(a) Application. Unless the context indicates otherwise, this section and §25.212 of this title (relating to Technical Requirements for Interconnection and Parallel Operation of On-Site Distributed Generation) apply to an electric utility for all purposes except to the extent preempted by federal law. The only part of this section that applies to electric cooperatives is subsection (o) of this section.
(b) Purpose. The purpose of this section includes stating the terms and conditions that govern the interconnection and parallel operation of both on-site distributed generation in order to implement Public Utility Regulatory Act (PURA) §39.101(b)(3) and a natural gas distributed generation facility in order to implement PURA §35.036. Sales of power by on-site distributed generation and natural gas distributed generation in the intrastate wholesale market are subject to §§25.191-25.203 of this title (relating to Open-Access Comparable Transmission Service for Electrical Utilities in the Electric Reliability Council of Texas).
(c) Definitions. The following words and terms when used in this section and §25.212 of this title shall have the following meanings, unless the context indicates otherwise:
  (1) Application for interconnection and parallel operation or application--The form of application prescribed in subsection (q) of this section.
  (2) Company--An electric utility operating a distribution system.
  (3) Customer--Any entity interconnected to the company’s utility system for the purpose of receiving or exporting electric power from or to the company’s utility system.
  (4) Distributed natural gas generation facility--A facility installed on the customer’s side of the meter that uses natural gas to generate not more than 2,000 kilowatts of electricity.
  (5) Facility--An electrical generating installation consisting of one or more on-site distributed generation units, including a distributed natural gas generation facility. The total capacity of the installation’s on-site distributed generation units may exceed ten megawatts (MW); however, no more than ten MW of the installation’s capacity will be interconnected at any point in time at the point of common coupling under this section.
  (6) Interconnection--The physical connection of distributed generation to the utility system in accordance with the requirements of this section so that parallel operation can occur.
  (7) Interconnection agreement--The form of agreement prescribed in subsection (p) of this section. The interconnection agreement sets forth the contractual conditions under which a company and a customer agree that one or more facilities may be interconnected with the company’s utility system.
  (8) Inverter-based protective function--A function of an inverter system, carried out using hardware and software, that is designed to prevent unsafe operating conditions from occurring before, during, and after the interconnection of an inverter-based static power converter unit with a utility system. For purposes of this definition, unsafe operating conditions are conditions that, if left uncorrected, would result in harm to personnel, damage to equipment, unacceptable system instability or operation outside legally established parameters affecting the quality of service to other customers connected to the utility system.
  (9) Network service--Network service consists of two or more utility primary distribution feeder sources electrically tied together on the secondary (or low voltage) side to form one power source for one or more customers. The service is designed to maintain service to the customers even after the loss of one of these primary distribution feeder sources.
  (10) On-site distributed generation (or distributed generation)--An electrical generating facility located at a customer’s point of delivery (point of common coupling) of ten megawatts (MW) or less and connected at a voltage less than 60 kilovolts (kV) which may be connected in parallel operation to the utility system.
  (11) Parallel operation--The operation of on-site distributed generation while the customer is connected to the company’s utility system.
  (12) Point of common coupling--The point where the electrical conductors of the company utility system are connected to the customer’s conductors and where any transfer of electric power between the customer and the utility system takes place, such as switchgear near the meter.
  (13) Pre-certified equipment--A specific generating and protective equipment system or systems that have been certified as meeting the applicable parts of this section relating to safety and reliability by an entity approved by the commission.
  (14) Pre-interconnection study--A study or studies that may be undertaken by a company in response to its receipt of a completed application for interconnection and parallel operation with the utility system. Pre-interconnection studies may include, but are not limited to, service studies, coordination studies and utility system impact studies.
  (15) Stabilized--A company utility system is considered stabilized when, following a disturbance, the system returns to the normal range of voltage and frequency for a duration of two minutes or a shorter time as mutually agreed to by the company and customer.
  (16) Tariff for interconnection and parallel operation of distributed generation--The tariff for interconnection and parallel operation of distributed generation prescribed in subsection (q) of this section.
  (17) Unit--A power generator.
  (18) Utility system--A company’s distribution system below 60 kV to which the generation equipment is interconnected.
(d) Terms of Service.
  (1) Distribution line charge. No distribution line charge shall be assessed to a customer for exporting energy to the utility system.
  (2) Interconnection operations and maintenance costs. No charge for operation and maintenance of a utility system’s facilities shall be assessed against a customer for exporting energy to the utility system.
  (3) Transmission charges. No transmission charges shall be assessed to a customer for exporting energy. For purposes of this paragraph, the term transmission charges means transmission access and line charges, transformation charges, and transmission line loss charges.
  (4) New or amended interconnection agreements. A new or amended interconnection agreement entered into 30 or more days after the commission’s approval of an electric utility’s compliance tariff filed pursuant to paragraph (5) of this subsection shall meet the requirements of this section.
  (5) Tariffs. Not later than 30 days after the effective date of this amended section, an electric utility shall file with the commission for approval tariff amendments to comply with this amended section, including subsections (p) and (q) of this section. An electric utility shall include in its tariff the fees for interconnection studies. An electric utility that sells electricity shall also include back-up, supplemental, and maintenance power services for distributed generation in its tariff.
(e) Disconnection and reconnection. A utility may disconnect a distributed generation unit from the utility system under the following conditions:
  (1) Expiration or termination of interconnection agreement. The interconnection agreement specifies the effective term and termination rights of company and customer. Upon expiration or termination of the interconnection agreement with a customer, in accordance with the terms of the agreement, the utility may disconnect customer’s facilities.
  (2) Non-compliance with the technical requirements specified in §25.212 of this title. A utility may disconnect a distributed generation facility if the facility is not in compliance with the technical requirements specified in §25.212 of this title. Within two business days from the time the customer notifies the utility that the facility has been restored to compliance with the technical requirements of §25.212 of this title, the utility shall have an inspector verify such compliance. Upon such verification, the customer in coordination with the utility may reconnect the facility.
  (3) System emergency. A utility may temporarily disconnect a customer’s facility without prior written notice in cases where continued interconnection will endanger persons or property. During the forced outage of a utility system, the utility shall have the right to temporarily disconnect a customer’s facility to make immediate repairs on the utility’s system. When possible, the utility shall provide the customer with reasonable notice and reconnect the customer as quickly as reasonably practical.
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