[Federal Register Volume 71, Number 144 (Thursday, July 27, 2006)]
[Rules and Regulations]
[Pages 42587-42592]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-11989]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 35

[Docket No. RM02-12-002; Order No. 2006-B]


Standardization of Small Generator Interconnection Agreements and 
Procedures

Issued July 20, 2006.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Order on clarification.

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SUMMARY: The Federal Energy Regulatory Commission clarifies one issue 
regarding Order No. 2006-A. Order Nos. 2006-A and 2006 require all 
public utilities that own, control, or operate facilities for 
transmitting electric energy in interstate commerce to file revised 
open access transmission tariffs containing standard small generator 
interconnection procedures and a standard small generator 
interconnection agreement, and to provide interconnection service under 
them to small generating facilities of no more than 20 megawatts.

DATES: Effective Date: August 28, 2006.

FOR FURTHER INFORMATION CONTACT: Michael G. Henry (Legal Information), 
Office of the General Counsel, Federal Energy Regulatory Commission, 
888 First Street, NE., Washington, DC 20426. (202) 502-8532.
    Kirk F. Randall, Office of Energy Markets and Reliability, Federal 
Energy Regulatory Commission, 888 First Street, NE., Washington, DC 
20426. (202) 502-8092.

SUPPLEMENTARY INFORMATION:

Before Commissioners: Joseph T. Kelliher, Chairman; Nora Mead Brownell, 
and Suedeen G. Kelly; Order on Clarification

I. Introduction

    1. This order grants a request for clarification of Order No. 2006-
A submitted by Southern California Edison (SoCal Edison).\1\ Order Nos. 
2006 and 2006-A require that all public utilities that own, control, or 
operate facilities used for transmitting electric energy in interstate 
commerce \2\ have on file with the Commission standard generator 
interconnection procedures (pro forma SGIP) and a standard small 
generator interconnection agreement (pro forma SGIA) for 
interconnecting with the Transmission Provider's Transmission System 
any Small Generating Facility capable of producing no more than 20 
megawatts of power.\3\ Order No. 2006 requires that all public 
utilities subject to it modify their open access transmission tariffs 
(OATTs) to include the pro forma SGIP and pro forma SGIA. On November 
22, 2005, the Commission issued Order No. 2006-A, which modified 
portions of Order No. 2006.\4\
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    \1\ Standardization of Small Generator Interconnection 
Agreements and Procedures, Order No. 2006, 70 FR 34189 (June 13, 
2005), FERC Stats. & Regs. ] 31,180 (2005) (Order No. 2006), order 
on reh'g, Order No. 2006A, 70 FR 71760 (November 30, 2005), FERC 
Stats. & Regs. ] 31,196 (2005).
    \2\ A public utility is a utility that owns, controls, or 
operates facilities used for transmitting electric energy in 
interstate commerce, as defined in section 201(e) of the Federal 
Power Act (FPA). 16 U.S.C. 824(e) (2000). A non-public utility that 
seeks voluntary compliance with the reciprocity condition of an open 
access transmission tariff may satisfy that condition by adopting 
these procedures and agreement, or by filing interconnection rules 
that substantially conform with, or are superior to, the pro forma 
SGIP and pro forma SGIA.
    \3\ Capitalized terms used in this order have the meanings 
specified in the Glossaries of Terms or the text of the pro forma 
SGIP or the pro forma SGIA. Small Generating Facility means the 
device for which the Interconnection Customer (the owner or operator 
of the Small Generating Facility) has requested interconnection. The 
utility with which the Small Generating Facility is interconnecting 
is the Transmission Provider. A Small Generating Facility is a 
device used for the production of electricity having a capacity of 
no more than 20 megawatts. The interconnection process begins when 
the Interconnection Customer submits an application for 
interconnection (Interconnection Request) to the Transmission 
Provider.
    \4\ Comparable documents for generators larger than 20 megawatts 
in size are set forth in Order No. 2003 and are referred to as the 
LGIP and LGIA. See Standardization of Generator Interconnection 
Agreements and Procedures, Order No. 2003, 68 FR 49845 (August 19, 
2003), FERC Stats. & Regs. ] 31,146 (2003) (Order No. 2003), order 
on reh'g, Order No. 2003-A, 69 FR 15932 (March 26, 2004), FERC 
Stats. & Regs. ] 31,160 (2004) (Order No. 2003-A), order on reh'g, 
Order No. 2003-B, 70 FR 265 (January 4, 2005), FERC Stats. & Regs. ] 
31,171 (2005) (Order No. 2003-B), order on reh'g, Order No. 2003-C, 
70 FR 37661 (June 30, 2005), FERC Stats. & Regs. ] 31,190 (2005) 
(Order No. 2003-C); see also Notice Clarifying Compliance 
Procedures, 106 FERC ] 61,009 (2004).
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II. Background

