interconnection Requests received, the times required to 
complete Interconnection Request approvals and disapprovals, and 
explanations for the actions taken on the Interconnection Requests.
    85. Section 3. Super-Expedited Procedures for Interconnecting a 
Small Generating Facility No Larger than 2 MW to a Low-Voltage 
Transmission System \41\--The Transmission Provider shall use the 
Super-Expedited Screening Criteria to evaluate Interconnection Requests 
submitted under Section 3. Interconnection Customers whose 
Interconnection Requests fail the Super-Expedited Screening Criteria 
may request Additional Review and, if necessary, follow the procedures 
specified in Section 4.
---------------------------------------------------------------------------

    \41\ See Appendix A for a flowchart depicting this procedure.
---------------------------------------------------------------------------

    86. Section 4. Procedures for Interconnecting a Small Generating 
Facility to a High-Voltage Transmission System and a Small Generating 
Facility Larger than 2 MW to a Low-Voltage Transmission System \42\--
Proposed Section 4.3 sets forth special Expedited Procedures for Small 
Generating Facilities no larger than 10 MW interconnecting with Low-
Voltage Transmission Systems, using the Expedited Screening Criteria. 
Proposed Section 4.4 describes queuing priority. Proposed Sections 4.5-
4.8 describe the accelerated procedures (as compared with the 
procedures in the Large Generator Interconnection Final Rule) for 
interconnecting Small Generating Facilities to High-Voltage 
Transmission Systems and Small Generating Facilities Larger than 10 MW 
to Low-Voltage Transmission Systems. These procedures include a Scoping 
Meeting and various Interconnection Studies that are used to evaluate 
Interconnection Requests.
---------------------------------------------------------------------------

    \42\ See Appendix B for a flowchart depicting this procedure.
---------------------------------------------------------------------------

    87. Charts--Charts include a diagram of a typical Small Generating 
Facility installation and flowcharts depicting the Proposed Section 3 
and Section 4 procedures.
    88. Appendices--Appendix 1 lists the Super-Expedited Screening 
Criteria that are applicable to the interconnection of Precertified 
Small Generating Facilities no larger than 2 MW with Low-Voltage 
Transmission Systems. Appendix 2 lists the Expedited Screening Criteria 
that are applicable to the interconnection of Small Generating 
Facilities no larger than 10 MW with Low-Voltage Transmission Systems. 
Appendices 3-5 are pro forma agreements for the Interconnection 
Feasibility Study, the Interconnection System Impact Study, and the 
Interconnection Facilities Study, respectively. The Commission does not 
expect that these agreements would be filed with the Commission when 
executed. Appendix 6 is the standard Interconnection Request 
(Application Form). Appendix 7 is the Standard Small Generator 
Interconnection Agreement.
2. Standard Small Generator Interconnection Agreement (Proposed SGIA)
    89. The Proposed SGIA sets forth the legal rights and obligations 
of each Party, addresses cost responsibility issues, establishes 
Milestones for the completion of the interconnection, and lays out a 
process for the resolution of disputes.
    90. Article 1. Definitions--Section 1 of the Proposed SGIP and 
Article 1 of the Proposed SGIA contain defined terms. For the sake of 
consistency, the Proposed SGIP and Proposed SGIA contain one common set 
of terms.
    91. Article 2. Scope and Limitations of Agreement--Proposed Article 
2 describes responsibilities of the Parties to construct, interconnect, 
operate, and maintain the Generating Facility and the Transmission 
Provider's Transmission System.
    92. Article 3. Inspection, Testing, Authorization, and Right of 
Access--Proposed Article 3 describes Generating Facility testing and 
inspection requirements. The Transmission Provider must provide written 
authorization before the Interconnection Customer begins Parallel 
Operation. Proposed Article 3 also gives the Transmission Provider 
certain limited rights to access Interconnection Customer's property.
    93. Article 4. Effective Date, Term, Termination, and 
Disconnection--Proposed Article 4 describes the Term of the Proposed 
SGIA and also addresses default (including cure), termination, and 
temporary disconnection rights.
    94. Article 5. Cost Responsibility, Milestones, Billing, and 
Payment--Proposed Article 5 assigns financial responsibility for the 
costs of owning, operating, maintaining, repairing, and replacing the 
Interconnection Customer's Interconnection Facilities, and operating, 
maintaining, repairing, and replacing Transmission Provider's 
Interconnection Facilities. The Transmission Provider and the 
Interconnection Customer shall agree on Milestones related to the 
construction of the facilities for which each Party is responsible. 
Financial security arrangements and billing and payment obligations 
also are described.
    95. Article 6. Miscellaneous--Proposed Article 6 contains a number 
of provisions, including: that the laws of the state where the Point of 
Interconnection is located will govern, the SGIA may be amended upon 
agreement of the Parties as approved by the Commission, expectations 
regarding system infrastructure and operational security, and 
provisions for successors or assigns. Also included are provisions 
governing rights of third party beneficiaries, waiver, notice and 
communications between the Parties, severability, Force Majeure, 
default, the use of subcontractors, consequential damages, 
environmental releases, and insurance. Several of these provisions were 
not included in the Coalition SGIAs. Commenters are requested to speak 
to whether these provisions should be modified in the Final Rule SGIA 
to accommodate the needs of Small Generators.
    96. Article 7. Confidentiality--Proposed Article 7 describes how 
Confidential Information must be treated by the Parties.
    97. Article 8. Disputes--Proposed Article 8 describes the Dispute 
Resolution procedure.

[[Page 49985]]

    98. Article 9. Signatures--Proposed Article 9 provides for 
signatures of the Interconnection Customer, Transmission Provider and, 
if applicable, the Transmission Owner.
    99. Appendices--The proposed SGIA includes the following additional 
information: (1) Description and costs of the Generating Facility, 
Interconnection Facilities, and metering equipment, (2) a one-line 
diagram depicting the Generating Facility, Interconnection Facilities, 
metering equipment, and Upgrades, (3) Milestones, (4) additional 
operating requirements for the Transmission Provider's Transmission 
System and Affected Systems needed to support the Interconnection 
Customer's needs, and (5) the Transmission Provider's description of 
its Network Upgrades and Distribution Upgrades and a best estimate of 
their costs.

III. Public Reporting Burden and Information Collection Statement

    100. The following collections of information contained in this 
proposed rule are being submitted to the Office of Management and 
Budget (OMB) for review under section 3507(d) of the Paperwork 
Reduction Act of 1995. The Commission identifies the information 
provided under part 35 as FERC-516A.
    101. Comments are solicited on the Commission's need for this 
information, whether the information would have practical use, the 
accuracy of the provided burden estimates, ways to enhance the quality, 
use, and clarity of the information to be collected, and any suggested 
methods for minimizing respondents' burden, including the use of 
automated information techniques. The following burden estimate 
includes the cost of preparing and submitting tariff changes to comply 
with the Commission's proposed regulation.
    Public Reporting Burden:

                                             Estimated Annual Burden
----------------------------------------------------------------------------------------------------------------
                                                     Number of       Number of       Hours Per     Total Annual
            Data Collection FERC-516A               Respondents      Responses       Response          Hours
----------------------------------------------------------------------------------------------------------------
Reporting.......................................             176               1              25           4,400
Recordkeeping...................................             176               1               2             352
    Totals......................................  ..............  ..............  ..............           4,752
----------------------------------------------------------------------------------------------------------------

Total Annual Hours for Collection (Reporting + Recordkeeping) = 4,400 
hours (176 respondents x 1 filing x 25 hours) + 352 hours (176 
respondents x 1 filing x 2 hours to develop interconnection agreement 
format) = 4,752 hours.
    Information Collection Costs: The Commission seeks comment on the 
costs to comply with these requirements. It has projected the average 
annualized cost for all respondents to be:

Annualized Startup Costs--Staffing requirements to review and prepare 
an interconnection agreement = $220,000 (176 respondents x $1,250 (25 
hours @ $50 hourly rate)).
Annualized Costs (Operation & Maintenance)--The cost is equal to $5,984 
(176 respondents x $34 (2 hours @ $17 hourly rate).
Total Annualized Costs (Startup and O&M) = $225,984.

    102. OMB regulations require OMB to approve certain information 
collection requirements imposed by agency rule. 5 CFR 1320.11. 
Accordingly, pursuant to OMB regulations, the Commission is providing 
notice of its proposed information collections to OMB.
    Title: FERC-516A, Small Generator Interconnection Procedures and 
Agreement.
    Action: Proposed Data Collections.
    OMB Control No: To be determined.
    The Applicant shall not be penalized for failure to respond to this 
collection of information unless the collection of information displays 
a valid OMB control number.
    Respondents: Business or other for profit.
    Frequency of Responses: One-time implementation.
    Necessity of Information: The proposed rule would revise the 
reporting requirements contained in 18 CFR part 35. The Commission is 
proposing a standard SGIP and standard SGIA that public utilities must 
adopt. The adoption of these procedures and agreement will: (1) Reduce 
interconnection time and costs for Interconnection Customers and 
Transmission Providers, (2) limit opportunities for Transmission 
Providers to favor their own generation, (3) ease entry for new 
generation, and (4) encourage needed investment in the generation and 
transmission infrastructure.
    103. Interconnection plays a growing crucial role in bringing much 
needed generation into the market to meet the needs of electricity 
customers. However, requests for interconnection frequently result in 
complex technical disputes about interconnection feasibility, cost and 
cost responsibility. The Commission expects that a standard SGIP and 
standard SGIA will reduce interconnection costs and time for 
Interconnection Customers and Transmission Providers, resolve most 
interconnection disputes, minimize opportunities for undue 
discrimination, foster increased development of economic generation, 
and improve system reliability.
    104. Internal Review: The Commission has assured itself, by means 
of internal review, that there is specific, objective support for the 
burden estimates associated with the information requirements. The 
Commission's Office of Markets, Tariffs and Rates will use the data 
included in filings under section 203 and 205 of the Federal Power Act 
to evaluate efforts for the interconnection and coordination of the 
U.S. electric transmission system and to ensure the orderly 
implementation of the interconnection procedures and interconnection 
agreement as well as for general industry oversight. These information 
requirements conform to the Commission's plan for efficient information 
collection, communication, and management within the electric power 
industry.
    105. 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: 
Michael Miller, Office of the Executive Director, Phone: (202) 502-
8415, fax: (202) 273-0873, E-mail: [email protected].
    106. For submitting comments concerning the collection of 
information(s) and the associated burden estimate(s), please send your 
comments to the contact listed above and to the Office of Management 
and Budget, Attention: Desk Officer for the Federal Energy Regulatory 
Commission, fax: (202) 395-7285, e-mail pamelabeverly@[email protected].

[[Page 49986]]

IV. Environmental Analysis

    107. 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.\43\ The 
Commission concludes that promulgating the proposed rule would not 
present a major federal action having a significant adverse impact on 
the human environment under the Commission's regulations implementing 
the National Environmental Policy Act.\44\ The proposed rule falls 
within the categorical exemption provided in the Commission's 
regulations for approval of actions under section 205 of the Federal 
Power Act relating to the filing of schedules containing all rates and 
charges for any transmission or sale for resale subject to the 
Commission's jurisdiction, plus the classification, practices, 
contracts and regulations that affect rates, charges, classifications 
and services.\45\ Consequently, neither an environmental assessment nor 
an environmental impact statement is required.
---------------------------------------------------------------------------

    \43\ Order No. 486, Regulations Implementing the National 
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & 
Regs. Preambles 1986-1990 ] 30,783 (1987).
    \44\ 18 CFR part 380 (2003).
    \45\ 18 CFR 380.4(a)(15)(16) (2003).
---------------------------------------------------------------------------

V. Regulatory Flexibility Act Certification

    108. The Regulatory Flexibility Act of 1980 (RFA) \46\ generally 
requires a description and analysis of proposed rules that will have 
significant economic impact on a substantial number of small entities. 
This rule applies to public utilities that own, control or operate 
interstate transmission facilities, not to electric utilities per se. 
The total number of public utilities that, absent waiver, would have to 
modify their current open access transmission tariffs by filing the 
Interim Tariff is 176.\47\ Of these only 6 public utilities, or less 
than two percent, dispose of 4 million MWh or less per year.\48\ The 
Commission does not consider this a substantial number, and in any 
event, these small entities may seek waiver of these requirements.\49\
---------------------------------------------------------------------------

    \46\ 5 U.S.C. 601-612 (2000).
    \47\ The sources for this figure are FERC Form No. 1 and FERC 
Form No. 1-F data.
    \48\ Id.
    \49\ The Regulatory Flexibility Act defines a ``small entity'' 
as ``one which is independently owned and operated and which is not 
dominant in its field of operation.'' See 5 U.S.C. 601(3) and 601(6) 
(2000); 15 U.S.C. 632(a)(1) (2000). In Mid-Tex Elec. Coop. v. FERC, 
773 F.2d 327, 340-343 (DC Cir. 1985), the court accepted the 
Commission's conclusion that, since virtually all of the public 
utilities that it regulates do not fall within the meaning of the 
term ``small entities'' as defined in the Regulatory Flexibility 
Act, the Commission did not need to prepare a regulatory flexibility 
analysis in connection with its proposed rule governing the 
allocation of costs for construction work in progress (CWIP). The 
CWIP rules applied to all public utilities. The Small Generator 
interconnection rules will apply only to those public utilities that 
own, control or operate interstate transmission facilities. These 
entities are a subset of the group of public utilities found not to 
require preparation of a regulatory flexibility analysis for the 
CWIP rule.
---------------------------------------------------------------------------

VI. Comment Procedures

    109. 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.
    110. Comments are due October 3, 2003. Comments must refer to 
Docket No. RM02-12-000, and must include the commenter's name, the 
organization they represent, if applicable, and their address. Comments 
may be filed either in electronic or paper format. Comments should be 
double spaced and include an executive summary.
    111. To facilitate the Commission's review of the comments, 
commenters are requested to identify each specific issue posed by the 
NOPR that their discussion addresses and to use headings that clearly 
identify the relevant Proposed SGIA article and Proposed SGIP section. 
Additional issues that commenters wish to raise should be identified 
separately. The Commission also invites commenters to explain the 
rationale for their support for any proposal in this NOPR.
    112. Comments may 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, and commenters may 
attach additional files with supporting information in certain other 
file formats. Commenters filing electronically do not need to make a 
paper filing. Commenters that are not able to file comments 
electronically must send an original and 14 copies of their comments 
to: Federal Energy Regulatory Commission, Office of the Secretary, 888 
First Street NE., Washington, DC 20426.
    113. 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.

VII. Document Availability

    114. 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 FERC's Home page (http://www.ferc.gov) and in FERC's 
Public Reference Room during normal business hours (8:30 a.m. to 5 p.m. 
Eastern time) at 888 First Street, NE., Room 2A, Washington, DC 20426.
    115. From FERC's Home page on the Internet, this information is 
available in the Federal Energy Regulatory Records Information System 
(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.
    116. User assistance is available for FERRIS and the FERC's Web 
site during normal business hours from our Help line at (202) 502-8222 
or the Public Reference Room at (202) 502-8371 Press 0, TTY (202) 502-
8659. E-Mail the Public Reference Room at 
[email protected].

List of Subjects in 18 CFR Part 35

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

    By direction of the Commission.
Magalie R. Salas,
Secretary.

    In consideration of the foregoing, the Commission proposes to amend 
Part 35, Chapter I, Title 18, Code of Federal Regulations, as follows:

PART 35--FILING OF RATE SCHEDULES

    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.

    2. In Sec.  35.28, paragraph (g) is added to read as follows:


Sec.  35.28  Non-discriminatory open access transmission tariff.

* * * * *
    (g) Standard interconnection procedures and agreement for small 
generators.
    (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 small generator 
interconnection procedures and agreement contained in Order

[[Page 49987]]

No.--------, FERC Stats. & Regs. ] -------- (Final Rule on Small 
Generator Interconnection) or such other small generator 
interconnection procedures and agreement as may be approved by the 
Commission consistent with Order No. --------, FERC Stats. & Regs. ] --
------ (Final Rule on Small Generator Interconnection).
    (i) The amendment required by this paragraph (g)(1) must be filed 
no later than [insert date that is 60 days after the effective date of 
the Final Rule].
    (ii) Any public utility that seeks a deviation from the standard 
interconnection procedures and agreement contained in Order No. ------
--, FERC Stats. & Regs. ] -------- (Final Rule on Small Generator 
Interconnection), must demonstrate that the deviation is consistent 
with the principles of Order No. --------, FERC Stats. & Regs. ] ------
-- (Final Rule on Small Generator Interconnection).
    (2) The non-public utility procedures for tariff reciprocity 
compliance described in paragraph (e) of this section are applicable to 
the standard small generator interconnection procedures and agreement.

    Note: The following appendices will not be published in the Code 
of Federal Regulations

BILLING CODE 6718-01-P
[GRAPHIC] [TIFF OMITTED] TP19AU03.001


[[Page 49988]]


[GRAPHIC] [TIFF OMITTED] TP19AU03.002


[[Page 49989]]


BILLING CODE 6718-01-C

Appendix C to the Small Generator Interconnection Preamble

Standard Small Generator Interconnection Procedures (SGIP) Including 
Standard Small Generator Interconnection Agreement (SGIA)

(Applicable To Generating Facilities No Larger Than 20 MW)

Table of Contents

Section 1. Definitions
Section 2. General Provisions
Section 3. Super-Expedited Procedures for Interconnecting a Small 
Generating Facility No Larger than 2 MW to a Low-Voltage 
Transmission System
    3.1 Precertification
    3.2 Interconnection Request
    3.3 Initial Review
    3.4 Additional Review
    3.5 Interconnection of the Generating Facility
Section 4. Procedures for Interconnecting a Small Generating 
Facility to a High-Voltage Transmission System and a Small 
Generating Facility Larger than 2 MW to a Low-Voltage Transmission 
System
    4.1 General
    4.2 Interconnection Request
    4.3 Expedited Procedures for a Small Generating Facility No 
Larger than 10 MW Interconnecting with Transmission Provider's Low-
Voltage Transmission System and a Small Generating Facility Failing 
the Super-Expedited Procedures
    4.4 Queuing Priority
    4.5 Scoping Meeting
    4.6 Interconnection Feasibility Study
    4.7 Interconnection System Impact Study
    4.7.1 General
    4.7.2 Distribution Interconnection System Impact Study
    4.7.3 Transmission Interconnection System Impact Study
    4.7.4 Coordinated Transmission and Distribution System Impact 
Studies
    4.7.5 Interconnection System Impact Study Cost Sharing
    4.8 Interconnection Facilities Study
    4.9 Interconnection of the Generating Facility
Charts
    Chart 1--Diagram of a Typical Small Generating Facility 
Installation
    Chart 2--Flow Chart of Super-Expedited Procedures for 
Interconnecting a Small Generating Facility No Larger than 2 MW to a 
Low-Voltage Transmission System
    Chart 3--Flow Chart of Procedures for Interconnecting a Small 
Generating Facility to a High-Voltage Transmission System and a 
Small Generating Facility Larger than 2 MW to a Low-Voltage 
Transmission System
Appendices
    Appendix 1--Super-Expedited Screening Criteria
    Appendix 2--Expedited Screening Criteria
    Appendix 3--Interconnection Feasibility Study Agreement
    Appendix 4--Interconnection System Impact Study Agreement
    Appendix 5--Interconnection Facilities Study Agreement
    Appendix 6--Small Generating Facility Interconnection Request 
(Application Form)
    Appendix 7--Standard Small Generator Interconnection Agreement

