draft – for discussion purposes only - Energetics Meetings and Events

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Interconnection ApplicationandTerms and ConditionsforUnits Over 10 kW up to 2,000 kWLevel 2General InformationThe following process and procedures were developed in accordance with NewJersey Administrative Code (“N.J.A.C.”) Section 14:4-9, the “Net Metering andInterconnection Standards for Class I Renewable Energy Systems.” Additional detailsmay be seen in Public Service Electric and Gas PSE&G’s (“PSE&G’s”) “Information andRequirements for Electric Service” document, which is generally known to all electricalcontractors doing business in PSE&G’s service area, and is available from any PSE&GWiring Inspection Department.To qualify for Net Metering, a Customer must meet the following conditions:a. Will generate electricity on the customer’s side of the meter using a Class 1renewable energy resource as defined in N.J.A.C. 14:4-9.2;b. Has an annual peak demand or peak load contribution, before accounting forthe effects of the Customer’s generating system, that is less than 10megawatts;c. Has a generating system sized no larger than what is allowed in N.J.A.C. 14.4-9.3(a) for the Customer’s residence or facility, as applicable;d. Has a generating system that is limited to a maximum size of 2,000 Kilowatts;ande. Meets all other requirements of N.J.A.C. 14:4-9.Please refer to PSE&G’s Tariff and the general terms and conditions for netmetering for additional information on applicable rates1.0 Application Process:a. Prior to the electrical contractor or solar installer beginning installation,Customer submits this Interconnection Application (“Application”) to PSE&Gfilled out completely.1

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005b. PSE&G evaluates the Application for completeness and notifies the Customerwithin 3 business days of receipt of the Application whether or not it iscomplete and, if not, advises the Customer of what is incomplete or missing inthe Application.c. Customer’s solar installer or electrical contractor must (i) contact PSE&G’slocal Wiring Inspection Department, (ii) complete the Application for WiringInspection, and (iii) obtain a DWMS job number prior to submitting suchApplication for Wiring Inspection.d. The aggregate generation capacity on the distribution circuit to which theCustomer-generator Facility will interconnect, including the capacity of theCustomer-generator Facility, shall not cause any distribution protectiveequipment (including but not limited to substation breakers, fuse cutouts, andline reclosers), or Customer equipment on the electric distribution system, toexceed 90 percent of the short circuit interrupting capability of the equipment.In addition, a Customer-generator Facility shall not be connected to a circuitthat already exceeds 90 percent of the short circuit interrupting capability,prior to interconnection of the Customer-generator Facility.e. If there are posted transient stability limits to generating units located in thegeneral electrical vicinity of the proposed Point of Common Coupling (e.g.,within 3 or 4 transmission voltage level busses), the aggregate generationcapacity (including the Customer-generator Facility) connected to thedistribution low voltage side of the substation transformer feeding thedistribution circuit containing the Point of Common Coupling shall not exceed10 MW.f. The aggregate generation capacity connected to the distribution circuit,including the Customer-generator Facility, shall not contribute more than 10%to the distribution circuit’s maximum fault current at the point on the highvoltage (primary) level nearest the proposed point of common coupling.g. If a Customer-generator Facility is to be connected to a radial distributioncircuit, the aggregate generation capacity connected to the electric distributionsystem by non-utility sources, including the Customer-generator Facility, shallnot exceed 10% (or 15% for solar electric generation) of the total circuitannual peak load. For the purposes of this paragraph, annual peak load shallbe based on measurements taken over the twelve months previous to thesubmittal of the Application, measured at the substation nearest to theCustomer-generator Facility.h. If a Customer-generator Facility is to be connected to PSE&G three-phase,three wire primary distribution lines, a three-phase or single-phase generatorshall be connected phase-to-phase.2