    2. Under Order No. 2006, if the proposed interconnection of the 
Interconnection Customer's Small Generating Facility with the 
Transmission Provider's Transmission System does not qualify for review 
under the accelerated Fast Track Process or the 10 kW Inverter Process, 
it is evaluated using industry-standard interconnection studies. These 
studies--the Feasibility Study, the System Impact Study, and the 
Facilities Study--are performed by the Transmission Provider under the 
pro forma study agreements in the pro forma SGIP. These study 
agreements, to be signed by the Transmission Provider and 
Interconnection Customer, are similar to, but less complex than, 
similar agreements for Large Generators contained in Order No. 2003. 
The Commission developed the pro forma SGIP and SGIA to offer a simple 
process for interconnecting Small Generating Facilities with the 
nation's electric grid.\5\ To this end, the three pro forma SGIP study 
agreements did not include boilerplate contract provisions

[[Page 42588]]

addressing issues such as waiver, amendment, and governing law.
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    \5\ See Order No. 2006 at P 1, 509.
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III. Request for Clarification

    3. Previously, in its request for rehearing of Order No. 2006, 
SoCal Edison urged the Commission to adopt miscellaneous boilerplate 
contract provisions in the pro forma study agreements. It proposed that 
the Commission include in the pro forma study agreements the 
miscellaneous provisions contained in article 12 of the pro forma SGIA. 
The Commission did not address this issue in Order No. 2006-A, and on 
rehearing of that order, SoCal Edison repeats its request.
Commission Conclusion
    4. We agree with SoCal Edison that the pro forma SGIP study 
agreements should contain standard legal terms and conditions. Although 
these added provisions will lengthen the study agreements, we conclude 
that their inclusion will benefit both generators and Transmission 
Providers. Since the period of time between when the study agreements 
are signed and when the studies are complete is short, we expect that 
including standard legal protections will clarify each party's legal 
rights under the study agreements and minimize disputes.
    5. We agree with SoCal Edison that certain of the provisions in 
article 12 of the SGIA provide the necessary clarity and legal 
protections to the parties, and will therefore adopt several of those 
provisions, with some minor editorial revisions, into each study 
agreement. Specifically, we will add to each study agreement articles 
12.1 through 12.4 and 12.6 through 12.8 (including provisions on 
governing law, amendment, third-party beneficiaries, waiver, multiple 
counterparts, partnership, and severability); as well as articles 12.11 
and 12.12 (subcontractors and reservation of rights).\6\ We will not 
include article 12.9 (security arrangements) or article 12.10 
(environmental releases) since neither of these provisions is relevant 
during the study phase of an interconnection project. Nor do we include 
article 12.5 (entirety of agreement), since it suggests that the SGIP 
may not be used to interpret the parties' obligations under the study 
agreements. The new provisions will become articles 13 through 21 of 
the Feasibility Study Agreement and the System Impact Study Agreement; 
and articles 11 through 19 of the Facilities Study Agreement. While 
this will increase the length of each study agreement, the increase in 
certainty justifies the inclusion of additional legal boilerplate.
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    \6\ The revised study agreements (not including unchanged 
attachments) are included as Appendices 1-3 to this order.
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    6. We also clarify that section 4 of the pro forma SGIP (dealing 
with matters such as dispute resolution, confidentiality, record 
retention, etc.) also applies to the interconnection study process. 
These provisions, along with the contractual provisions being added to 
the study agreements themselves, provide the parties with a way to 
resolve disputes and the necessary legal protections should a dispute 
arise.

IV. Additional Changes to the SGIA

    7. Finally, we note that articles 1.1 through 1.4 of the pro forma 
SGIA are not listed in the pro forma SGIA's Table of Contents. We will 
correct that here. The corrections to article 1 of the Table of 
Contents are included as Appendix 4 of this order.