Section 1. Definitions

    When used with initial capitalization, the following terms shall 
have the meanings specified or referred to below. Terms used in this 
document with initial capitalization that are not defined below 
shall have the meanings specified in the section in which they are 
used or as specified in the Transmission Provider's Open Access 
Transmission Tariff (OATT), as may be amended from time to time.
    Additional Review shall mean a technical evaluation by the 
Transmission Provider of a proposed interconnection that has failed 
to pass the Super-Expedited Screening Criteria. The review will 
determine whether minor modifications to the Transmission Provider's 
Transmission System (e.g., changing meters, fuses, relay settings) 
can be performed in order to enable the interconnection to be made 
safely and reliably.
    Adverse System Impact shall mean the negative effects due to 
technical or operational limits on conductors or equipment being 
exceeded that may compromise the safety and reliability of the 
electric system.
    Affected System shall mean an electric system other than the 
Transmission Provider's Transmission System that may be affected by 
the proposed interconnection.
    Affiliate shall mean, with respect to a corporation, partnership 
or other entity, each such other corporation, partnership or other 
entity that directly or indirectly, through one or more 
intermediaries, controls, is controlled by, or is under common 
control with, such corporation, partnership or other entity.
    Applicable Laws and Regulations shall mean 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.
    Breach shall mean the failure of a Party to perform or observe 
any material term or condition of the Standard Small Generator 
Interconnection Agreement.
    Breaching Party shall mean a Party that is in Breach of the 
Standard Small Generator Interconnection Agreement.
    Business Day shall mean Monday through Friday, excluding Federal 
Holidays.
    Calendar Day shall mean any day including Saturday, Sunday or a 
Federal Holiday.
    Commercial Operation Date of a unit shall mean the date on which 
the Interconnection Customer commences commercial operation of the 
unit at the Generating Facility after testing of such unit has been 
completed.
    Confidential Information shall mean any confidential, 
proprietary or trade secret information of a plan, specification, 
pattern, procedure, design, device, list, concept, policy or 
compilation relating to the present or planned business of a Party, 
which is designated as confidential by the Party supplying the 
information, whether conveyed orally, electronically, in writing, 
through inspection, or otherwise.
    Control Area shall mean an electrical system or systems bounded 
by interconnection metering and telemetry, capable of controlling 
generation to maintain its interchange schedule with other Control 
Areas and contributing to frequency regulation of the 
interconnection. A Control Area must be certified by NERC.
    Default shall mean the failure of a Breaching Party to cure its 
Breach in accordance with Article 6.17 of the Standard Small 
Generator Interconnection Agreement.
    Dispute Resolution shall mean the procedure for resolution of a 
dispute between the Parties in which they will first attempt to 
resolve the dispute on an informal basis.
    Distribution System shall mean 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 shall mean the additions, modifications, 
and upgrades to the Transmission Provider's Distribution System at 
or beyond the Point of Interconnection to facilitate interconnection 
of the Generating Facility and render the transmission service 
necessary to effect Interconnection Customer's wholesale sale of 
electricity in interstate commerce. Distribution Upgrades do not 
include Interconnection Facilities.
    Effective Date shall mean the date on which the Standard Small 
Generator Interconnection Agreement becomes effective upon execution 
by the Parties subject to acceptance by the Commission, or if filed 
unexecuted, upon the date specified by the Commission.
    Emergency Condition shall mean a condition or situation: (1) 
That in the judgement of the Party making the claim is imminently 
likely to endanger life or property, or (2) that, in the case of a 
Transmission Provider, is imminently likely (as determined in a non-
discriminatory manner) to cause a material adverse effect on the 
security of, or damage to Transmission Provider's Transmission 
System, Transmission Provider's Interconnection Facilities or the 
electric systems of others to which the Transmission Provider's 
Transmission System is directly connected, or (3) that, in the case 
of Interconnection Customer, is imminently likely (as determined in 
a non-discriminatory manner) to cause a material adverse effect on 
the security of, or damage to, the Generating Facility or 
Interconnection Customer's Interconnection Facilities. System 
restoration and black start shall be considered Emergency 
Conditions; provided, that the Interconnection Customer is not 
obligated by the Standard Small Generator Interconnection Agreement 
to possess black start capability.
    Environmental Law shall mean Applicable Laws or Regulations 
relating to pollution or protection of the environment or natural 
resources.

[[Page 49990]]

    Expedited Procedures shall mean the process described in the 
Standard Small Generator Interconnection Procedures for (1) a 
Generating Facility no larger than 10 MW interconnecting with a 
Transmission Provider's Low-Voltage Transmission System, and (2) a 
Generating Facility failing the Super-Expedited Procedures. The 
Expedited Procedures use the Expedited Screening Criteria to 
determine whether the Small Generating Facility can be 
interconnected without any further Interconnection Studies.
    Expedited Screening Criteria shall mean the technical variables 
that are employed in the Expedited Procedures for evaluating the 
impact of interconnecting the Small Generating Facility to the 
Transmission Provider's Transmission System as it exists at the time 
of the analysis.
    Fault Current shall mean the current that is produced by an 
electrical fault, such as single-phase to ground, double-phase to 
ground, three-phase to ground, phase-to-phase, and three-phase. The 
Fault Current is several times larger in magnitude than the current 
that normally flows through a circuit. A protective device must be 
able to interrupt this Fault Current within a few cycles. The Fault 
Current increases when a new generator is interconnected.
    Federal Power Act shall mean the Federal Power Act, as amended, 
16 U.S.C. 791a et seq.
    FERC shall mean the Federal Energy Regulatory Commission 
(Commission) or its successor.
    Force Majeure shall mean any act of God, labor disturbance, act 
of the public enemy, war, insurrection, riot, fire, storm or flood, 
explosion, breakage or accident to machinery or equipment, any 
order, regulation or restriction imposed by governmental, military 
or lawfully established civilian authorities, or any other cause 
beyond a Party's control. A Force Majeure event does not include an 
act of negligence or intentional wrongdoing.
    Generating Facility shall mean Interconnection Customer's device 
for the production of electricity identified in the Interconnection 
Request, but shall not include the Interconnection Customer's 
Interconnection Facilities.
    Generating Facility Capacity shall mean the net capacity of the 
Generating Facility and the aggregate net capacity of the Generating 
Facility where it includes multiple energy production devices.
    Good Utility Practice shall mean 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 shall mean 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 Interconnection Customer, Transmission Provider, or any 
Affiliate thereof.
    Hazardous Substances shall mean any chemicals, materials or 
substances defined as or included in the definition of ``hazardous 
substances,'' ``hazardous wastes,'' ``hazardous materials,'' 
``hazardous constituents,'' ``restricted hazardous materials,'' 
``extremely hazardous substances,'' ``toxic substances,'' 
``radioactive substances,'' ``contaminants,'' ``pollutants,'' 
``toxic pollutants'' or words of similar meaning and regulatory 
effect under any applicable Environmental Law, or any other 
chemical, material or substance, exposure to which is prohibited, 
limited or regulated by any applicable Environmental Law.
    High-Voltage shall mean voltage levels at or above 69 kV.
    IEEE shall mean the Institute of Electrical and Electronics 
Engineers.
    Initial Review shall mean the Transmission Provider's review of 
the Interconnection Customer's Interconnection Request using the 
Super-Expedited Screening Criteria described in Section 3 of the 
Standard Small Generator Interconnection Procedures.
    In-Service Date shall mean the date upon which the 
Interconnection Customer reasonably expects it will be ready to 
begin use of the Transmission Provider's Interconnection Facilities 
to obtain back feed power.
    Interconnection Customer shall mean any entity, including the 
Transmission Provider, Transmission Owner or any of the Affiliates 
or subsidiaries of either, that proposes to interconnect its 
Generating Facility with the Transmission Provider's Transmission 
System.
    Interconnection Customer's Interconnection Facilities shall mean 
all facilities and equipment, as identified in Appendix 2 of the 
Standard Small Generator Interconnection Agreement, that are located 
between the Generating Facility and the Point of Change of 
Ownership, including any modification, addition, or upgrades to such 
facilities and equipment necessary to physically and electrically 
interconnect the Generating Facility to the Transmission Provider's 
Transmission System. Interconnection Customer's Interconnection 
Facilities are sole use facilities.
    Interconnection Facilities shall mean the Transmission 
Provider's Interconnection Facilities and the Interconnection 
Customer's Interconnection Facilities. Collectively, Interconnection 
Facilities include all facilities and equipment between the 
Generating Facility and the Point of Interconnection, including any 
modification, additions or upgrades that are necessary to physically 
and electrically interconnect the 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 Facilities Study shall mean a study conducted by 
the Transmission Provider or a third party consultant for the 
Interconnection Customer to determine a list of facilities 
(including Transmission Provider's Interconnection Facilities and 
Network Upgrades as identified in the Interconnection System Impact 
Study), the cost of those facilities, and the time required to 
interconnect the Generating Facility with the Transmission 
Provider's Transmission System. The scope of the study is defined 
the Standard Small Generator Interconnection Procedures.
    Interconnection Facilities Study Agreement shall mean the form 
of agreement contained in Appendix 5 of the Standard Small Generator 
Interconnection Procedures for conducting the Interconnection 
Facilities Study.
    Interconnection Feasibility Study shall mean a preliminary 
evaluation of the system impact and cost of interconnecting the 
Generating Facility to the Transmission Provider's Transmission 
System, the scope of which is described in the Standard Small 
Generator Interconnection Procedures.
    Interconnection Feasibility Study Agreement shall mean the form 
of agreement contained in Appendix 3 of the Standard Small Generator 
Interconnection Procedures for conducting the Interconnection 
Feasibility Study.
    Interconnection Request shall mean an Interconnection Customer's 
request, in the form of Appendix 6 to the Standard Small Generator 
Interconnection Procedures, in accordance with the Tariff, to 
interconnect a new Generating Facility, or to increase the capacity 
of, or make a Material Modification to the operating characteristics 
of, an existing Generating Facility that is interconnected with the 
Transmission Provider's Transmission System.
    Interconnection Service shall mean the service provided by the 
Transmission Provider associated with interconnecting the 
Interconnection Customer's Generating Facility to the Transmission 
Provider's Transmission System and enabling it to receive electric 
energy and capacity from the Generating Facility at the Point of 
Interconnection, pursuant to the terms of the Standard Small 
Generator Interconnection Agreement and, if applicable, the 
Transmission Provider's Tariff.
    Interconnection Study shall mean any of the following studies: 
the Interconnection Feasibility Study, the Interconnection System 
Impact Study, and the Interconnection Facilities Study described in 
the Standard Small Generator Interconnection Procedures.
    Interconnection System Impact Study shall mean an engineering 
study that evaluates the impact of the proposed interconnection on 
the safety and reliability of Transmission Provider's Transmission 
System and, if applicable, an Affected System. The study shall 
identify and detail the system impacts that would result if the 
Generating Facility

[[Page 49991]]

were interconnected without project modifications or system 
modifications, focusing on the Adverse System Impacts identified in 
the Interconnection Feasibility Study, or to study potential 
impacts, including but not limited to those identified in the 
Scoping Meeting as described in the Standard Small Generator 
Interconnection Procedures.
    Interconnection System Impact Study Agreement shall mean the 
form of agreement contained in Appendix 4 of the Standard Small 
Generator Interconnection Procedures for conducting the 
Interconnection System Impact Study.
    Large Generating Facility shall mean a Generating Facility 
having a Generating Facility Capacity of more than 20 MW.
    Low-Voltage shall mean voltage levels below 69 kV.
    Material Modification shall mean a modification that has a 
material impact on the cost or timing of any Interconnection Request 
with a later queue priority date.
    Milestones shall mean the events and associated dates listed in 
Appendix 3 of the Standard Small Generator Interconnection 
Agreement. The Milestones describe events that are to be met by 
either Party as the Generating Facility proceeds to interconnection 
and Parallel Operation.
    MW shall mean the abbreviation for megawatts, which is used to 
describe the capacity of a generating facility.
    NERC shall mean the North American Electric Reliability Council 
or its successor organization.
    Network Upgrades shall mean the additions, modifications, and 
upgrades to the Transmission Provider's Transmission System required 
at or beyond the point at which the Interconnection Customer 
interconnects to the Transmission Provider's Transmission System to 
accommodate the interconnection of the Generating Facility to the 
Transmission Provider's Transmission System.
    Operating Requirements shall mean any operating and technical 
requirements that may be applicable due to Regional Transmission 
Organization, Independent System Operator, Control Area, or 
Transmission Provider requirements, including those set forth in 
Appendix 4 of the Standard Small Generator Interconnection 
Agreement.
    Parallel Operation shall mean the two-way flow of power between 
a generator and a Transmission System. Generators that operate in 
parallel with a Transmission System require additional protection 
and control devices. This may be contrasted with a stand-alone 
generator that operates isolated from the utility company's electric 
system.
    Party or Parties shall mean Transmission Provider, Transmission 
Owner, Interconnection Customer or any combination of the above.
    Point of Change of Ownership shall mean the point, as set forth 
in Appendix 2 of the Standard Small Generator Interconnection 
Agreement, where the Interconnection Customer's Interconnection 
Facilities connect to the Transmission Provider's Interconnection 
Facilities.
    Point of Common Coupling shall mean the point in the 
interconnection of the Generating Facility with Transmission 
Provider's Transmission System at which the harmonic limits are 
applied.
    Point of Interconnection shall mean the point, as set forth in 
Appendix 2 of the Standard Small Generator Interconnection 
Agreement, where the Interconnection Facilities connect to the 
Transmission Provider's Transmission System.
    Precertified shall describe a Generating Facility if an 
identical sample of the manufacturer's model has been submitted to a 
national testing laboratory and found, after appropriate testing, to 
be in compliance with applicable consensus industry operational and 
safety standards.
    Queue Position shall mean the order of a valid Interconnection 
Request, relative to all other pending valid Interconnection 
Requests, that is established based upon the date and time of 
receipt of the valid Interconnection Request by the Transmission 
Provider.
    Reasonable Efforts shall mean, with respect to an action 
required to be attempted or taken by a Party under the Standard 
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.
    Rules shall mean the rules promulgated by FERC relating to the 
interconnection of generators.
    Scoping Meeting shall mean the meeting between representatives 
of the Interconnection Customer and Transmission Provider conducted 
for the purpose of discussing alternative interconnection options, 
to exchange information including any transmission data and earlier 
study evaluations that would be reasonably expected to impact such 
interconnection options, to analyze such information, and to 
determine the potential feasible Points of Interconnection.
    Secondary Network shall mean a type of Low-Voltage electric 
system that is generally used in large metropolitan areas that are 
densely populated in order to provide high reliability of service 
(also known as secondary grid network or area network).
    Site Control shall mean documentation reasonably demonstrating: 
(1) ownership of, a leasehold interest in, or a right to develop a 
site for the purpose of constructing the Generating Facility, (2) an 
option to purchase or acquire a leasehold site for such purpose, or 
(3) an exclusivity or other business relationship between the 
Interconnection Customer and the entity having the right to sell, 
lease or grant the Interconnection Customer the right to possess or 
occupy a site for such purpose.
    Small Generating Facility shall mean a Generating Facility 
having a Generating Facility Capacity of no more than 20 MW.
    Standard Small Generator Interconnection Agreement (SGIA) shall 
mean the form of interconnection agreement applicable to an 
Interconnection Request pertaining to a Small Generating Facility, 
that is included in the Transmission Provider's Tariff.
    Standard Small Generator Interconnection Procedures (SGIP) shall 
mean the interconnection procedures applicable to an Interconnection 
Request pertaining to a Small Generating Facility that are included 
in the Transmission Provider's Tariff.
    Spot Network shall mean a type of Low-Voltage system found 
within modern commercial buildings to provide high reliability of 
service. Spot Networks generally use 12 kV to 480/277 volt vaults on 
site.
    Super-Expedited Procedures shall mean the process described in 
Section 3 of the Standard Small Generator Interconnection Procedures 
for Generating Facilities no larger than 2 MW interconnecting with 
Transmission Provider's Low-Voltage Transmission System. The Super-
Expedited Procedures use the Super-Expedited Screening Criteria to 
determine whether the proposed interconnection may cause an Adverse 
System Impact on Transmission Provider's Transmission System.
    Super-Expedited Screening Criteria shall mean the technical 
variables that are employed in the Super-Expedited Procedures for 
evaluating the interconnection of a Small Generating Facility no 
larger than 2 MW to a Transmission Provider's Low-Voltage 
Transmission System.
    System Protection Facilities shall mean the equipment, including 
necessary protection signal communications equipment, required to 
protect (1) the Transmission Provider's Transmission System from 
faults or other electrical disturbances occurring at the Generating 
Facility and (2) the Generating Facility from faults or other 
electrical system disturbances occurring on the Transmission 
Provider's Transmission System or on other delivery systems or other 
generating systems to which the Transmission Provider's Transmission 
System is directly connected.
    Tariff shall mean the Transmission Provider'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.
    Technical Master shall mean a person, as described in Article 8 
of the Standard Small Generator Interconnection Agreement, with 
relevant technical experience selected to adjudicate disputes 
between the Parties.
    Term shall mean the duration of the Standard Small Generator 
Interconnection Agreement.
    Transmission Owner shall mean an 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 
Standard Small Generator Interconnection Agreement to the extent 
necessary.
    Transmission Provider shall mean 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 Provider's Interconnection Facilities shall mean 
all facilities and equipment owned, controlled, or operated by the 
Transmission Provider from the Point of

[[Page 49992]]

Change of Ownership to the Point of Interconnection as identified in 
Appendix 2 of the Standard Small Generator Interconnection 
Agreement, including any modifications, additions or upgrades to 
such facilities and equipment. The Transmission Provider's 
Interconnection Facilities are sole use facilities and shall not 
include Distribution Upgrades or Network Upgrades.
    Transmission System shall mean the facilities owned, controlled 
or operated by the Transmission Provider or Transmission Owner that 
are used to provide transmission service under the Tariff.
    Upgrades shall mean 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.

Section 2. General Provisions

    2.1 An Interconnection Request to interconnect a Generating 
Facility no larger than 2 MW with Transmission Provider's Low-
Voltage Transmission System shall be evaluated under the Super-
Expedited Procedures set forth in Section 3 of these Procedures. If 
the Generating Facility fails to pass the procedures set forth in 
Section 3, it may then be evaluated pursuant to Section 4 of these 
Procedures.
    2.2 An Interconnection Request to interconnect: (1) A Generating 
Facility larger than 2 MW but no larger than 20 MW with Transmission 
Provider's Low-Voltage Transmission System, or (2) a Generating 
Facility with Transmission Provider's High-Voltage Transmission 
System, or (3) a Generating Facility that does not pass the Super-
Expedited Procedures as set forth in Section 3 of these Procedures, 
shall be evaluated pursuant to Section 4 of these Procedures.
    2.3 If the Interconnection Request is for a Generating Facility 
that includes multiple energy production devices at a site for which 
Interconnection Customer seeks a single Point of Interconnection, 
the Interconnection Request shall be evaluated on the basis of the 
aggregate capacity of the multiple devices.
    2.4 If the Interconnection Request is for an increase in 
capacity for an existing Generating Facility, the Interconnection 
Request shall be evaluated on the basis of the new total capacity of 
the Generating Facility.
    2.5 Transmission Provider shall maintain records of all 
Interconnection Requests received, the times required to complete 
Interconnection Request approvals and disapprovals, and 
justifications for the actions taken on the Interconnection 
Requests. Transmission Provider shall keep such records on file for 
three years.
    2.6 To assist a prospective Interconnection Customer, 
Transmission Provider shall designate a contact person from whom 
information on the Interconnection Request and about Transmission 
Provider's Transmission System can be obtained through informal 
requests regarding a proposed project. Such information should 
include studies and other materials useful to an understanding of 
the feasibility of an interconnection at a particular point on 
Transmission Provider's Transmission System, except to the extent 
providing such materials would violate security requirements or 
confidentiality agreements, or be contrary to law or the 
Commission's Regulations. Transmission Provider shall comply with 
reasonable requests for access to or copies of such studies.
    2.7 Transmission Provider shall coordinate the conduct of any 
studies required to determine the impact of the Interconnection 
Request on Affected Systems and include those results in the 
applicable study within the time frame specified in these 
procedures. Transmission Provider shall include Affected System 
representatives in all meetings held with Interconnection Customer 
as required by these procedures. Interconnection Customer shall 
cooperate with Transmission Provider in all matters related to the 
conduct of studies and the determination of modifications to 
Affected Systems. An Affected System that is a Transmission Provider 
itself shall cooperate with Transmission Provider in all matters 
related to the conduct of studies and the determination of 
modifications to Affected Systems. In no instance shall the 
processing of the Interconnection Request be delayed as a result of 
inaction by an Affected System.
    2.8 Once an Interconnection Request is deemed complete, any 
Material Modification to the proposed Generating Facility, 
Interconnection Customer's Interconnection Facilities, or site of 
the interconnection not agreed to in writing by Transmission 
Provider, shall require submission of a new Interconnection Request.
    2.9 Proof of Site Control for the Generating Facility shall be 
submitted with the Interconnection Request.
    2.10 Transmission Provider may propose to interconnect more than 
one Generating Facility at a single Point of Interconnection in 
order to minimize costs. However, an Interconnection Customer may 
elect to pay the entire cost of separate Interconnection Facilities.
    2.11 The following articles from the Standard Small Generator 
Interconnection Agreement are incorporated in these procedures by 
reference: Article 6.12 (Security Arrangements), Article 7 
(Confidentiality), and Article 8 (Dispute Resolution).

