in-20260211-IR-170250368FRA: CUSTOMER FACILITY INTERCONNECTION STANDARDS

TITLE 170 INDIANA UTILITY REGULATORY COMMISSION Final Rule LSA Document #25-368 DIGEST CUSTOMER FACILITY INTERCONNECTION STANDARDS Amends 170 IAC 4-4.3 concerning customer facility interconnection standards. Effective 30 days after filing with the publisher. HISTORY Notice of First Public Comment Period: 20250723-IR-170250368FNA Regulatory Analysis submitted with Notice of First Public Comment Period: 20250723-IR-170250368RAA Date of First Hearing: August 27, 2025 CITATIONS AFFECTED: 170 IAC 4-4.3 SUMMARY/RESPONSE TO COMMENTS The Indiana Utility Regulatory Commission (IURC) requested public comment from July 23, 2025, through August 28, 2025, and during the public hearing on August 27, 2025. IURC received no comments in response to the Notice of First Public Comment Period. FINAL RULE Sec. 1. (a) The definitions in this section apply throughout this rule. (b) "Area network" means a type of electric distribution system served by multiple transformers interconnected in an electrical network circuit that is generally used in large metropolitan areas, which are densely populated, in order to provide high reliability of service. (c) "Commission" means the Indiana utility regulatory commission. (d) "Customer-generator "Customer facility" means an arrangement of equipment for the production of electricity, that including energy storage systems or technologies, which is owned and operated by: (e) "Eligible customer" means any: that has agreed, orally or otherwise, to pay for electric service received from an investor-owned electric utility and is in good standing with that utility. (f) "Equipment package" means a group of components connecting an electric generator a customer facility with an electric distribution system and includes all interface equipment, including any of the following: The term includes an integrated generator or electric source. (g) "Interconnection" or "interconnected" means the physical, parallel connection of a customer-generator customer facility with a distribution facility of an investor-owned electric utility. (h) "Investor-owned electric utility" or "utility" means a public utility, as defined in IC 8-1-2-1: (i) "Nameplate capacity" means the full-load continuous rating of a generator customer facility under specified conditions as designated by the manufacturer. (j) "Parallel" means the designed operation of the: where the instantaneous flow of electrical energy may automatically occur in either direction across the interconnection point between the customer-generator customer facility and the electrical utility's distribution system. (k) "Spot network" means a type of electric distribution system that uses at least two (2) or more intertied transformers to supply an electrical network circuit. A spot network is generally used to supply power to a single customer or a small group of customers. (l) "System emergency" means a condition on a utility's system reasonably likely to result in any of the following: Sec. 2. This rule shall apply applies to any investor-owned electric utility, subject to the jurisdiction of the commission, that may now or hereafter be engaged in the: of electric service and all customer-generator the customer facilities that apply for interconnection with such those utilities on or after the effective date of this rule. Sec. 3. (a) Customer-generator Customer facilities shall be are exempt from revenue requirements and associated regulation under IC 8-1-2 as administered by the commission, except that but the commission shall have authority over rates charged by electric utilities to customer-generator customer facilities. (b) Upon On the agreement of an eligible customer and the utility, the customer-generator customer facility interconnection may be exempt from the requirements of this rule, except for the provisions of section 4(f) and 4(g) of this rule. Sec. 4. (a) Each An investor-owned electric utility shall provide each of the following three (3) procedures for applications for the interconnection of customer-generator customer facilities and use: (b) Each utility shall designate a contact person or an office from which an eligible customer can obtain basic application forms and information through an informal process. (c) Each utility shall use commission-approved interconnection application and interconnection agreement forms. (d) The utility may require the applicant to include a disconnect switch as a supplement to the equipment package. (e) Application and interconnection review fees shall be are set as follows: (f) The interconnection and operation of any customer-generator a customer facility is secondary to and shall may not interfere with the ability of the utility to meet its primary responsibility of furnishing reasonably adequate service to all customers. (g) All The customer-generator customer facility electrical installations shall must conform to the following: Sec. 5. (a) In order To qualify for the Level 1 and the Level 2 interconnection review procedures described in sections 6 and 7 of this rule, a customer-generator customer facility must shall be certified as complying with the following standards, as applicable: (b) An equipment package shall be is considered certified for interconnection operation if it has been tested and listed by a nationally recognized testing and certification laboratory in compliance with subsection (a)(1). (c) If the equipment package has been tested and listed in accordance with this section as an integrated package that includes a generator or other electric source the customer facility: of the listed equipment package. (d) If the equipment package includes only the interface components, an interconnection applicant must show that the generator or other electric source customer facility being utilized used with the equipment package is: If the generator or electric source customer facility being utilized used with the equipment package is consistent with the testing and listing performed by the a nationally recognized testing and certification laboratory, the