V. Compliance

    8. As in Order No. 2006, the tariffs of non-independent 
Transmission Providers will be deemed to have been modified to include 
the revised pro forma SGIP study agreements and SGIA on the effective 
date of this order. The non-independent Transmission Provider is not 
required to make any additional filing before it is otherwise required 
to do so by Order No. 2006.\7\ If a non-independent Transmission 
Provider seeks to modify the pro forma study agreements it must make an 
FPA section 205 filing explaining why its changes are ``consistent with 
or superior to'' the Commission's pro forma study agreements.\8\
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    \7\ See Order No. 2006 at P 544 (stating that a non-independent 
Transmission Provider wishing to adopt the pro forma SGIP and pro 
forma SGIA without modification may wait until it complies with the 
Commission's Electronic Tariff Filings rulemaking); see also 
Electronic Tariff Filings, Notice of Proposed Rulemaking, 69 FR 
43929 (Jul. 23, 2004), FERC Stats. & Regs. ] 32,575 (2004).
    \8\ See Order No. 2006 at P 546.
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    9. Independent Transmission Providers will be given an additional 
60 days after the effective date of this order to make conforming 
changes. If the Commission has already acted on the independent 
Transmission Provider's Order Nos. 2006 and 2006-A compliance filing by 
the effective date of this order, the independent Transmission Provider 
must make a new compliance filing to incorporate the new provisions (or 
request variation). If the Commission has not yet acted on the 
independent Transmission Provider's Order Nos. 2006 or 2006-A 
compliance filings, the independent Transmission Provider must submit 
an amendment to its pending filing. Independent Transmission Providers 
that have been given an extension of time to make Order Nos. 2006 and 
2006-A compliance filings beyond the effective date of this order must 
include the changes to their study agreements in that filing.
    10. Any study agreements signed before the effective date of this 
order are grandfathered and need not be revised to include the 
revisions set forth in this order. All study agreements signed on or 
after the effective date of this order must include the revisions set 
forth in this order.

VI. Information Collection Statement

    11. Order Nos. 2006 and 2006-A contain information collection 
requirements for which the Commission obtained approval from the Office 
of Management and Budget (OMB). The OMB Control Number for this 
collection of information is 1902-0203. By clarifying the provisions of 
Order Nos. 2006 and 2006-A, this order does not make substantive 
modifications to the Commission's information collection requirements 
and, accordingly, OMB approval for this order is not necessary. 
However, the Commission will send a copy of this order to OMB for 
informational purposes.

VII. Document Availability

    12. The Commission will publish the full text of this document in 
the Federal Register. Interested persons also may obtain this document 
from the Commission'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. This document is also available electronically from 
the Commission's eLibrary system (http://www.ferc.gov/docs-filing/elibrary.asp) in PDF and Microsoft Word format. To access this document 
in eLibrary, type ``RM02-12'' in the docket number field and specify a 
date range that includes this document's issuance date. User assistance 
is available for eLibrary and the Commission's Web site during normal 
business hours from the Commission's 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].

VIII. Effective Date

    13. Changes to Order Nos. 2006 and 2006-A made in this Order on 
Rehearing will become effective on August 28, 2006.

[[Page 42589]]

List of Subjects in 18 CFR Part 35

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

    By the Commission.
Magalie R. Salas,
Secretary.

    Note: The following appendices will not appear in the Code of 
Federal Regulations.