Section 3. Super-Expedited Procedures for Interconnecting a Small 
Generating Facility No Larger Than 2 MW to a Low-Voltage Transmission 
System

    3.1 Precertification. In order to qualify for the Super-
Expedited Procedures described in this section, Interconnection 
Customer's Generating Facility must be precertified. The Generating 
Facility shall be considered precertified if an identical sample of 
the manufacturer's model has been submitted to a national testing 
laboratory and found, after appropriate testing, to be in compliance 
with applicable consensus industry operational and safety standards. 
No further design review, testing or additional equipment shall be 
required to meet the precertification requirements of this section.
    3.2 Interconnection Request. Interconnection Customer shall 
submit to Transmission Provider an Interconnection Request 
(Application Form) in the form specified in Appendix 6 of these 
procedures. Transmission Provider shall notify Interconnection 
Customer within three Business Days of receipt of the 
Interconnection Request and inform Interconnection Customer of the 
date and time when it was received. Within ten Business Days from 
the date of receipt of the Interconnection Request, Transmission 
Provider shall notify Interconnection Customer whether the request 
is complete. If the Interconnection Request is not complete, 
Transmission Provider shall at the same time provide Interconnection 
Customer in writing a list detailing all information that must be 
provided to complete the Interconnection Request. The 
Interconnection Request shall be deemed complete when the required 
information has been provided by Interconnection Customer, or the 
Parties have agreed that Interconnection Customer may provide 
additional information at a later time, as specified in Section 7 of 
the Interconnection Request.
    3.3 Initial Review. Within 20 Calendar Days after Transmission 
Provider notifies Interconnection Customer it has received a 
completed Interconnection Request, Transmission Provider shall: (1) 
Evaluate the Interconnection Request using the Super-Expedited 
Screening Criteria in Appendix 1 of these procedures, (2) review 
Interconnection Customer's analysis using the same criteria (if 
provided by Interconnection Customer), and (3) provide 
Interconnection Customer with its evaluation, including a comparison 
of the results of its own analyses with those of Interconnection 
Customer (if applicable).
    If Transmission Provider determines that the Interconnection 
Request: (1) passes the Super-Expedited Screening Criteria, or (2) 
fails one or more of the Super-Expedited Screening Criteria but 
determines that the Generating Facility can be interconnected safely 
and reliably, it shall provide Interconnection Customer a Standard 
Small Generator Interconnection Agreement within five Business Days 
after such determination.
    3.4 Additional Review. If Transmission Provider determines that 
the Interconnection Request fails the Super-Expedited Screening 
Criteria and cannot determine that the Generating Facility may be 
interconnected safely and reliably with its Transmission System, 
Interconnection Customer may offer to pay for an expedited 
Additional Review of the interconnection. The Additional Review 
shall not exceed six hours of Transmission Provider's engineering 
time (to be paid for by Interconnection Customer) and shall be 
completed within ten Business Days of the request. The review will 
determine whether minor modifications to Transmission Provider's 
Transmission System (e.g., changing meters, fuses, relay settings) 
can be performed in order to enable the interconnection to be made 
safely and reliably. Transmission Provider shall provide 
Interconnection Customer with a copy of the review. If the 
Additional Review indicates that the interconnection can be made 
safely and reliably with minor modifications and Interconnection 
Customer agrees to pay these

[[Page 49993]]

additional costs, Transmission Provider shall provide 
Interconnection Customer a Standard Small Generator Interconnection 
Agreement within five Business Days after such determination. If the 
review indicates that the interconnection cannot be made safely and 
reliably with minor modifications, the Interconnection Request shall 
be processed under Section 4 of these Procedures.
    3.5 Interconnection of the Generating Facility. After the 
Standard Small Generator Interconnection Agreement is signed by the 
Parties, interconnection of the Generating Facility will proceed 
according to the Milestones agreed to by the Parties in Appendix 3 
of the Standard Small Generator Interconnection Agreement.

Section 4. Procedures for Interconnecting a Small Generating Facility 
to a High-Voltage Transmission System and a Small Generating Facility 
Larger Than 2 MW to a Low-Voltage Transmission System

    4.1 General. An Interconnection Request to interconnect: (1) A 
Generating Facility larger than 2 MW but no larger than 20 MW with 
Transmission Provider's Low-Voltage Transmission System, or (2) a 
Generating Facility with Transmission Provider's High-Voltage 
Transmission System. Generating Facilities larger than 2 MW but no 
larger than 10 MW and Generating Facilities no larger than 2 MW that 
do not pass the Super-Expedited Procedures, that are to be 
interconnected with Transmission Provider's Low-Voltage Transmission 
System, shall be processed pursuant to the Expedited Procedures 
found in Section 4.3 of this section.
    4.2 Interconnection Request. Interconnection Customer shall 
submit to Transmission Provider an Interconnection Request 
(Application Form) in the form specified in Appendix 6 of these 
procedures. Transmission Provider shall notify Interconnection 
Customer within three Business Days of receipt of the 
Interconnection Request and inform Interconnection Customer of the 
date and time when it was received. Within ten Business Days from 
the date of receipt of the Interconnection Request, Transmission 
Provider shall notify Interconnection Customer whether the request 
is complete. If the Interconnection Request is not complete, 
Transmission Provider shall at the same time provide Interconnection 
Customer in writing a list detailing all information that must be 
provided to complete the Interconnection Request. The 
Interconnection Request shall be deemed complete when the required 
information has been provided by Interconnection Customer, or the 
Parties have agreed that Interconnection Customer may provide 
additional information at a later time, as specified in Section 7 of 
the Interconnection Request.
    4.3 Expedited Procedures for a Small Generating Facility No 
Larger Than 10 MW Interconnecting With Transmission Provider's Low-
Voltage Transmission System and a Small Generating Facility Failing 
the Super-Expedited Procedures. An Interconnection Customer may 
request that Transmission Provider use the Expedited Screening 
Criteria contained in Appendix 2 of these procedures to evaluate the 
Interconnection Request.
    4.3.1 If Transmission Provider determines that the Generating 
Facility can be interconnected safely and reliably based upon its 
analysis using the Expedited Screening Criteria, it shall provide 
Interconnection Customer a Standard Small Generator Interconnection 
Agreement within five Business Days after such determination.
    If the Generating Facility passes the Expedited Screening 
Criteria, but Transmission Provider determines that the Generating 
Facility cannot be interconnected safely and reliably, the Parties 
shall conduct a Scoping Meeting. If at the Scoping Meeting the 
Parties conclude that an Interconnection Feasibility Study is 
required, and the study indicates no Adverse System Impact to 
Transmission Provider's Transmission System, the cost of the study 
shall be borne by Transmission Provider and no Interconnection 
System Impact Study shall be required. If the results of the 
Interconnection Feasibility Study indicate an Adverse System Impact 
to Transmission Provider's Transmission System, the cost of the 
study shall be borne by Interconnection Customer and an 
Interconnection System Impact Study shall be performed.
    4.4 Queuing Priority. Transmission Provider shall assign a Queue 
Position based upon the date and time the Interconnection Request is 
deemed complete. The Queue Position of each Interconnection Request 
will be used to determine the cost responsibility for the facilities 
necessary to accommodate the interconnection.
    4.5 Scoping Meeting. A Scoping Meeting will be held within ten 
Business Days, or as agreed to by the Parties, after Transmission 
Provider has notified Interconnection Customer that the 
Interconnection Request is deemed complete. The purpose of the 
meeting shall be to review the Interconnection Request, existing 
studies relevant to the Interconnection Request, and the results of 
the application of the Super-Expedited and/or Expedited Screening 
Criteria. Parties are expected to bring to the meeting personnel, 
including system engineers and other resources as may be reasonably 
required to accomplish the purpose of the meeting.
    4.5.1 If the Parties agree at the Scoping Meeting that an 
Interconnection Feasibility Study needs to be performed, 
Transmission Provider shall provide Interconnection Customer, no 
later than five Business Days after the Scoping Meeting, an 
Interconnection Feasibility Study Agreement including an outline of 
the scope of the study and a non-binding good faith estimate of the 
cost to perform the study.
    4.5.2 If the Parties agree at the Scoping Meeting that an 
Interconnection Feasibility Study does not need to be performed, 
Transmission Provider shall provide Interconnection Customer, no 
later than five Business Days after the Scoping Meeting, an 
Interconnection Facilities Study Agreement including an outline of 
the scope of the study and a non-binding good faith estimate of the 
cost to perform the study.
    4.6 Interconnection Feasibility Study. An Interconnection 
Feasibility Study will include the following analyses for the 
purpose of identifying a potential Adverse System Impact to 
Transmission Provider's Transmission System that would result from 
the interconnection: (1) Initial identification of any circuit 
breaker short circuit capability limits exceeded as a result of the 
interconnection, (2) initial identification of any thermal overload 
or voltage limit violations resulting from the interconnection, (3) 
initial review of grounding requirements and system protection, and 
(4) description and non-binding estimated cost of facilities 
required to interconnect the Generating Facility to Transmission 
Provider's Transmission System in a safe and reliable manner.
    4.6.1 If Interconnection Customer asks that the Interconnection 
Feasibility Study evaluate multiple potential points of 
interconnection, additional evaluations may need to be performed. 
All such evaluations are to be paid by Interconnection Customer.
    4.6.2 An Interconnection System Impact Study shall not be 
required if the Interconnection Feasibility Study indicates no 
Adverse System Impact or if it identifies an Adverse System Impact, 
but Transmission Provider is able to identify a remedy without the 
need for an Interconnection System Impact Study. Otherwise an 
Interconnection System Impact Study shall be required.
    4.7 Interconnection System Impact Study. The Interconnection 
System Impact Study shall evaluate the impact of the proposed 
interconnection on the safety and reliability of Transmission 
Provider's Transmission System and, if applicable, Affected Systems. 
The study shall identify and detail the system impacts that would 
result if the Generating Facility were interconnected without 
project modifications or system modifications, focusing on the 
Adverse System Impacts identified in the Interconnection Feasibility 
Study, or to study potential impacts, including but not limited to 
those identified in the Scoping Meeting. The study will consider all 
generating facilities that, on the date the Interconnection System 
Impact Study is commenced: (1) Are directly interconnected with 
Transmission Provider's Transmission System, (2) are interconnected 
with Affected Systems and may have an impact on the proposed 
interconnection, and (3) have a signed Interconnection Agreement to 
interconnect with Transmission Provider's Transmission System.
    4.7.1 General. The Interconnection System Impact Study will 
consider, as appropriate, a short circuit analysis, a stability 
analysis, a power flow analysis, voltage drop and flicker studies, 
protection and set point coordination studies, and grounding 
reviews. The Interconnection System Impact Study will state the 
underlying assumptions of the study, show the results of the 
analyses, and list any potential impediments to providing the 
requested interconnection service. The study will indicate required 
Upgrades and a non-binding good faith estimate of cost and time to 
construct.
    4.7.2 Distribution Interconnection System Impact Study. A 
distribution Interconnection System Impact Study shall be performed 
if a

[[Page 49994]]

potential Distribution System Adverse System Impact is identified in 
the Interconnection Feasibility Study. Transmission Provider shall 
send Interconnection Customer an Interconnection System Impact Study 
Agreement within five Business Days of transmittal of the 
Interconnection Feasibility Study report, including an outline of 
the scope of the study and a good faith estimate of the cost to 
perform the study. The study shall incorporate a load flow study, an 
analysis of equipment interrupting ratings, protection coordination 
study, voltage drop and flicker studies, protection and set point 
coordination studies, and grounding reviews, and the impact on 
system operation, as necessary.
    4.7.3 Transmission Interconnection System Impact Study. Where 
the Interconnection Feasibility Study or a distribution 
Interconnection System Impact Study shows a potential Transmission 
System Adverse System Impact, within five Business Days following 
transmittal of the Interconnection Feasibility Study report and/or 
distribution Interconnection System Impact Study Report, 
Transmission Provider shall notify any Affected Systems in 
accordance with the procedures provided for in Transmission 
Provider's Tariff on file with FERC. Transmission Provider shall 
also send Interconnection Customer an Interconnection System Impact 
Study Agreement, including an outline of the scope of the study and 
a good faith estimate of the cost to perform the study.
    4.7.4 Coordinated Transmission and Distribution System Impact 
Studies. Where transmission and distribution facilities are owned by 
different entities (such as in the case of transmission-dependent 
utilities (TDUs)) and no single entity is in a position to conduct 
an Interconnection System Impact Study covering both transmission 
and distribution electric systems, Transmission Provider, as 
applicable, shall conduct the Interconnection System Impact Study. 
Affected Systems shall participate in the study and provide all 
information necessary to prepare the study.
    4.7.5 Interconnection System Impact Study Cost Sharing. Affected 
transmission and distribution providers may participate in the 
preparation of the Interconnection System Impact Study, with a 
division of costs among such entities as they may agree. All 
affected parties shall be afforded an opportunity to review and 
comment upon an Interconnection System Impact Study that covers 
potential Adverse System Impacts on their systems, and Transmission 
Provider has thirty additional Calendar Days to complete an 
Interconnection System Impact Study requiring review by Affected 
Systems.
    4.8 Interconnection Facilities Study.
    4.8.1 Within five Business Days of completion of the 
Interconnection System Impact Study, a report will be prepared and 
transmitted to Interconnection Customer along with an 
Interconnection Facilities Study Agreement, which shall include an 
outline of the scope of the study and a non-binding good faith 
estimate of the cost to perform the study.
    4.8.2 The Interconnection Facilities Study shall specify and 
estimate the cost of the equipment, engineering, procurement and 
construction work (including overheads) needed to implement the 
conclusions of the Interconnection Feasibility Study and 
Interconnection System Impact Study to interconnect the Generating 
Facility. The Interconnection Facilities Study shall also identify: 
(1) The electrical switching configuration of the equipment, 
including, without limitation, transformer, switchgear, meters, and 
other station equipment, (2) the nature and estimated cost of 
Transmission Provider's Interconnection Facilities and Upgrades 
necessary to accomplish the interconnection, and (3) an estimate of 
the time required to complete the construction and installation of 
such facilities.
    4.8.3 Parties may agree to permit Interconnection Customer to 
separately arrange for a third party to design and construct the 
required Interconnection Facilities. In such cases, Transmission 
Provider may review the design of the facilities, under the 
provisions of the Interconnection Facilities Study Agreement. If the 
Parties agree to separately arrange for design and construction, and 
comply with any security and confidentiality requirements, 
Transmission Provider shall make all relevant information available 
to Interconnection Customer in order to permit Interconnection 
Customer to obtain an independent design and cost estimate for the 
facilities.
    4.8.4 Upon completion of the Interconnection Facilities Study, 
and with the agreement of Interconnection Customer to pay for 
Interconnection Facilities and Upgrades identified in the 
Interconnection Facilities Study, Transmission Provider shall 
provide Interconnection Customer a Standard Small Generator 
Interconnection Agreement within five Business Days.
    4.9 Interconnection of the Generating Facility. After the 
Standard Small Generator Interconnection Agreement is signed by the 
Parties, interconnection of the Generating Facility will proceed 
according to the Milestones agreed to by the Parties in Appendix 3 
of the Standard Small Generator Interconnection Agreement.
BILLING CODE 6718-01-P

[[Page 49995]]

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[[Page 49996]]


[GRAPHIC] [TIFF OMITTED] TP19AU03.004


[[Page 49997]]


[GRAPHIC] [TIFF OMITTED] TP19AU03.005

BILLING CODE 6718-01-C

Appendix 1

Super-Expedited Screening Criteria (Applicable to Generating Facilities 
No Larger than 2 MW)

    1.1 For interconnection of the Generating Facility to a radial 
Low-Voltage circuit, the aggregate new generation capacity on the 
circuit shall not exceed five percent of the total circuit annual 
peak load as most recently measured at the substation.
    1.2 For interconnection of the Generating Facility to the load 
side of Spot Network protectors, the Generating Facility must 
utilize an inverter-based equipment package and, together with other 
inverter-based generation, shall not exceed the smaller of five 
percent of a Spot Network's maximum load or 50 kW.
    1.3 The Generating Facility, in aggregation with other 
generation on the Low-Voltage circuit, shall not contribute more 
than ten percent to the circuit's

[[Page 49998]]

maximum Fault Current on the High-Voltage (primary) level nearest 
the proposed Point of Common Coupling.
    1.4 The Generating Facility, in aggregate with other generation 
on the Low-Voltage circuit, shall not cause any protective devices 
and equipment (including, but not limited to, substation breakers, 
fuse cutouts, and line reclosers), or customer equipment on the 
system to exceed 85 percent of the short circuit interrupting 
capability; nor is the interconnection proposed for a circuit that 
already exceeds 85 percent of the short circuit interrupting 
capability.
    1.5 The Generating Facility, in aggregate with other generation 
interconnected to the Low-Voltage side of the substation transformer 
feeding the circuit where the Generating Facility proposes to 
interconnect, shall not exceed 10 MW in an area where there are 
known or posted transient stability limitations to generating units 
located in the general electrical vicinity (e.g., three or four 
High-Voltage busses from the point of interconnection).
    1.6 For interconnection of a single-phase generator where the 
primary Low-Voltage electric system is three-phase, four-wire, the 
Generating Facility shall be connected line-to-neutral. For 
interconnection of a single-phase generator where the primary Low-
Voltage electric system is three-phase, three-wire, the Generating 
Facility shall be connected line-to-line.
    1.7 For interconnection of a proposed three-phase generator to a 
three-phase, four-wire Low-Voltage circuit or a Low-Voltage circuit 
having mixed three-wire and four-wire sections, the aggregate 
generation capacity including the Generating Facility shall not 
exceed ten percent of line section peak load.
    1.8 If the Generating Facility is to be interconnected on 
single-phase shared secondary, the aggregate new generation capacity 
on the shared secondary shall not exceed 20 kVA.
    1.9 If the Generating Facility is single-phase and is to be 
interconnected on a center tap neutral of a 240 volt service, its 
addition shall not create an imbalance between the two sides of the 
240 volt service of more than 20 percent of nameplate rating of the 
service transformer.
    1.10 The Generating Facility's Point of Common Coupling shall be 
on a Low-Voltage electric system.

Appendix 2

Expedited Screening Criteria (Applicable to Generating Facilities No 
Larger than 10 MW)

    1.1 For interconnection of the Generating Facility to a radial 
Low-Voltage circuit, the Generating Facility's capacity in aggregate 
with other generation on the circuit shall not exceed 15 percent of 
total circuit annual peak load as most recently measured at the 
substation; nor shall it exceed 15 percent of a Low-Voltage circuit 
line section design capacity. A line section is defined as that 
section of the Low-Voltage electric system between two 
sectionalizing devices.
    1.2 The Generating Facility, in aggregation with other 
generation on the Low-Voltage circuit, shall not contribute more 
than ten percent to the Low-Voltage circuit's maximum Fault Current 
at the point on the primary level nearest the proposed Point of 
Common Coupling.
    1.3 Interconnection of the Generating Facility in aggregate with 
other generation on the Low-Voltage circuit shall not cause any 
equipment, protective devices (including, but not limited to, 
substation breakers, fuse cutouts, and line reclosers), or customer 
equipment on the system to exceed 90 percent of their short circuit 
interrupting capability; nor may the interconnection be proposed for 
a circuit that already exceeds the 90 percent capability limit.
    1.4 The Generating Facility's Point of Common Coupling shall not 
be on a Low-Voltage secondary or Spot Network.
    1.5 The Generating Facility, in aggregate with other generation 
interconnected to the Low-Voltage side of the substation transformer 
feeding the Low-Voltage circuit where the Generating Facility 
proposes to interconnect, shall not exceed 10 MW in an area where 
there are known or posted transient stability limitations to 
generating units located in the general electrical vicinity (e.g., 
three or four High-Voltage level busses from the point of 
interconnection).

Appendix 3

Interconnection Feasibility Study Agreement

    This agreement is made and entered into this ------day of------
------20----by and between--------------------, a------------
organized and existing under the laws of the State of------------, 
(``Interconnection Customer,'') and------------, a ------------
existing under the laws of the State of------------, (``Transmission 
Provider''). Interconnection Customer and Transmission Provider each 
may be referred to as a ``Party,'' or collectively as the 
``Parties.''

