solar energyResponding to a petition filed by the Solar Energy Industries Association last year, the Federal Energy Regulatory Commission ("FERC") at its January meeting issued a Notice of Proposed Rulemaking ("NOPR") soliciting comments on changes to its rules governing interconnection of small generators. Citing the rapid growth of solar photo-voltaic ("PV") systems and expanding state renewable portfolio standards, FERC argues that changes in the Small Generator Interconnection process are necessary to keep up with changes in the industry. The proposed changes are aimed at encouraging distributed generation by streamlining the interconnection process, especially for generators with capacity of 5 MW or less. Comments on the NOPR are due June 3, 2013. FERC will hold a technical conference on the proposals prior to that date.

Under the current process, small generators (defined as generators with no more than 20 MW of capacity) may interconnect with FERC-jurisdictional transmission utilities by following the pro forma Small Generation Interconnection Procedures ("SGIP") and signing a pro forma Small Generator Interconnection Agreement ("SGIA"). Under the existing SGIP process, small generators with a capacity between 2 and 20 MW are required to follow the "Study Process," in which they file a request for a study with the interconnecting utility, which then carries out system impact studies to identify any reliability or safety problems that might be created by the new generator and the system upgrades that the generator must pay for to remedy these problems.

Rather than going through the Study Process, generators under 2 MW of capacity go through the "Fast Track Process." The Fast Track Process relies on a series of "technical screens," rather than studies, to identify potential safety and reliability concerns. If no problems are identified, the generator can then sign a SGIA and interconnect. If problems are identified, then the interconnecting utility generator can work through options with the interconnecting utility to resolve those problems. Finally, very small generators, with 10 kW of capacity or less, can interconnect using the "10 kW Inverter Process," which allows them to interconnect if they use a certified inverter designed to avoid safety and reliability issues and pass the "technical screen" process.