Appendix 1: Revised Feasibility Study Agreement

Attachment 6

Feasibility Study Agreement

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

Recitals

    WHEREAS, Interconnection Customer is proposing to develop a 
Small Generating Facility or generating capacity addition to an 
existing Small Generating Facility consistent with the 
Interconnection Request completed by Interconnection Customer on --
------------------ ; and
    WHEREAS, Interconnection Customer desires to interconnect the 
Small Generating Facility with the Transmission Provider's 
Transmission System; and
    WHEREAS, Interconnection Customer has requested the Transmission 
Provider to perform a feasibility study to assess the feasibility of 
interconnecting the proposed Small Generating Facility with the 
Transmission Provider's Transmission System, and of any Affected 
Systems;
    NOW, THEREFORE, in consideration of and subject to the mutual 
covenants contained herein the Parties agreed as follows:
    1.0 When used in this Agreement, with initial capitalization, 
the terms specified shall have the meanings indicated or the 
meanings specified in the standard Small Generator Interconnection 
Procedures.
    2.0 The Interconnection Customer elects and the Transmission 
Provider shall cause to be performed an interconnection feasibility 
study consistent the standard Small Generator Interconnection 
Procedures in accordance with the Open Access Transmission Tariff.
    3.0 The scope of the feasibility study shall be subject to the 
assumptions set forth in Attachment A to this Agreement.
    4.0 The feasibility study shall be based on the technical 
information provided by the Interconnection Customer in the 
Interconnection Request, as may be modified as the result of the 
scoping meeting. The Transmission Provider reserves the right to 
request additional technical information from the Interconnection 
Customer as may reasonably become necessary consistent with Good 
Utility Practice during the course of the feasibility study and as 
designated in accordance with the standard Small Generator 
Interconnection Procedures. If the Interconnection Customer modifies 
its Interconnection Request, the time to complete the feasibility 
study may be extended by agreement of the Parties.
    5.0 In performing the study, the Transmission Provider shall 
rely, to the extent reasonably practicable, on existing studies of 
recent vintage. The Interconnection Customer shall not be charged 
for such existing studies; however, the Interconnection Customer 
shall be responsible for charges associated with any new study or 
modifications to existing studies that are reasonably necessary to 
perform the feasibility study.
    6.0 The feasibility study report shall provide the following 
analyses for the purpose of identifying any potential adverse system 
impacts that would result from the interconnection of the Small 
Generating Facility as proposed:
    6.1 Initial identification of any circuit breaker short circuit 
capability limits exceeded as a result of the interconnection;
    6.2 Initial identification of any thermal overload or voltage 
limit violations resulting from the interconnection;
    6.3 Initial review of grounding requirements and electric system 
protection; and
    6.4 Description and non-binding estimated cost of facilities 
required to interconnect the proposed Small Generating Facility and 
to address the identified short circuit and power flow issues.
    7.0 The feasibility study shall model the impact of the Small 
Generating Facility regardless of purpose in order to avoid the 
further expense and interruption of operation for reexamination of 
feasibility and impacts if the Interconnection Customer later 
changes the purpose for which the Small Generating Facility is being 
installed.
    8.0 The study shall include the feasibility of any 
interconnection at a proposed project site where there could be 
multiple potential Points of Interconnection, as requested by the 
Interconnection Customer and at the Interconnection Customer's cost.
    9.0 A deposit of the lesser of 50 percent of good faith 
estimated feasibility study costs or earnest money of $1,000 may be 
required from the Interconnection Customer.
    10.0 Once the feasibility study is completed, a feasibility 
study report shall be prepared and transmitted to the 
Interconnection Customer. Barring unusual circumstances, the 
feasibility study must be completed and the feasibility study report 
transmitted within 30 Business Days of the Interconnection 
Customer's agreement to conduct a feasibility study.
    11.0 Any study fees shall be based on the Transmission 
Provider's actual costs and will be invoiced to the Interconnection 
Customer after the study is completed and delivered and will include 
a summary of professional time.
    12.0 The Interconnection Customer must pay any study costs that 
exceed the deposit without interest within 30 calendar days on 
receipt of the invoice or resolution of any dispute. If the deposit 
exceeds the invoiced fees, the Transmission Provider shall refund 
such excess within 30 calendar days of the invoice without interest.
    13.0 Governing Law, Regulatory Authority, and Rules: The 
validity, interpretation and enforcement of this Agreement and each 
of its provisions shall be governed by the laws of the state of ----
---------------- (where the Point of Interconnection is located), 
without regard to its conflicts of law principles. This Agreement is 
subject to all Applicable Laws and Regulations. Each Party expressly 
reserves the right to seek changes in, appeal, or otherwise contest 
any laws, orders, or regulations of a Governmental Authority.
    14.0 Amendment: The Parties may amend this Agreement by a 
written instrument duly executed by both Parties.
    15.0 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.
    16.0 Waiver
    16.1 The failure of a Party to this Agreement to insist, on any 
occasion, upon strict performance of any provision of this Agreement 
will not be considered a waiver of any obligation, right, or duty 
of, or imposed upon, such Party.
    16.2 Any waiver at any time by either Party of its rights with 
respect to this Agreement shall not be deemed a continuing waiver or 
a waiver with respect to any other failure to comply with any other 
obligation, right, duty of this Agreement. Termination or default of 
this Agreement for any reason by Interconnection Customer shall not 
constitute a waiver of the Interconnection Customer's legal rights 
to obtain an interconnection from the Transmission Provider. Any 
waiver of this Agreement shall, if requested, be provided in 
writing.
    17.0 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.
    18.0 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.
    19.0 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

[[Page 42590]]

