Distribution Interconnection Policy

1. General Procedure and Standards

1.1 Introduction and Scope

Owensboro Municipal Utilities (OMU) recognizes the desire that some customers (Customer) generate their own electricity on-site while maintaining electrical connection to the OMU Electric Distribution System (OMU System). This Policy (Policy) contains the general requirements and technical operating parameters for interconnecting Renewable Distribution Generation Facilities and the associated equipment (DG System) to the OMU System for non-utility generation or co-generation.

Renewable Distribution Facilities are those facilities considered to be “green” and renewable in nature. They typically produce power by the means of photovoltaic systems (PV), wind, hydro, methane by-products, etc. Generating facilities producing power by the means of diesel, natural gas, coal, or other fossil fuels are outside the scope of this policy and shall not be considered for connection to the OMU system under this policy.

The operation of non-utility generation in parallel with the OMU System poses important safety concerns for OMU personnel and equipment. The safe, reliable operation of the OMU System for all customers is of the utmost importance to OMU. Accordingly, any interconnected DG System must meet the requirements set forth by the latest version of the applicable standards IEEE 1547, IEEE C62, UL 1741, NFPA 70, and all applicable federal, state, and local safety codes and regulations. More stringent requirement and guidelines may be included as part of this Policy.

The requirements contained in this Policy generally do not apply to “separately operating” systems. Separately operating systems typically include small emergency generating units for residential use and certain uninterruptible power systems (UPS) which do not energize the OMU System in the normal course of operation. These systems have no capability or possibility of connecting and operating in parallel with the OMU System. Where these systems utilize open-transition switching (break-before-make), the requirements of this Policy do not apply. Standards and requirements for such systems can be found in OMU’s Rules and Regulations for Electric Utility Service.

Where separately operating systems require close-transition switching (make- before-break) for synchronizing or other purposes, the system should be considered as a parallel operation to OMU’s system and shall be subject to all of the requirements of this Policy and all criteria’s set by OMU for parallel operation. If there is a question on whether the customer’s installation meets the criteria as a separately operated system, OMU’s Delivery Engineering Department shall review the installation, equipment, and switching procedure and make the final decision as to whether it meets the separately operating criteria.

This Policy is currently the only arrangement for “net” metering services offered by OMU although this Policy is not strictly a net metering program as offered by some other utilities. Requirements for interconnection to the OMU system will be based on the size of the system and will be broken down into four levels:

  • Level 1- less than 3kW or 10kW Certified Inverter Process
  • Level 2- 3kW to less than 100 kW
  • Level 3- 100kW to less than 1MW
  • Level 4- Greater than 1MW to 2MW

1.2 Application Process

Each Customer requesting interconnection for DG Systems onto the OMU System shall obtain and submit a completed Interconnection Application (Attachment 1 or 2) depending the size of the proposed installation to the OMU Delivery Engineering Department. In addition to the completed application, Customer shall pay the nonrefundable study cost per Table 1. Customer should supply any drawings, equipment list, and single line diagrams of the proposed DG System that would provide the necessary information required for OMU Delivery Engineering to perform an accurate analysis. Submittal of the completed application shall serve as customer’s acceptance of the terms, conditions, and requirements set forth and included in this policy.

DG SizeOperating CharacteristicsCost
Level 1Parallel Export, Parallel Operation$100
Level 2No Power Export, Parallel Operation$500
Level 2Power Export, Parallel Operation$750
Level 3No Power Export, Parallel Operation$750
Level 3Power Export, Parallel Operation$1,000
Level 4No Power Export, Parallel Operation$1,500
Level 4Power Export, Parallel Operation$2,000

Once a completed application is received, OMU Delivery Engineering Department will review the application within twenty (20) business days to ensure that the application has all the required and appropriate information on it necessary for OMU to properly analyze the proposed system. If the application is found to be incomplete, OMU will notify the Customer by one of the contact means listed on the application. The application will be considered idled until OMU receives any requested information. Customer should not purchase any equipment until the proposed system is approved by OMU Delivery Engineering Department. OMU shall not be held responsible for any cost incurred by the customer for any purchased equipment, engineering services, or study cost for DG Systems not approved for parallel operation to the OMU System.