Recitals

    Whereas, Interconnection Customer is proposing to develop a 
Small Generating Facility or generating capacity addition to an 
existing Small Generating Facility consistent with the 
Interconnection Request completed by Interconnection Customer on----
--------; and
    Whereas, Interconnection Customer desires to interconnect the 
Generating Facility with Transmission Provider's Transmission 
System; and
    Whereas, Interconnection Customer has requested Transmission 
Provider to perform an Interconnection Feasibility Study to assess 
the feasibility of interconnecting the proposed Generating Facility 
to Transmission Provider's Transmission System, and of any Affected 
Systems;
    Now, Therefore, in consideration of and subject to the mutual 
covenants contained herein the Parties agreed as follows:

    1.0 When used in this agreement, with initial capitalization, 
the terms specified shall have the meanings indicated. Terms used in 
this agreement with initial capitalization but not defined in this 
agreement shall have the meanings specified in Section 1 of the 
Standard Small Generator Interconnection Procedures.
    2.0 Interconnection Customer elects and Transmission Provider 
shall cause to be performed an Interconnection Feasibility Study 
consistent with Section 4.6 of the Standard Small Generator 
Interconnection Procedures in accordance with the Tariff.
    3.0 The scope of the Interconnection Feasibility Study shall be 
subject to the assumptions set forth in Attachment A to this 
agreement.
    4.0 The Interconnection Feasibility Study shall be based on the 
technical information provided by Interconnection Customer in the 
Interconnection Request, as may be modified as the result of the 
Scoping Meeting. Transmission Provider reserves the right to request 
additional technical information from Interconnection Customer as 
may reasonably become necessary consistent with Good Utility 
Practice during the course of the Interconnection Feasibility Study 
and as designated in accordance with Section 4.5 (Scoping Meeting) 
of the Standard Small Generator Interconnection Procedures. If 
Interconnection Customer modifies its Interconnection Request, the 
time to complete the Interconnection Feasibility Study may be 
extended by agreement of the Parties.
    5.0 In performing the study, Transmission Provider shall rely, 
to the extent reasonably practicable, on existing studies of recent 
vintage. The Interconnection Customer will not be charged for such 
existing studies; however, Interconnection Customer shall be 
responsible for charges associated with any new study or 
modifications to existing studies that are reasonably necessary to 
perform the Interconnection Feasibility Study.
    6.0 The Interconnection Feasibility Study report shall provide 
the following information:

--Preliminary identification of any circuit breaker short circuit 
capability limits exceeded as a result of the interconnection,
--preliminary identification of any thermal overload or voltage 
limit violations resulting from the interconnection, and
--preliminary description and non-bonding estimated cost of 
facilities required to interconnect the Generating Facility to 
Transmission Provider's Transmission System and to address the 
identified short circuit and power flow issues.

    7.0 Transmission Provider may require a study deposit of the 
lesser of 100 percent of estimated non-binding good faith study 
costs or $1,000.
    8.0 The Interconnection Feasibility Study shall be completed and 
the results shall be transmitted to Interconnection Customer within 
thirty Calendar Days after this agreement is signed by the Parties.
    9.0 Study fees shall be based on actual costs and will be 
invoiced to Interconnection Customer after the study is transmitted 
to Interconnection Customer. The invoice shall include an itemized 
listing of employee time and costs expended on the study.
    10.0 Interconnection Customer shall pay any actual study costs 
that exceed the deposit without interest within thirty Calendar Days 
on receipt of the invoice. Transmission Provider shall refund any 
excess amount without interest within thirty Calendar Days of the 
invoice.

[[Page 49999]]

    In witness whereof, the Parties have caused this agreement to be 
duly executed by their duly authorized officers or agents on the day 
and year first above written.
[Insert name of Transmission Provider]

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

 Signed----------------------------------------------------------------

Name (Printed):
-----------------------------------------------------------------------

 Title-----------------------------------------------------------------

[Insert name of Interconnection Customer]
 Signed----------------------------------------------------------------

Name (Printed):
-----------------------------------------------------------------------

 Title-----------------------------------------------------------------

Attachment A to Interconnection Feasibility Study Agreement

Assumptions Used in Conducting the Interconnection Feasibility Study

    The Interconnection Feasibility Study will be based upon the 
information set forth in the Interconnection Request and agreed upon 
in the Scoping Meeting held on------------:
    (1) Designation of Point of Interconnection and configuration to 
be studied.
    (2) Designation of alternative Points of Interconnection and 
configuration.
    (1) and (2) are to be completed by Interconnection Customer. 
Other assumptions (listed below) are to be provided by 
Interconnection Customer and Transmission Provider.

Appendix 4

Interconnection System Impact Study Agreement

    This agreement is made and entered into this ------day of------
------ 20----by and between------------, a------------organized and 
existing under the laws of the State of ------------, 
(``Interconnection Customer,'') and ------------, a------------
existing under the laws of the State of ------------, 
(``Transmission Provider''). Interconnection Customer and 
Transmission Provider each may be referred to as a ``Party,'' or 
collectively as the ``Parties.''

Recitals

    Whereas, Interconnection Customer is proposing to develop a 
Small Generating Facility or generating capacity addition to an 
existing Small Generating Facility consistent with the 
Interconnection Request completed by Interconnection Customer on --
----------; and
    Whereas, Interconnection Customer desires to interconnect the 
Generating Facility with Transmission Provider's Transmission 
System;
    Whereas, Transmission Provider has completed an Interconnection 
Feasibility Study and provided the results of said study to 
Interconnection Customer (This recital to be omitted if the Parties 
have agreed to forego the Interconnection Feasibility Study.); and
    Whereas, Interconnection Customer has requested Transmission 
Provider to perform an Interconnection System Impact Study to assess 
the impact of interconnecting the Generating Facility to 
Transmission Provider's Transmission System, and of any Affected 
Systems;
    Now, therefore, in consideration of and subject to the mutual 
covenants contained herein the Parties agreed as follows:
    1.0 When used in this agreement, with initial capitalization, 
the terms specified shall have the meanings indicated. Terms used in 
this agreement with initial capitalization but not defined in this 
agreement shall have the meanings specified in Section 1 of the 
Standard Small Generator Interconnection Procedures.
    2.0 Interconnection Customer elects and Transmission Provider 
shall cause to be performed an Interconnection System Impact Study 
consistent with Section 4.7 of the Standard Small Generator 
Interconnection Procedures in accordance with the Tariff.
    3.0 The scope of the Interconnection System Impact Study shall 
be subject to the assumptions set forth in Attachment A to this 
agreement.
    4.0 The Interconnection System Impact Study will be based upon 
the results of the Interconnection Feasibility Study and the 
technical information provided by Interconnection Customer in the 
Interconnection Request. Transmission Provider reserves the right to 
request additional technical information from Interconnection 
Customer as may reasonably become necessary consistent with Good 
Utility Practice during the course of the Interconnection System 
Impact Study. If Interconnection Customer modifies its designated 
Point of Interconnection, Interconnection Request, or the technical 
information provided therein is modified, the time to complete the 
Interconnection System Impact Study may be extended.
    5.0 The Interconnection System Impact Study report shall provide 
the following information:

--Identification of any circuit breaker short circuit capability 
limits exceeded as a result of the interconnection,
--Identification of any thermal overload or voltage limit violations 
resulting from the interconnection,
--Identification of any instability or inadequately damped response 
to system disturbances resulting from the interconnection and
--Description and non-binding, good faith estimated cost of 
facilities required to interconnect the Generating Facility to 
Transmission Provider's Transmission System and to address the 
identified short circuit, instability, and power flow issues.

    6.0 Transmission Provider may require a study deposit of the 
lesser of 50 percent of estimated non-binding good faith study costs 
or $3,000.
    7.0 The distribution Interconnection System Impact Study, if 
required, shall be completed and the results transmitted to 
Interconnection Customer within thirty Calendar Days after this 
agreement is signed by the Parties. The transmission Interconnection 
System Impact Study, if required, shall be completed and the results 
transmitted to Interconnection Customer within forty-five Calendar 
Days after this agreement is signed by the Parties, or in accordance 
with Transmission Provider's queuing procedures.
    8.0 Study fees shall be based on actual costs and will be 
invoiced to Interconnection Customer after the study is transmitted 
to Interconnection Customer. The invoice shall include an itemized 
listing of employee time and costs expended on the study.
    9.0 Interconnection Customer shall pay any actual study costs 
that exceed the deposit without interest within 30 Calendar Days on 
receipt of the invoice. Transmission Provider shall refund any 
excess amount without interest within thirty Calendar Days of the 
invoice.
    In witness thereof, the Parties have caused this agreement to be 
duly executed by their duly authorized officers or agents on the day 
and year first above written.
[Insert name of Transmission Provider]
-----------------------------------------------------------------------

 Signed----------------------------------------------------------------

Name (Printed):
-----------------------------------------------------------------------

 Title-----------------------------------------------------------------

[Insert name of Interconnection Customer]
-----------------------------------------------------------------------
 Signed----------------------------------------------------------------

Name (Printed):
-----------------------------------------------------------------------

 Title-----------------------------------------------------------------

Attachment A to Interconnection System Impact Study Agreement

Assumptions Used in Conducting the Interconnection System Impact Study

    The Interconnection System Impact Study shall be based upon the 
results of the Interconnection Feasibility Study, subject to any 
modifications in accordance with Section 4.7 of the Standard Small 
Generator Interconnection Procedures, and the following assumptions:
    (1) Designation of Point of Interconnection and configuration to 
be studied.
    (2) Designation of alternative Points of Interconnection and 
configuration.
    (1) and (2) are to be completed by Interconnection Customer. 
Other assumptions (listed below) are to be provided by 
Interconnection Customer and Transmission Provider.

Appendix 5

Interconnection Facilities Study Agreement

    This agreement is made and entered into this ------ day of ----
-------- 20 ---- by and between --------------------, a ------------ 
organized and existing under the laws of the State of ------------, 
(``Interconnection Customer,'') and ------------, a ------------ 
existing under the laws of the State of ------------, 
(``Transmission Provider''). Interconnection Customer and 
Transmission Provider each may be referred to as a ``Party,'' or 
collectively as the ``Parties.''

Recitals

    Whereas, Interconnection Customer is proposing to develop a 
Small Generating Facility or generating capacity addition to an 
existing Small Generating Facility consistent with the 
Interconnection Request completed by Interconnection Customer on --
----------; and

[[Page 50000]]

    Whereas, Interconnection Customer desires to interconnect the 
Generating Facility with Transmission Provider's Transmission 
System;
    Whereas, Transmission Provider has completed an Interconnection 
System Impact Study and provided the results of said study to 
Interconnection Customer; and
    Whereas, Interconnection Customer has requested Transmission 
Provider to perform an Interconnection Facilities Study to specify 
and estimate the cost of the equipment, engineering, procurement and 
construction work needed to implement the conclusions of the 
Interconnection System Impact Study in accordance with Good Utility 
Practice to physically and electrically connect the Generating 
Facility to Transmission Provider's Transmission System.
    Now, therefore, in consideration of and subject to the mutual 
covenants contained herein the Parties agreed as follows:
    1.0 When used in this agreement, with initial capitalization, 
the terms specified shall have the meanings indicated. Terms used in 
this agreement with initial capitalization but not defined in this 
agreement shall have the meanings specified in Section 1 of the 
Standard Small Generator Interconnection Procedures.
    2.0 Interconnection Customer elects and Transmission Provider 
shall cause an Interconnection Facilities Study consistent with 
Section 4.8 of the Standard Small Generator Interconnection 
Procedures to be performed in accordance with the Tariff.
    3.0 The scope of the Interconnection Facilities Study shall be 
subject to data provided in Attachment A to this agreement.
    4.0 An Interconnection Facilities Study report (1) shall provide 
a description, estimated cost of (consistent with Attachment A), 
schedule for required facilities to interconnect the Generating 
Facility to Transmission Provider's Transmission System and (2) 
shall address the short circuit, instability, and power flow issues 
identified in the Interconnection System Impact Study.
    5.0 Transmission Provider may require a study deposit of the 
lesser of 50 percent of estimated non-binding good faith study costs 
or $10,000.
    6.0 In cases where no Upgrades are required, the Interconnection 
Facilities Study shall be completed and the results shall be 
transmitted to Interconnection Customer within thirty Calendar Days 
after this agreement is signed by the Parties. In cases where 
Upgrades are required, the Interconnection Facilities Study shall be 
completed and the results shall be transmitted to Interconnection 
Customer within forty-five Calendar Days after this agreement is 
signed by the Parties.
    7.0 Study fees shall be based on actual costs and will be 
invoiced to Interconnection Customer after the study is transmitted 
to Interconnection Customer. The invoice shall include an itemized 
listing of employee time and costs expended on the study.
    8.0 Interconnection Customer shall pay any actual study costs 
that exceed the deposit without interest within 30 Calendar Days on 
receipt of the invoice. Transmission Provider shall refund any 
excess amount without interest within thirty Calendar Days of the 
invoice.

    In witness whereof, the Parties have caused this agreement to be 
duly executed by their duly authorized officers or agents on the day 
and year first above written.
[Insert name of Transmission Provider]
-----------------------------------------------------------------------
Signed-----------------------------------------------------------------
Name (Printed):
-----------------------------------------------------------------------
Title------------------------------------------------------------------
[Insert name of Interconnection Customer]
-----------------------------------------------------------------------
Signed-----------------------------------------------------------------
Name (Printed):
-----------------------------------------------------------------------
Title------------------------------------------------------------------

Attachment A to Interconnection Facilities Study Agreement

Data To Be Provided by Interconnection Customer With the 
Interconnection Facilities Study Agreement

    Provide location plan and simplified one-line diagram of the 
plant and station facilities. For staged projects, please indicate 
future generation, transmission circuits, etc.
    On the one-line diagram, indicate the generation capacity 
attached at each metering location. (Maximum load on CT/PT)
    On the one-line diagram, indicate the location of auxiliary 
power. (Minimum load on CT/PT) Amps
    One set of metering is required for each generation connection 
to the new ring bus or existing Transmission Provider station. 
Number of generation connections: ----
    Will an alternate source of auxiliary power be available during 
CT/PT maintenance? Yes ---- No ----
    Will a transfer bus on the generation side of the metering 
require that each meter set be designed for the total plant 
generation? Yes ---- No ---- (Please indicate on the one-line 
diagram).
    What type of control system or PLC will be located at the 
Generating Facility?
-----------------------------------------------------------------------
    What protocol does the control system or PLC use?
-----------------------------------------------------------------------
    Please provide a 7.5-minute quadrangle map of the site. Indicate 
the plant, station, transmission line, and property lines.
    Physical dimensions of the proposed interconnection station:
-----------------------------------------------------------------------
    Bus length from generation to interconnection station:
-----------------------------------------------------------------------
    Line length from interconnection station to Transmission 
Provider's Transmission System.
-----------------------------------------------------------------------
    Tower number observed in the field. (Painted on tower leg)*:
-----------------------------------------------------------------------
    Number of third party easements required for transmission 
lines*:
-----------------------------------------------------------------------
    * To be completed in coordination with Transmission Provider.
    Is the Generating Facility located in Transmission Provider's 
service area?
    Yes ---- No ---- If No, please provide name of local provider:
-----------------------------------------------------------------------
    Please provide the following proposed schedule dates:

Begin Construction
Date:------------------------------------------------------------------
Generator step-up transformers receive back feed power
Date:------------------------------------------------------------------
Generation Testing
Date:------------------------------------------------------------------
Commercial Operation
Date:------------------------------------------------------------------

Appendix 6

Small Generating Facility Interconnection Request (Application Form)

Instructions

    Interconnection Customer declares its intention to sell 
electricity at wholesale in interstate commerce. Interconnection 
customer submits this request to interconnect its Small Generating 
Facility with the Transmission Provider's Transmission System 
pursuant to a Tariff.
    In order for the Generating Facility to be considered for 
interconnection to Transmission Provider's Transmission System, 
Interconnection Customer must submit to Transmission Provider (1) a 
completed Interconnection Request (The Interconnection Request shall 
be deemed complete when the required information has been provided 
by Interconnection Customer, or the Parties have agreed that 
Interconnection Customer may provide additional information at a 
later time, as specified in Section 7 below), and (2) the 
appropriate non-refundable processing fee.
    If requested information is not applicable, indicate by using 
``N/A''.
    Additional information to evaluate an Interconnection Request 
may be required by Transmission Provider as the application process 
proceeds.

Processing Fee

    Indicate the amount of processing fee enclosed: $------
    Processing Fee for Small Generating Facilities No Larger than 2 
MW:

The greater of:
$0.50/nameplate KVA rating, or
$100 for single phase generators no larger than 25 KVA, or
$500 for three phase generators and single phase generators larger 
than 25 KVA

    Processing Fee for Small Generating Facilities Larger than 2 MW 
but No Larger than 20 MW:

$1,000 for generators no larger than 10 MW
$2,000 for generators larger than 10 MW

Section 1. Interconnection Customer Information

Interconnection Request (Application Form)

    Indicate whether Interconnection Customer intends to participate 
as:
---- Network Resource
---- Energy-Only Resource
---- Non-Exporting Resource Participating in a Wholesale Market
---- Other (Describe: ------------)

[[Page 50001]]

    Indicate Generating Facility size:
---- 0-2.00 MW
---- 2.01-10.00 MW
---- 10.01-20.00 MW
    Application is for:
----New Generating Facility
---- Capacity addition to Existing Generating Facility
    If capacity addition to existing facility, please describe:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
    Legal Name of Interconnection Customer (or, if an Individual, 
Individual's Name)
Name:------------------------------------------------------------------
Mailing Address:-------------------------------------------------------
City:------------------------------------------------------------------
State:-----------------------------------------------------------------
Zip:-------------------------------------------------------------------
    Generating Facility Location (if different from above):
-----------------------------------------------------------------------
Telephone:
Daytime:---------------------------------------------------------------
Evening:---------------------------------------------------------------
Fax:-------------------------------------------------------------------
E-Mail Address:--------------------------------------------------------
    Alternative Contact Information (If different from 
Interconnection Customer information above)
Contact Name:----------------------------------------------------------
Title:-----------------------------------------------------------------
Address:---------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Telephone:
Daytime:---------------------------------------------------------------
Evening:---------------------------------------------------------------
Fax:-------------------------------------------------------------------
E-Mail Address:--------------------------------------------------------
    For generators installed at locations with existing electric 
service to which the proposed Generating Facility will interconnect, 
provide:
-----------------------------------------------------------------------
(Local Electric Service Provider Name*)
-----------------------------------------------------------------------
(Current Account Number*)
    (*To be provided by Interconnection Customer if the local 
electric service provider is different from Transmission Provider)
Contact Name:----------------------------------------------------------
Contact Title:---------------------------------------------------------
Address:---------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Telephone:
Daytime:---------------------------------------------------------------
Evening:---------------------------------------------------------------
Fax:-------------------------------------------------------------------
E-Mail Address:--------------------------------------------------------

Section 2. Generator Qualifications

Energy Source:
------Hydro [Specify Type (e.g., Run-of-River)----------]
------ Solar
------ Wind
------ Diesel
------ Natural Gas
------ Fuel Oil
------ Other (Specify ------------------------)
Type of Generator:
------ Synchronous
------ Induction
------ DC Generator or Solar with Inverter
Generator Nameplate Rating: ---------- kW (Typical)
Generator Nameplate KVA: ----------
Interconnection Customer or Customer-Site Load: ------ kW (if none, 
so state) (Typical)
---------- (Reactive Load, if known)
Maximum physical export capability requested: --------kW
List components of the Generating Facility that are Precertified:


 
                Equipment Type                                                 Precertifying Entity
 
 
-----------------------------------------------                  -----------------------------------------------
 
-----------------------------------------------                  -----------------------------------------------
 
-----------------------------------------------                  -----------------------------------------------
 
-----------------------------------------------                  -----------------------------------------------
 
-----------------------------------------------                  -----------------------------------------------
 
-----------------------------------------------                  -----------------------------------------------
 
-----------------------------------------------                  -----------------------------------------------
 

Section 3. Generator Technical Information

 Small Generating Facility (or solar collector) manufacturer, model 
name, number, and version:---------------------------------------------
    Nameplate output power rating in kW: (Summer)------ (Winter)----
--
    Nameplate output power rating in KVA: (Summer) ------ (Winter) 
------
Individual generator power factor:
     Rated power factor leading: ------------
     Rated power factor lagging: ------------

Wind Generators

    Number of generators to be interconnected pursuant to this 
Interconnection Request: --

 Elevation: ------------ ----Single Phase ---- Three Phase
    Inverter manufacturer, model name, number, and version:
-----------------------------------------------------------------------
    List of adjustable setpoints for the protective equipment or 
software:
-----------------------------------------------------------------------

    Note: A completed General Electric Company Power Systems Load 
Flow (PSLF) data sheet must be supplied with the Interconnection 
Request.