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005i. If a Customer-generator Facility is to be connected to PSE&G three-phase,four wire primary distribution lines, a three-phase or single phase generatorshall be connected line-to-neutral and shall be effectively grounded.j. If a Customer-generator Facility is to be connected to a single-phase sharedsecondary, the aggregate generation capacity on the shared secondary,including the Customer-generator Facility, shall not exceed 20 kilovolt-amps(kVA).k. If a Customer-generator Facility is single-phase and is to be connected to atransformer center tap neutral of a 240 volt service, the addition of theCustomer-generator Facility shall not create an imbalance between the twosides of the 240 volt service, which is greater than 20% of the nameplaterating of the service transformer.l. A Customer-generator Facility’s Point of Common Coupling shall not be on atransmission line.m. If a Customer-generator Facility’s proposed Point of Common Coupling is ona spot or an area network, the interconnection shall meet the followingrequirements, in addition to the requirements in (d) through (l) above:1. For a Customer-generator Facility that will be connected to a spotnetwork circuit, the aggregate generation capacity connected to thatspot network from customer-generator facilities, including theCustomer-generator Facility , shall not exceed 5% of the spotnetwork’s maximum load;2. For a Customer-generator Facility that utilizes inverter basedprotective functions, which will be connected to an area network, theCustomer-generator Facility , combined with other exportingcustomer-generator facilities on the load side of network protectivedevices, shall not exceed 10% of the minimum annual load on thenetwork, or 500 kW, whichever is less. For the purposes of thisparagraph, the percent of minimum load for solar electric generationCustomer-generator Facility shall be calculated based on theminimum load occurring during an off-peak daylight period;3. For a Customer-generator Facility that will be connected to a spot oran area network that does not utilize inverter based protectivefunctions, or for an inverter based Customer-generator Facility thatdoes not meet the requirements of 1 or 2 above, the CustomergeneratorFacility shall utilize reverse power relays or otherprotection devices that ensure no export of power from theCustomer-generator Facility, including inadvertent export (under3

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005fault conditions), may occur that could adversely affect protectivedevices on the network.n. PSE&G will then determine whether the Customer’s equipment can beinterconnected safely and reliably with the PSE&G system using the screensfor Level 2 facilities referenced above. The Customer shall provide one-linediagrams or system schematics and equipment details as requested in thisApplication. PSE&G’s review can take up to 20 business days. PSE&G shallnotify the Customer in writing via e-mail, fax or first class mail as to whetheror not the installation is approved as follows:1. The Customer-generator Facility meets the applicable requirementsfor Level 2 facilities in N.J.A.C. 14:4-9.8. In this case, PSE&Gshall notify the Customer that the interconnection will be finallyapproved upon completion of the process set forth at (o) through(p) below. Within three business days after this notice, PSE&Gshall provide the Customer with an executable InterconnectionAgreement;2. The Customer-generator Facility has failed to meet one or more ofthe applicable requirements in N.J.A.C. 14:4-9.8, but PSE&G hasnevertheless determined that the Customer-generator Facility canbe interconnected consistent with safety, reliability, and powerquality. In this case, PSE&G shall notify the Customer that theinterconnection will be finally approved upon completion of theprocess set forth at (o) through (r) below. Within five (5) businessdays after this notice, PSE&G shall provide the Customer with anexecutable Interconnection Agreement;3. The Customer-generator Facility has failed to meet one or more ofthe applicable requirements in N.J.A.C. 14:4-9.8, but the initialreview indicates that additional review may enable PSE&G todetermine that the Customer-generator Facility can beinterconnected consistent with safety, reliability, and powerquality. In such a case, PSE&G shall offer to perform additionalreview to determine whether minor modifications to the electricdistribution system (for example, changing meters, fuses, or relaysettings) would enable the interconnection to be made consistentwith safety, reliability and power quality. PSE&G shall provide tothe Customer a non-binding, good faith estimate of the costs ofsuch additional review, and/or such minor modifications. PSE&Gshall undertake the additional review or modifications only afterthe Customer consents to pay for the review and/or modifications.If the additional review required is substantial, an Impact Studymay need to be performed in accordance with the attachedAppendix 3, Impact Study Agreement; or4

