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Montana Administrative Register Notice 38-2-207 No. 15   08/12/2010    
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BEFORE THE DEPARTMENT OF PUBLIC SERVICE REGULATION

OF THE STATE OF MONTANA

 

In the matter of the adoption New Rules I through XIII pertaining to interconnection standard established by the federal Energy Policy Act of 2005

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      NOTICE OF ADOPTION

 

 

TO:  All Concerned Persons

 

            1.  On February 25, 2010, the Department of Public Service Regulation published MAR Notice No. 38-2-207 pertaining to the public hearing on the adoption of the above-stated rules at page 491 of the 2010 Montana Administrative Register, Issue Number 4.

 

2.  A public hearing was held on March 31, 2010.  Six people testified at the hearing.  Six written comments were received by the March 31, 2010 deadline.

 

3.  The department has adopted New Rules III (38.5.8403), VII (38.5.8407), XII (38.5.8412), and XIII (38.5.8413) as proposed.

 

4.  The department has adopted the following rules as proposed, but with the following changes from the original proposal, new matter underlined, deleted matter interlined:

 

NEW RULE I (38.5.8401) DEFINITIONS  Terminology used in these rules has the following meanings, except where the context clearly indicates otherwise:

(1)  "Applicant" means a person or entity that who has filed an application to interconnect a customer-generator facility to an EDS Electric Delivery System.  An applicant may include a third party who owns and operates a small generator facility under agreement with a customer or leases a small generator facility to a customer.

(2) through (4) remain as proposed.

(5)  "Customer-generator Generator" means a residential or commercial customer that generates electricity, typically on the customer's side of the meter.

(6) and (7) remain as proposed.

(8)  "Export" means power flows past the point of interconnection onto the EDS.

(9)  "Good Standing" means a customer's account is not in arrears.

(8) and (9) remain as proposed, but are renumbered (10) and (11).

(10) (12)  "Interconnect" means to connect a utility customer's generator to the EDS electric distribution company's electric distribution system.

(11) remains as proposed, but is renumbered (13).

(14)  "Interconnection Customer" means an applicant that has entered into an interconnection agreement with an EDC to interconnect a small generator facility and has interconnected that small generator facility.

(15)  "Line Section" means the portion of a radial distribution circuit to which an applicant seeks to interconnect and is bounded by automatic sectionalizing devices or the end of a distribution line.

(12) through (15) remain as proposed, but are renumbered (16) through (19).

 

AUTH: 69-3-103, MCA

IMP: 69-3-102, MCA

 

            NEW RULE II (38.5.8402) APPLICABILITY  (1)  The interconnection procedures set forth in this subchapter apply to applicants proposing to install and interconnect a small generator facility to an EDC's system that satisfies the following criteria:

(a)  The small generator facility must be sited on the utility customer's premises; and

(b)  The customer installing the small generator facility must be in good standing with the utility;

(c)  The proposed small generator facility's point of interconnection may not be on a transmission line;

(d)  The power produced from the small generator facility must be contained on the EDS and not flow onto the transmission system; and

(e)  The power exported by an interconnection customer can only be sold to the EDC.

  

AUTH: 69-3-103, MCA

IMP: 69-3-102, MCA

 

            NEW RULE IV (38.5.8404) AGREEMENTS, FORMS, AND FEES  (1)  The EDC shall file standard applications for interconnection requests, standard agreements required by the interconnection rules, a schedule of fees for processing interconnection requests, and a schedule of rates for performing the various studies required by these rules with the commission. 

(2)  All agreements, forms, fees, and rates must be filed with and approved by the commission after public notice and opportunity for comment. 

(3)  Utilities may not deviate from the standard agreements and fees filed with the commission without commission approval.

(4)  A customer may petition the commission to require the utility to amend its agreements, forms, fees, and rates.

(5)  The commission on its own, may require the utility to amend its agreements, forms, fees, and rates.

 

AUTH: 69-3-103, MCA

IMP: 69-3-102, MCA

 

            NEW RULE V (38.5.8405) CERTIFIED EQUIPMENT  (1)  An interconnection request may be eligible for expedited interconnection review as determined under [NEW RULE VI] if the small generator facility uses certified interconnection equipment.  Interconnection equipment shall be deemed certified upon establishment of all of the following:

(a)  The interconnection equipment has been labeled and is publicly listed by an NRTL at the time of the interconnection application;

(b)  The NRTL testing the interconnection equipment makes readily available for verification all test standards and procedures it utilized in performing such equipment certification, and, with consumer approval, the test data itself.  The NRTL may make such information available on its web site and by encouraging such information to be included in the manufacturer's literature accompanying the equipment;

(c)  The applicant verifies that the intended use of the interconnection equipment falls within the use or uses for which the interconnection equipment was labeled, and listed by the NRTL;.