Small Generating Facility Characteristic Data (for rotating 
machines)

Synchronous and Induction Generators:

Direct Axis Transient Reactance, X'd: ------ P.U.
Direct Axis Unsaturated Transient Reactance, X'di: ------ P.U.
Direct Axis Subtransient Reactance, X''d: ------ P.U.
Generator Saturation Constant (1.2): ------
Generation Saturation Constant (1.2): ------
Negative Sequence Reactance: ------ P.U.
Zero Sequence Reactance: ------ P.U.
KVA Base:--------------------------------------------------------------
RPM Frequency:---------------------------------------------------------

Induction Generators:

(*) Field Volts:-------------------------------------------------------
(*) Field Amperes:-----------------------------------------------------
(*) Motoring Power (kW):-----------------------------------------------
(*) Neutral Grounding Resistor (If Applicable):------------------------
(*) I22t or K (Heating Time Constant):-----------
(*) Rotor Resistance:--------------------------------------------------
(*) Stator Resistance:-------------------------------------------------
(*) Stator Reactance:--------------------------------------------------
(*) Rotor Reactance:---------------------------------------------------
(*) Magnetizing Reactance:---------------------------------------------
(*) Short Circuit Reactance:-------------------------------------------
(*) Exciting Current:--------------------------------------------------
(*) Temperature Rise:--------------------------------------------------
(*) Frame Size:--------------------------------------------------------
(*) Design Letter:-----------------------------------------------------
(*) Reactive Power Required In Vars (No Load):-------------------------
(*) Reactive Power Required In Vars (Full Load):-----------------------
(*) Total Rotating Inertia, H: -- Per Unit on KVA Base

    Note: Please consult Transmission Provider prior to submitting 
the Interconnection Request to determine if the information 
designated by (*) is required.

Excitation and Governor System Data for Synchronous Generators Only

    If determined to be required, provide appropriate IEEE model 
block diagram of excitation system, governor system, and power 
system stabilizer (PSS) in accordance with the regional reliability 
council criteria.

[[Page 50002]]

A PSS may be determined to be required by applicable studies. A copy 
of the manufacturer's block diagram may not be substituted.

Section 4. Interconnecting Equipment Technical Data Information

    Will a transformer be used between the Small Generating Facility 
and the Point of Interconnection? ---- Yes ---- No
    Will the transformer be provided by Interconnection Customer? --
---- Yes ------ No

Transformer Data for Interconnection Customer-Owned Transformer (if 
applicable)

The transformer is: ------ single phase ------ three phase Size: --
---- KVA Transformer impedance: ------ % on ------ KVA Base
    If Three Phase:
    Transformer Primary: ---------- Volts ----------Delta ----------
Wye ---------- Wye Grounded
    Transformer Secondary: ---------- Volts ---------- Delta ------
---- Wye ----------Wye Grounded
 Transformer fuse data for Interconnection Customer-owned fuse (if 
applicable):-----------------------------------------------------------
-----------------------------------------------------------------------

    Note: Please attach a copy of fuse manufacturer's minimum melt 
and total clearing time-current curves

Fuse Manufacturer:-----------------------------------------------------
Type: ---------- Size: ---------- Speed: ----------

Interconnecting Circuit Breaker (if applicable)

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

Interconnection Protective Relays (if applicable)

    Note: Please attach a 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)

    Note: Please attach a copy of manufacturer's excitation & ratio 
correction curves
Manufacturer:----------------------------------------------------------
Type:------------------------------------------------------------------
Accuracy Class:--------------------------------------------------------
Proposed Ratio Connection:----------/5
Manufacturer:----------------------------------------------------------
Type:------------------------------------------------------------------
Accuracy Class:--------------------------------------------------------
Proposed Ratio Connection:----------/5

Potential Transformer Data (if applicable)

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

Section 5. General Information

Requested Point of Interconnection:------------------------------------
-----------------------------------------------------------------------
Proposed In-Service Date:----------------------------------------------
Please attach a one-line diagram showing the configuration of all 
generating facility equipment, current and potential circuits, and 
protection and control schemes.
Is a one line diagram attached? --------
Yes --------No
Please attach any site documentation that indicates the precise 
physical location of the proposed generating facility (e.g., USGS 
topographic map or other diagram or documentation).
Is site documentation attached? -------- Yes -------- No
Please attach any documentation that describes and details the 
operation of the protection and control schemes.
Is protection and control scheme documentation attached? -------- 
Yes -------- No
Proposed location of protective interface equipment on property 
(Include address if different from Interconnection Customer's 
address):
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Please attach 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 attached?
    -------- Yes -------- No
Please attach Site Control documentation.
Is Site Control documentation attached? -------- Yes -------- No
Does Interconnection Customer currently have control of the site? --
------ Yes -------- No

Section 6. Signatures

I hereby certify that, to the best of my knowledge, all the 
information provided in this Interconnection Request is true and 
correct.
For Interconnection Customer (Printed):--------------------------------
-----------------------------------------------------------------------
Signature:-------------------------------------------------------------
Date:------------------------------------------------------------------
I hereby determine that on the date and time specified below, 
Interconnection Customer has provided or agreed to provide per 
Section 7 all required information, and the Interconnection Request 
is considered complete.
 For Transmission Provider (Printed):----------------------------------
-----------------------------------------------------------------------
 Signature:------------------------------------------------------------
Date:------------------------------------------------------------------
Time:------------------------------------------------------------------

Section 7. Agreement to Provide Data if Not Included With Initial 
Interconnection Request

 
                                  Data Item                                                                      Date to be Provided
 
 
-----------------------------------------------------------------------------               ------------------------------------------------------------
 
-----------------------------------------------------------------------------               ------------------------------------------------------------
 
-----------------------------------------------------------------------------               ------------------------------------------------------------
 
-----------------------------------------------------------------------------               ------------------------------------------------------------
 
-----------------------------------------------------------------------------               ------------------------------------------------------------
 
-----------------------------------------------------------------------------               ------------------------------------------------------------
 
-----------------------------------------------------------------------------               ------------------------------------------------------------
 
-----------------------------------------------------------------------------               ------------------------------------------------------------
 
-----------------------------------------------------------------------------               ------------------------------------------------------------
 
-----------------------------------------------------------------------------               ------------------------------------------------------------

[[Page 50003]]

 
 
-----------------------------------------------------------------------------               ------------------------------------------------------------
 
-----------------------------------------------------------------------------               ------------------------------------------------------------
 
-----------------------------------------------------------------------------               ------------------------------------------------------------
Agreed to by:
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
For Transmission Provider                                                     .............  Date
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
For Interconnection Customer                                                  .............  Date
 

Appendix 7 to the Standard Small Generator Interconnection Procedures

STANDARD SMALL GENERATOR INTERCONNECTION AGREEMENT (SGIA)

Table of Contents

Identification of Parties and Recitals
Article 1. Definitions
Article 2. Scope and Limitations of Agreement
    2.1 Scope and Limitations of Agreement
    2.2 Responsibilities of the Parties
    2.3 Parallel Operation Obligations
    2.4 Metering
Article 3. Inspection, Testing, Authorization, and Right of Access
    3.1 Equipment Testing and Inspection
    3.2 Authorization Required Prior To Parallel Operation
    3.3 Right of Access
Article 4. Effective Date, Term, Termination, and Disconnection
    4.1 Effective Date
    4.2 Term of Agreement
    4.3 Termination
    4.4 Temporary Disconnection
    4.4.1 Emergency Conditions
    4.4.2 Routine Maintenance, Construction and Repair
    4.4.3 Forced Outages
    4.4.4 Adverse Operating Effects
    4.4.5 Modification of the Generating Facility
    4.4.6 Reconnection
Article 5. Cost Responsibility, Milestones, Billing, and Payment
    5.1 Cost Responsibility
    5.1.1 Interconnection Facilities
    5.1.2 Network Upgrades
    5.1.2.1 Refund of Amounts Advanced for Network Upgrades
    5.1.3 Distribution Upgrades
    5.1.4 Operating and Maintenance Expenses
    5.1.5 General
    5.2 Financial Security Arrangements
    5.3 Milestones
    5.4 Billing and Payment
    5.4.1 Billing Procedure for Interconnection Facilities 
Construction
    5.4.2 Final Accounting
Article 6. Miscellaneous
    6.1 Governing Law, Regulatory Authority and Rules
    6.2 Amendment
    6.3 No Third Party Beneficiaries
    6.4 Waiver
    6.5 Assignment
    6.6 Entire Agreement
    6.7 Notices
    6.8 Multiple Counterparts
    6.9 No Partnership
    6.10 Communications
    6.11 Severability
    6.12 Security Arrangements
    6.13 Indemnity
    6.14 Force Majeure
    6.15 Environmental Releases
    6.16 Insurance
    6.17 Default
    6.18 Subcontractors
    6.19 Consequential Damages
    6.20 Reservation of Rights
Article 7. Confidentiality
    7.1 Confidentiality
    7.2 Term
    7.3 Scope
    7.4 Release of Confidential Information
    7.5 Rights
    7.6 No Warranties
    7.7 Standard of Care
    7.8 Order of Disclosure
    7.9 Termination of Agreement
    7.10 Remedies
    7.11 Disclosure to FERC or its Staff
    7.12 Competitively Sensitive, Commercial or Financial 
Information
    7.13 Information in Public Domain
Article 8. Disputes
    8.1 Submission
    8.2 External Arbitration Procedures
    8.3 Arbitration Decisions
    8.4 Costs
Article 9. Signatures
Appendix 1--Description and Costs of Generating Facility, 
Interconnection Facilities, and Metering Equipment
Appendix 2--One-line Diagram Depicting Generating Facility, 
Interconnection Facilities, Metering Equipment, and Upgrades
Appendix 3--Milestones
Appendix 4--Additional Operating Requirements for Interconnection 
Provider's Transmission System and Affected Systems Needed to 
Support the Interconnection Customer's Needs
Appendix 5--Transmission Provider's Description of Transmission 
System Upgrades and Best Estimate of Upgrade Costs

Identification of Parties and Recitals

    This agreement is made and entered into this ---- day of ------
------, by ------------, a ------------ organized and existing under 
the laws of the State/Commonwealth of ------------ and having its 
principal place of business in ------------ (``Transmission 
Provider'') and ------------, a ------------ organized and existing 
under the laws of the State/Commonwealth of ------------ and having 
its principal place of business in ------------, ------------ 
(``Interconnection Customer'').
    Whereas, Interconnection Customer desires to engage in the 
interconnected operation of its Generating Facility with 
Transmission Provider's Transmission System;
    Whereas, Interconnection Customer has applied for and been 
approved by Transmission Provider for interconnection pursuant to 
Transmission Provider's Small Generating Facility interconnection 
process and in accordance with the Standard Small Generator 
Interconnection Procedures; and
    Whereas, Parties agree that interconnection of the Generating 
Facility will be expedited to the greatest extent possible.
    Now, therefore, in consideration of and subject to the mutual 
covenants contained herein, it is agreed:

Article 1. Definitions

    When used with initial capitalization, the following terms shall 
have the meanings specified or referred to below. Terms used in this 
document with initial capitalization that are not defined below 
shall have the meanings specified in the section in which they are 
used or as specified in the Transmission Provider's Open Access 
Transmission Tariff (OATT), as may be amended from time to time.
    Additional Review shall mean a technical evaluation by the 
Transmission Provider of a proposed interconnection that has failed 
to pass the Super-Expedited Screening Criteria. The review will 
determine whether minor modifications to the Transmission Provider's 
Transmission System (e.g., changing meters, fuses, relay settings) 
can be performed in order to enable the interconnection to be made 
safely and reliably.
    Adverse System Impact shall mean the negative effects due to 
technical or operational limits on conductors or equipment being 
exceeded that may compromise the safety and reliability of the 
electric system.
    Affected System shall mean an electric system other than the 
Transmission Provider's Transmission System that may be affected by 
the proposed interconnection.
    Affiliate shall mean, with respect to a corporation, partnership 
or other entity, each such other corporation, partnership or other 
entity that directly or indirectly, through one

[[Page 50004]]

or more intermediaries, controls, is controlled by, or is under 
common control with, such corporation, partnership or other entity.
    Applicable Laws and Regulations shall mean 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.
    Breach shall mean the failure of a Party to perform or observe 
any material term or condition of the Standard Small Generator 
Interconnection Agreement.
    Breaching Party shall mean a Party that is in Breach of the 
Standard Small Generator Interconnection Agreement.
    Business Day shall mean Monday through Friday, excluding Federal 
Holidays.
    Calendar Day shall mean any day including Saturday, Sunday or a 
Federal Holiday.
    Commercial Operation Date of a unit shall mean the date on which 
the Interconnection Customer commences commercial operation of the 
unit at the Generating Facility after testing of such unit has been 
completed.
    Confidential Information shall mean any confidential, 
proprietary or trade secret information of a plan, specification, 
pattern, procedure, design, device, list, concept, policy or 
compilation relating to the present or planned business of a Party, 
which is designated as confidential by the Party supplying the 
information, whether conveyed orally, electronically, in writing, 
through inspection, or otherwise.
    Control Area shall mean an electrical system or systems bounded 
by interconnection metering and telemetry, capable of controlling 
generation to maintain its interchange schedule with other Control 
Areas and contributing to frequency regulation of the 
interconnection. A Control Area must be certified by NERC.
    Default shall mean the failure of a Breaching Party to cure its 
Breach in accordance with Article 6.17 of the Standard Small 
Generator Interconnection Agreement.
    Dispute Resolution shall mean the procedure for resolution of a 
dispute between the Parties in which they will first attempt to 
resolve the dispute on an informal basis.
    Distribution System shall mean 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 shall mean the additions, modifications, 
and upgrades to the Transmission Provider's Distribution System at 
or beyond the Point of Interconnection to facilitate interconnection 
of the Generating Facility and render the transmission service 
necessary to effect Interconnection Customer's wholesale sale of 
electricity in interstate commerce. Distribution Upgrades do not 
include Interconnection Facilities.
    Effective Date shall mean the date on which the Standard Small 
Generator Interconnection Agreement becomes effective upon execution 
by the Parties subject to acceptance by the Commission, or if filed 
unexecuted, upon the date specified by the Commission.
    Emergency Condition shall mean a condition or situation: (1) 
That in the judgement of the Party making the claim is imminently 
likely to endanger life or property, or (2) that, in the case of a 
Transmission Provider, is imminently likely (as determined in a non-
discriminatory manner) to cause a material adverse effect on the 
security of, or damage to Transmission Provider's Transmission 
System, Transmission Provider's Interconnection Facilities or the 
electric systems of others to which the Transmission Provider's 
Transmission System is directly connected, or (3) that, in the case 
of Interconnection Customer, is imminently likely (as determined in 
a non-discriminatory manner) to cause a material adverse effect on 
the security of, or damage to, the Generating Facility or 
Interconnection Customer's Interconnection Facilities. System 
restoration and black start shall be considered Emergency 
Conditions; provided, that the Interconnection Customer is not 
obligated by the Standard Small Generator Interconnection Agreement 
to possess black start capability.
    Environmental Law shall mean Applicable Laws or Regulations 
relating to pollution or protection of the environment or natural 
resources.
    Expedited Procedures shall mean the process described in the 
Standard Small Generator Interconnection Procedures for (1) a 
Generating Facility no larger than 10 MW interconnecting with a 
Transmission Provider's Low-Voltage Transmission System, and (2) a 
Generating Facility failing the Super-Expedited Procedures. The 
Expedited Procedures use the Expedited Screening Criteria to 
determine whether the Small Generating Facility can be 
interconnected without any further Interconnection Studies.
    Expedited Screening Criteria shall mean the technical variables 
that are employed in the Expedited Procedures for evaluating the 
impact of interconnecting the Small Generating Facility to the 
Transmission Provider's Transmission System as it exists at the time 
of the analysis.
    Fault Current shall mean the current that is produced by an 
electrical fault, such as single-phase to ground, double-phase to 
ground, three-phase to ground, phase-to-phase, and three-phase. The 
Fault Current is several times larger in magnitude than the current 
that normally flows through a circuit. A protective device must be 
able to interrupt this Fault Current within a few cycles. The Fault 
Current increases when a new generator is interconnected.
    Federal Power Act shall mean the Federal Power Act, as amended, 
16 U.S.C. 791a et seq.
    FERC shall mean the Federal Energy Regulatory Commission 
(Commission) or its successor.
    Force Majeure shall mean any act of God, labor disturbance, act 
of the public enemy, war, insurrection, riot, fire, storm or flood, 
explosion, breakage or accident to machinery or equipment, any 
order, regulation or restriction imposed by governmental, military 
or lawfully established civilian authorities, or any other cause 
beyond a Party's control. A Force Majeure event does not include an 
act of negligence or intentional wrongdoing.
    Generating Facility shall mean Interconnection Customer's device 
for the production of electricity identified in the Interconnection 
Request, but shall not include the Interconnection Customer's 
Interconnection Facilities.
    Generating Facility Capacity shall mean the net capacity of the 
Generating Facility and the aggregate net capacity of the Generating 
Facility where it includes multiple energy production devices.
    Good Utility Practice shall mean 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 shall mean 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 Interconnection Customer, Transmission Provider, or any 
Affiliate thereof.
    Hazardous Substances shall mean any chemicals, materials or 
substances defined as or included in the definition of ``hazardous 
substances,'' ``hazardous wastes,'' ``hazardous materials,'' 
``hazardous constituents,'' ``restricted hazardous materials,'' 
``extremely hazardous substances,'' ``toxic substances,'' 
``radioactive substances,'' ``contaminants,'' ``pollutants,'' 
``toxic pollutants'' or words of similar meaning and regulatory 
effect under any applicable Environmental Law, or any other 
chemical, material or substance, exposure to which is prohibited, 
limited or regulated by any applicable Environmental Law.
    High-Voltage shall mean voltage levels at or above 69 kV.
    IEEE shall mean the Institute of Electrical and Electronics 
Engineers.
    Initial Review shall mean the Transmission Provider's review of 
the Interconnection Customer's Interconnection Request using the 
Super-Expedited Screening Criteria described in Section 3 of the 
Standard Small Generator Interconnection Procedures.