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 20054. The Customer-generator Facility has failed to meet one or more ofthe applicable requirements at (c) through (l) above, and the initialreview indicates that additional review would not enable PSE&Gto determine that the Customer-generator Facility could beinterconnected consistent with safety, reliability, and powerquality. In such a case, PSE&G shall notify the Customer that theInterconnection Application has been denied, and shall provide anexplanation of the reason(s) for the denial, including a list ofadditional information and/or modifications to the Customer'sfacility, which would be required in order to obtain an approvalunder level 2 interconnection procedures.o. A Customer that receives an interconnection agreement under (n)1 or 2 above,or after successful completion of the tasks contemplated in (n) 3 above, shall:1. Execute the agreement and return it to PSE&G at least ten (10)business days prior to starting operation of the Customer-generatorFacility; and2. Indicate to PSE&G the anticipated Date of Commercial Operationof the Customer-generator Facility.p. After installation, the local electrical inspection authority having jurisdictionmust inspect the work, and submit a Certificate of Approval to the localPSE&G Wiring Inspection Department. Prior to allowing parallel operation,PSE&G may inspect the Customer’s facility for compliance with its standards,which may include a Witness Test, and then schedules the Customer for theappropriate metering equipment replacement, if necessary. If a readilyaccessible exterior disconnect switch is not installed, the Customer must bepresent for installation of the metering equipment and the Witness Test, inorder to furnish access to the Customer-generator Facility’s disconnectingmeans.q. PSE&G then notifies the Customer in writing that interconnection of theCustomer’s facility is authorized by sending a signed copy of the Certificateof Completion to the Customer. The Customer shall notify PSE&G at leastfive (5) days prior notice to arrange for a Witness Test and meter replacement.If the Witness Test was not satisfactory, PSE&G has the right to disconnectthe Customer’s facility. The Customer has no right to operate in parallel untila Witness Test has been performed or previously waived by PSE&G on theApplication Form. If required, PSE&G will endeavor to complete the WitnessTest within 10 business days of receipt of the Certificate of Approval.5

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005r. For an Customer that receives an interconnection agreement under (o)1 or 2above, approval of interconnected operation of the Customer-generatorFacility shall be conditioned on all of the following occurring:1. The interconnection has been approved by the electrical code officialwith jurisdiction over the interconnection;2. PSE&G’s inspection and/or witnessing of commissioning testsarranged under (p) above are successfully completed; and3. The planned start date provided by the Customer under (o) above haspassed.s. If the Customer’s Application is not approved, PSE&G shall advise theCustomer why the Customer-generator Facility cannot be interconnectedsafely and reliably, and what must be done by the Customer to permit it tointerconnect with PSE&G as per (n) 4 above. If it is determined that theCustomer must resubmit its Application so that its facility can be consideredunder the Level 3 interconnection review process, then the requirementsreferenced in N.J.A.C. 14:4-9.9 shall apply.2.0 Contact Information:Customer must provide the contact information for the legal applicant (i.e. theCustomer-Generator as defined in N.J.A.C. 14:4-9). If another party is responsible forinterfacing with PSE&G, you should provide that contact information as well.3.0 Ownership Information:Please enter the legal names of the owner or owners of the Customer’s facility(i.e. the Customer-Generator Facility as defined in N.J.A.C. 14:4-9), including theirpercentage ownership.4.0 Customer-Generator Facility Certification Requirements:To qualify under this specific Application process, the Customer-Generator’s applicableequipment must be:UL1741 Listed - This standard (“Inverters, Converters, and Controllers for Use inIndependent Power Systems”) addresses the electrical interconnection design of variousforms of generating equipment. Many manufacturers choose to submit their equipmentto a Nationally Recognized Testing Laboratory (“NRTL”) that verifies compliance withUL1741. This “listing” is then marked on the equipment and supporting documentation.IEEE 1547 Compliant - This standard (“Interconnecting Distributed Resources withElectric Power Systems”) contains additional requirements for the design of distributed6