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.
    20.0 Subcontractors: Nothing in this Agreement shall prevent a 
Party from utilizing the services of any subcontractor as it deems 
appropriate to perform its obligations under this Agreement; 
provided, however, that each Party shall require its subcontractors 
to comply with all applicable terms and conditions of this Agreement 
in providing such services and each Party shall remain primarily 
liable to the other Party for the performance of such subcontractor.
    20.1 The creation of any subcontract relationship shall not 
relieve the hiring Party of any of its obligations under this 
Agreement. The hiring Party shall be fully responsible to the other 
Party for the acts or omissions of any subcontractor the hiring 
Party hires as if no subcontract had been made; provided, however, 
that in no event shall the Transmission Provider be liable for the 
actions or inactions of the Interconnection Customer or its 
subcontractors with respect to obligations of the Interconnection 
Customer under this Agreement. Any applicable obligation imposed by 
this Agreement upon the hiring Party shall be equally binding upon, 
and shall be construed as having application to, any subcontractor 
of such Party.
    20.2 The obligations under this article will not be limited in 
any way by any limitation of subcontractor's insurance.
    21.0 Reservation of Rights: The Transmission Provider shall have 
the right to make a unilateral filing with FERC to modify this 
Agreement with respect to any rates, terms and conditions, charges, 
classifications of service, rule or regulation under section 205 or 
any other applicable provision of the Federal Power Act and FERC's 
rules and regulations thereunder, and the Interconnection Customer 
shall have the right to make a unilateral filing with FERC to modify 
this Agreement under any applicable provision of the Federal Power 
Act and FERC's rules and regulations; provided that each Party shall 
have the right to protest any such filing by the other Party and to 
participate fully in any proceeding before FERC in which such 
modifications may be considered. Nothing in this Agreement shall 
limit the rights of the Parties or of FERC under sections 205 or 206 
of the Federal Power Act and FERC's rules and regulations, except to 
the extent that the Parties otherwise agree as provided herein.
    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]

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Signed:----------------------------------------------------------------
Name (Printed):--------------------------------------------------------
Title:-----------------------------------------------------------------

[Insert name of Interconnection Customer]

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Signed:----------------------------------------------------------------
Name (Printed):--------------------------------------------------------
Title:-----------------------------------------------------------------

Appendix 2: Revised System Impact Study Agreement

Attachment 7

System Impact Study Agreement

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

Recitals

    WHEREAS, the Interconnection Customer is proposing to develop a 
Small Generating Facility or generating capacity addition to an 
existing Small Generating Facility consistent with the 
Interconnection Request completed by the Interconnection Customer on 
-------------------- ; and
    WHEREAS, the Interconnection Customer desires to interconnect 
the Small Generating Facility with the Transmission Provider's 
Transmission System;
    WHEREAS, the Transmission Provider has completed a feasibility 
study and provided the results of said study to the Interconnection 
Customer (This recital to be omitted if the Parties have agreed to 
forego the feasibility study.); and
    WHEREAS, the Interconnection Customer has requested the 
Transmission Provider to perform a system impact study(s) to assess 
the impact of interconnecting the Small Generating Facility with the 
Transmission Provider's Transmission System, and of any Affected 
Systems;
    NOW, THEREFORE, in consideration of and subject to the mutual 
covenants contained herein the Parties agreed as follows:
    1.0 When used in this Agreement, with initial capitalization, 
the terms specified shall have the meanings indicated or the 
meanings specified in the standard Small Generator Interconnection 
Procedures.
    2.0 The Interconnection Customer elects and the Transmission 
Provider shall cause to be performed a system impact study(s) 
consistent with the standard Small Generator Interconnection 
Procedures in accordance with the Open Access Transmission Tariff.
    3.0 The scope of a system impact study shall be subject to the 
assumptions set forth in Attachment A to this Agreement.
    4.0 A system impact study will be based upon the results of the 
feasibility study and the technical information provided by 
Interconnection Customer in the Interconnection Request. The 
Transmission Provider reserves the right to request additional 
technical information from the Interconnection Customer as may 
reasonably become necessary consistent with Good Utility Practice 
during the course of the system impact study. If the Interconnection 
Customer modifies its designated Point of Interconnection, 
Interconnection Request, or the technical information provided 
therein is modified, the time to complete the system impact study 
may be extended.
    5.0 A system impact study shall consist of a short circuit 
analysis, a stability analysis, a power flow analysis, voltage drop 
and flicker studies, protection and set point coordination studies, 
and grounding reviews, as necessary. A system impact study shall 
state the assumptions upon which it is based, state the results of 
the analyses, and provide the requirement or potential impediments 
to providing the requested interconnection service, including a 
preliminary indication of the cost and length of time that would be 
necessary to correct any problems identified in those analyses and 
implement the interconnection. A system impact study shall provide a 
list of facilities that are required as a result of the 
Interconnection Request and non-binding good faith estimates of cost 
responsibility and time to construct.
    6.0 A distribution system impact study shall incorporate a 
distribution load flow study, an analysis of equipment interrupting 
ratings, protection coordination study, voltage drop and flicker 
studies, protection and set point coordination studies, grounding 
reviews, and the impact on electric system operation, as necessary.
    7.0 Affected Systems may participate in the preparation of a 
system impact study, with a division of costs among such entities as 
they may agree. All Affected Systems shall be afforded an 
opportunity to review and comment upon a system impact study that 
covers potential adverse system impacts on their electric systems, 
and the Transmission Provider has 20 additional Business Days to 
complete a system impact study requiring review by Affected Systems.
    8.0 If the Transmission Provider uses a queuing procedure for 
sorting or prioritizing projects and their associated cost 
responsibilities for any required Network Upgrades, the system 
impact study shall consider all generating facilities (and with 
respect to paragraph 8.3 below, any identified Upgrades associated 
with such higher queued interconnection) that, on the date the 
system impact study is commenced--
    8.1 Are directly interconnected with the Transmission Provider's 
electric system; or
    8.2 Are interconnected with Affected Systems and may have an 
impact on the proposed interconnection; and
    8.3 Have a pending higher queued Interconnection Request to 
interconnect with the Transmission Provider's electric system.
    9.0 A distribution system impact study, if required, shall be 
completed and the results transmitted to the Interconnection 
Customer within 30 Business Days after this Agreement is signed by 
the Parties. A transmission system impact study, if required, shall 
be completed and the results transmitted to the Interconnection 
Customer within 45 Business Days after this Agreement is signed by 
the Parties, or in accordance with the Transmission Provider's 
queuing procedures.
    10.0 A deposit of the equivalent of the good faith estimated 
cost of a distribution

