Interconnection insurance requirements [RE-wrenches]

[William Miller]

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Allan:

Timely question, for me, anyhow.  I am feeling pretty passionate about this 
subject just lately.  Allow me to relate a story about a recent incident:

I am just wrapping up a job that has been difficult in that the paperwork 
has been problematic.  The client is an older, very independent, 
libertarian type who wants no government or corporate interference in his 
life.  I talked the client into applying for a rebate thinking it only fair 
that he get his fair share of the incentive.  Turns out he is on an Ag 
rate, requiring a much more extensive application under the utility's 
regulations.  I filled out the expanded application in due course, with 
some grumbling.

Unbeknownst to me, the client does not have any type of liability 
insurance.  Fortunately, we just learned that the insurance requirement is 
not really a requirement.  The CSI handbook states:  "Insurance 
requirements for systems < 30 kW will be equivalent to what is currently 
required for interconnection to the utility grid."  I understood that this 
means that the requirements for insurance for the small grid-tie customer 
is the same as for the average customer buying power from the grid, which 
is none.

I was told the client, if not submitting insurance had to submit a letter 
to that effect.  I assumed that the client need only submit a letter 
testifying that they were not going to submit proof of insurance.  I wrote 
a letter my client signed, stating that the client was electing not to 
submit proof of insurance.  This was initially not at all acceptable to the 
utility.

A representative from the utility told me the following, and I'm not making 
this up:  "If the customer has insurance, they are required to submit it," 
and, "If the customer does not have insurance, they are required to 
stipulate, in writing that they do not have insurance."  Believe me, I have 
this in writing.

I don't know about you, but if I did not have insurance, I sure would not 
want to put that in writing.  Furthermore, if the statute says no insurance 
is required, I do not see how that can be twisted to say what the utility 
representative stated above.  This, in my opinion, defies logic and left me 
feeling very upset.  I am a very principled person that brooks no abuse.

Fortunately, when I pleaded my case, using humanistic terms (...I'm in a 
bind here, please help me out), the utility relented and has agreed to 
accept the original letter.  They cited the language of the agreement which 
has several "hold harmless" clauses.

I still have a strong desire to pursue the issue.  If the statute states 
that insurance is not required, then requiring one to testify to not having 
insurance and withholding an interconnection agreement on the point seems, 
frankly, like an abuse of power.  If you are interested, let me know and I 
will keep you informed.

I hope this long story sheds some light on how the insurance requirement 
can be abused.  Let me know if you have any questions.  I appreciate your 
efforts to keep the requirement reasonable.  Let me know if I can help in 
any way.  This is important work.

William Miller

At 11:50 AM 5/2/2007, you wrote:

>Wrenches,
>As I have indicated in recent posts, I'm involved in workshops to revise our
>Public Regulatory Commission's interconnection standards. There are many
>issues, but today's request is about requiring liability insurance. A
>section of the "straw man" document that is serving as the basis for
>discussion will require liability insurance for all interconnected systems.
>The existing under-10kW regulation ("Rule 571" referenced below) recommends
>but doesn't require it, and I want to make sure this remains.
>
>Here is the new text, followed [in brackets] by my own draft comments on
>this particular section. I need supporting information for my argument that
>insurance shouldn't be required on small systems. I also need to know that
>my comments about homeowner's policies are accurate. Any help from Wrenches
>in other jurisdictions is much appreciated.
>
>11.9     Insurance
>All Generating facilities shall obtain liability insurance to cover risks,
>liabilities, and consequences that may arise as a result of interconnection
>with a utility system.  A utility may require qualifying Generating
>facilities larger than 50 kW to obtain general liability insurance not to
>exceed $1,000,000 before the qualifying Generating facility is
>interconnected with the public utility.  In extraordinary cases and for good
>cause shown the Commission may require a Generating facility to obtain a
>greater amount of general liability insurance. [Note: Historically with
>residential and small commercial systems, this is covered under general
>liability provisions in homeowner's policies, and these have generally been
>determined in other jurisdictions to be sufficient. It must not be required
>on small residential systems, as the insurance industry has not caught up
>with the rapid growth of residential PV; as such any specific rider could
>add prohibitively to the cost of the system. Note also that existing Rule
>571 states that "All customers are urged to obtain adequate liability
>insurance to cover risks, liabilities, and consequences which may arise as a
>result of interconnection with a utility system." This has served adequately
>to date and should not be changed.]
>
>
>
>Thanks as usual for any assistance.
>
>Allan
>
>Positive Energy


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