(d) (2)  If the interconnection equipment is an integrated equipment package such as an inverter, then the applicant must show that the generator or other electric source being utilized is compatible with the interconnection equipment and is consistent with the testing and listing specified for this type of interconnection equipment;.

(e) (3)  If the interconnection equipment includes only interface components (switchgear, multifunction relays, or other interface devices), then the applicant must show that the generator or other electric source being utilized is compatible with the interconnection equipment and is consistent with the testing and listing specified for this type of interconnection equipment;.

(f) (4)  Interconnection equipment must be evaluated by a NRTL in accordance with the following codes and standards:

(i) (a)  IEEE 1547-2003 Standard for Interconnecting Distributed Resources with Electric Power Systems (including use of IEEE 1547.1-2005 testing protocols to establish conformity); and

(ii) (b)  UL 1741 Inverters, Converters, and Controllers for Use in Independent Power Systems; and.

(g) (5)  Certified interconnection equipment shall not require further design testing or production testing, as specified by IEEE Standard 1547-2003 Sections 5.1 and 5.2, or additional interconnection equipment modification to meet the requirements for expedited review; however, nothing herein shall preclude the need for an interconnection installation evaluation, commissioning tests or periodic testing as specified by IEEE Standard 1547-2003 Sections 5.3, 5.4, and 5.5, or for a witness test that may be conducted by the EDC.

 

AUTH: 69-3-103, MCA

IMP: 69-3-102, MCA

 

            NEW RULE VI (38.5.8406) REVIEW PROCEDURES  (1)  An EDC shall review interconnection requests using one or more of the following review procedures:

(a)  An EDC shall use Level 1 procedures for evaluation of all interconnection requests to connect inverter-based small generation facilities if:

(i)  The small generator facility has a nameplate capacity of 10 50 kW or less; and

(ii)  The customer interconnection equipment proposed for the small generator facility is certified.

(b)  An EDC shall use Level 2 procedures for evaluating interconnection requests if:

(i)  The small generator facility has a nameplate capacity of 2 MW or less; and

(ii)  The interconnection equipment proposed for the small generator facility is certified; or

(iii)  The small generator facility was reviewed under Level 1 review procedures but not approved and the applicant has submitted a new interconnection request for consideration.

(c)  An EDC shall use Level 3 review procedures for evaluating interconnection requests to area networks and radial distribution circuits where power will not be exported based on the following criteria:

(i)  For interconnection requests to the load side of an area network the following criteria must be satisfied to qualify for a Level 3 expedited review:

(A)  The nameplate capacity of the small generator facility is less than or equal to 50 kW;

(B)  The proposed small generator facility utilizes a certified inverter-based equipment package;

(C)  The small generator utilizes reverse power relays and/or other protection functions that prevent the export of power into the area network;

(D)  The aggregate of all generation on the area network does not exceed the smaller of 5% of an area network's maximum load or 50 kW; and

(E)  No construction of facilities by the electric distribution company shall be required to accommodate the small generator facility.

(ii)  For interconnection requests to a radial distribution circuit, the following criteria must be satisfied to qualify for a Level 3 expedited review:

(A)  The small generator facility has a nameplate capacity of 10 MW or less;

(B)  The aggregated total of the nameplate capacity of all of the generators on the circuit, including the proposed small generator facility, is 10 MW or less;

(C)  The small generator will use reverse power relays or other protection functions that prevent power flow onto the electric distribution system;

(D)  The small generator is not served by a shared transformer; and

(E)  No construction of facilities by the EDC on its own system shall be required to accommodate the small generator facility. 

(d)  An EDC shall use the Level 4 study procedures for evaluating interconnection requests if:

(i)  The nameplate capacity of the small generator facility is 10 MW or less; and 

(ii) (i)  The interconnection request was not approved under a Level 1, Level 2, or Level 3 expedited review and the applicant has submitted an interconnection request for consideration under a Level 4 study review; or

(iii) (ii)  The interconnection request does not meet the criteria for expedited review under Level 1, Level 2, or Level 3 review procedures.

 

AUTH: 69-3-103, MCA

IMP: 69-3-102, MCA

 

NEW RULE VIII (38.5.8408) ADDITIONAL REQUIREMENTS  (1) remains as proposed.

(2)  To assist customers in the interconnection process, the EDC must: will

(a)  Maintain all interconnection related documents on their proprietary web site; designate an employee or office from which basic information on the application can be obtained through an informal process.

(b)  Designate an employee or office from which basic information on the application can be obtained through an informal process and prominently display the contact information on the proprietary web site required in (a); and Upon request, the EDC shall provide the applicant with all relevant forms, documents and technical requirements for filing a complete application for interconnection of generators. 