[[Page 42591]]

system impact study and the one half the good faith estimated cost 
of a transmission system impact study may be required from the 
Interconnection Customer.
    11.0 Any study fees shall be based on the Transmission 
Provider's actual costs and will be invoiced to the Interconnection 
Customer after the study is completed and delivered and will include 
a summary of professional time.
    12.0 The Interconnection Customer must pay any study costs that 
exceed the deposit without interest within 30 calendar days on 
receipt of the invoice or resolution of any dispute. If the deposit 
exceeds the invoiced fees, the Transmission Provider shall refund 
such excess within 30 calendar days of the invoice without interest.
    13.0 Governing Law, Regulatory Authority, and Rules: The 
validity, interpretation and enforcement of this Agreement and each 
of its provisions shall be governed by the laws of the state of ----
(where the Point of Interconnection is located), without regard to 
its conflicts of law principles. This Agreement is subject to all 
Applicable Laws and Regulations. Each Party expressly reserves the 
right to seek changes in, appeal, or otherwise contest any laws, 
orders, or regulations of a Governmental Authority.
    14.0 Amendment: The Parties may amend this Agreement by a 
written instrument duly executed by both Parties.
    15.0 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.
    16.0 Waiver
    16.1 The failure of a Party to this Agreement to insist, on any 
occasion, upon strict performance of any provision of this Agreement 
will not be considered a waiver of any obligation, right, or duty 
of, or imposed upon, such Party.
    16.2 Any waiver at any time by either Party of its rights with 
respect to this Agreement shall not be deemed a continuing waiver or 
a waiver with respect to any other failure to comply with any other 
obligation, right, duty of this Agreement. Termination or default of 
this Agreement for any reason by Interconnection Customer shall not 
constitute a waiver of the Interconnection Customer's legal rights 
to obtain an interconnection from the Transmission Provider. Any 
waiver of this Agreement shall, if requested, be provided in 
writing.
    17.0 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.
    18.0 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.
    19.0 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.
    20.0 Subcontractors: Nothing in this Agreement shall prevent a 
Party from utilizing the services of any subcontractor as it deems 
appropriate to perform its obligations under this Agreement; 
provided, however, that each Party shall require its subcontractors 
to comply with all applicable terms and conditions of this Agreement 
in providing such services and each Party shall remain primarily 
liable to the other Party for the performance of such subcontractor.
    20.1 The creation of any subcontract relationship shall not 
relieve the hiring Party of any of its obligations under this 
Agreement. The hiring Party shall be fully responsible to the other 
Party for the acts or omissions of any subcontractor the hiring 
Party hires as if no subcontract had been made; provided, however, 
that in no event shall the Transmission Provider be liable for the 
actions or inactions of the Interconnection Customer or its 
subcontractors with respect to obligations of the Interconnection 
Customer under this Agreement. Any applicable obligation imposed by 
this Agreement upon the hiring Party shall be equally binding upon, 
and shall be construed as having application to, any subcontractor 
of such Party.
    20.2 The obligations under this article will not be limited in 
any way by any limitation of subcontractor's insurance.
    21.0 Reservation of Rights: The Transmission Provider shall have 
the right to make a unilateral filing with FERC to modify this 
Agreement with respect to any rates, terms and conditions, charges, 
classifications of service, rule or regulation under section 205 or 
any other applicable provision of the Federal Power Act and FERC's 
rules and regulations thereunder, and the Interconnection Customer 
shall have the right to make a unilateral filing with FERC to modify 
this Agreement under any applicable provision of the Federal Power 
Act and FERC's rules and regulations; provided that each Party shall 
have the right to protest any such filing by the other Party and to 
participate fully in any proceeding before FERC in which such 
modifications
    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]

