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California's "Rule 21" specifies standard interconnection, operating and metering requirements for distributed generation (DG) systems up to 10 megawatts (MW) in capacity, including renewables, with separate simplified rules for small renewables under 10 kilowatts (kW). Rule 21 includes model tariff language; thus, each of the state's three major IOUs -- Pacific Gas and Electric Company (PG&E), San Diego Gas & Electric Company (SDG&E), and Southern California Edison Company (SCE) -- have filed Rule 21 tariffs with the California Public Utilities Commission (CPUC). Each tariff is essentially the same.

Net metering in California applies to renewable-energy systems up to 1 MW in capacity and includes provisions for time-of-use (TOU) net metering. Significantly, net-metered systems up to 1 MW are exempt from paying costs associated with the interconnection studies, distribution system modifications or application review fees discussed below.

'''<u>Large DG Systems up to 10 MW</u>'''
California's Rule 21 is based on a screening process that determines the level of review process for interconnected systems. After a customer applies for interconnection, the utility performs an Initial Review Process (IRP) of the project plans. If all screens are passed, then the system qualifies for "simplified interconnection," whereby no additional studies are needed. If a system does not pass the IRP, it must undergo a Supplemental Review Process (SRP).

As an outcome of the SRP, systems may be permitted to connect to the grid under "simplified interconnection" with some additional requirements. If the proposed project fails one or more screens, the system is subjected to an "interconnection study. The costs of this study are determined by the utility and paid by the system owner. The process is illustrated graphically on the California Energy Commission's (CEC) DG program web site (see above), which also includes links to on-line application forms and a database of current statistics on the number of DG installations for each of the three main IOUs.

Technical requirements for DG installations mirror those established in IEEE 1547, including requirements regarding flicker, harmonics, voltage and frequency fluctuations, islanding, DC injection, and protection devices. Although portions of the IEEE 1547 standard will be incorporated into California's interconnection standards, IEEE 1547 will not supersede Rule 21, given that Rule 21 has a wider scope and is more specific on many issues than IEEE 1547.

The CPUC has also issued an order addressing rate design issues for standby generators. With regard to exit fees in particular, the CPUC ruled in 2003 that systems under 1 MW that are net metered and/or eligible for CPUC or California Energy Commission (CEC) clean-energy incentives are fully exempt from exit-fee charges. This includes many photovoltaic (PV) and wind-energy systems, as well as fuel cells.

'''<u>Small Photovoltaic (PV) and Wind-Energy Systems Under 10 kW</u>'''
PV and wind-energy systems under 10 kW qualify for net metering and "simplified interconnection," under which no supplemental review or interconnection studies are necessary. These systems must comply with the requirements in National Electrical Code Article 690 and UL 1741. While utilities must provide a bi-directional meter for net-metered systems, system owners who choose to employ TOU metering must pay for the new meter.