equipment package shall be is deemed certified, and the utility shall not require further design review, testing, or additional certification of the listed equipment package. Sec. 6. (a) Each investor-owned electric utility shall adopt a Level 1 interconnection review procedure. The utility shall use the Level 1 review procedure for an application to interconnect a customer-generator customer facility that: (b) For a customer-generator customer facility described in subsection (a), the utility shall approve interconnection under the Level 1 review if all of the applicable requirements in subsections (c) though through (h) are met. A utility shall may not impose additional requirements not specifically authorized under this section. (c) If a customer-generator customer facility is to be connected to a radial distribution circuit, the aggregate generation nameplate capacity connected to the circuit, including the proposed nameplate capacity, shall may not exceed five percent (5%) of the circuit annual peak load as most recently measured at the substation; the aggregate generation nameplate capacity connected to a line section, including the proposed nameplate capacity, shall may not exceed ten percent (10%) of the line section annual peak load as most recently measured or estimated based on the most recently measured circuit load at the substation. (d) The aggregate generation nameplate capacity on the distribution circuit to which the customer-generator customer facility will interconnect, including its nameplate capacity, shall may not contribute more than ten percent (10%) to the circuit's maximum fault current at the point on which where the primary level that is nearest the proposed point of common coupling. (e) If a customer-generator customer facility is to be connected to a single-phase shared secondary, the aggregate generation nameplate capacity connected to the shared secondary, including the proposed nameplate capacity, shall may not exceed the lesser of twenty (20) kVA or the nameplate rating of the service transformer. (f) If a single-phase customer-generator customer facility is to be interconnected on a center tap neutral of a two hundred forty (240) volt service, the addition of the customer-generator customer facility shall may not create an imbalance between the two (2) sides of the two hundred forty (240) volt service more than twenty percent (20%) of the nameplate rating of the service transformer. (g) The customer-generator customer facility point of common coupling shall may not be on: (h) The customer-generator customer facility shall may not violate any the applicable provisions of IEEE 1547 the Institute of Electrical and Electronic Engineers 1547-2018, Standard for Interconnecting Interconnection and Interoperability of Distributed Energy Resources with Associated Electric Power Systems Interfaces, as identified by the utility. (i) The utility shall notify the applicant within ten (10) business days after receiving an application for Level 1 interconnection review as to whether the application is complete. If the application is incomplete, the notification shall must include a list detailing the information needed to complete the application. (j) Within fifteen (15) business days after the utility notifies the applicant that the application is complete, the utility shall notify the applicant that the customer-generator customer facility: (k) If approved, the utility shall, within ten (10) business days after sending the notice of approval under subsection (j)(1), do the following: (l) An applicant that receives an interconnection agreement under subsection (k) shall do the following: If the utility requires an inspection of the customer-generator customer facility, the applicant shall may not begin operating the facility until completion of the inspection. (m) Upon: After: the utility shall approve the interconnection, conditioned on approval by the electric code officials with jurisdiction over the interconnection. (n) If an application for Level 1 interconnection review is denied because it does not meet at least one (1) or more of the applicable requirements of this section, an applicant may resubmit the application under the Level 2 or Level 3 interconnection review procedure as appropriate. Sec. 7. (a) Each investor-owned electric utility shall adopt a Level 2 interconnection review procedure. The utility shall use the Level 2 review procedure for an application to interconnect a customer-generator customer facility that: (b) For a customer-generator customer facility described in subsection (a), the utility shall approve interconnection under the Level 2 review if all of the applicable requirements in subsections (c) through (o) are met. A utility shall may not impose additional requirements not specifically authorized under this section. (c) If a customer-generator customer facility is to be connected to a radial distribution circuit, the aggregate generation nameplate capacity connected to the circuit, including the proposed nameplate capacity, shall may not exceed fifteen percent (15%) of the line section annual peak load as most recently measured or estimated based on the most recently measured circuit load at the substation. (d) The aggregate generation capacity on the distribution circuit to which the customer-generator customer facility will interconnect, including its capacity, shall may not contribute more than ten percent (10%) to the circuit's maximum fault current at the point on which where the primary level that is nearest the proposed point of common coupling. (e) If a customer-generator customer facility is to be connected to a single-phase shared secondary, the aggregate generation capacity connected to the shared secondary, including the proposed capacity, shall may not exceed the lesser of twenty (20) kVA or the nameplate rating of the service transformer. (f) If a single-phase customer-generator customer facility is to be interconnected on a center tap neutral of a two hundred forty (240) volt service, its addition will not create an imbalance between the two (2) sides of the two hundred