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005generation equipment, and includes requirements for installation practices and testing.(IEEE 1547 includes, by reference, IEEE 929.)5.0 Interconnection Fees in accordance with N.J.A.C. 14:4-9.10:(a) For a Level 2 interconnection review, PSE&G shall charge a fee of $50 plus$1 per kilowatt of the Customer-Generator Facility's capacity, plus the cost ofany minor modifications to PSE&G’s electric distribution system or additionalreview, if required under N.J.A.C. 14:4-9.8(o)3 or 4. Costs for such minormodifications or additional review shall be determined by PSE&G. Costs forengineering work done as part of any Impact Study shall not exceed $100 perhour. If the facility does not qualify for a Level 2 review, the following wouldapply.(b) For a Level 3 interconnection review, PSE&G shall charge a fee of $100 plus$2 per kilowatt of the Customer-Generator Facility's capacity, as well ascharges for actual time spent on any impact and/or facilities studies requiredunder N.J.A.C. 14:4-9.9. Costs for engineering work done as part of anImpact Study or Facilities Study shall not exceed $100 per hour. If PSE&Gmust install facilities in order to accommodate the interconnection of theCustomer-Generator Facility, the cost of such facilities shall be theresponsibility of the Applicant.7

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Appendix 2Interconnection ApplicationforCustomer-generator FacilitiesGreater than 10 kVA up to 2,000 kVACustomer:Name: _____________________________ Phone: (___)__________Address:_____________________________ Municipality: ________________Consulting Engineer or Contractor:Name: _____________________________ Phone: (___)__________Address:_____________________________Estimated In-Service Date: ________________________________Existing Electric Service:Capacity: __________Amps Voltage: __________VoltsService Character: Single Phase Three Phase Secondary3 Phase Transformer Connection Wye DeltaLocation of Protective Interface Equipment on Property:(include address if different from customer address)IEEE 1547 Listed? Yes No (If yes, attach manufacturer’s cutsheet showing IEEE 1547 listing)UL 1741 Listed? Yes No (If yes, attach manufacturer’s cutsheet showing UL 1741 listing)8

Energy Producing Equipment/Inverter Information:Manufacturer: ____________________________________________Model No. ________________ Version No. ____________________Synchronous Induction Inverter Other _________Rating: __________ kW Rating: __________ kVARated Output: VA Rated Voltage: VoltsRate Frequency: Hertz Rated Speed: RPMEfficiency: % Power Factor: ________ %Rated Current: Amps Locked Rotor Current: AmpsSynchronous Speed: RPM Winding Connection:Min. Operating Freq./Time:Generator Connection: Delta Wye Wye GroundedSystem Type Tested (Total System): Yes No; attach productliteratureOne Line Diagram attached: Yes NoInstallation Test Plan attached: Yes NoFor Synchronous Machines:Submit copies of the Saturation Curve and the Vee CurveSalient Non-SalientTorque: _____lb-ft Rated RPM: _______ Field Amperes: ________ at ratedgenerator voltage and current and ________% PF over-excitedType of Exciter: ________________________________________________Output Power of Exciter: _________________________________________Type of Voltage Regulator: _______________________________________Direct-axis Synchronous Reactance (Xd) _______ohmsDirect-axis Transient Reactance (X'd) _______ohmsDirect-axis Sub-transient Reactance (X"d) _______ohmsFor Induction Machines:Rotor Resistance (Rr)_____ohms Exciting Current ____AmpsRotor Reactance (Xr)_____ohms Reactive Power Required:Magnetizing Reactance (Xm)_____ohms ___VARs (No Load)Stator Resistance (Rs)_____ohms ___VARs (Full Load)Stator Reactance (Xs)_____ohmsShort Circuit Reactance (X"d)_____ohmsPhases: Single Three-PhaseFrame Size: ____________ Design Letter: ____ Temp. Rise: ____________ O C.

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005For Inverters:Manufacturer:_______________________ Model: ____________________Type: Forced Commutated Line CommutatedRated Output _________ Amps ________ VoltsEfficiency ________%Customer Signature:_____________________________ __________________________ _________CUSTOMER TITLE DATE10

