Energy Law Alert: Public Utility Commission Issues Proposed Oregon Small Generator Interconnection Rules for Public Comment
9/28/2007

The Oregon Public Utility Commission has published proposed Small Generator Interconnection Rules to provide procedures and standards for connecting a small generator facility to a regulated electric transmission and distribution ("T&D") system of an electric distribution company ("EDC"), including Pacific Power and Light, Portland General Electric, and Idaho Power. The proposed rules apply to facilities that generate up to 10 megawatts ("MW") of output, including net metering facilities. These rules will be important to small generators of electricity from renewable energy sources, especially solar power generators. The proposed rules facilitate small generator interconnection by standardizing interconnection requirements and procedures and by ensuring the safety and reliability of the distribution system.

The rules propose two forms of application based on the size of the nameplate generation: Form 1 for facilities with an output of 25 kilowatts ("kW") and less, and Form 2 for facilities with an output between 25 kW and 10 MW. Four levels of application exist, reflecting the complexity of the interconnection, with Level 1 being the simplest and Level 4 being the most complex (and most expensive). The levels are summarized below. Interconnection fees range from $100 to $1,000 and do not include detailed studies, engineering evaluations, or required improvements.

Level 1:

• 25 kW or less nameplate capacity;
• Interconnection equipment is inverter-based;
• Proposed point of interconnection is not a transmission line; and
• Interconnection equipment is lab-tested.

Level 2:

• Two MW or less nameplate capacity;
• Proposed connection is to a radial distribution circuit, or to a spot network that is limited to serving one customer;
• Interconnection equipment is lab-tested or field-tested; and
• Application does not qualify for Level 1 review.

Level 3:

• 10 MW or less nameplate capacity;
• Application does not qualify for Level 1 or Level 2 review; and
• Facility does not export power beyond the point of interconnection.

Level 4:

• 10 MW or less nameplate capacity;
• Facility exports power; and
• Application does not qualify for Level 1 or Level 2 review.

Each review level also includes additional technical standards and application review procedures.

As mentioned above, the initial application cost depends on the level of review. Additional costs may accrue depending on the scope of work deemed necessary as determined by feasibility, facilities, and system impact studies. In general, the applicant bears the costs of any improvements to the T&D system necessitated by the interconnection, including metering and monitoring equipment. The EDC must identify the interconnection facilities necessary to safely connect the small generator facility with the EDC, and the interconnection customer is responsible for the costs of those facilities. The interconnection customer is also responsible for all reasonable expenses, including overhead, associated with owning, operating, maintaining, repairing, and replacing its interconnection equipment. The costs of system upgrades identified and installed by the EDC are also the responsibility of the interconnection customer, although the applicant may be compensated for any benefits enjoyed by other users as a result of the system upgrades. Repairs to adverse system impacts identified by the EDC are also billed to the interconnection customer. Finally, the EDC may require a deposit of not more than 50 percent of the cost estimate, not to exceed $1,000, to be paid in advance by the applicant for studies or improvements.

The comment period is open until November 27, 2007. There will be an opportunity to comment publicly on the rules on November 13, at a 9 a.m. public comment hearing. The proposed rules can be found at the following link: www.puc.state.or.us/PUC/admin_rules/proposed/ar521word.doc.

For more information on the proposed rules, please contact:

William H. Holmes at whholmes@stoel.com or (503) 294-9207,
Stephen C. Hall at schall@stoel.com or (503) 294-9625,
Jennifer H. Martin at jhmartin@stoel.com or (503) 294-9852