[Federal Register Volume 73, Number 157 (Wednesday, August 13, 2008)]
[Proposed Rules]
[Pages 47101-47103]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-18800]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 73, No. 157 / Wednesday, August 13, 2008 / 
Proposed Rules  

[[Page 47101]]



DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Part 1730

RIN 0572-AC07


Interconnection of Distributed Resources

AGENCY: Rural Utilities Service, USDA.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Rural Utilities Service, an agency delivering the U.S. 
Department of Agriculture's Rural Development Utilities Programs (Rural 
Development and/or Agency) proposes to require that Rural Development 
Electric Program borrowers will be responsible for establishing and 
maintaining a written standard policy relating to the Interconnection 
of Distributed Resources (IDR). The intended effect is that owners of 
distributed resources know what they have to do to connect their 
facilities to the electric power systems of borrower electric 
cooperatives.

DATES: Written comments must be received by Rural Development Utilities 
Programs no later than October 14, 2008.

ADDRESSES: Submit comments by either of the following methods: Federal 
eRulemaking Portal: Go to http://www.regulations.gov and, in the lower 
``Search Regulations and Federal Actions'' box, select ``Rural 
Utilities Service'' from the agency dropdown menu, then click on 
``Submit.'' In the Docket ID column, select RUS-08-Electric-0001 to 
submit or view public comments and to view supporting and related 
materials available electronically. Information on using 
Regulations.gov, including instructions for accessing documents, 
submitting comments, and viewing the docket after the close of the 
comment period, is available through the site's ``User Tips'' link.
    Postal Mail/Commercial Delivery: Please send your comment addressed 
to Michele Brooks, Director, Program Development and Regulatory 
Analysis, USDA Rural Development, 1400 Independence Avenue, SW., STOP 
1522, Room 5159, Washington, DC 20250-1522. Please state that your 
comment refers to Docket No. RUS-06-Agency-0052.
    Other Information: Additional information about Rural Development 
and its programs is available on the Internet at http://www.rurdev.usda.gov/index.html.

FOR FURTHER INFORMATION CONTACT: Georg Shultz, USDA--Rural Development 
Utilities Programs, 1400 Independence Avenue, SW., Washington, DC 
20250-1569, telephone (202) 720-1900 or e-mail to 
[email protected].

SUPPLEMENTARY INFORMATION: 

Executive Order 12866

    This proposed rule has been determined to be not significant for 
purposes of Executive Order 12866 and, therefore, has not been reviewed 
by the Office of Management and Budget.

Catalog of Federal Domestic Assistance

    The program described by this proposed rule is listed in the 
Catalog of Federal Domestic Assistance Programs under number 10.850, 
Rural Electrification Loans and Loan Guarantees. This catalog is 
available on a subscription basis from the Superintendent of Documents, 
the United States Government Printing Office, Washington, DC 20402-9325 
or at http://www.cfda.gov.

Executive Order 12372

    This proposed rule is excluded from the scope of Executive Order 
12372, Intergovernmental Consultation, which may require consultation 
with State and local officials. See the final rule related notice 
entitled, ``Department Programs and Activities Excluded from Executive 
Order 12372'' (50 FR 47034).

Information Collection and Recordkeeping Requirements

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
chapter 35), comments are invited on this information collection for 
which the Agency intends to request approval from the Office of 
Management and Budget (OMB).
    Comments on this notice must be received by October 14, 2008.
    Comments are invited on (a) whether the collection of information 
is necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility; (b) the 
accuracy of the agency's estimate of burden including the validity of 
the methodology and assumption used; (c) ways to enhance the quality, 
utility and clarity of the information to be collected; and (d) ways to 
minimize the burden of the collection of information on those who are 
to respond, including through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques on 
other forms or information technology.
    Comments may be sent to Michele Brooks, Director, Program 
Development and Regulatory Analysis, Rural Development, U.S. Department 
of Agriculture, 1400 Independence Avenue, SW., Stop 1522, Room 5166 
South Building, Washington, DC 20250.
    Title: 7 CFR part 1730, Interconnection of Distributed Resources.
    OMB Control No.: 0572-XXXX.
    Type of Request: New information collection.
    Abstract: The Agency manages loan programs in accordance with the 
Rural Electrification Act of 1936, 7 U.S.C. 901 et seq., as amended (RE 
Act).
    Distributed resources have become an important addition to the 
nation's energy supply. However often times the owners of distributed 
resources have a difficult time connecting their distributed resources 
to the electric power system of rural electric cooperatives. This 
regulation will facilitate the Interconnection of Distributed Resources 
(IDR) by requiring that borrower electric cooperatives publish their 
requirements for this interconnection in a written document that is 
available to the public.
    Title 7 CFR part 1730 Electric System and Maintenance, subpart C 
Interconnection of Distributed Resources, establishes a requirement for 
borrowers to develop a written standard policy relating to the IDR 
having an installed capacity of not more than 10 megavolt amperes (MVA) 
at the point of common coupling.
    Estimate of Burden: Public reporting burden for this collection of 
information

[[Page 47102]]

is estimated to average \1/2\ hour per response.
    Respondents: Not for profit organizations, business or other for 
profit.
    Estimated Number of Respondents: 150.
    Estimated Number of Responses per Respondent: 1.
    Estimated Annual Responses: 150.
    Estimated Total Annual Burden on Respondents: 75 hours.
    Copies of this information collection can be obtained from Joyce 
McNeil, Program Development and Regulatory Analysis. Telephone: 202 
720-0812.
    All responses to this information collection and recordkeeping 
notice will be summarized and included in the request for OMB approval. 
All comments will also become a matter of public record.