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Appendix 3Impact Study AgreementThis Impact Study Agreement (“Agreement”) is made and entered into this ___day of ______ by and between __________________, a _____________ organized andexisting under the laws of the State of _____________, (‘‘Customer,’’) and PublicService Electric and Gas PSE&G, a company existing under the laws of the State of NewJersey, (‘‘PSE&G’’). Customer and PSE&G each may be referred to as a ‘‘Party,’’ orcollectively as the ‘‘Parties.’’Recitals:Whereas, Customer is proposing to develop a Customer-generator Facility orgenerating capacity addition to an existing Customer-generator Facility consistent withthe Interconnection Application completed by Customer on ________________; andWhereas, Customer desires to interconnect the Customer-generator Facility withPSE&G’s Distribution System;Whereas, PSE&G has completed an initial review and provided the results ofsaid study to Customer; andWhereas, Customer has requested PSE&G to perform an Impact Study to assessthe impact of interconnecting the Customer-generator Facility to PSE&G’s DistributionSystem;Now, therefore, in consideration of and subject to the mutual covenantscontained herein the Parties agreed as follows:1.0 When used in this Agreement, with initial capitalization, the terms specified shallhave the meanings indicated. Terms used in this Agreement with initialcapitalization but not defined in this Agreement shall have the meanings specifiedin Attachment 1 of the Customer-generator Interconnection Agreement.2.0 Customer elects and PSE&G shall cause to be performed an InterconnectionSystem Impact Study consistent with Section (e) of the InterconnectionApplication.3.0 The scope of this Impact Study shall be subject to the assumptions set forth inAttachment A to this Agreement.4.0 The Impact Study will be based upon the results of the initial review and thetechnical information provided by Customer in the Interconnection Application.PSE&G reserves the right to request additional technical information fromCustomer as may become reasonably necessary consistent with Good UtilityPractice during the course of the Impact Study. If Customer modifies its11

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005designated Point of Common Coupling, Interconnection Application, or thetechnical information provided therein is modified, the time to complete theImpact Study may be extended.5.0 The Impact Study report shall provide the following information:a) Identification of any required minor modifications necessary to allow forthe interconnection of the Customer-generator Facility; andb) Description and non-binding, good faith estimated cost of facilitiesrequired to interconnect the Customer-generator Facility to PSE&G’sDistribution System and to address the identified minor modificationsrequired.c) An Impact Study shall include the following elements, as applicable:1. Load flow study;2. Short-circuit study;3. Circuit protection and coordination study;4. Impact on the operation of PSE&G’s electric distribution system;5. Stability study (and the conditions that would justify including thiselement in the Impact Study);6. Voltage collapse study (and the conditions that would justifyincluding this element in the Impact Study); and7. Additional elements, if approved in writing by Board staff prior tothe Impact Study.6.0 PSE&G requires an up-front deposit of the good faith estimated study costs.7.0 The Impact Study shall be completed based on a mutually agreed upon schedule,unless the schedule is extended due to additional information being required fromthe Customer during the course of the study.8.0 Study fees shall be based on actual costs and will be invoiced to Customer withinninety (90) days from when the study is transmitted to Customer.9.0 Customer shall pay any actual study costs that exceed the deposit without interestwithin thirty (30) calendar days of receipt of the invoice. PSE&G shall refund anyexcess amount without interest within thirty (30) calendar days of the invoice.In witness whereof, the Parties have caused this Agreement to be duly executedby their duly authorized officers or agents on the day and year first above written.PSE&G Signature: Title: Date:Customer Signature: Title: Date:12

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Attachment A to Impact Study AgreementAssumptions Used in Conducting the Impact StudyThe Impact Study shall be based upon the results of PSE&G’s initial review, subject toany modifications, and the following assumptions:(1) Designation of Point of Common Coupling and configuration to be studied.(2) Designation of alternative Points of Common Coupling and configuration.Items (1) and (2) are to be completed by Customer. Other assumptions (listed below) areto be provided by Customer and PSE&G.13

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Appendix 4Certificate of CompletionInstallation Information:Check if owner-installedCustomer-generator: _________________________Contact Person:Mailing Address:Location of Facility (if different from above):______________________________________________________City: State: Zip Code:Telephone (Daytime):Facsimile Number:Electrical Contractor:Name:Mailing Address:(Evening):E-Mail Address:City: State: Zip Code:Telephone (Daytime):Facsimile Number:(Evening):E-Mail Address:License number: ____________________________________Date Interconnection Application was approved by the PSE&G:_______________________Application ID number: ______________________________Electrical Inspection:The system has been installed and inspected in compliance with the localBuilding/Electrical Code of(appropriate governmental authority)Signed (Local Electrical Wiring Inspector, or attach signed electrical inspection):___________________________Name (printed):Date: ___________14