forty (240) volt service more than twenty percent (20%) of the nameplate rating of the service transformer. (g) The aggregate generation capacity on the distribution circuit to which the customer-generator customer facility will interconnect, including its capacity, shall may not cause any: to exceed ninety percent (90%) of the short circuit interrupting capability of the equipment. In addition, a customer-generator customer facility shall may not be connected to a circuit that already exceeds ninety percent (90%) of the short circuit interrupting capability. (h) If there are known or posted transient stability limits to generating units located in the general electrical vicinity of the proposed point of common coupling, for example, three (3) or four (4) transmission voltage level busses, the aggregate generation capacity, including the proposed facility, connected to the distribution low voltage side of the substation transformer feeding the distribution circuit containing the point of common coupling shall may not exceed ten (10) megawatts. (i) If a customer-generator customer facility is to be connected to three-phase, three (3) wire primary utility distribution lines, a three-phase or single-phase generator shall must be connected phase to phase. (j) If a customer-generator customer facility is to be connected to three-phase, four (4) wire primary utility distribution lines, the generator shall appear appears to the primary utility distribution line as an effectively grounded source. (k) The customer-generator customer facility point of common coupling shall may not be on a transmission line. (l) If a customer-generator customer facility is to be connected to the load side of spot network protectors, the proposed facility shall: (m) If a customer-generator customer facility is to be connected to any network, the proposed facility must utilize shall use a protective scheme that will ensure that its current flow will not affect the network protective devices, including reverse power relays or a comparable function. Synchronous customer-generator customer facilities shall may not be interconnected to a secondary network. (n) If a customer-generator customer facility that: both of which include reverse power relays functions, the proposed facility, in aggregate with other generation interconnected on the load side of the network protective devices, will not exceed the lesser of ten percent (10%) of the minimum load on the network or fifty (50) kilowatts. (o) The customer-generator customer facility shall may not violate any the applicable provisions of the Institute of Electrical and Electronic Engineers (IEEE) 1547 1547-2018, Standard for Interconnecting Interconnection and Interoperability of Distributed Energy Resources with Associated Electric Power Systems Interfaces, as identified by the utility. (p) The utility shall notify the applicant within ten (10) business days after receiving an application for Level 2 interconnection review as to whether the application is complete. If the application is incomplete, the notification shall must include a list detailing all of the information needed to complete the application. (q) Within fifteen (15) business days after the utility notifies the applicant that the application is complete, the investor-owned electric utility shall perform an initial review to determine if the applicable requirements of subsections (c) through (o) are met. During the initial review the utility may, at its own expense, conduct any studies or tests it deems necessary to evaluate the proposed interconnection. The initial review shall result in one (1) of the following determinations: (r) An applicant that receives an interconnection agreement under subsection (q)(1) or (q)(2) shall do the following: (s) The utility may: The utility shall schedule any inspections or tests under this section promptly and within a reasonable time after submittal of the application. The applicant shall may not begin operating the customer-generator customer facility until after the inspection and testing is completed. (t) For an applicant that receives an interconnection agreement under subsection (q)(1) or (q)(2), approval of interconnected operation of the customer-generator customer facility shall be is conditioned on all of the following: (u) For an applicant that pays for additional review under subsection (q)(3), within ten (10) business days from the receipt of after payment is received, the utility shall perform any additional review and notify the applicant of the results. If the additional review determines that the customer-generator customer facility can be interconnected without adversely affecting safety, reliability, and power quality upon on the completion of utility system modifications, the utility shall provide a cost estimate of the modifications with the results. Within twenty (20) business days after receipt of receiving the cost estimate, the applicant will either: Upon receipt of After payment is received, the utility shall proceed to schedule and complete the required modifications or new construction. Within five (5) business days after the completion of the modifications or new construction, the utility shall provide the applicant with an executable interconnection agreement and notification that the interconnection will finally be approved upon on completion of the process set forth in subsections (r) through (t). (v) If an application for Level 2 interconnection review is denied because it does not meet at least one (1) or more of the applicable requirements in this section, an applicant may resubmit the application under the Level 3 interconnection review procedure as appropriate. Sec. 8. (a) Each investor-owned electric utility shall adopt a Level 3 interconnection review procedure. The utility shall use the Level 3 review procedure for an application to interconnect a customer-generator customer facility that: (b) The utility shall do the following: (c) The utility shall provide an impact study agreement to the applicant, which shall include includes a good faith estimate of the cost for an impact