National Environmental Policy Act Certification

    The Agency has determined that this proposed rule will not 
significantly affect the quality of the human environment as defined by 
the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). 
Therefore, this action does not require an environmental impact 
statement or assessment.

Regulatory Flexibility Act Certification

    It has been determined that the Regulatory Flexibility Act is not 
applicable to this proposed rule since the Agency is not required by 5 
U.S.C. 551 et seq. or any other provision of law to publish a notice of 
proposed rulemaking with respect to the subject matter of this rule.

Unfunded Mandates

    This rule contains no Federal mandates (under the regulatory 
provisions of Title II of the Unfunded Mandates Reform Act of 1995) for 
State, local, and tribal governments for the private sector. Thus, this 
rule is not subject to the requirements of section 202 and 205 of the 
Unfunded Mandates Reform Act of 1995.

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. The Agency has determined that this proposed rule 
meets the applicable standards in section 3 of the Executive Order.

Background

    Rural Development Utilities Programs proposes to amend 7 CFR part 
1730 by adding a subpart C titled ``Interconnection of Distributed 
Resources''. This rule will require that Rural Development Electric 
Program borrowers shall be responsible for establishing and maintaining 
a written standard policy relating to the interconnection of 
distributed resources (IDR). This rule will allow owners of distributed 
resources to ascertain the requirements of borrower electric 
cooperatives regarding connection to the electric cooperative 
facilities by referring to written borrower standards for IDR.
    This proposed rule is needed because currently the owners of 
distributed resources often do not know what they must do to connect 
their facilities to the electric power system of a borrower electric 
cooperative. This proposed rule would benefit the owners of distributed 
resources. The purpose of this action is to allow the owners of 
distributed resources to know exactly what they must do to connect 
their facilities with the electric power systems of borrower electric 
cooperatives.
    The United States electric power system (electric power system) 
consists of three distinct components: Generation facilities, 
transmission facilities (including bulk transmission and 
subtransmission facilities) and distribution facilities. Specific 
definitions of generation, transmission and distribution facilities are 
located at 7 CFR 1710.2.
    Rural Development Electric Program borrowers have always had a 
legal obligation to the Agency to maintain their respective systems. In 
satisfying these legal obligations, a borrower furthers the purposes of 
the Rural Electrification Act of 1936, as amended (7 U.S.C. 901 et 
seq.) while also preserving the value of its system to serve as 
collateral for repayment of the Agency assistance. Generally speaking, 
the scope of these legal obligations is frequently measured against 
prudent utility practices (PUP). Thus, it is entirely appropriate for 
the Agency to expect that its borrowers will be aware of and follow 
developing IDR standards using PUP. Voluntary standards using PUP are 
emerging within the private sector and the requirements of this 
proposed rule are consistent with those voluntary standards.
    This rule refers to an international standard published by the 
Institute of Electrical and Electronic Engineers (IEEE). It also allows 
individual borrowers to create their own additional technical 
requirements to meet local conditions that are consistent with PUP. The 
regulation applies to IDR having an installed capacity of not more than 
10 megavolt amperes (MVA). This specific value was chosen to correspond 
with the international standard published by IEEE.
    This regulation requires liability insurance for distributed 
resource facilities that are interconnected to borrowers' electric 
systems. Current federal regulations do not specify the amount of 
liability insurance required except when the distributed resource 
facility is owned by a Rural Development Electric Program borrower, 
contractor, engineer, or architect. Moreover, the Agency expects that 
borrower ownership of distributed resources will be uncommon. Comments 
are specifically requested on this issue, in particular, whether the 
regulation should specify a minimum amount of liability insurance, and 
if so, what minimum amount should be required.

List of Subjects

    Electric power; Loan program--energy; Reporting and recordkeeping 
requirements; Rural areas.

    For reasons set forth in the preamble, the Agency proposes to amend 
7 CFR, Chapter XVII, part 1730 by adding subpart C to read as follows:

PART 1730--ELECTRIC SYSTEM OPERATIONS AND MAINTENANCE

    1. The authority citation for part 1730 continues to read as 
follows:

     Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.

    2. Add Subpart C to read as follows:

Subpart C--Interconnection of Distributed Resources

Sec.
1730.60 General.
1730.61 Policy.
1730.62 Definitions.
1730.63 IDR policy criteria.
1730.64 Power purchase agreements.
1730.65 Effective dates.
1730.66 Administrative waiver.
1730.67-99 [Reserved]

Subpart C--Interconnection of Distributed Resources


Sec.  1730.60  General.