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Person/Entity Installing the Customer-generator Facility:Name:___________________________PSE&G:___________________________________Mailing Address:City: State: Zip Code:Telephone (Daytime):Facsimile Number:(Evening):E-Mail Address:As a condition of interconnection you are required to send/fax a copy of this form alongwith a copy of the signed electrical permit to (insert the PSE&G associate’s name below):Name: _____________________PSE&GMail 1:_____________________Mail 2:_____________________City, State ZIP: ______________Fax No.:_____Final Approval of Interconnection ApplicationThe Certificate of Completion has been received and final approval to interconnect theCustomer-generator Facility is granted.PSE&G Signature: Title: Date:15

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Appendix 5CUSTOMER-GENERATORINTERCONNECTION AGREEMENT(For Customer-Generator Facilities No Larger Than 2 MW)16

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005STANDARD CUSTOMER-GENERATOR INTERCONNECTION AGREEMENTFOR INTERCONECTION OF NEW CUSTOMER-GENERATOR FACILITIESWITH A CAPACITY OF 2 MVA OR LESSThis Agreement is made and entered into this ___ day of ______ by and between__________________, a _____________ organized and existing under the laws of theState of _____________, (‘‘Customer,’’) and Public Service Electric and Gas, a companyexisting under the laws of the State of New Jersey, (‘‘PSE&G’’). Customer and PSE&Geach may be referred to as a ‘‘Party,’’ or collectively as the ‘‘Parties.’’Recitals:Whereas, Customer is proposing to develop a Customer-generator Facility, orgenerating capacity addition to an existing Customer-generator Facility, consistentwith the Interconnection Application completed by Customer on________________; andWhereas, Customer desires to interconnect the Customer-generator with PSE&G’sDistribution System;Whereas, PSE&G has completed an initial review and provided the results of saidreview to Customer;Whereas, Customer requested PSE&G to perform an Impact Study to assess theimpact of interconnecting the Generating Facility to PSE&G’s Distribution System;Now, therefore, in consideration of and subject to the mutual covenants containedherein, the Parties agreed as follows:Article 1.Scope and Limitations of Agreement1.1 This Agreement shall be used for all Interconnection Applicationssubmitted under the terms of the New Jersey Administrative Code(“N.J.A.C.”) Section 14:4-9, the “Net Metering andInterconnection Standards for Class I Renewable Energy Systems,”except for those submitted under the Level I application processoutlined in such regulations for 10 kW and under inverter-basedprojects.1.2 This Agreement governs the terms and conditions under which theCustomer-generator Facility will interconnect to, and operate inparallel with, PSE&G’s Distribution System.1.3 This Agreement does not constitute an agreement to purchase ordeliver the Customer’s power.17

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 20051.4 Nothing in this Agreement is intended to affect any otheragreement between PSE&G and the Customer.1.5 Responsibilities of the Parties1.5.1 The Parties shall perform all obligations of this Agreementin accordance with all Applicable Laws and Regulations,Operating Requirements, and Good Utility Practice.1.5.2 The Customer shall construct, interconnect, operate andmaintain its Customer-generator Facility, and construct,operate, and maintain its Interconnection Facilities inaccordance with the applicable manufacturer’srecommended maintenance schedule, in accordance withthis Agreement, and with Good Utility Practice.1.5.3 PSE&G shall construct, own, operate, and maintain itsDistribution System and Interconnection Facilities inaccordance with this Agreement, and with Good UtilityPractice.1.5.4 The Customer agrees to construct its facilities or systems inaccordance with applicable specifications that meet orexceed those provided by the National Electrical Code,National Electrical Safety Code, the American NationalStandards Institute, IEEE, Underwriters Laboratories, anyOperating Requirements in effect at the time ofconstruction, and other applicable national and State codesand standards. The Customer agrees to design, install,maintain, and operate its Customer-generator Facility so asto reasonably minimize the likelihood of a disturbanceadversely affecting or impairing the system or equipment ofPSE&G or Affected Systems.1.5.5 Each Party shall operate, maintain, repair, and inspect, andshall be fully responsible for the facilities that it now orsubsequently may own unless otherwise specified in theAttachments to this Agreement. Each Party shall beresponsible for the safe installation, maintenance, repairand condition of their respective lines and appurtenances ontheir respective sides of the point of change of ownership.PSE&G and the Customer, as appropriate, shall provideInterconnection Facilities that adequately protect PSE&G’sDistribution System, personnel, and other persons fromdamage and injury. The allocation of responsibility for thedesign, installation, operation, maintenance and ownership18