study to be performed by the utility. (d) If the proposed interconnection may affect electric transmission or delivery systems other than those controlled by the utility, operators of these systems may require additional studies to determine the impact of the interconnection on these systems. The utility shall coordinate the studies of other operators, but shall not be responsible for their timing. The applicant shall be is responsible for the costs of any such additional studies required by other affected system operators. The studies shall be conducted only after the applicant has provided written authorization. (e) After the applicant has executed the impact study agreement and has paid the utility the amount of the good faith estimate required under subsection (c), the utility shall conduct the impact study and notify the applicant of the results as follows: (f) If the applicant requests a facilities study under subsection (e)(2), the utility shall provide a facilities study agreement. The facilities study agreement shall describe describes the work to be undertaken in the facilities study and shall include includes a good faith estimate of the cost to the applicant for completion of the study. Upon On execution by the applicant of the facilities study agreement, the utility shall conduct a facilities study, which shall must identify the following: (g) Upon On completion of the facilities study, the utility shall provide the applicant with the results of the study and an executable interconnection agreement. The agreement shall must list the following: (h) If the applicant wishes to interconnect, the applicant shall do the following: (i) Within fifteen (15) business days after notice from the applicant that the customer-generator customer facility has been installed, the utility shall do the following: The utility and the applicant shall select a date by mutual agreement for the utility to witness commissioning tests. (j) Provided the customer-generator customer facility passes any the required commissioning tests satisfactorily, the utility shall notify the applicant in writing, within five (5) business days after the tests, of one (1) of the following: (k) If the commissioning tests are not satisfactory, the customer-generator customer facility shall repair or replace the unsatisfactory equipment and reschedule a commissioning test under subsection (i). Sec. 9. (a) The investor-owned electric utility may perform reasonable onsite inspections to verify the proper installation and continuing safe operation of the customer-generator customer facility and interconnection facilities: The cost of the inspection or inspections shall be is at the utility's expense; however, the utility shall is not be responsible for any other cost the customer may incur as a result of the inspection or inspections. (b) The customer shall install, operate, and maintain the customer-generator customer facility in accordance with the manufacturer's suggested practices for safe, efficient, and reliable operation in parallel to the utility's system. (c) The utility may isolate any customer-generator a customer facility if the utility believes continued interconnection with the customer-generator customer facility creates or contributes to a system emergency. System emergencies causing discontinuance of interconnection shall be are subject to verification by the commission upon on a complaint made by the customer in accordance with the commission's consumer complaint rules. (d) If the utility finds that the customer-generator's customer's facility is not in compliance with the requirements of this rule, and the noncompliance adversely affects the safety, reliability, or power quality of the electric distribution system, the utility may require the customer-generator customer to disconnect the customer-generator customer facility until compliance is achieved. Sec. 10. (a) The liability insurance and indemnification requirements of a customer-generator customer facility that is also a net metering facility, as defined at 170 IAC 4-4.2-1, shall be are in accordance with 170 IAC 4-4.2-8. (b) The liability insurance and indemnification requirements of a customer-generator customer facility that is not also a net metering facility, as defined at 170 IAC 4-4.2-1, shall be are as follows: Sec. 11. (a) Within sixty (60) days of the effective date of this rule, all investor-owned electric utilities shall submit for approval, via through the commission's thirty (30) day filing process, generic interconnection application and interconnection agreement forms for each of the three (3) levels of review. (b) To assist the commission in monitoring the effectiveness of this rule over time, each investor-owned utility shall file a report with the commission's electricity division before March 2 of each year following the effective date of this rule. The report shall must contain the number, size, and type of the following: Sec. 12. In the event If an investor-owned electric utility and an eligible customer are unable to cannot agree on matters relating to customer-generator customer facility interconnection, either party may raise a customer complaint to the commission in accordance with the commission's consumer complaint rules. LSA Document #25-368 Notice of First Public Comment Period: July 23, 2025 Approved by Attorney General: January 14, 2026 Approved by Governor: January 16, 2026 Filed with Publisher: January 16, 2026, 3:25 p.m. Documents Incorporated by Reference: Institute of Electrical and Electronics Engineers 1547-2018, Standard for Interconnection and Interoperability of Distributed Energy Resources with Associated Electric Power Systems Interfaces; Underwriters Laboratories 1741: Standards for Inverters, Converters, Controllers and Interconnection System Equipment for Use with Distributed Energy Resources (3rd ed. 2021, rev. Oct. 23, 2024) Small Business Regulatory Coordinator: Steve Davies, Deputy General Counsel, Indiana Utility Regulatory Commission, 101 West Washington Street, Suite 1500 East, Indianapolis, IN 46204, (317) 232-2711 (Office), sdavies@urc.in.gov