In November 2005, the Indiana Utility Regulatory Commission (IURC) approved rules governing the interconnection of distributed generation (DG). Indiana's interconnection rules require the state's investor-owned utilities to provide three levels of interconnection to customer-generators.
- Level 1: Applies to inverter-based systems with a maximum nameplate capacity of 10 kilowatts (kW). These systems must comply with IEEE 1547 and UL 1741 standards. There are no application fees or other fees for Level 1 interconnection review. Utilities may not impose additional requirements not specified in the IURC rules. There are specific limitations on a single system's potential impact and the aggregate potential impact on the grid under Level 1 interconnection.
- Level 2: Applies to systems with a maximum capacity of 2 megawatts (MW). These systems also must comply with IEEE 1547 and UL 1741 standards. For Level 2 interconnection, a utility may charge fees of up to $50, plus $1 per kW of the system's nameplate capacity, plus the cost of any minor modifications to the electric distribution system or additional review. Costs for engineering work done as part of any additional review may not exceed $100 per hour. There are specific limitations on a single system's potential impact and the aggregate potential impact on the grid under Level 2 interconnection.
- Level 3: Applies to systems that do not qualify for either Level 1 or Level 2 interconnection procedures. For Level 3 interconnection review, a utility may charge up to $100 plus $2 per kW of the system's nameplate capacity, as well as charges for actual time spent on any impact or facilities studies required by Indiana's rules. Costs for engineering work done as part of any impact or facilities study may not exceed $100 per hour.
Utilities must use an interconnection application and interconnection agreement approved by the IURC. A mutual indemnification provision and reasonable time limits on application review are included in the rules. Customer-generators must obtain "only reasonable amounts of insurance against risks for which there is a likelihood of occurrence." Customers with net-metered systems must abide by the indemnification and insurance provisions specified in the state's net metering rules. Utilities may require customers to install an external disconnect switch at the customer's expense. Any disputes between customers and utilities will be settled according to the IURC's consumer-complaint rules.
Utilities must use an IURC-approved interconnection agreement and interconnection form for each of the three levels of review. In addition, utilities must file an annual report on or before March 1 of each year. The report must specify the number, size and type of facilities interconnected as of December 31 of each year.
Qualifying facilities (QFs) and net-metered systems also must comply with the applicable requirements of Indiana's DG interconnection standards.