(c)  Upon the customer's request, the EDC shall meet with the customer prior to submission of an application for expedited interconnection.

(3) through (7) remain as proposed

(8)  EDC monitoring and control of a small generator facilityies shall be is permitted only if the nameplate capacity rating of the small generator facility interconnecting to the EDS, or the aggregate nameplate capacity of all small generator facilities on the line section in combination with the small generator facility interconnecting to the EDS, rating is greater than 15% of the line section annual peak load as most recently measured at the substation or exceeds the annual minimum load of the line section.  Any monitoring and control requirements shall be consistent with the EDC's written and published requirements and must be clearly identified as part of an interconnection agreement executed by the interconnection customer and EDC.

(9)  The EDC shall have the option of performing a witness test to verify the small generator facility complies with the standards listed in [NEW RULE VII] after construction of the small generator facility is completed.  The applicant shall provide the EDC at least 20 business days notice of the planned commissioning test for the small generator facility.  If the EDC elects to perform a witness test, it shall contact the applicant to schedule the witness test at a mutually agreeable time within ten business days of the scheduled commissioning test.  If the EDC does not perform the witness test within ten business days of the commissioning test, the witness test is deemed waived.  If the witness test is not acceptable to the EDC, the EDC must document all deficiencies and provide a written report identifying the deficiencies to the applicant within five business days of the witness test.  The applicant shall be granted a period of 30 business days to address and resolve any deficiencies.  If the applicant fails to address and resolve the deficiencies to the satisfaction of the EDC, the interconnection request shall be deemed withdrawn.  If a witness test is not performed by the EDC or an entity approved by the EDC, the applicant must still satisfy the interconnection test specifications and requirements set forth in IEEE standard 1547-2003 Section 5.  The applicant shall, if requested by the EDC, provide a copy of all documentation in its possession regarding testing conducted pursuant to IEEE Standard 1547.1-2005.

(10) remains as proposed.

(11)  An EDC shall have the right to inspect a customer-generator's facility before and after interconnection approval is granted, at reasonable hours and with reasonable prior notice provided to the customer-generator.  If the EDC discovers the customer-generator's facility is not in compliance with the requirements of IEEE Standard 1547-2003, and the noncompliance adversely affects the safety or reliability of the electric system, the EDC may require disconnection of the customer-generator's facility until it complies.  Immediately upon disconnection of the customer-generator's facility, the EDC shall provide a written report detailing how the customer-generator's facility is not complying with IEEE Standard 1547-2003 or these rules.

 

AUTH: 69-3-103, MCA

IMP: 69-3-102, MCA

 

NEW RULE IX (38.5.8409) LEVEL 1 EXPEDITED REVIEW  (1) remains as proposed.

(2)  The EDC shall evaluate the potential for adverse system impacts using the following screens which must be satisfied:

(a)  For interconnection of a proposed small generator facility to a radial distribution circuit line section, the aggregated generation on the circuit line section, including the proposed small generator facility, may not exceed:

(i)  15% of the line section annual peak load as most recently measured at the substation; or

(ii)  the annual minimum load of the line section.

(b) remains as proposed.

(c)  When a proposed small generator facility is to be interconnected on a single-phase shared secondary line, the aggregate generation capacity on the shared secondary line section, including the proposed small generator facility, may not exceed 20 kilovolt-amps (kVA);

(d) through (f) remain as proposed.

(3)  The Level 1 interconnection review must be conducted in accordance with the following procedures:

(a)  An EDC shall, within ten business days after receipt of the interconnection request, inform the applicant that the interconnection request is complete or incomplete and what materials are missing;

(b)  When an interconnection request is complete, the EDC shall assign a line section queue position if there is more than one interconnection request pending for the same line section.  The line section queue position of the interconnection request shall be used to determine the potential adverse system impact of the small generator facility based on the relevant screening criteria.  The EDC shall notify the applicant about other higher line section queued applicants on the same line section or spot network for which interconnection is sought.  Line section queue position shall not be forfeited or otherwise impacted by any pending dispute submitted under the provisions of [NEW RULE XIII];

(b) (c)  The EDC shall, within 15 business days after the end of the ten business days noted in (3)(a), verify that the small generator facility equipment can be interconnected safely and reliably using Level 1 screens;

(c) (d)  Unless the EDC determines and demonstrates that a small generator facility cannot be interconnected safely or reliably to its system and provides a letter to the applicant explaining its reasons for denying an interconnection request, the EDC shall provide the applicant with a small generator interconnection agreement within five business days and approve the interconnection request subject to the following conditions:

(i)  The small generator facility has been approved by local or municipal electric code officials with jurisdiction over the interconnection;

(ii)  A certificate of completion has been returned to the EDC. Completion of local inspections may be designated on inspection forms used by local inspecting authorities;

(iii)  The witness test has been successfully completed or waived; and

(iv)  The applicant has signed a standard small generator interconnection agreement.  When an applicant does not sign the agreement within 30 business days after receipt from the EDC, the interconnection request shall be deemed withdrawn.