[[Page 50005]]

    In-Service Date shall mean the date upon which the 
Interconnection Customer reasonably expects it will be ready to 
begin use of the Transmission Provider's Interconnection Facilities 
to obtain back feed power.
    Interconnection Customer shall mean any entity, including the 
Transmission Provider, Transmission Owner or any of the Affiliates 
or subsidiaries of either, that proposes to interconnect its 
Generating Facility with the Transmission Provider's Transmission 
System.
    Interconnection Customer's Interconnection Facilities shall mean 
all facilities and equipment, as identified in Appendix 2 of the 
Standard Small Generator Interconnection Agreement, that are located 
between the Generating Facility and the Point of Change of 
Ownership, including any modification, addition, or upgrades to such 
facilities and equipment necessary to physically and electrically 
interconnect the Generating Facility to the Transmission Provider's 
Transmission System. Interconnection Customer's Interconnection 
Facilities are sole use facilities.
    Interconnection Facilities shall mean the Transmission 
Provider's Interconnection Facilities and the Interconnection 
Customer's Interconnection Facilities. Collectively, Interconnection 
Facilities include all facilities and equipment between the 
Generating Facility and the Point of Interconnection, including any 
modification, additions or upgrades that are necessary to physically 
and electrically interconnect the 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 Facilities Study shall mean a study conducted by 
the Transmission Provider or a third party consultant for the 
Interconnection Customer to determine a list of facilities 
(including Transmission Provider's Interconnection Facilities and 
Network Upgrades as identified in the Interconnection System Impact 
Study), the cost of those facilities, and the time required to 
interconnect the Generating Facility with the Transmission 
Provider's Transmission System. The scope of the study is defined 
the Standard Small Generator Interconnection Procedures.
    Interconnection Facilities Study Agreement shall mean the form 
of agreement contained in Appendix 5 of the Standard Small Generator 
Interconnection Procedures for conducting the Interconnection 
Facilities Study.
    Interconnection Feasibility Study shall mean a preliminary 
evaluation of the system impact and cost of interconnecting the 
Generating Facility to the Transmission Provider's Transmission 
System, the scope of which is described in the Standard Small 
Generator Interconnection Procedures.
    Interconnection Feasibility Study Agreement shall mean the form 
of agreement contained in Appendix 3 of the Standard Small Generator 
Interconnection Procedures for conducting the Interconnection 
Feasibility Study.
    Interconnection Request shall mean an Interconnection Customer's 
request, in the form of Appendix 6 to the Standard Small Generator 
Interconnection Procedures, in accordance with the Tariff, to 
interconnect a new Generating Facility, or to increase the capacity 
of, or make a Material Modification to the operating characteristics 
of, an existing Generating Facility that is interconnected with the 
Transmission Provider's Transmission System.
    Interconnection Service shall mean the service provided by the 
Transmission Provider associated with interconnecting the 
Interconnection Customer's Generating Facility to the Transmission 
Provider's Transmission System and enabling it to receive electric 
energy and capacity from the Generating Facility at the Point of 
Interconnection, pursuant to the terms of the Standard Small 
Generator Interconnection Agreement and, if applicable, the 
Transmission Provider's Tariff.
    Interconnection Study shall mean any of the following studies: 
the Interconnection Feasibility Study, the Interconnection System 
Impact Study, and the Interconnection Facilities Study described in 
the Standard Small Generator Interconnection Procedures.
    Interconnection System Impact Study shall mean an engineering 
study that evaluates the impact of the proposed interconnection on 
the safety and reliability of Transmission Provider's Transmission 
System and, if applicable, an Affected System. The study shall 
identify and detail the system impacts that would result if the 
Generating Facility were interconnected without project 
modifications or system modifications, focusing on the Adverse 
System Impacts identified in the Interconnection Feasibility Study, 
or to study potential impacts, including but not limited to those 
identified in the Scoping Meeting as described in the Standard Small 
Generator Interconnection Procedures.
    Interconnection System Impact Study Agreement shall mean the 
form of agreement contained in Appendix 4 of the Standard Small 
Generator Interconnection Procedures for conducting the 
Interconnection System Impact Study.
    Large Generating Facility shall mean a Generating Facility 
having a Generating Facility Capacity of more than 20 MW.
    Low-Voltage shall mean voltage levels below 69 kV.
    Material Modification shall mean a modification that has a 
material impact on the cost or timing of any Interconnection Request 
with a later queue priority date.
    Milestones shall mean the events and associated dates listed in 
Appendix 3 of the Standard Small Generator Interconnection 
Agreement. The Milestones describe events that are to be met by 
either Party as the Generating Facility proceeds to interconnection 
and Parallel Operation.
    MW shall mean the abbreviation for megawatts, which is used to 
describe the capacity of a generating facility.
    NERC shall mean the North American Electric Reliability Council 
or its successor organization.
    Network Upgrades shall mean the additions, modifications, and 
upgrades to the Transmission Provider's Transmission System required 
at or beyond the point at which the Interconnection Customer 
interconnects to the Transmission Provider's Transmission System to 
accommodate the interconnection of the Generating Facility to the 
Transmission Provider's Transmission System.
    Operating Requirements shall mean any operating and technical 
requirements that may be applicable due to Regional Transmission 
Organization, Independent System Operator, Control Area, or 
Transmission Provider requirements, including those set forth in 
Appendix 4 of the Standard Small Generator Interconnection 
Agreement.
    Parallel Operation shall mean the two-way flow of power between 
a generator and a Transmission System. Generators that operate in 
parallel with a Transmission System require additional protection 
and control devices. This may be contrasted with a stand-alone 
generator that operates isolated from the utility company's electric 
system.
    Party or Parties shall mean Transmission Provider, Transmission 
Owner, Interconnection Customer or any combination of the above.
    Point of Change of Ownership shall mean the point, as set forth 
in Appendix 2 of the Standard Small Generator Interconnection 
Agreement, where the Interconnection Customer's Interconnection 
Facilities connect to the Transmission Provider's Interconnection 
Facilities.
    Point of Common Coupling shall mean the point in the 
interconnection of the Generating Facility with Transmission 
Provider's Transmission System at which the harmonic limits are 
applied.
    Point of Interconnection shall mean the point, as set forth in 
Appendix 2 of the Standard Small Generator Interconnection 
Agreement, where the Interconnection Facilities connect to the 
Transmission Provider's Transmission System.
    Precertified shall describe a Generating Facility if an 
identical sample of the manufacturer's model has been submitted to a 
national testing laboratory and found, after appropriate testing, to 
be in compliance with applicable consensus industry operational and 
safety standards.
    Queue Position shall mean the order of a valid Interconnection 
Request, relative to all other pending valid Interconnection 
Requests, that is established based upon the date and time of 
receipt of the valid Interconnection Request by the Transmission 
Provider.
    Reasonable Efforts shall mean, with respect to an action 
required to be attempted or taken by a Party under the Standard 
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.
    Rules shall mean the rules promulgated by FERC relating to the 
interconnection of generators.
    Scoping Meeting shall mean the meeting between representatives 
of the Interconnection Customer and Transmission Provider conducted 
for the purpose of discussing alternative interconnection options, 
to exchange information including

[[Page 50006]]

any transmission data and earlier study evaluations that would be 
reasonably expected to impact such interconnection options, to 
analyze such information, and to determine the potential feasible 
Points of Interconnection.
    Secondary Network shall mean a type of Low-Voltage electric 
system that is generally used in large metropolitan areas that are 
densely populated in order to provide high reliability of service 
(also known as secondary grid network or area network).
    Site Control shall mean documentation reasonably demonstrating: 
(1) Ownership of, a leasehold interest in, or a right to develop a 
site for the purpose of constructing the Generating Facility, (2) an 
option to purchase or acquire a leasehold site for such purpose, or 
(3) an exclusivity or other business relationship between the 
Interconnection Customer and the entity having the right to sell, 
lease or grant the Interconnection Customer the right to possess or 
occupy a site for such purpose.
    Small Generating Facility shall mean a Generating Facility 
having a Generating Facility Capacity of no more than 20 MW.
    Standard Small Generator Interconnection Agreement (SGIA) shall 
mean the form of interconnection agreement applicable to an 
Interconnection Request pertaining to a Small Generating Facility, 
that is included in the Transmission Provider's Tariff.
    Standard Small Generator Interconnection Procedures (SGIP) shall 
mean the interconnection procedures applicable to an Interconnection 
Request pertaining to a Small Generating Facility that are included 
in the Transmission Provider's Tariff.
    Spot Network shall mean a type of Low-Voltage system found 
within modern commercial buildings to provide high reliability of 
service. Spot Networks generally use 12 kV to 480/277 volt vaults on 
site.
    Super-Expedited Procedures shall mean the process described in 
Section 3 of the Standard Small Generator Interconnection Procedures 
for Generating Facilities no larger than 2 MW interconnecting with 
Transmission Provider's Low-Voltage Transmission System. The Super-
Expedited Procedures use the Super-Expedited Screening Criteria to 
determine whether the proposed interconnection may cause an Adverse 
System Impact on Transmission Provider's Transmission System.
    Super-Expedited Screening Criteria shall mean the technical 
variables that are employed in the Super-Expedited Procedures for 
evaluating the interconnection of a Small Generating Facility no 
larger than 2 MW to a Transmission Provider's Low-Voltage 
Transmission System.
    System Protection Facilities shall mean the equipment, including 
necessary protection signal communications equipment, required to 
protect (1) the Transmission Provider's Transmission System from 
faults or other electrical disturbances occurring at the Generating 
Facility and (2) the Generating Facility from faults or other 
electrical system disturbances occurring on the Transmission 
Provider's Transmission System or on other delivery systems or other 
generating systems to which the Transmission Provider's Transmission 
System is directly connected.
    Tariff shall mean the Transmission Provider'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.
    Technical Master shall mean a person, as described in Article 8 
of the Standard Small Generator Interconnection Agreement, with 
relevant technical experience selected to adjudicate disputes 
between the Parties.
    Term shall mean the duration of the Standard Small Generator 
Interconnection Agreement.
    Transmission Owner shall mean an 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 
Standard Small Generator Interconnection Agreement to the extent 
necessary.
    Transmission Provider shall mean 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 Provider's Interconnection Facilities shall mean 
all facilities and equipment owned, controlled, or operated by the 
Transmission Provider from the Point of Change of Ownership to the 
Point of Interconnection as identified in Appendix 2 of the Standard 
Small Generator Interconnection Agreement, including any 
modifications, additions or upgrades to such facilities and 
equipment. The Transmission Provider's Interconnection Facilities 
are sole use facilities and shall not include Distribution Upgrades 
or Network Upgrades.
    Transmission System shall mean the facilities owned, controlled 
or operated by the Transmission Provider or Transmission Owner that 
are used to provide transmission service under the Tariff.
    Upgrades shall mean 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.

Article 2. Scope and Limitations of Agreement

    2.1 Scope and Limitations of Agreement. Transmission Provider 
and Interconnection Customer agree to interconnect the Generating 
Facility at the location described in Appendices 1 and 2 to this 
agreement, in accordance with this agreement. This agreement governs 
the facilities required to interconnect the Generating Facility to 
Transmission Provider's Transmission System and contains the terms 
and conditions under which Interconnection Customer may interconnect 
the Generating Facility, as described in Appendices 1 and 2, and to 
operate in parallel with Transmission Provider's Transmission 
System. This agreement does not authorize Interconnection Customer 
to export power or constitute an agreement to purchase or wheel 
Interconnection Customer's power. The export, purchase, or wheeling 
of power and other services that Interconnection Customer may 
require from Transmission Provider will be covered under separate 
agreements and nothing in this agreement is intended to affect any 
other agreement between Transmission Provider and Interconnection 
Customer. Interconnection Customer will be responsible for 
separately making all necessary arrangements (including scheduling) 
for delivery of electricity with Transmission Provider, distribution 
provider, Independent System Operator, or Regional Transmission 
Organization (as applicable).
    2.2 Responsibilities of the Parties.
    2.2.1 The Parties shall perform all obligations of this 
agreement in accordance with all Applicable Laws and Regulations, 
Operating Requirements, and Good Utility Practice.
    2.2.2 Interconnection Customer shall construct, interconnect, 
operate and maintain its Generating Facility and construct, operate, 
and maintain its Interconnection Facilities in accordance with the 
applicable manufacturer's recommended maintenance schedule, in 
compliance with all aspects of the Rules, in accordance with this 
agreement, and with Good Utility Practice.
    2.2.3 Transmission Provider shall construct, operate, and 
maintain its Transmission System and Interconnection Facilities in 
compliance with all aspects of the Rules, in accordance with this 
agreement, and with Good Utility Practice.
    2.2.4 Interconnection Customer agrees to cause its facilities or 
systems to be constructed in accordance with applicable 
specifications that meet or exceed those provided by the National 
Electrical Safety Code, the American National Standards Institute, 
IEEE, Underwriter's Laboratory, and Operating Requirements in effect 
at the time of construction and other applicable national and state 
codes and standards. Interconnection Customer agrees to design, 
install, maintain, and operate, or cause the design, installation, 
maintenance, and operation of the Generating Facility so as to 
reasonably minimize the likelihood of a disturbance, originating on 
the system or equipment affecting or impairing the system or 
equipment of Transmission Provider, or Affected Systems.
    2.2.5 Each Party shall operate, maintain, repair, and inspect, 
and shall be fully responsible for the facilities that it now or 
subsequently may own unless otherwise specified in Appendices 1 and 
2 of this agreement. Each Party shall be responsible for the safe 
installation, maintenance, repair and condition of their respective 
lines and appurtenances on their respective sides of the Point of 
Change of Ownership. Transmission Provider and Interconnection 
Customer, as appropriate, shall provide Interconnection Facilities 
that adequately protect Transmission Provider's Transmission System, 
personnel, and other persons from damage and injury. The allocation 
of responsibility for the design, installation, operation, 
maintenance and ownership of Interconnection Facilities shall

[[Page 50007]]

be delineated in Appendices 1, 2, 4, and 5 of this agreement.
    2.2.6 Transmission Provider shall negotiate with all Affected 
Systems in support of Interconnection Customer's interconnection 
needs.
    2.3 Parallel Operation Obligations. Once the Generating Facility 
has been authorized to commence Parallel Operation, Interconnection 
Customer shall abide by all rules and procedures pertaining to the 
Parallel Operation of the Generating Facility in the applicable 
Control Area, including, but not limited to, the rules and 
procedures concerning the operation of generation set forth in the 
Tariff or by the system operator for Transmission Provider's 
Transmission System and the Operating Requirements set forth in 
Appendix 4 of this agreement.
    2.4 Metering. Interconnection Customer will be responsible for 
Transmission Provider's reasonable and necessary cost for the 
purchase, installation, operation, maintenance, testing, repair, and 
replacement of metering and data acquisition equipment specified in 
Appendices 1 and 2 of this agreement. Interconnection Customer's 
metering (and data acquisition, as required) equipment shall conform 
to applicable industry rules and operating requirements.

Article 3. Inspection, Testing, Authorization, and Right of Access

    3.1 Equipment Testing and Inspection.
    3.1.1 Interconnection Customer shall perform operational testing 
and inspection of the Generating Facility and Interconnection 
Facilities prior to interconnection. No fewer than five Business 
Days (or as may be agreed to by the Parties) prior to such testing 
and inspection, Interconnection Customer shall notify Transmission 
Provider of such activities. Testing and inspection shall occur on a 
Business Day. Transmission Provider may send qualified personnel to 
the Generating Facility site to inspect the interconnection and 
observe the Generating Facility's testing. Interconnection Customer 
shall provide Transmission Provider a written test report when such 
testing and inspection is completed.
    3.1.2 Upon completion of such operational testing and inspection 
and receipt of the written report, Transmission Provider shall 
provide to Interconnection Customer written acknowledgment that it 
has received Interconnection Customer's written report; provided, 
however, any such written acknowledgment shall not be deemed to be 
or construed as any representation, assurance, guarantee, or 
warranty by Transmission Provider of the safety, durability, 
suitability, or reliability of the Generating Facility or any 
associated control, protective, and safety devices owned or 
controlled by Interconnection Customer or the quality of power 
produced by the Generating Facility.
    3.2 Authorization Required Prior To Parallel Operation. 
Transmission Provider will use its best efforts to identify any 
requirements applicable to safe and reliable Parallel Operation and 
to notify Interconnection Customer of any changed or additional 
requirements as soon as they are known. Transmission Provider will 
cooperate with Interconnection Customer in addressing and meeting 
such requirements (including information and study requirements), 
and to obtain appropriate notifications that such requirements are 
met. Interconnection Customer will notify Transmission Provider once 
it has complied with all such requirements. Upon such notification, 
Transmission Provider will provide Interconnection Customer with 
written authorization to operate the Generating Facility in parallel 
with Transmission Provider's Transmission System. Such authorization 
shall not be unreasonably withheld, conditioned or delayed.
    3.3 Right of Access. Upon reasonable notice, and subject to any 
required or necessary regulatory approvals, Interconnection Customer 
shall furnish to Transmission Provider at no cost, and as agreed 
upon by all Parties, any rights of use, licenses, rights of way, or 
easements with respect to lands owned or controlled by 
Interconnection Customer and its agents that are necessary to enable 
Transmission Provider to obtain ingress and egress to construct, 
operate, maintain, repair, test (or witness testing), inspect, 
replace or remove facilities and equipment to: (1) Interconnect the 
Generating Facility with Transmission Provider's Transmission 
System, (2) operate and maintain the Generating Facility, 
Interconnection Facilities (if required), and Transmission 
Provider's Transmission System, and (3) disconnect or remove 
Interconnection Customer's facilities and equipment upon termination 
of this agreement. In exercising such licenses, rights of way, and 
easements, Transmission Provider shall not unreasonably disrupt or 
interfere with normal operation of Interconnection Customer's 
property and shall adhere to all applicable safety rules and 
procedures. In the event of Emergency Conditions or hazardous 
conditions, Transmission Provider and Interconnection Customer shall 
exercise all Reasonable Efforts to comply with these provisions.

Article 4. Effective Date, Term, Termination, and Disconnection

    4.1 Effective Date. This agreement shall become effective upon 
execution by the Parties subject to acceptance by FERC (if 
applicable), or if filed unexecuted, upon the date specified by 
FERC. Transmission Provider shall promptly file this agreement with 
FERC upon execution, if required.
    4.2 Term of Agreement. This agreement shall be effective on the 
Effective Date and shall remain in effect for a period of ten years 
from the Effective Date or such other longer period as the Parties 
may agree and shall be automatically renewed for each successive 
one-year period thereafter, unless terminated earlier in accordance 
with Article 4.3 of this agreement.
    4.3 Termination. No termination shall become effective until the 
Parties have complied with all Applicable Laws and Regulations 
applicable to such termination, including the filing with FERC of a 
notice of termination of this agreement (if required), which notice 
has been accepted for filing by FERC.
    4.3.1 Interconnection Customer may terminate this agreement at 
any time by giving Transmission Provider thirty Calendar Days 
written notice.
    4.3.2 In the event that there is a material change in Applicable 
Laws and Regulations that would prevent Transmission Provider from 
performing its obligations under this agreement or would impose a 
substantial additional cost upon Transmission Provider to perform 
its obligations under this agreement, and for which cost 
Transmission Provider is not reimbursed by Interconnection Customer 
or any other party, Transmission Provider may terminate this 
agreement by giving Interconnection Customer at least thirty 
Calendar Days prior written notice.
    4.4 Temporary Disconnection.
    4.4.1 Emergency Conditions. Under Emergency Conditions, 
Transmission Provider shall have the right to immediately suspend 
Interconnection Service and temporarily disconnect the Generating 
Facility. Transmission Provider shall notify Interconnection 
Customer promptly when it becomes aware of an Emergency Condition 
that affects the Generating Facility or Transmission Provider's 
Transmission System that may reasonably be expected to affect 
Interconnection Customer's operation of the Generating Facility. 
Interconnection Customer shall notify Transmission Provider promptly 
when it becomes aware of an emergency condition that may reasonably 
be expected to affect Transmission Provider's Transmission System or 
other Affected Systems. To the extent information is known, the 
notification shall describe the Emergency Condition, the extent of 
the damage or deficiency, or the expected effect on the operation of 
both Parties' facilities and operations, its anticipated duration, 
and the necessary corrective action.
    4.4.2 Routine Maintenance, Construction and Repair. Transmission 
Provider shall have the right to interrupt Interconnection Service 
or curtail the output of the Generating Facility and temporarily 
disconnect the Generating Facility from Transmission Provider's 
Transmission System when necessary for routine maintenance, 
construction, and repairs on Transmission Provider's Transmission 
System. Transmission Provider shall provide Interconnection Customer 
with five Business Days notice prior to such interruption. 
Transmission Provider shall use its best efforts to coordinate such 
reduction or temporary disconnection with Interconnection Customer.
    4.4.3 Forced Outages. During any forced outage of 
Interconnection Customer's facilities, Transmission Provider shall 
have the right to suspend Interconnection Service to effect 
immediate repairs on Transmission Provider's Transmission System; 
provided, however, Transmission Provider shall use its best efforts 
to provide Interconnection Customer with prior notice. If prior 
notice is not given, Transmission Provider will provide 
Interconnection Customer written documentation after the fact 
explaining the circumstances of the disconnection.
    4.4.4 Adverse Operating Effects. Transmission Provider shall 
notify Interconnection Customer that operation of the Generating 
Facility may cause disruption

[[Page 50008]]

or deterioration of service to other customers served from the same 
electric system or if operating the Generating Facility could cause 
damage to Transmission Provider's Transmission System or Affected 
Systems. If, after notice to Interconnection Customer has been 
provided and a reasonable time to correct such adverse operating 
effect has elapsed, consistent with the conditions, and 
Interconnection Customer has failed to make such corrections, 
Transmission Provider may disconnect the Generating Facility. 
Transmission Provider shall provide Interconnection Customer with 
five Business Days notice prior to such disconnection.
    4.4.5 Modification of the Generating Facility. Interconnection 
Customer must receive written authorization from Transmission 
Provider before making any Material Modification to the Generating 
Facility. If Interconnection Customer makes such modification 
without Transmission Provider's prior written authorization, the 
latter shall have the right to temporarily disconnect the Generating 
Facility. Such authorization shall not be unreasonably withheld.
    4.4.6 Reconnection. The Parties shall cooperate with each other 
to restore the Generating Facility, Interconnection Facilities, and 
Transmission Provider's Transmission System to their normal 
operating state as soon as reasonably practicable following any 
reduction or temporary disconnection.