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Signed:----------------------------------------------------------------
Name (Printed):--------------------------------------------------------
Title:-----------------------------------------------------------------

[Insert name of Interconnection Customer]

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Signed:----------------------------------------------------------------
Name (Printed):--------------------------------------------------------
Title:-----------------------------------------------------------------

Appendix 3: Revised Facilities Study Agreement

Attachment 8

Facilities Study Agreement

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

Recitals

    WHEREAS, the Interconnection Customer is proposing to develop a 
Small Generating Facility or generating capacity addition to an 
existing Small Generating Facility consistent with the 
Interconnection Request completed by the Interconnection Customer on 
-------------------- ; and
    WHEREAS, the Interconnection Customer desires to interconnect 
the Small Generating Facility with the Transmission Provider's 
Transmission System;
    WHEREAS, the Transmission Provider has completed a system impact 
study and provided the results of said study to the Interconnection 
Customer; and
    WHEREAS, the Interconnection Customer has requested the 
Transmission Provider to perform a facilities study to specify and 
estimate the cost of the equipment, engineering, procurement and 
construction work needed to implement the conclusions of the system 
impact study in accordance with Good Utility Practice to physically 
and electrically connect the Small Generating Facility with the 
Transmission Provider's Transmission System.
    NOW, THEREFORE, in consideration of and subject to the mutual 
covenants contained herein the Parties agreed as follows:
    1.0 When used in this Agreement, with initial capitalization, 
the terms specified shall have the meanings indicated or the 
meanings specified in the standard Small Generator Interconnection 
Procedures.
    2.0 The Interconnection Customer elects and the Transmission 
Provider shall cause a facilities study consistent with the standard 
Small Generator Interconnection Procedures to be performed in 
accordance with the Open Access Transmission Tariff.
    3.0 The scope of the facilities study shall be subject to data 
provided in Attachment A to this Agreement.
    4.0 The facilities study shall specify and estimate the cost of 
the equipment, engineering, procurement and construction work 
(including overheads) needed to

[[Page 42592]]