(d) (e)  When a small generator facility is not approved under a Level 1 review, the applicant may submit a new interconnection request for consideration under Level 2, Level 3, or Level 4 procedures If the small generator facility is not approved under a Level 1 review, the EDC shall provide the applicant a letter explaining its reasons for denying the interconnection request.  The applicant may submit a new interconnection request for consideration under a Level 2, Level 3, or Level 4 interconnection review; however, the line section queue position assigned to the Level 1 interconnection request shall be retained provided the request is made within 15 business days after notification that the current interconnection request has not been approved.

 

AUTH: 69-3-103, MCA

IMP: 69-3-102, MCA

 

NEW RULE X (38.5.8410) LEVEL 2 EXPEDITED REVIEW  (1) remains as proposed.

(2)  The EDC shall evaluate the potential for adverse system impacts using the following screens which must be satisfied:

(a)  For interconnection of a proposed small generator facility to a radial distribution circuit, the aggregated generation on the circuit, including the proposed small generator facility, may not exceed:

(i)  15% of the line section annual peak load as most recently measured at the substation; or

(ii)  the annual minimum load of the line section.

(b) through (e) remain as proposed.

(f)  The proposed small generator facility, in aggregate with other generation on the distribution circuit, may not cause any distribution protective devices and equipment (including substation breakers, fuse cutouts, and line reclosers), or other customer equipment on the electric distribution system to be exposed to fault currents exceeding 90% of the short circuit interrupting capability including X/R effects;

(g) through (k) remain as proposed.

(l)  The proposed small generator facility's point of interconnection may not be on a transmission line;

(m) and (n) remain as proposed, but are renumbered (l) and (m).

(3) through (6) remain as proposed.

(7)  If the small generator facility is not approved under a Level 2 review, the EDC shall provide the applicant a letter explaining its reasons for denying the interconnection request. The applicant may submit a new interconnection request for consideration under a Level 3 or Level 4 interconnection review; however, the line section queue position assigned to the Level 2 interconnection request shall be retained provided the request is made within 15 business days of after notification that the current interconnection request is denied has not been approved.

 

AUTH: 69-3-103, MCA

IMP: 69-3-102, MCA

 

NEW RULE XI (38.5.8411) LEVEL 3 EXPEDITED REVIEW  (1) and (2) remain as proposed.

(3)  For interconnection requests to the load side of an area network, the following criteria must be satisfied:

(a)  The nameplate capacity of the small generator facility is less than or equal to 50 kW;

(b)  The proposed small generator facility utilizes a certified inverter-based equipment package;

(c)  The small generator utilizes reverse power relays and/or other protection functions that prevent the export of power into the area network;

(d)  The aggregate of all generation on the area network does not exceed the smaller of 5% of an area network's maximum load or 50 kW; and

(e)  No construction of the facilities by the electric distribution company shall be required to accommodate the small generator facility.

(3) (4)  Interconnection requests meeting the requirements set forth in [NEW RULE VI(1)(c)(i) XI(3)] for nonexporting small generator facilities interconnecting to an area network shall be presumed to be appropriate for interconnection. The EDC shall process the interconnection request to area networks using the following procedures:

(a)  The EDC shall evaluate the interconnection request under Level 2 interconnection review procedures as set forth in [NEW RULE X(3)] except that the EDC may have 25 business days to conduct an area network impact study to determine any potential adverse system impacts of interconnecting to the EDC's area network; however, the EDC shall not be obligated to meet the timeline for reviewing the interconnection request as provided for herein until such time as the EDC has completed the review of all other interconnection requests that have a higher line section queue position;

(b)  In the event the area network impact study identifies potential adverse system impacts, the EDC may determine at its sole discretion that it is inappropriate for the small generator facility to interconnect to the area network in which case the interconnection request shall be denied; however, the applicant may elect to submit a new interconnection request for consideration under Level 4 procedures in which case the line section queue position assigned to the Level 3 interconnection request will be retained provided the request is made within 15 business days of after notification that the current application is denied; and

(c)  In the event the EDC denies the interconnection request, the EDC shall provide the applicant with a copy of its area network impact study and written justification for denying the interconnection request.

(5)  For interconnection requests to a radial distribution circuit, the following criteria must be satisfied:

(a)  The aggregated total of the nameplate capacity of all of the generators on the circuit, including the proposed small generator facility, is 10 MW or less;

(b)  The small generator will use reverse power relays or other protection functions that prevent power flow onto the electric distribution system;

(c)  The small generator is not served by a shared transformer; and

(d)  No construction of facilities by the EDC on its own system shall be required to accommodate the small generator facility.