Within thirty (30) business days of receiving a completed application, OMU will evaluate the proposed DG System using the guidelines set forth by FERC Order 2006. OMU will evaluate each system per the Small Generator Interconnection Procedure (SGIP) as laid out in the FERC order. Typically, only Level 1 systems and smaller Level 2 systems are eligible for the Fast Track and 10kW Certified Inverter Process. Level 2 thru Level 4 systems will require the Complete Study Process. Customers proposing DG Systems that are approved under the Fast Track and 10 kW Certified Inverter Process will be notified within forty-five (45) business days of the completed application. Customers proposing DG Systems required to go through the Complete Study Process will be notified within sixty (60) business days to OMU’s decision of the proposed DG System. If OMU finds issues with the proposed DG System, OMU will request Customer to investigate mitigation option and provide proposed solutions. OMU will run up to two analyses with proposed solutions under the initial study cost. Customer will be required to pay for any additional analysis required after two at $50 per analysis. Once OMU approves the installation, OMU and the Customer will complete the Small Generator Interconnection Agreement (SGIA)(Attachment 3). Once the SGIA is complete, it shall serve as written notification to the Customer that Customer may purchase and install the proposed DG equipment. However, Customer shall not attempt to parallel the DG equipment to OMU’s system until all provisions of this policy and any additional requirements discovered during the Complete Study Process have been met.

OMU reserves the right to witness any functionality and commissioning testing of the installed DG system. A ten (10) day written notification should be provided to OMU prior to testing. All testing shall be in accordance with IEEE 1547.1. A copy of all testing and installation reports shall be submitted to OMU Delivery Engineering Department along with the Certificate of Completion (Attachment 4). Once OMU reviews and approves the Certificate of Completion and all testing and commissioning reports, OMU will give final written notification stating that the DG System is approved for parallel operation with OMU’s System. Only after the Customer receives this final notification shall the parallel operation occur. Under no circumstances shall a Customer operate any unapproved DG System in parallel operation with OMU’s System.

2. Fast Track and 10kW Certified Inverter Process

2.1 Fast Track Process

The Fast Track Process is used for all Level 1 applications and some smaller units from Level 2 applications. Experience has shown that smaller systems do not cause a great amount of adverse effects to a utility’s system. Therefore, a full study process is typically not required for these systems. However, if OMU determines that a small proposed system may cause some adverse effects to its system, OMU may deem the application necessary for a Complete Study Process. All of the requirements of the OMU system and DG equipment as stated in Section 4 of this document shall apply to all applications studied under the Fast Track Process.

2.2 10kW Certified Inverter Process

The 10 kW Certified Inverter Process is used to quickly approve, for parallel interconnection to the OMU system, pre-packaged DG systems that have UL testing and certification as a package. The requirements of the OMU system as stated in section 4 of this policy shall apply to 10 kW Certified Inverters as well.

3. Complete Study Process

The Complete Study Process in compliance with FERC Order 2006 consists of the Minimum Engineering Review, System Impact Study, and Facilities Study. If a Complete Study Process is required, OMU Delivery Engineering and the Customer may have a meeting to discuss the entire scope of the project and review any drawings and other information that the Customer may be able to supply OMU to assist in an accurate analysis. Depending on the size of the proposed DG Equipment, parts of the Complete Study Process may not be required if so determined by OMU.

3.1 Minimum Engineering Review

The Minimum Engineering Review is designed to identify any adverse system impacts that would result from the interconnection of the proposed DG System. Examples of such negative impacts would include exceeding short circuit capability ratings of any breakers, violation of the thermal overload or voltage limits, and a review of grounding requirements and electric system protection.