Article 5. Cost Responsibility, Milestones, Billing, and Payment

    5.1 Cost Responsibility.
    5.1.1 Interconnection Facilities. Interconnection Customer will 
pay for the cost of Interconnection Facilities itemized in Appendix 
1 of this agreement. Transmission Provider will provide a best 
estimate cost, including overheads, for the purchase and 
construction of its Interconnection Facilities and provide a 
detailed itemization of such costs. Costs associated with 
Interconnection Facilities may be shared with other entities that 
may benefit from such facilities by agreement of Interconnection 
Customer, such other entities, and Transmission Provider.
    5.1.2 Network Upgrades. Transmission Provider or Transmission 
Owner shall design, procure, construct, install, and own Network 
Upgrades described in Appendix 5 of this agreement. Unless 
Transmission Provider or Transmission Provider elect to initially 
pay for such facilities, the actual cost of the Network Upgrades, 
including overheads, shall be borne by Interconnection Customer.
    5.1.2.1 Refund of Amounts Advanced for Network Upgrades. 
Interconnection Customer shall be entitled to a refund, equal to the 
total amount paid to Transmission Provider and Affected Systems, if 
any, for the Network Upgrades with interest, including any tax 
gross-up or other tax-related payments, to be paid to 
Interconnection Customer on a dollar-for-dollar basis, for the non-
usage sensitive portion of transmission charges, as payments are 
made under Transmission Provider's Tariff and Affected Systems' 
Tariffs. Notwithstanding the foregoing, Interconnection Customer, 
Transmission Provider, and any Affected Systems may adopt any 
alternative payment schedule that is mutually agreeable so long as 
Transmission Provider and any Affected Systems refund all amounts 
paid by Interconnection Customer, with interest, within five years 
from the Commercial Operation Date. Transmission Provider and any 
Affected Systems shall provide refunds to Interconnection Customer 
only after commercial operation of the Generating Facility has been 
demonstrated. If the Generating Facility fails to achieve commercial 
operation, but it or another Generating Facility is later 
constructed and makes use of the Network Upgrades, Transmission 
Provider and Affected System Operator shall at that time provide 
refunds to Interconnection Customer for the amounts advanced for the 
Network Upgrades. Any refund shall include interest calculated in 
accordance with the methodology set forth in FERC's regulations at 
18 CFR 35.19a(a)(2)(ii) from the date of any payment for Network 
Upgrades through the date on which Interconnection Customer receives 
a refund of such payment pursuant to this subparagraph. 
Interconnection Customer may assign such refund rights to any 
person.
    Notwithstanding any other provision of this agreement, nothing 
herein shall be construed as relinquishing or foreclosing any 
rights, including but not limited to firm transmission rights, 
capacity rights, transmission congestion rights, or transmission 
credits, that Interconnection Customer shall be entitled to, now or 
in the future under any other agreement or tariff as a result of, or 
otherwise associated with, the transmission capacity, if any, 
created by the Network Upgrades, including the right to obtain 
refunds or transmission credits for transmission service that is not 
associated with the Generating Facility.
    5.1.3 Distribution Upgrades. Transmission Provider or 
Transmission Provider shall design, procure, construct, install, and 
own the distribution Upgrades described in Appendix 5 of this 
agreement. The actual cost of the Distribution Upgrades, including 
overheads, shall be directly assigned to Interconnection Customer.
    5.1.4 Operating and Maintenance Expenses. Subject to the 
provisions herein addressing the use of facilities by others, and 
except for operating and maintenance expenses associated with 
modifications made for providing service to a third party and such 
third party pays for such expenses, Interconnection Customer shall 
be responsible for all reasonable expenses, including overheads, 
associated with: (1) Owning, operating, maintaining, repairing, and 
replacing its own Interconnection Facilities, and (2) operating, 
maintaining, repairing, and replacing Transmission Provider's 
Interconnection Facilities.
    5.1.5 General. If the Parties agree that the Generating Facility 
benefits Transmission Provider's Transmission System, 
Interconnection Customer's cost responsibility for Transmission 
Provider's Interconnection Facilities or Upgrades will be reduced 
commensurate with such benefit. Benefits must be measurable and 
verifiable.
    Where multiple Interconnection Requests require Upgrades to 
Transmission Provider's Transmission System, Interconnection 
Customers will be assigned costs or benefits separately where 
impacts can be separately attributed to respective projects. Where 
such attribution is not possible, Interconnection Customers will 
share costs or benefits in proportion to their projected Generating 
Facility capacities.
    5.2 Financial Security Arrangements. At least thirty Calendar 
Days prior to the commencement of the procurement, installation, or 
construction of a discrete portion of a Transmission Provider 
Interconnection Facilities and Upgrades, Interconnection Customer 
shall provide Transmission Provider, at Interconnection Customer's 
option, a guarantee, a surety bond, letter of credit or other form 
of security that is reasonably acceptable to Transmission Provider 
and is consistent with the Uniform Commercial Code of the 
jurisdiction where the Point of Interconnection is located. Such 
security for payment shall be in an amount sufficient to cover the 
costs for constructing, procuring, and installing the applicable 
portion of Transmission Provider Interconnection Facilities and 
Upgrades and shall be reduced on a dollar-for-dollar basis for 
payments made to Transmission Provider under this agreement during 
its Term. In addition:
    The guarantee must be made by an entity that meets the 
creditworthiness requirements of Transmission Provider, and contain 
terms and conditions that guarantee payment of any amount that may 
be due from Interconnection Customer, up to an agreed-to maximum 
amount.
    The letter of credit must be issued by a financial institution 
reasonably acceptable to Transmission Provider and must specify a 
reasonable expiration date.
    The surety bond must be issued by an insurer reasonably 
acceptable to Transmission Provider and must specify a reasonable 
expiration date.
    5.3 Milestones. Parties shall agree on milestones for which each 
Party is responsible and list them in Appendix 3 of this agreement. 
A Party's obligations under this provision may be extended by 
agreement.
    5.3.1 If Interconnection Customer fails to meet agreed 
milestones for which it is responsible, other than for reasons of 
Force Majeure, its responsibility for costs incurred to that point 
by Transmission Provider will increase at the rate of interest 
calculated in accordance with the methodology set forth in FERC's 
regulations at 18 CFR 35.19a(a)(2)(ii) from the date of failure 
until the date the Milestone is met.
    5.3.2 If Transmission Provider fails to meet agreed milestones 
for which it is responsible, other than for reasons of Force 
Majeure, Interconnection Customer will be credited interest for 
costs incurred to that point (including the Interconnection Request 
processing fee and study costs incurred under the Standard Small 
Generator Interconnection Procedures) calculated at the rate in 
accordance with the methodology set forth in FERC's regulations at 
18 CFR 35.19a(a)(2)(ii) from the date of failure until the date the 
Milestone is met.
    5.4 Billing and Payment. Billing and payment obligations for 
services rendered,

[[Page 50009]]

for which Interconnection Customer is responsible under this 
agreement shall be performed in accordance with Transmission 
Provider's Tariff or in accordance with the terms of this agreement.
    5.4.1 Billing Procedure for Interconnection Facilities 
Construction. Transmission Provider shall bill Interconnection 
Customer for monthly expenditures for the design, engineering and 
construction of, or for other charges related to, Interconnection 
Facilities contemplated by this agreement. Interconnection Customer 
shall pay each bill within thirty Calendar Days after receipt 
thereof.
    5.4.2 Final Accounting. Within forty-five Calendar Days after 
completion of the construction and installation of Transmission 
Provider's Interconnection Facilities and/or Upgrades described in 
Appendices 1, 2, and 5 of this agreement, Transmission Provider 
shall provide Interconnection Customer with a final accounting 
report of any difference between: (1) Interconnection Customer's 
cost responsibility for the actual cost of such facilities under 
this agreement, and (2) Interconnection Customer's previous 
aggregate payments to Transmission Provider for such facilities. If 
Interconnection Customer's cost responsibility under this agreement 
exceeds its previous aggregate payments, Transmission Provider shall 
invoice Interconnection Customer and Interconnection Customer shall 
make payment to Transmission Provider. If Interconnection Customer's 
previous aggregate payments exceed its cost responsibility under 
this agreement, Transmission Provider shall refund to 
Interconnection Customer an amount equal to the difference within 
forty-five Calendar Days of the provision of such final accounting 
report.

Article 6. Miscellaneous

    6.1 Governing Law, Regulatory Authority and Rules. The validity, 
interpretation and enforcement of this agreement and each of its 
provisions shall be governed by the laws of the State 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.
    6.2 Amendment. The Parties may by mutual agreement amend this 
agreement by a written instrument duly executed by both of the 
Parties.
    6.3 No Third Party Beneficiaries. This agreement is not intended 
to and does not create rights, remedies, or benefits of any 
character whatsoever in favor of any persons, corporations, 
associations, or entities other than the Parties, and the 
obligations herein assumed are solely for the use and benefit of the 
Parties, their successors in interest and where permitted, their 
assigns.
    6.4 Waiver. The failure of a Party to this agreement to insist, 
on any occasion, upon strict performance of any provision of this 
agreement will not be considered a waiver of any obligation, right, 
or duty of, or imposed upon, such Party.
    Any waiver at any time by either Party of its rights with 
respect to this agreement shall not be deemed a continuing waiver or 
a waiver with respect to any other failure to comply with any other 
obligation, right, duty of this agreement. Termination or Default of 
this agreement for any reason by Interconnection Customer shall not 
constitute a waiver of Interconnection Customer's legal rights to 
obtain an interconnection from Transmission Provider. Any waiver of 
this agreement shall, if requested, be provided in writing.
    6.5 Assignment. This agreement may be assigned by either Party 
only with the written consent of the other; provided that either 
Party may assign this agreement without the consent of the other 
Party to any Affiliate of the assigning Party with an equal or 
greater credit rating and with the legal authority and operational 
ability to satisfy the obligations of the assigning Party under this 
agreement; and provided further that Interconnection Customer shall 
have the right to assign this agreement, without the consent of 
Transmission Provider, for collateral security purposes to aid in 
providing financing for the Generating Facility, provided that 
Interconnection Customer will require any secured party, trustee or 
mortgagee to notify Transmission Provider of any such assignment. 
Any financing arrangement entered into by Interconnection Customer 
pursuant to this article will provide that prior to or upon the 
exercise of the secured party's, trustee's or mortgagee's assignment 
rights pursuant to said arrangement, the secured creditor, the 
trustee or mortgagee will notify Transmission Provider of the date 
and particulars of any such exercise of assignment right(s). Any 
attempted assignment that violates this article is void and 
ineffective. Any assignment under this agreement shall not relieve a 
Party of its obligations, nor shall a Party's obligations be 
enlarged, in whole or in part, by reason thereof. Where required, 
consent to assignment will not be unreasonably withheld, conditioned 
or delayed.
    6.6 Entire Agreement. This agreement, including all appendices 
attached hereto, constitutes the entire agreement between the 
Parties with reference to the subject matter hereof, and supersedes 
all prior and contemporaneous understandings or agreements, oral or 
written, between the Parties with respect to the subject matter of 
this agreement. There are no other agreements, representations, 
warranties, or covenants which constitute any part of the 
consideration for, or any condition to, either Party's compliance 
with its obligations under this agreement.
    6.7 Notices. Unless otherwise provided in this agreement, any 
notice, demand or request required or permitted to be given by 
either Party to the other and any instrument required or permitted 
to be tendered or delivered by either Party in writing to the other 
shall be effective when delivered and may be so given, tendered or 
delivered, by recognized national courier, or by depositing the same 
with the United States Postal Service with postage prepaid, for 
delivery by certified or registered mail, addressed to the Party, or 
personally delivered to the Party, at the address set out below:

 Transmission Provider:------------------------------------------------
-----------------------------------------------------------------------
 Interconnection Customer:---------------------------------------------

-----------------------------------------------------------------------
Either Party may change the notice information by giving five 
Business Days written notice prior to the effective date of the 
change.
    6.7.1 Billings and Payments. Billings and payments shall be sent 
to the addresses set out below:
 Transmission Provider:------------------------------------------------
-----------------------------------------------------------------------
 Interconnection Customer:---------------------------------------------

-----------------------------------------------------------------------
    6.7.2 Alternative Forms of Notice. Any notice or request 
required or permitted to be given by either Party to the other and 
not required by this agreement to be given in writing may be so 
given by telephone, facsimile or e-mail to the telephone numbers and 
e-mail addresses set out below:
 Transmission Provider:------------------------------------------------
-----------------------------------------------------------------------
 Interconnection Customer:---------------------------------------------
-----------------------------------------------------------------------
    6.7.3 Operations and Maintenance Notice. Each Party shall notify 
the other Party in writing of the identity of the person(s) that it 
designates as the point(s) of contact with respect to operations and 
maintenance the Party's facilities.
    6.8 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.
    6.9 No Partnership. This agreement shall not be interpreted or 
construed to create an association, joint venture, agency 
relationship, or partnership between the Parties or to impose any 
partnership obligation or partnership liability upon either Party. 
Neither Party shall have any right, power or authority to enter into 
any agreement or undertaking for, or act on behalf of, or to act as 
or be an agent or representative of, or to otherwise bind, the other 
Party.
    6.10 Communications. Each Party will provide the other Party 
with the name, title, address and phone numbers of its 
representative to receive operational communications and to conduct 
the daily communications which may be necessary or convenient for 
the administration of this agreement. Such designations, including 
names, addresses, and phone numbers, may be communicated or revised 
by one Party's notice to the other in accordance with Article 6.7.
    6.11 Severability. If any provision or portion of this agreement 
shall for any reason be held or adjudged to be invalid or illegal or 
unenforceable by any court of competent jurisdiction or other 
Governmental Authority, (1) Such portion or provision shall be 
deemed separate and independent, (2) the Parties shall negotiate in 
good faith to restore insofar as practicable the benefits to each 
Party that were affected by such ruling, and (3) the remainder of 
this agreement shall remain in full force and effect.
    6.12 Security Arrangements. Infrastructure security of 
Transmission

[[Page 50010]]

System equipment and operations and control hardware and software is 
essential to ensure day-to-day reliability and operational security. 
The Commission expects all Transmission Providers, market 
participants, and Interconnection Customers interconnected to 
electric systems to comply with the recommendations offered by the 
President's Critical Infrastructure Protection Board and, 
eventually, best practice recommendations from the electric 
reliability authority. All public utilities are expected to meet 
basic standards for system infrastructure and operational security, 
including physical, operational, and cyber-security practices.
    6.13 Indemnity. The Parties shall at all times indemnify, 
defend, and save the other Party harmless from, any and all damages, 
losses, claims, including claims and actions relating to injury to 
or death of any person or damage to property, demand, suits, 
recoveries, costs and expenses, court costs, attorney fees, and all 
other obligations by or to third parties, arising out of or 
resulting from the other Party's action or inactions of its 
obligations under this agreement on behalf of the indemnifying 
Party, except in cases of gross negligence or intentional wrongdoing 
by the Indemnified Party.
    Indemnified Person. If an Indemnified Person is entitled to 
indemnification under this article as a result of a claim by a third 
party, and the Indemnifying Party fails, after notice and reasonable 
opportunity to proceed under this article, to assume the defense of 
such claim, such Indemnified Person may at the expense of the 
Indemnifying Party contest, settle or consent to the entry of any 
judgement with respect to, or pay in full, such claim.
    Indemnifying Party. If an Indemnifying Party is obligated to 
indemnify and hold any Indemnified Person harmless under this 
article, the amount owing to the Indemnified Person shall be the 
amount of such Indemnified Person's actual Loss, net of any 
insurance or other recovery.
    Indemnity Procedures. Promptly after receipt by an Indemnified 
Person of any claim or notice of the commencement of any action or 
administrative or legal proceeding or investigation as to which the 
indemnity provided for in this article may apply, the Indemnified 
Person shall notify the Indemnifying Party of such fact. Any failure 
of or delay in such notification shall not affect a Party's 
indemnification obligation unless such failure or delay is 
materially prejudicial to the Indemnifying Party.
    The Indemnifying Party shall have the right to assume the 
defense thereof with counsel designated by such Indemnifying Party 
and reasonably satisfactory to the Indemnified Person. If the 
defendants in any such action include one or more Indemnified 
Persons and the Indemnifying Party and if the Indemnified Person 
reasonably concludes that there may be legal defenses available to 
it and/or other Indemnified Persons which are different from or 
additional to those available to the Indemnifying Party, the 
Indemnified Person shall have the right to select separate counsel 
to assert such legal defenses and to otherwise participate in the 
defense of such action on its own behalf. In such instances, the 
Indemnifying Party shall only be required to pay the fees and 
expenses of one additional attorney to represent an Indemnified 
Person or Indemnified Persons having such differing or additional 
legal defenses.
    The Indemnified Person shall be entitled, at its expense, to 
participate in any such action, suit or proceeding, the defense of 
which has been assumed by the Indemnifying Party. Notwithstanding 
the foregoing, the Indemnifying Party (1) shall not be entitled to 
assume and control the defense of any such action, suit or 
proceedings if and to the extent that, in the opinion of the 
Indemnified Person and its counsel, such action, suit or proceeding 
involves the potential imposition of criminal liability on the 
Indemnified Person, or there exists a conflict or adversity of 
interest between the Indemnified Person and the Indemnifying Party, 
in such event the Indemnifying Party shall pay the reasonable 
expenses of the Indemnified Person, and (2) shall not settle or 
consent to the entry of any judgement in any action, suit or 
proceeding without the consent of the Indemnified Person, which 
shall not be reasonably withheld, conditioned or delayed.
    6.14 Force Majeure. Economic hardship is not considered a Force 
Majeure event.
    Neither Party shall be considered to be in Default with respect 
to any obligation hereunder other than the obligation to pay money 
when due, if prevented from fulfilling such obligation by Force 
Majeure. A Party unable to fulfill any obligation hereunder (other 
than an obligation to pay money when due) by reason of Force Majeure 
shall give notice and the full particulars of such Force Majeure to 
the other Party in writing or by telephone as soon as reasonably 
possible after the occurrence of the cause relied upon. Telephone 
notices given pursuant to this article shall be confirmed in writing 
as soon as reasonably possible and shall specifically state full 
particulars of the Force Majeure, the time and date when the Force 
Majeure occurred and when the Force Majeure is reasonably expected 
to cease. The Party affected shall exercise due diligence to remove 
such disability with reasonable dispatch, but shall not be required 
to accede or agree to any provision not satisfactory to it in order 
to settle and terminate a strike or other labor disturbance.
     6.15 Environmental Releases. Each Party shall notify the other 
Party, first orally and then in writing, of the release of any 
hazardous substances, any asbestos or lead abatement activities, or 
any type of remediation activities related to the Generating 
Facility or the Interconnection Facilities, each of which may 
reasonably be expected to affect the other Party. The notifying 
Party shall: (1) Provide the notice as soon as practicable, provided 
such Party makes a good faith effort to provide the notice no later 
than twenty-four hours after such Party becomes aware of the 
occurrence, and (2) promptly furnish to the other Party copies of 
any publicly available reports filed with any governmental 
authorities addressing such events.
    6.16 Insurance. Each Party shall, at its own expense, maintain 
in force throughout the period of the Standard Small Generator 
Interconnection Agreement, and until released by the other Party, 
the following minimum insurance coverages, with insurers authorized 
to do business in the State where the Point of Interconnection is 
located:
    6.16.1 Employers' Liability and Workers' Compensation Insurance 
providing statutory benefits in accordance with the laws and 
regulations of the State in which the Point of Interconnection is 
located. The minimum limits for the Employers' Liability Insurance 
shall be ($----) each accident bodily injury by accident, ($----) 
each employee bodily injury by disease, and ($----) policy limit 
bodily injury by disease.
    6.16.2 Commercial General Liability Insurance including premises 
and operations, personal injury, broad form property damage, broad 
form blanket contractual liability coverage (including coverage for 
the contractual indemnification) products and completed operations 
coverage, coverage for explosion, collapse and underground hazards, 
independent contractors coverage, coverage for pollution to the 
extent normally available and punitive damages to the extent 
normally available and a cross liability endorsement, with minimum 
limits of ($----) per occurrence/($----) aggregate combined single 
limit for personal injury, bodily injury, including death and 
property damage.
    6.16.3 Comprehensive Automobile Liability Insurance for coverage 
of owned and non-owned and hired vehicles, trailers or semi-trailers 
designed for travel on public roads, with a minimum, combined single 
limit of ($----) per occurrence for bodily injury, including death, 
and property damage.
    6.16.4 Excess Public Liability Insurance over and above the 
Employers' Liability Commercial General Liability and Comprehensive 
Automobile Liability Insurance coverage, with a minimum combined 
single limit of ($----) per occurrence/($----) aggregate.
    6.16.5 The Commercial General Liability Insurance, Comprehensive 
Automobile Insurance and Excess Public Liability Insurance polies 
shall name the other Party, its parent, associated and Affiliate 
companies and their respective directors, officers, agents, servants 
and employees (``Other Party Group'') as additional insured. All 
policies shall contain provisions whereby the insurers waive all 
rights of subrogation in accordance with the provisions of the 
Standard Small Generator Interconnection Agreement against the Other 
Party Group and provide thirty days advance written notice to the 
Other Party Group prior to anniversary date of cancellation or any 
material change in coverage or condition.
    6.16.6 The Commercial General Liability Insurance, Comprehensive 
Automobile Liability Insurance and Excess Public Liability Insurance 
policies shall contain provisions that specify that the policies are 
primary and shall apply to such extent without consideration for 
other policies separately carried and shall state that each insured 
is provided coverage as though a separate policy had been issued to 
each, except the insurer's liability shall not be