(4) (6)  For an interconnection request meeting the requirements of [NEW RULE VI(1)(c)(ii) XI(5)] for nonexporting small generator facilities interconnecting to a radial distribution circuit, the EDC shall evaluate the interconnection request under the Level 2 expedited review in [NEW RULE X]. The EDC shall approve the interconnection request if all of the applicable screens in [NEW RULE X(2)] are satisfied.

(5) (7)  For a small generator facility that satisfies the criteria in (3) (4) or (4) (5) of this rule, the EDC shall approve the interconnection request and provide a standard interconnection agreement for the applicant to sign within five business days.

(6) through (8) remain as proposed, but are renumbered (8) through (10).

 

AUTH: 69-3-103, MCA

IMP: 69-3-102, MCA

 

5.  The department has thoroughly considered the comments received.  All revisions to the rules as originally proposed are in response to comment or to enhance clarity. A summary of the comments received and the department's responses area as follows:

 

            COMMENT NO. 1:  The International Brotherhood of Electrical Workers (IBEW) filed comments supporting the proposed rules.  IBEW further commented a reference to Montana Code Annotated (MCA) Title 50, chapter 60 and MCA Title 37, chapter 38 should be made in the rules.

 

            RESPONSE:  The department appreciates IBEW's support for the proposed rules.  The department is not persuaded additional references to MCA Title 50, chapter 60 and MCA Title 37, chapter 38 are necessary. 

 

            COMMENT NO. 2:  Montana Renewable Energy Association (MREA), Montana's Alternative Energy Resources Organization (AERO) and the Interstate Renewable Energy Council (IREC) urge the department to adopt the proposed rules after updating the rules to reflect industry best practices.

 

            RESPONSE:  The department is not persuaded the rules require updating and concludes the rules with appropriate amendments are appropriate for Montana.

 

            COMMENT NO. 3:  NorthWestern Energy (NWE) commented the rules are vague, nonspecific, and open to misinterpretation or misunderstanding.  Further, NWE commented the interconnection rules modeled after South Dakota's should be adopted.

 

            COMMENT NO. 4:  The Montana Small Independent Renewable Generators (MSIRG) and NWE commented the proposed rules may contradict or are not consistent with existing qualified facility, net metering, and federal rules. 

 

            RESPONSE:  The department does not agree with NWE or MSIRG and is not persuaded South Dakota's rules are appropriate for Montana.

 

            COMMENT NO. 5:  MSIRG stated their primary concern is small generators must not be charged for transmission upgrades not required by their project and any network upgrades charged to small generators be repaid by the utility.

 

            RESPONSE:  The proposed rules are not applicable to interconnection of small generators to the transmission system or for interconnection of small generators flowing power onto the transmission system.  The proposed rules have been amended to clarify the intended applicability.

 

            COMMENT NO. 6:  NWE noted concern with the status of existing pending interconnection requests and requested the department define which rules govern the various processes.  Additionally, NWE commented the new rules do not adequately describe the types of small generators the rules apply.  NWE suggested the rule should not apply to small generator facilities that are producing electricity for resale to a person other than the interconnecting electric utility.

 

            COMMENT NO. 7:  MSIRG commented the applicability of the rules should be clarified.

 

            COMMENT NO. 8:  IREC requested the rules apply to all state-jurisdictional interconnections of small generator facilities.

 

            RESPONSE: The department has amended New Rule II to clarify the applicability of the rules.

 

            COMMENT NO. 9:  NWE noted inconsistencies in the proposed rules concerning the requirement to submit new interconnection requests if the small generator is not able to interconnect under Level 1, Level 2, or Level 3 expedited reviews.

 

            RESPONSE:  The department has amended the rules to make them consistent throughout.

 

            COMMENT NO. 10:  The Renewable Northwest Project (RNP) and Natural Resource Defense Council (NRDC) commented there are several aspects of the rule that can be improved upon, but commented the rule is a significant step forward in making a more efficient and rational process of interconnecting small renewable generation to the utility.

 

            RESPONSE:  The department thanks RNP/NRDC for their comment.

 

            COMMENT NO. 11:  IREC commented the rules should include limitations on insurance requirements and encouraged the department to adopt the limitations proposed in IREC's model interconnection standards.

 

            RESPONSE:  The department is not persuaded by IREC's comments.  The department concluded the interconnection agreements the utilities are required to file with the department are the appropriate place to address insurance requirements.  The department's approach will ensure adequate flexibility is available to modify insurance requirements. 

 

            COMMENT NO. 12:  IREC suggested the department address transfer of ownership of interconnected facilities to a new party and guarantee the ability to transfer or assign an interconnection agreement so long as the assignee gives written notice to the EDC.