3.2 System Impact Study

The System Impact Study is designed to identify and detail the electric system impacts that would result if the proposed project were interconnected without project modification or electric system modifications. This study focuses more deeply on the adverse system impacts identified in the Minimum Engineering Review. The System Impact Study shall also evaluate the impact of the proposed DG System on the reliability of the electric system.

3.3 Facilities Study

The Facility Study is designed to identify what modifications to the OMU System and its facilities are needed, including the detailed cost and scheduled completion date for these modifications. The Customer shall be responsible for any OMU System or facility upgrade cost in addition to the nonrefundable study cost paid at the time of application.

Once OMU and the Customer agree to the results of the study, and the Customer agrees to pay for all charges associated with any system or facility upgrades, OMU and the Customer will execute the Small Generator Interconnection Agreement (SGIA)(Attachment 3). Once the SGIA is complete, it shall serve as written notification to the Customer that Customer may purchase and install the proposed DG System. Customer will have ninety (90) days from the time the SGIA is executed to start the installation of the approved DG System. If installation has not begun within the ninety (90) day period, the SGIA shall become void and customer shall be responsible to pay a restudy fee of $50 to ensure no system changes have occurred. A new SGIA will then be executed. Customer shall not attempt to parallel the DG System to OMU’s System until all provisions of this policy and any additional requirements discovered during the Complete Study Process have been met.

OMU reserves the right to witness any functionality and commissioning testing of the installed DG System. All testing shall be in accordance with IEEE 1547.1. A copy of all testing and installation reports shall be submitted to OMU Delivery Engineering Department along with the Certificate of Completion (Attachment 4). Once OMU reviews and approves the Certificate of Completion and all testing and commissioning reports, OMU will give final written notification stating that the DG System is approved for parallel operation with OMU’s system. Only after the customer receives this final notification shall the parallel operation occur. Under no circumstances shall a customer operate any unapproved DG equipment in parallel operation with OMU’s system.

4. General System Information and DG Equipment Requirements

4.1  All Customer requests for interconnection to the OMU system will be handled on a first come, first consideration basis. An application in idle for incomplete information will not be removed from the order of consideration unless requested information is not provided by the Customer within twenty (20) business days.

4.2  OMU shall not serve as the Engineer for any proposed DG Systems nor recommend manufacturers, vendors, or technical experts to the Customer. OMU’s sole responsibility is to evaluate any proposed DG Systems for possible negative effects to the OMU System. Should a negative effect be discovered during one of the evaluation methods, OMU will notify the Customer of the issues that the proposed system will cause to the OMU System. OMU shall not be responsible to provide mitigation options or redesign of the proposed DG System to resolve any issues.

4.3  All DG Systems shall be designed for interconnection at the Customer secondary- service voltage level. DG systems for a single transformer will be limited to the smaller of 20 kVA or transformer nameplate rating for single-phase shared secondary. If a Customer desires to install DG facilities to a transformer that has already met the above limits, but has not met the limits set below in 4.7 and 4.12, Customer shall be responsible to pay OMU to install an isolated OMU transformer. Customer will be responsible for the installation of poles, transformers, and other equipment required to isolate the service of their facilities from other OMU customers.

4.4  A dedicated transformer shall be required if the Engineering Review, System Impact Study, or field commissioning indicates a primary voltage fluctuation greater than 2.5% or a secondary voltage fluctuation greater than 5%. Customer shall be responsible to pay for the installation of poles, transformers, and other equipment required to isolate the service of their facilities from other OMU customers.

4.5  All DG Systems shall have a manual, lockable, DG System disconnect switch located on the outside of the building as close as possible (10 feet or less) to the existing OMU meter. This disconnect switch shall be able to handle full-load breaking and completely isolate the DG System from the OMU System. Though the switch will typically be operated by the customer, OMU reserves the right to disconnect the DG System from the OMU System for emergencies or system abnormalities at any time without prior notification. OMU shall not be responsible to compensate the Customer for any power cost, lost revenue, etc. caused from the disconnection. If OMU determines system abnormalities are caused from the DG System, OMU will place a lock on the disconnect switch in the open position. OMU will notify the Customer in writing that the DG System has been locked out from paralleling with the OMU System and why. Customer shall be responsible to determine the cause for the disturbance and show OMU Delivery Engineering proof that the issue has been resolved. Once OMU is satisfied with the resolution, OMU will remove the lock and allow interconnection operations to resume. The switch and enclosure should conform to NEMA, NESC, and NEC guidelines for such equipment.