[[Page 50011]]

increased beyond the amount for which the insurer would have been 
liable had only one insured been covered. Each Party shall be 
responsible for its respective deductibles or retentions.
    6.16.7 The Commercial General Liability Insurance, Comprehensive 
Automobile Liability Insurance and Excess Public Liability Insurance 
policies, if written on a Claims First Made Basis, shall be 
maintained in full force and effect for two years after termination 
of the Standard Small Generator Interconnection Agreement, which 
coverage may be in the form of tail coverage or extended reporting 
period coverage if agreed by the Parties.
    6.16.8 The requirements contained herein as to the types and 
limits of all insurance to be maintained by the Parties are not 
intended to and shall not in any manner, limit or qualify the 
liabilities and obligations assumed by the Parties under the 
Standard Small Generator Interconnection Agreement.
    6.16.9 Within ten days following execution of the Standard Small 
Generator Interconnection Agreement, and as soon as practicable 
after the end of each fiscal year or at the renewal of the insurance 
policy and in any event within ninety days thereafter, each Party 
shall provide certification of all insurance required in the 
Standard Small Generator Interconnection Agreement, executed by each 
insurer or by an authorized representative of each insurer.
    6.16.10 Notwithstanding the foregoing, each Party may self-
insure to the extent it maintains a self-insurance program; provided 
that, such Party's senior secured debt is rated at investment grade, 
or better, by Standard & Poor's. For any period of time that a 
Party's senior secured debt is unrated by Standard & Poor's or is 
rated at less than investment grade by Standard & Poor's, such Party 
shall comply with the insurance requirements applicable to it under 
Articles 6.16.1 through 6.16.9. In the event that a Party is 
permitted to self-insure pursuant to this Article 6.16.10, it shall 
not be required to comply with the insurance requirements applicable 
to it under Articles 6.16.1 through 6.16.9.
    6.16.11 The Parties agree to report to each other in writing as 
soon as practical all accidents or occurrences resulting in injuries 
to any person, including death, and any property damage arising out 
of the Standard Small Generator Interconnection Agreement.
    6.17 Default.
    6.17.1 General. No Default shall exist where such failure to 
discharge an obligation (other than the payment of money) is the 
result of Force Majeure as defined in this agreement or the result 
of an act or omission of the other Party. Upon a Default, the non-
defaulting Party shall give written notice of such Default to the 
defaulting Party. Except as provided in Article 6.17.2, the 
defaulting Party shall have thirty Calendar Days from receipt of the 
Default notice within which to cure such Default; provided however, 
if such Default is not capable of cure within thirty Calendar Days, 
the defaulting Party shall commence such cure within thirty Calendar 
Days after notice and continuously and diligently complete such cure 
within ninety Calendar Days from receipt of the Default notice; and, 
if cured within such time, the Default specified in such notice 
shall cease to exist.
    6.17.2 Right To Terminate. If a Default is not cured as provided 
in this article, or if a Default is not capable of being cured 
within the period provided for herein, the non-defaulting Party 
shall have the right to terminate this agreement by written notice 
at any time until cure occurs, and be relieved of any further 
obligation hereunder and, whether or not that Party terminates this 
agreement, to recover from the defaulting Party all amounts due 
hereunder, plus all other damages and remedies to which it is 
entitled at law or in equity. The provisions of this article will 
survive termination of this agreement.
    6.18 Subcontractors.
    6.18.1 General. Nothing in this Agreement shall prevent a Party 
from utilizing the services of any subcontractor as it deems 
appropriate to perform its obligations under this Agreement; 
provided, however, that each Party shall require its subcontractors 
to comply with all applicable terms and conditions of this Agreement 
in providing such services and each Party shall remain primarily 
liable to the other Party for the performance of such subcontractor.
    6.18.2 Responsibility of Principal. The creation of any 
subcontract relationship shall not relieve the hiring Party of any 
of its obligations under this Agreement. The hiring Party shall be 
fully responsible to the other Party for the acts or omissions of 
any subcontractor the hiring Party hires as if no subcontract had 
been made; provided, however, that in no event shall the 
Transmission Provider be liable for the actions or inactions of the 
Interconnection Customer or its subcontractors with respect to 
obligations of the Interconnection Customer under Article 5 of this 
Agreement. Any applicable obligation imposed by this Agreement upon 
the hiring Party shall be equally binding upon, and shall be 
construed as having application to, any subcontractor of such Party.
    6.18.3 No Limitation by Insurance. The obligations under this 
article will not be limited in any way by any limitation of 
subcontractor's insurance.
    6.19 Consequential Damages. Other than as expressly provided for 
in this agreement, neither Party shall be liable under any provision 
of this agreement for any losses, damages, costs or expenses for any 
special, indirect, incidental, consequential, or punitive damages, 
including but not limited to loss of profit or revenue, loss of the 
use of equipment, cost of capital, cost of temporary equipment or 
services, whether based in whole or in part in contract, in tort, 
including negligence, strict liability, or any other theory of 
liability; provided, however, that damages for which a Party may be 
liable to the other Party under another agreement will not be 
considered to be special, indirect, incidental, or consequential 
damages hereunder.
    6.20 Reservation of Rights. Transmission Provider shall have the 
right to make a unilateral filing with FERC to modify this LGIA with 
respect to any rates, terms and conditions, charges, classifications 
of service, rule or regulation under section 205 or any other 
applicable provision of the Federal Power Act and FERC's rules and 
regulations thereunder, and Interconnection Customer shall have the 
right to make a unilateral filing with FERC to modify this LGIA 
pursuant to section 206 or any other applicable provision of the 
Federal Power Act and FERC's rules and regulations thereunder; 
provided that each Party shall have the right to protest any such 
filing by the other Party and to participate fully in any proceeding 
before FERC in which such modifications may be considered. Nothing 
in this LGIA shall limit the rights of the Parties or of FERC under 
sections 205 or 206 of the Federal Power Act and FERC's rules and 
regulations thereunder, except to the extent that the Parties 
otherwise mutually agree as provided herein.

Article 7. Confidentiality

    7.1 Confidentiality. Confidential Information shall include, 
without limitation, all information relating to a Party's 
technology, research and development, business affairs, and pricing, 
and any information supplied by either of the Parties to the other 
prior to the execution of this Agreement.
    Information is Confidential Information only if it is clearly 
designated or marked in writing as confidential on the face of the 
document, or, if the information is conveyed orally or by 
inspection, if the Party providing the information orally informs 
the Party receiving the information that the information is 
confidential.
    If requested by either Party, the other Party shall provide in 
writing, the basis for asserting that the information referred to in 
this Article warrants confidential treatment, and the requesting 
Party may disclose such writing to the appropriate Governmental 
Authority. Each Party shall be responsible for the costs associated 
with affording confidential treatment to its information.
    7.2 Term. During the term of this agreement, and for a period of 
three years after the expiration or termination of this agreement, 
except as otherwise provided in this article, each Party shall hold 
in confidence and shall not disclose to any person Confidential 
Information.
    7.3 Scope. Confidential Information shall not include 
information that the receiving Party can demonstrate: (1) Is 
generally available to the public other than as a result of a 
disclosure by the receiving Party, (2) was in the lawful possession 
of the receiving Party on a non-confidential basis before receiving 
it from the disclosing Party, (3) was supplied to the receiving 
Party without restriction by a third party, who, to the knowledge of 
the receiving Party after due inquiry, was under no obligation to 
the disclosing Party to keep such information confidential, (4) was 
independently developed by the receiving Party without reference to 
Confidential Information of the disclosing Party, (5) is, or 
becomes, publicly known, through no wrongful act or omission of the 
receiving Party or Breach of this agreement, or (6) is required, in 
accordance with Article 7.8 (Order of Disclosure) to be disclosed by 
any Governmental Authority or is otherwise required to be disclosed 
by law or subpoena, or is necessary in any legal

[[Page 50012]]

proceeding establishing rights and obligations under this agreement. 
Information designated as Confidential Information will no longer be 
deemed confidential if the Party that designated the information as 
confidential notifies the other Party that it no longer is 
confidential.
    7.4 Release of Confidential Information. Neither Party shall 
release or disclose Confidential Information to any other person, 
except to its employees, consultants, or to parties who may be or 
considering providing financing to or equity participation with 
Interconnection Customer, or to potential purchasers or assignees of 
Interconnection Customer, on a need-to-know basis in connection with 
this agreement, unless such person has first been advised of the 
confidentiality provisions of this article and has agreed to comply 
with such provisions. Notwithstanding the foregoing, a Party 
providing Confidential Information to any person shall remain 
primarily responsible for any release of Confidential Information in 
contravention of this article.
    7.5 Rights. Each Party retains all rights, title, and interest 
in the Confidential Information that each Party discloses to the 
other Party. The disclosure by each Party to the other Party of 
Confidential Information shall not be deemed a waiver by either 
Party or any other person or entity of the right to protect the 
Confidential Information from public disclosure.
    7.6 No Warranties. By providing Confidential Information, 
neither Party makes any warranties or representations as to its 
accuracy or completeness. In addition, by supplying Confidential 
Information, neither Party obligates itself to provide any 
particular information or Confidential Information to the other 
Party nor to enter into any further agreements or proceed with any 
other relationship or joint venture.
    7.7 Standard of Care. Each Party shall use at least the same 
standard of care to protect Confidential Information it receives as 
it uses to protect its own Confidential Information from 
unauthorized disclosure, publication or dissemination. Each Party 
may use Confidential Information solely to fulfill its obligations 
to the other Party under this agreement or its regulatory 
requirements.
    7.8 Order of Disclosure. If a court or a Government Authority or 
entity with the right, power, and apparent authority to do so 
requests or requires either Party, by subpoena, oral deposition, 
interrogatories, requests for production of documents, 
administrative order, or otherwise, to disclose Confidential 
Information, that Party shall provide the other Party with prompt 
notice of such request(s) or requirement(s) so that the other Party 
may seek an appropriate protective order or waive compliance with 
the terms of this Agreement. Notwithstanding the absence of a 
protective order or waiver, the Party may disclose such Confidential 
Information which, in the opinion of its counsel, the Party is 
legally compelled to disclose. Each Party will use Reasonable 
Efforts to obtain reliable assurance that confidential treatment 
will be accorded any Confidential Information so furnished.
    7.9 Termination of Agreement. Upon termination of this agreement 
for any reason, each Party shall, within ten Calendar Days of 
receipt of a written request from the other Party, use Reasonable 
Efforts to destroy, erase, or delete (with such destruction, 
erasure, and deletion certified in writing to the other Party) or 
return to the other Party, without retaining copies thereof, any and 
all written or electronic Confidential Information received from the 
other Party.
    7.10 Remedies. The Parties agree that monetary damages would be 
inadequate to compensate a Party for the other Party's Breach of its 
obligations under this article. Each Party accordingly agrees that 
the other Party shall be entitled to equitable relief, by way of 
injunction or otherwise, if the first Party Breaches or threatens to 
Breach its obligations under this article, which equitable relief 
shall be granted without bond or proof of damages, and the receiving 
Party shall not plead in defense that there would be an adequate 
remedy at law. Such remedy shall not be deemed an exclusive remedy 
for the Breach of this article, but shall be in addition to all 
other remedies available at law or in equity. The Parties further 
acknowledge and agree that the covenants contained herein are 
necessary for the protection of legitimate business interests and 
are reasonable in scope. No Party, however, shall be liable for 
indirect, incidental, or consequential or punitive damages of any 
nature or kind resulting from or arising in connection with this 
article.
    7.11 Disclosure to FERC or its Staff. Notwithstanding anything 
in this article to the contrary, and pursuant to 18 CFR 1b.20, if 
FERC or its staff, during the course of an investigation or 
otherwise, requests information from one of the Parties that is 
otherwise required to be maintained in confidence pursuant to this 
Agreement, the Party shall provide the requested information to FERC 
or its staff, within the time provided for in the request for 
information. In providing the information to FERC or its staff, the 
Party may, consistent with 18 CFR 388.112, request that the 
information be treated as confidential and non-public by FERC and 
its staff and that the information be withheld from public 
disclosure. Parties are prohibited from notifying the other Party to 
this LGIA prior to the release of the Confidential Information to 
the Commission or its staff. The Party shall notify the other Party 
to this agreement when it is notified by FERC or its staff that a 
request to release Confidential Information has been received by 
FERC, at which time either of the Parties may respond before such 
information would be made public, pursuant to 18 CFR 38.112.
    7.12 Competitively Sensitive, Commercial or Financial 
Information. Subject to the exception in Article 7.11, any 
information that a Party claims is competitively sensitive, 
commercial or financial information under this agreement 
(``Confidential Information'') shall not be disclosed by the other 
Party to any person not employed or retained by the other Party, 
except to the extent disclosure is (1) required by law, (2) 
reasonably deemed by the disclosing Party to be required to be 
disclosed in connection with a dispute between or among the Parties, 
or the defense of litigation or dispute, (3) otherwise permitted by 
consent of the other Party, such consent not to be unreasonably 
withheld, or (4) necessary to fulfill its obligations under this 
agreement or as a transmission service provider or a Control Area 
operator including disclosing the Confidential Information to the 
RTO or ISO or to a regional or national reliability organization. 
The Party asserting confidentiality shall notify the other Party in 
writing of the information it claims is confidential. Prior to any 
disclosures of the other Party's Confidential Information under this 
subparagraph, or if any third party or Governmental Authority makes 
any request or demand for any of the information described in this 
subparagraph, the disclosing Party agrees to promptly notify the 
other Party in writing and agrees to assert confidentiality and 
cooperate with the other Party in seeking to protect the 
Confidential Information from public disclosure by confidentiality 
agreement, protective order or other reasonable measures.
    7.13 Information in Public Domain. This provision shall not 
apply to any information that was or is hereafter in the public 
domain (except as a result of a Breach of this provision).

Article 8. Disputes

    8.1 Submission. In the event either Party has a dispute, or 
asserts a claim, that arises out of or in connection with this 
agreement or its performance, such Party (the ``Disputing Party'') 
shall provide the other Party with written notice of the dispute or 
claim (``Notice of Dispute''). Such dispute or claim shall be 
referred to a designated senior representative of each Party for 
resolution on an informal basis as promptly as practicable after 
receipt of the Notice of Dispute by the other Party. In the event 
the designated representatives are unable to resolve the claim or 
dispute through unassisted or assisted negotiations within thirty 
Calendar Days of the other Party's receipt of the Notice of Dispute, 
such claim or dispute may, upon agreement of the Parties, be 
submitted to arbitration and resolved in accordance with the 
arbitration procedures set forth below. In the event the Parties do 
not agree to submit such claim or dispute to arbitration, each Party 
may exercise whatever rights and remedies it may have in equity or 
at law consistent with the terms of this agreement.
    8.2 External Arbitration Procedures. Any arbitration initiated 
under this agreement shall be conducted before a single neutral 
Arbitrator/Technical Master (hereinafter referred to as Arbitrator) 
appointed by the Parties. If the Parties fail to agree upon a single 
Arbitrator within ten Calendar Days of the submission of the dispute 
to arbitration, each Party shall choose one Arbitrator who shall sit 
on a three-member arbitration panel. The two Arbitrators so chosen 
shall within 20 Calendar Days select a third Arbitrator to chair the 
arbitration panel. In either case, the Arbitrators shall be 
knowledgeable in electric utility matters, including electric 
transmission and bulk power issues, and shall not have any current 
or past substantial business or financial relationships with any 
party to the arbitration (except prior arbitration). The 
Arbitrator(s) shall provide each of the Parties an opportunity to be 
heard and, except as otherwise provided herein,

[[Page 50013]]

shall conduct the arbitration in accordance with the Commercial 
Arbitration Rules of the American Arbitration Association 
(``Arbitration Rules'') and any applicable FERC regulations or 
Regional Transmission Organization rules; provided, however, in the 
event of a conflict between the Arbitration Rules and the terms of 
this article, the terms of this article shall prevail.
    8.3 Arbitration Decisions. Unless otherwise agreed by the 
Parties, the Arbitrator(s) shall render a decision within 90 
Calendar Days of appointment and shall notify the Parties in writing 
of such decision and the reasons therefor. The Arbitrator(s) shall 
be authorized only to interpret and apply the provisions of this 
agreement and shall have no power to modify or change any provision 
of this agreement in any manner. The decision of the Arbitrator(s) 
shall be final and binding upon the Parties, and judgment on the 
award may be entered in any court having jurisdiction. The decision 
of the Arbitrator(s) may be appealed solely on the grounds that the 
conduct of the Arbitrator(s), or the decision itself, violated the 
standards set forth in the Federal Arbitration Act or the 
Administrative Dispute Resolution Act. The final decision of the 
Arbitrator must also be filed with FERC if it affects jurisdictional 
rates, terms and conditions of service, Interconnection Facilities, 
or Upgrades.
    8.4 Costs. Each Party shall be responsible for its own costs 
incurred during the arbitration process and for the following costs, 
if applicable: (1) The cost of the Arbitrator chosen by the Party to 
sit on the three-member panel and one half of the cost of the third 
Arbitrator chosen, or (2) one half the cost of the single Arbitrator 
jointly chosen by the Parties.

Article 9. Signatures

    In witness whereof, Parties have caused this agreement to be 
executed by their respective duly authorized representatives.

For Transmission Provider

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

For Transmission Owner (If Applicable)

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

For Interconnection Customer

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

Appendix 1

Description and Costs of Generating Facility, Interconnection 
Facilities, and Metering Equipment

    Equipment, including the Generating Facility, Interconnection 
Facilities, and metering equipment shall be itemized and identified 
as being owned by Interconnection Customer, Transmission Provider, 
or Transmission Owner. 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.

Appendix 2

One-line Diagram Depicting Generating Facility, Interconnection 
Facilities, Metering Equipment, and Upgrades

Appendix 3

Milestones

 In-Service Date:------------------------------------------------------
    Critical milestones and responsibility as agreed to by the 
Parties:

[[Page 50014]]



 
                           Milestone/Date                                             Responsible Party
 
(1)
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(2)
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(3)
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(4)
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(5)
---------------------------------------------------------------------       ------------------------------------
(6)
---------------------------------------------------------------------       ------------------------------------
(7)
---------------------------------------------------------------------       ------------------------------------
(8)
---------------------------------------------------------------------       ------------------------------------
(9)
---------------------------------------------------------------------       ------------------------------------
(10)
---------------------------------------------------------------------       ------------------------------------
Agreed to by:
For Transmission Provider                                             .....  Date
---------------------------------------------------------------------       ------------------------------------
For Transmission Owner (If Applicable)                                .....  Date
---------------------------------------------------------------------       ------------------------------------
For Interconnection Customer                                          .....  Date
---------------------------------------------------------------------       ------------------------------------
 

Appendix 4

Additional Operating Requirements for Interconnection Provider's 
Transmission System and Affected Systems Needed To Support 
Interconnection Customer's Needs

    Transmission Provider shall also provide requirements that must 
be met by Interconnection Customer prior to initiating Parallel 
Operation with Transmission Provider's Transmission System.

Appendix 5

Transmission Provider's Description of Transmission System Upgrades and 
Best Estimate of Upgrade Costs

    Transmission Provider shall describe Upgrades and provide an 
itemized best estimate of the cost, including overheads, of the 
Upgrades and annual operation and maintenance expenses associated 
with such Upgrades. Transmission Provider shall functionalize 
Upgrade costs and annual expenses as either transmission or 
distribution related.

[FR Doc. 03-20155 Filed 8-18-03; 8:45 am]
BILLING CODE 6718-01-P