FERC Adds Another Standard for DG Interconnection

Date: 19 May 2005 | posted in: Energy, Energy Self Reliant States | 0 Facebooktwitterredditmail

The Federal Energy Regulatory Commission (FERC) has adopted standard rules for interconnecting distributed generation (DG) projects of 20 MW or less with the electricity grid. These new rules will operate alongside FERC’s previously issued rules that govern interconnections of DG projects larger than 20 MW. FERC also has an ongoing proceeding that is developing special rules for interconnecting wind energy projects with the grid [see FERC’s Generation Interconnection web site].

In most cases, FERC’s new rules will cover DG projects that are interconnecting with the grid at the transmission level. However, FERC asserts that if the DG project plans to interconnect with a portion of the distribution system subject to an open access transmission tariff (OATT), for the purpose of making wholesale sales, then this final rule would apply.

The new rule (FERC Order No. 2006) directs public utilities to amend their OATTs to offer non-discriminatory, standardized interconnection service for small generators. The amendments must include a Small Generator Interconnection Procedures (SGIP) document and a Small Generator Interconnection Agreement (SGIA).

The SGIP contains the technical procedures that the small generator and utility must follow in the course of connecting the generator with the utility’s lines. It provides three ways to evaluate a request for interconnection. There is a default study process that can be used by any project and two procedures that use technical screens to evaluate proposed interconnections: (1) the fast track process for a certified facility no larger than 2 MW and (2) the expedited process for a certified inverter-based project no larger than 10 kW.

The SGIA contains the contractual provisions for the interconnection and spells out who pays for improvements to the utility’s electric system, if needed to complete the interconnection. Issues such as insurance requirements, dispute resolution procedures and liability related items are also addressed.

The final rule titled, Standardization of Small Generator Interconnection Agreements and Procedures, is effective 60 days after its publication in the Federal Register. Regional transmission organizations (RTOs) and independent system operators (ISOs) have an additional 90 days to comply.

While the federal rules are generally welcomed by the distributed generation industry, action at the state level may be more meaningful and more helpful to the emerging industry. Interconnection of most DG projects under 20 MW will be taking place at the distribution system level and will not be subject to the requirements under Order 2006. FERC acknowledges this and says, “…our hope is that states may find this rule helpful in formulating their own interconnection rules.


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John Farrell

John Farrell directs the Energy Democracy initiative at the Institute for Local Self-Reliance and he develops tools that allow communities to take charge of their energy future, and pursue the maximum economic benefits of the transition to 100% renewable power.