4.6  OMU’s “net” metering will be achieved with the use of two meters-a power used (revenue) meter and a power generated meter. All proposed DG Systems shall include an OMU approved meter base for the placement of an OMU meter to record the power generated. The power generated meter base shall be in a direct series path with the DG System disconnect switch and be in close proximity and on the same exterior wall to the existing OMU meter. A typical OMU approved small DG System is shown in Figure 3.

4.7  For an interconnection of a proposed DG System to a radial distribution circuit, the aggregated generation, including that of the proposed DG System, shall not exceed 15% of the total distribution circuits annual peak load as measured by OMU at the substation circuit breaker. The total distribution circuit is defined as the mainline feeder and all branch lines from the substation breaker to the end of line or furthest tie point to other substations.

4.8  The proposed DG System, in aggregation with other generation on the same distribution circuit, shall not contribute more than 10% to the distribution circuit’s maximum fault current at the point of interconnection to the primary voltage level.

4.9  The proposed DG System, in aggregate with other generation on the same distribution circuit, shall not cause any OMU distribution protective devices and equipment or Customer owned equipment to exceed 85% of the short circuit interrupting capability. Additionally, a DG System shall not be proposed for an OMU circuit that already exceeds 85% of the short circuit interrupting capability.

4.10  All DG Systems proposed to connect to the OMU System shall either be a three- phase or single-phase, phase-to-phase connection where the primary distribution line type is three-phase, three wire (Delta connection); or an effectively grounded three-phase or single-phase, line-to- neutral connection where the primary distribution line type is three-phase, four wire (Wye connection). These criteria’s shall be met to limit the potential for creating over- voltage issues on the OMU System due to a loss of ground during the operating time of any anti-islanding function.

4.11  If the proposed DG System is single-phase and it is to be connected to a delta or open-delta service via a center tap neutral, its addition shall not create an imbalance between the two sides of the 240 volt service of more than 20% of the nameplate rating of the transformer. Additionally, it shall not cause the load of any of the individual phases to exceed twice the load of any of the other transformers.

4.12  The DG System, in aggregate with other generation interconnected to other circuits of a substation power transformer, shall not exceed six (6) MW per substation power transformer. This limit may be reduced at OMU’s discretion for areas with transient stability limitations or other operational issues.

4.13  All steady-state and transient operating limits for voltage, flicker voltage, frequency, harmonic contents, etc. shall comply with the most recent versions of IEEE 519, IEEE 141, and ANSI C84. OMU requires the inverter to cease parallel operation to OMU’s System within six (6) cycles when any of the following criteria’s are met:

4.13.1 OMU line voltage is less than or equal to 80% of nominal voltage (100 volts secondary)

4.13.2 OMU line voltage is equal to or more than 110% of nominal voltage (137 volts secondary)

4.14  Subsequent to the occurrence of events which causes the inverter to cease power production to the Customer or OMU System, OMU’s System voltage shall remain stable in voltage and frequency for a time not less than five (5) minutes prior to the DG System interconnecting to the OMU System again.

4.15  OMU may request periodic testing of the DG System to ensure compliance with the designed and permitted interconnected equipment. This testing shall be done at the Customer’s expense and test reports shall be provided to OMU. The testing shall be done within thirty (30) business days of written notification from OMU. Failure to test and provide reports to OMU within this time frame will suspend the SGIA and OMU may disconnect the DG System from interconnection to the OMU system via the disconnect switch and place a lock on the switch until such test are performed.