    Each electric program distribution borrower (as defined in Sec.  
1710.2) is responsible for establishing and maintaining a written 
standard policy relating to the Interconnection of Distributed 
Resources (IDR) having an installed capacity of not more than 10 
megavolt amperes (MVA) at the point of common coupling.


Sec.  1730.61  Policy.

    The Distributed Resource facility must not cause significant 
degradation

[[Page 47103]]

of the safety, power quality, or reliability on the borrower's electric 
power system or other electric power systems interconnected to the 
borrower's electric power system. The Agency encourages borrowers to 
consider model policy templates developed by knowledgeable and expert 
institutions, such as, but not limited to, the National Association of 
Regulatory Utility Commissioners, the Federal Energy Regulatory 
Commission and the National Rural Electric Cooperative Association. The 
Agency encourages all related electric borrowers to cooperate in the 
development of a common Distributed Resource policy.


Sec.  1730.62  Definitions.

    ``Distributed Resources'' as used in this subpart means sources of 
electric power that are not directly connected to a bulk power 
transmission system, having an installed capacity of not more than 10 
MVA, connected to the borrower's electric power system through a point 
of common coupling. Distributed resources include both generators and 
energy storage technologies.
    ``Responsible Party'' as used in this subpart means the owner, 
operator or any other person or entity that is accountable to the 
borrower under the borrower's interconnection policy for Distributed 
Resources.


Sec.  1730.63  IDR policy criteria.

    (a) General.
    (1) The borrower's IDR policy and procedures shall be readily 
available to the public and include, but not limited to, a standard 
application, application process, application fees, and agreement.
    (2) All costs to be recovered from the applicant regarding the 
application process or the actual interconnection are to be clearly 
explained to the applicant and authorized by the applicant prior to the 
borrower incurring these costs. The borrower may require separate 
nonrefundable deposits sufficient to insure serious intent by the 
applicant prior to proceeding either with the application or actual 
interconnection process.
    (3) IDR policies must be approved by the borrower's Board of 
Directors.
    (4) The borrower may establish a new rate classification for 
customers with Distributed Resources.
    (5) IDR policies must provide for reconsideration and updates every 
three years or more frequently as circumstances warrant.
    (b) Technical requirements.
    (1) IDR policies must be consistent with prudent electric utility 
practice.
    (2) IDR policies must incorporate the standard 1547 as promulgated 
and amended by the Institute of Electrical and Electronic Engineers 
(IEEE). The title of IEEE Standard 1547 is ``IEEE Standard for 
Interconnecting Distributed Resources with Electric Power Systems''. 
You may obtain a copy of IEEE Standard 1547 from: IEEE, 3 Park Avenue, 
New York, NY 10016-5997.
    (3) IDR policies must provide for appropriate electric power system 
disconnect facilities, as determined by the borrower, which shall 
include a lockable disconnect, a visible open, and fusing, that are 
readily accessible to and operable by authorized personnel at all 
times.
    (4) IDR policies must provide for borrower access to the 
Distributed Resources facility during normal business hours and all 
emergency situations.
    (c) Responsible party obligations. IDR policies must provide for 
appropriate Responsible Parties to assume the following risks and 
responsibilities:
    (1) A Responsible Party must agree to maintain appropriate 
liability insurance as outlined in the borrower's interconnection 
policy.
    (2) A Responsible Party must be responsible for the Distributed 
Resources compliance with all national, State, local government 
requirements and electric utility standards for the safety of the 
public and personnel responsible for utility electric power system 
operations, maintenance and repair.
    (3) A Responsible Party must be responsible for the safe and 
effective operation and maintenance of the facility.
    (4) Only Responsible Parties may apply for interconnection and the 
Responsible Party must demonstrate the financial and managerial 
capability to develop, construct and operate the distributed resources.


Sec.  1730.64  Power purchase agreements.

    Nothing in this subpart requires the borrower to enter into 
purchase power arrangements with the owner of the Distributed 
Resources.


Sec.  1730.65  Effective dates.

    (a) Each electric program borrower with an approved electric 
program loan as of [DATE OF PUBLICATION OF THE FINAL RULE] shall have 
an IDR policy board approved and in effect no later than [DATE 2 YEARS 
FROM DATE OF PUBLICATION OF THE FINAL RULE].
    (b) An electric program borrower that submits an application to the 
Agency for financial assistance on or after [DATE 2 YEARS FROM DATE OF 
PUBLICATION OF THE FINAL RULE] shall include with its application 
package a letter of certification executed by the General Manager that 
the borrower meets the requirements of this subpart.


Sec.  1730.66  Administrative waiver.

    The Administrator may waive in all or part, for good cause, the 
requirements and procedures of this subpart.


Sec. Sec.  1730.67-1730.99  [Reserved]

    Dated: July 11, 2008.
James M. Andrew,
Administrator, Rural Utilities Service.
[FR Doc. E8-18800 Filed 8-12-08; 8:45 am]
BILLING CODE 3410-15-P