 

            RESPONSE: The department is not persuaded transfer of ownership provisions should be included as part of the adopted rules.  Rather the department has concluded transfer or assignment of an interconnection agreement should be contained in the utilities interconnection agreement with the interconnection customer.

 

            COMMENT NO. 13:  MREA/AERO suggested the definition of "Customer-generator" be changed to ensure potential "customer-generators" are not excluded if they are not a residential or commercial customer.  Additionally, IREC recommended the definition of "Customer-generator" be removed from the rules to allow any generator able to avail itself to the rules to interconnect as the definition is overly restrictive.

 

            RESPONSE:  The department has amended the definition of "Customer-generator" to ensure potential "customer-generators" are not inadvertently excluded from interconnection.

 

            COMMENT NO. 14:  NWE suggested a definition of "non-exporting" be included in the proposed rule to clarify the applicability of Level 3 expedited review.

 

            RESPONSE:  The department has amended New Rule I to include a definition for "export".

 

            COMMENT NO. 15:  MSIRG and NWE commented a definition of "good standing" was not provided.

 

            RESPONSE:  The department has amended New Rule I to include a definition of "good standing".

 

            COMMENT NO. 16:  RNP/NRDC requested a definition for "prime mover" be included in the rules.

 

            RESPONSE:  The department is not persuaded that a definition of "prime mover" is necessary.

 

            COMMENT NO. 17:  IREC commented the 10 MW limit in the rules may create a potential gap of rule coverage between Montana's interconnection rules and FERC's.

 

            COMMENT NO. 18:  MSIRG commented the rules should apply to all generators a utility serves, not just those under 10 MW in nameplate capacity or a rationale for selecting 10 MW should be provided.

 

            COMMENT NO. 19:  NWE commented 10 MW is a good fit for keeping power produced by a small generator limited to the distribution system.

 

            RESPONSE:  The department concluded a 10 MW limit in nameplate capacity is appropriate for the proposed rules because the IEEE standard utilized as the technical basis of the rules is limited to 10 MW.  An additional rule making will be proposed to address any potential gap created between these rules and FERC's.

 

            COMMENT NO. 20:  MREA/AERO, IREC, and RNP/NRDC recommended the department develop uniform rates, agreements, and forms that can be applied to all regulated utilities rather than requiring the utilities to individually develop rates, agreements, and forms.  Further, MREA/AERO, IREC, and RNP/NRDC recommended the department adopt the 2009 IREC model forms.

 

            COMMENT NO. 21:  NWE commented the department needs to be aware the rule places a requirement upon NWE to develop application forms, agreements, price schedules, and instructions for the interconnection process.  NWE noted they may have to develop a set of forms in addition to its FERC forms which may be confusing to potential interconnectors.

 

            RESPONSE:  The department is not persuaded that it is inappropriate for the utilities to develop the agreements, procedures, and fees necessary for the interconnection process.  The department believes the responsibility of developing uniform rates, agreements, and forms lies with the utilities with appropriate department oversight.

 

            COMMENT NO. 22:  NWE commented the interconnection study deposits required by the proposed rules should be consistent with federal requirements.  NWE further commented the proposed rules do not provide for interest provisions, refund of deposits if amount exceeds cost, or whether the EDC can assess the interconnector additional fees if study cost exceed the deposit amount. 

 

            RESPONSE:  The department acknowledges the rules do not have provisions for handling study deposits, interest, refunds, or additional charges and concludes these items should be included in each utility's agreements and forms filed with the department.

 

            COMMENT NO. 23:  MSIRG proposed the department amend the rules to clarify and strengthen the procedures for the filing and review of the each utility's proposed interconnection request forms, standards, agreements, study fees, and rates.  MSIRG also commented deadlines for filing the required agreements, rates, and forms with the department and a standard of review the department will utilize for approving the agreements, rates, forms, etc. should be clarified.

 

            RESPONSE:  The department has amended New Rule IV to add provisions for petition by an interconnection applicant to petition the utility to modify its agreements, rates, or fees.  Additionally, New Rule IV has been amended to note the department may on its own initiative require the utilities to review and amend their interconnection agreements, forms, rates, etc.

 

            COMMENT NO. 24:  IREC commented the department should fix the fees and charges for applications as well as the rate paid for engineering services related to interconnection at all levels consistent with IREC's Model.

 

            RESPONSE:  The department is not persuaded the IREC model is more appropriate than what is already contained in the rules.  The fees and engineering service rates will be fixed as they cannot be deviated from once filed with, and approved by, the department.

 

            COMMENT NO. 25:  RNP/NRDC recommended amendment of New Rule V to ensure the requirements can be met and the purpose of the rule is accomplished.

 

            RESPONSE:  New Rule V was amended to ensure interconnection equipment that meets UL1741 and IEEE 1547 can be used for interconnecting small generator facilities.