implement the conclusions of the system impact study(s). The 
facilities study shall also identify (1) the electrical switching 
configuration of the equipment, including, without limitation, 
transformer, switchgear, meters, and other station equipment, (2) 
the nature and estimated cost of the Transmission Provider's 
Interconnection Facilities and Upgrades necessary to accomplish the 
interconnection, and (3) an estimate of the time required to 
complete the construction and installation of such facilities.
    5.0 The Transmission Provider may propose to group facilities 
required for more than one Interconnection Customer in order to 
minimize facilities costs through economies of scale, but any 
Interconnection Customer may require the installation of facilities 
required for its own Small Generating Facility if it is willing to 
pay the costs of those facilities.
    6.0 A deposit of the good faith estimated facilities study costs 
may be required from the Interconnection Customer.
    7.0 In cases where Upgrades are required, the facilities study 
must be completed within 45 Business Days of the receipt of this 
Agreement. In cases where no Upgrades are necessary, and the 
required facilities are limited to Interconnection Facilities, the 
facilities study must be completed within 30 Business Days.
    8.0 Once the facilities study is completed, a facilities study 
report shall be prepared and transmitted to the Interconnection 
Customer. Barring unusual circumstances, the facilities study must 
be completed and the facilities study report transmitted within 30 
Business Days of the Interconnection Customer's agreement to conduct 
a facilities study.
    9.0 Any study fees shall be based on the Transmission Provider's 
actual costs and will be invoiced to the Interconnection Customer 
after the study is completed and delivered and will include a 
summary of professional time.
    10.0 The Interconnection Customer must pay any study costs that 
exceed the deposit without interest within 30 calendar days on 
receipt of the invoice or resolution of any dispute. If the deposit 
exceeds the invoiced fees, the Transmission Provider shall refund 
such excess within 30 calendar days of the invoice without interest.
    11.0 Governing Law, Regulatory Authority, and Rules: The 
validity, interpretation and enforcement of this Agreement and each 
of its provisions shall be governed by the laws of the state of ----
---------------- (where the Point of Interconnection is located), 
without regard to its conflicts of law principles. This Agreement is 
subject to all Applicable Laws and Regulations. Each Party expressly 
reserves the right to seek changes in, appeal, or otherwise contest 
any laws, orders, or regulations of a Governmental Authority.
    12.0 Amendment: The Parties may amend this Agreement by a 
written instrument duly executed by both Parties.
    13.0 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.
    14.0 Waiver
    14.1 The failure of a Party to this Agreement to insist, on any 
occasion, upon strict performance of any provision of this Agreement 
will not be considered a waiver of any obligation, right, or duty 
of, or imposed upon, such Party.
    14.2 Any waiver at any time by either Party of its rights with 
respect to this Agreement shall not be deemed a continuing waiver or 
a waiver with respect to any other failure to comply with any other 
obligation, right, duty of this Agreement. Termination or default of 
this Agreement for any reason by Interconnection Customer shall not 
constitute a waiver of the Interconnection Customer's legal rights 
to obtain an interconnection from the Transmission Provider. Any 
waiver of this Agreement shall, if requested, be provided in 
writing.
    15.0 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.
    16.0 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.
    17.0 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.
    18.0 Subcontractors: Nothing in this Agreement shall prevent a 
Party from utilizing the services of any subcontractor as it deems 
appropriate to perform its obligations under this Agreement; 
provided, however, that each Party shall require its subcontractors 
to comply with all applicable terms and conditions of this Agreement 
in providing such services and each Party shall remain primarily 
liable to the other Party for the performance of such subcontractor.
    18.1 The creation of any subcontract relationship shall not 
relieve the hiring Party of any of its obligations under this 
Agreement. The hiring Party shall be fully responsible to the other 
Party for the acts or omissions of any subcontractor the hiring 
Party hires as if no subcontract had been made; provided, however, 
that in no event shall the Transmission Provider be liable for the 
actions or inactions of the Interconnection Customer or its 
subcontractors with respect to obligations of the Interconnection 
Customer under this Agreement. Any applicable obligation imposed by 
this Agreement upon the hiring Party shall be equally binding upon, 
and shall be construed as having application to, any subcontractor 
of such Party.
    18.2 The obligations under this article will not be limited in 
any way by any limitation of subcontractor's insurance.
    19.0 Reservation of Rights: The Transmission Provider shall have 
the right to make a unilateral filing with FERC to modify this 
Agreement with respect to any rates, terms and conditions, charges, 
classifications of service, rule or regulation under section 205 or 
any other applicable provision of the Federal Power Act and FERC's 
rules and regulations thereunder, and the Interconnection Customer 
shall have the right to make a unilateral filing with FERC to modify 
this Agreement under any applicable provision of the Federal Power 
Act and FERC's rules and regulations; provided that each Party shall 
have the right to protest any such filing by the other Party and to 
participate fully in any proceeding before FERC in which such 
modifications
    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:-----------------------------------------------------------------

Appendix 4: Revised Table of Contents for Article 1 of the SGIA

Table of Contents

                                                                Page No.
Article 1. Scope and Limitations of Agreement................          1
  1.1 Applicability..........................................          1
  1.2 Purpose................................................          1
  1.3 No Agreement to Purchase or Deliver Power..............          1
  1.4 Limitations............................................          1
  1.5 Responsibilities of the Parties........................          2
  1.6 Parallel Operation Obligations.........................          2
  1.7 Metering...............................................          3
  1.8 Reactive Power.........................................          3
 

 [FR Doc. E6-11989 Filed 7-26-06; 8:45 am]
BILLING CODE 6717-01-P