5. Disputes

In the event that OMU and the Customer, do not agree to any part of this policy or the outcomes of any studies or proposed changes to a proposed or installed DG system, all parties will attempt to resolve any conflicts or disputes in a prompt, equitable, good-faith manner. If parties are unable to resolve the conflict or dispute in the above informal manner, the following dispute resolution process must be followed:

5.1 Customer shall file a written request for a formal dispute resolution meeting with the OMU Director of Delivery. Within five (5) business days of receipt of the letter, the Director of Delivery shall schedule a meeting to include the Delivery Engineering Manager, Director of Delivery, and Director of Power Marketing along with the Customer. Parties shall attempt a good faith effort to resolve the conflict or dispute within ten (10) business days.

5.2  If a resolution cannot be agreed upon in 5.1, the Customer shall notify the General Manager in writing their concerns of the dispute or conflict and the reason a resolution failed. The General Manager shall set up a meeting within five (5) days of receipt of the letter with the Customer. The General Manager shall have thirty (30) days from the meeting to issue a position on the conflict or dispute.

5.3  If the Customer is still not satisfied with the position taken by the General Manager, the Customer shall reply to the General Manager with five (5) business days. The General Manager shall then take the dispute forward to the Utility Commission of the City of Owensboro. The Customer shall have their opportunity to present the dispute or conflict to the Utility Commission meeting at the next regularly scheduled Utility Commission Meeting. The Commission shall have to the next regularly scheduled meeting to provide a response. The decision of the Utility Commission shall be considered final.

6. Confidentiality

OMU shall maintain confidentiality of all information submitted by the Customer if the information is designated as so by markings and labeled as “Confidential” except where applicable laws and regulations do not allow such information to be confidential. In the instance that OMU is requested to produce confidential information, OMU shall give advanced written notice to the Customer to give the Customer an opportunity to seek protective treatment of such information. Confidential information does not include information that is currently or has been in the public domain, required to be publicly submitted, or divulged by an authorized government agency.

7. Indemnification, Insurance, and Liability

7.1  OMU and the Customer shall at all times indemnify, defend, and save the other party harmless from any and all damages, losses, claims; including claims and actions relating to injury or death of any person or property damage, demand, suits, recoveries, costs and expense, court cost, attorney fees, and other obligations by or to third parties; arising out of or resulting from the other party’s action or inaction of its obligation under this policy on behalf of the indemnifying party, except in cases of gross negligence or intentional wrongdoing by the indemnified party.

7.2  OMU’s liability to the Customer, and vise-versa, for any loss, cost, claim, injury, liability, or expense, including reasonable attorney’s fees, relating to or arising from any act or omission in its performance of its obligation pursuant to this policy shall be limited to the amount of direct damages actually incurred. In no event shall either OMU or the Customer be liable to the other party for any indirect, incidental, special, consequential, or punitive damages of any kind whatsoever, except where gross negligence or intentional wrongdoing is determined to be the cause of such liability.

7.3  Customers approved for interconnection to the OMU system shall maintain liability insurance in the amount of $100,000 for residential and $300,000 for commercial per interconnection. If the site owner is different than the system owner, the site owner shall maintain liability insurance in the same amount. The Customer shall provide a Certificate of Insurance to OMU annually. If the insurance is discontinued, for any reason, including transfer of ownership of the DG System, the Customer shall notify OMU in writing within five (5) business days of the discontinuation. At that time, OMU reserves the right to disconnect the DG System via the disconnect switch and place a lock on the switch until a valid Certificate of Insurance is provided to OMU.

8. Termination

The SGIA may be terminated under the following conditions:

8.1  By the customer with a thirty (30) day advance written notice to OMU of the intent to cease operation of the DG system; or,

8.2  By OMU in the instance that the DG System fails to stay connected to the OMU System for any consecutive twelve (12) months; or,
8.3  By OMU if the Customer fails to within thirty (30) business days remedy a system disturbance caused by the DG system, correct any violation of this Policy, or failure to provide requested testing.