 

            COMMENT NO. 26:  RNP/NRDC recommended a definition or clarification for "publicly listed".

 

            RESPONSE:  The department is not persuaded a definition or clarification for "publicly listed" is necessary.

 

            COMMENT NO. 27:  IREC commented there is no IEEE standard 1547 certification available from a Nationally Recognized Testing Laboratory for all equipment that might be used in the interconnection process.  IREC commented non-inverter-based systems would be forced into a Level 4 review.

            RESPONSE:  The department acknowledges the certified equipment provision in New Rule V limits the equipment that can be used for expedited interconnections.  However, the department concludes a higher level of review is necessary if equipment used for interconnections has not been found to meet IEEE standards by a Nationally Recognized Testing Laboratory.   

 

            COMMENT NO. 28:  IREC, MREA/AERO, RNP/NRDC, and NWE recommended the department include a provision in the rules to require EDCs to include all interconnection related documents, standards, agreements, forms, etc. on the EDS's proprietary web site.  Additionally, IREC suggested the proposed rules require the EDC contact information prominently displayed on the EDC's web site.

 

            RESPONSE:  The department has amended New Rule VIII to include a provision for requiring all interconnection related documents on the EDC's proprietary web site.

 

            COMMENT NO. 29:  IREC recommended the definition of "Customer-generator" be removed from the proposed rules to allow any generator able to avail itself to the proposed rules to interconnect.

 

            RESPONSE:  The department does not agree that the rules should allow any type of generator to interconnect.  The rules were proposed to implement Section 1254 of the Electricity Modernization Act of 2005 which specifies interconnection service for "an electric consumer under which an on-site generating facility on the customer's premises shall be connected to the local distribution facilities".

 

            COMMENT NO. 30:  IREC recommended the term "interconnection customer" be defined as it is used throughout the rules.

 

            RESPONSE: The department agrees with IREC and has amended New Rule I to include a definition for "interconnection customer".

 

            COMMENT NO. 31:  IREC commented the proposed rules should not preclude third-party ownership of renewable energy systems and the definition of "Applicant" should be amended.

 

            RESPONSE:  The department agrees third-party ownership of generators should be permitted and has amended the definition of "Applicant" in New Rule I.

 

            COMMENT NO. 32:  RNP/NRDC suggested New Rule V(d) and (e) be combined/reworded to cover all equipment.

 

            RESPONSE:  The department is not persuaded New Rule V(d) and (e) should be combined/reworded to cover all equipment.

 

            COMMENT NO. 33:  MREA/AERO, NWE, RNP/NRDC, and IREC commented the Level 1 small generator nameplate capacity be increased from 10 kW or less to 50 kW or less.

 

            RESPONSE:  The department agrees and amended New Rule VI(a)(i) to incorporate the higher limit for Level 1 interconnections.

 

            COMMENT NO. 34:  IREC recommended the Level 3 expedited rule review in New Rule VI be revised to place the technical standards portion in New Rule XI.

 

            RESPONSE:  The department agrees and has amended New Rule VI and New Rule XI.

 

            COMMENT NO. 35:  IREC commented New Rule VI(1)(c) should be revised to allow nonexporting systems no greater than 10 MW as discussed in IREC's Model rather than 50 kW.

 

            RESPONSE:  The department is not persuaded IREC's model is more appropriate. 

 

            COMMENT NO. 36:  MREA/AERO, IREC and RNP/NRDC recommended the requirement for a lockable, visible-break isolation device accessible by the EDC be removed from New Rule VIII.

 

            COMMENT NO. 37:  NWE commented they currently require visible-break isolation devices on their system.

 

            RESPONSE:  The department is not persuaded the lockable, visible-break isolation device requirement should be removed.  The department appreciates the commenter's comments and will examine the requirement of installing a lockable, visible-break isolation device once the rules have been implemented.

 

            COMMENT NO. 38:  NWE commented New Rule VIII(8) places monitoring and control obligations on the EDC and requires the EDC to develop and publish monitoring and control requirements.

 

            RESPONSE:  The department acknowledges EDCs will have to develop monitoring and control requirement guidelines.   

 

            COMMENT NO. 39:  NWE commented additional criteria should be included so the aggregated load of the generators does not exceed the annual minimum load of the line section.

 

            RESPONSE:  The department agrees with NWE and has amended New Rule VIII(8) to clarify when an EDC may monitor or control a small generator facility on a distribution line section.

 

            COMMENT NO. 40:  RNP/NRDC commented a utility should be required to meet with an applicant under all circumstances rather than just prior to submission of an interconnection application.

 

            RESPONSE:  The department is not persuaded the EDC should be required to meet under all circumstances. 

 

            COMMENT NO. 41:  RNP/NRDC and IREC commented New Rule VIII(5) should be revised to allow minor changes by the applicant without the need for written consent from the EDC.

 

            RESPONSE:  The department is not persuaded New Rule VIII(5) should be amended.  Furthermore, the department believes that allowing minor changes would lead to disputes as whether a change was minor.

 

            COMMENT NO. 42:  RNP/NRDC commented clarification of New Rule VIII(9) is necessary to specify what standards or criteria are used for the witness test conducted by the EDC. 

 

            RESPONSE:  The department agrees with RNP/NRDC and has amended New Rule VIII(9) to define the witness test criteria and documentation of unacceptable witness test results.

 

            COMMENT NO. 43:  RNP/NRDC commented New Rule VIII(11) should include a provision to require EDCs to document and report to the interconnection customer which requirements of IEEE 1547-2003 the small generator facility is not complying.  

 

            RESPONSE:  The department agrees with RNP/NRDC and has amended New Rule VIII(11).

 

            COMMENT NO. 44:  NWE requests they be given greater flexibility to address unforeseen operational problems.

 

            RESPONSE:  The request for flexibility is contrary to the intent of the rules.

 

            COMMENT NO. 45:  NWE commented a statement be included that the 90% short circuit rating be revised to allow de-rating for the X/R effect.

 

            RESPONSE:  The department has amended the rules to allow de-rating of the EDCs short circuit interrupting capability due to X/R effects.

 

            COMMENT NO. 46:  IREC commented Level 1 applicants should be assigned a queue position.

 

            RESPONSE:  The department has amended New Rule XI(3)(b) to address queue positions for Level 1 applicants.

 

            COMMENT NO. 47:  IREC commented the timeframes allowed by the rules should match the timeframes allowed in IREC's Model Rules.

 

            RESPONSE:  The department is not persuaded the timeframes should be revised.

 

            COMMENT NO. 48:  IREC commented New Rule IX should include a timeframe for when the EDC must provide an executable interconnection agreement once the EDC has determined the small generator facility passes Level 1.

 

            RESPONSE:  The department agrees and has amended New Rule IX to include a timeframe.

 

            COMMENT NO. 49:  IREC commented the New Rules should reference "line section" rather than circuit and "line section" should be defined.

 

            RESPONSE:  The department agrees and has amended the rules.

 

            COMMENT NO. 50:  IREC suggested a definition for "Minor System Modification" be included in the rules.

 

            RESPONSE:  The department is not persuaded a definition is necessary.

 

            COMMENT NO. 51:  NWE commented Level 3 reviews are for small generators that do not export power beyond the point of interconnection and noted interconnectors should be made aware that any Level 4 interconnection would require a full interconnection study.

 

            RESPONSE:  The department agrees with NWE that Level 3 reviews are for small generators that do not export power beyond the point of interconnection.  However, the department does not agree with NWE's contention that all Level 4 interconnections require a full interconnection study.  The New Rule XII(4)(a) allows the EDC and applicant to waive meetings and studies by mutual agreement as studies should be conducted only if necessary.

 

            COMMENT NO. 52:  MSIRG commented the mechanism for establishing the share of costs for network upgrades among multiple queued projects, and for reimbursement of such costs, is not laid out well in the proposed rules.  Further, MSIRG comments to the extent cost allocation is discussed, it violates the fundamental principles of fairness, established federal interconnection rules, and Montana's existing interconnection rules pertaining to QFs.

 

            RESPONSE:  The department does not agree with MSIRG and is not persuaded the rules should be revised. 

 

            COMMENT NO. 53:  IREC commented a limit on the cost of the actual distribution upgrades be included in the proposed Rule XII and the cost of distribution system upgrades not be permitted to exceed 125%, in any future installation, the estimated cost determined in the facilities study.

 

            RESPONSE:  The department is not persuaded a limit should be imposed.

 

            COMMENT NO. 54:  NWE commented the department should consider the mechanism FERC has used with regard to alternative dispute resolution and incorporate a similar model at the state level.

 

            RESPONSE:  The department is not persuaded FERC's dispute resolution model is more appropriate.

 

            COMMENT NO. 55:  RNP/NRDC requests New Rule XIII(4) be clarified to ensure if an applicant invokes the dispute resolution process, it shall suffer no prejudice with respect to the processing of the interconnection request and shall not lose its place in the queue while the dispute is being resolved.

 

            RESPONSE:  The department is not persuaded clarification is necessary.

 

DEPARTMENT OF PUBLIC SERVICE REGULATION

 

/s/ Robin McHugh                                          /s/  Greg Jergeson

Robin McHugh                                               Greg Jergeson

Rule Reviewer                                               Chairman

                                                                        Public Service Commission

 

Certified to the Secretary of State August 2, 2010.

 

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