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005of Interconnection Facilities shall be delineated in theAttachments to this Agreement.1.5.6 PSE&G shall coordinate with any Affected Systems tosupport the interconnection as contemplated under theterms of the New Jersey Administrative Code (“N.J.A.C.”)Section 14:4-9(d).1.6 Parallel Operation ObligationsOnce the Customer-generator Facility has been authorized to commenceparallel operation, the Customer shall abide by all pertinent rules andprocedures pertaining to the parallel operation of the Customer-generatorFacility, including, but not limited to; 1) the rules and proceduresconcerning the operation of generation set forth in the Tariff or byPSE&G’s Distribution System operations personnel; and, 2) anyOperating Requirements set forth in Attachment 3 of this Agreement.1.7 MeteringThe Customer shall be responsible for the cost for the purchase,installation, operation, maintenance, testing, repair, and replacement ofmetering and data acquisition equipment specified in Attachments 2 and 3of this Agreement.1.8 Reactive PowerThe Customer shall design its Customer-generator Facility to maintain acomposite power delivery at continuous rated power output at the Point ofCommon Coupling at a power factor within the range of 0.95 leading to0.95 lagging, unless PSE&G has established different requirements thatapply to all similarly situated generators in the control area on acomparable basis. The requirements of this paragraph shall not apply towind generators.1.9 Capitalized TermsCapitalized terms used herein shall have the meanings specified in theGlossary of Terms in Attachment 1 or the body of this Agreement.Article 2.Inspection, Testing, Authorization, and Right of Access2.1 Equipment Testing and InspectionThe Customer shall test and inspect its Customer-generator Facility andInterconnection Facilities prior to interconnection, and in accordance with19

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005the requirements of IEEE 1547.1. The Customer shall notify PSE&G ofsuch activities no fewer than fifteen (15) days (or as may be agreed to bythe Parties) prior to such testing and inspection. Testing and inspectionshall occur on a Business Day. The PSE&G may, at its own expense, sendqualified personnel to the Customer-generator Facility site to inspect theinterconnection and observe the testing. The Customer shall providePSE&G a written test report when such testing and inspection iscompleted.2.2 Authorization Required Prior to Parallel OperationThe Customer shall not operate its Customer-generator Facility in parallelwith PSE&G’s Distribution System without prior written authorization ofPSE&G. PSE&G will provide such authorization once PSE&G receivesnotification that the Customer has complied with all applicable paralleloperation requirements. Such authorization shall not be unreasonablywithheld, conditioned, or delayed.2.3 Right of Access2.3.1 Upon reasonable notice, PSE&G may send a qualified person tothe premises of the Customer to inspect the interconnection, andobserve the commissioning of the Customer-generator Facility(including any required testing), startup, and operation for a periodof up to three Business Days after initial start-up of the unit. Inaddition, the Customer shall notify PSE&G at least fifteen (15)days prior to conducting any on-site verification testing of theCustomer-generator Facility.2.3.2 Following the initial inspection process described above, atreasonable hours, and upon reasonable notice, or at any timewithout notice in the event of an emergency or hazardouscondition, PSE&G shall have access to the Customer’s premisesfor any reasonable purpose in connection with the performance ofthe obligations imposed on it by this Agreement or if necessary tomeet its legal obligation to provide service to other customers.Article 3.Effective Date, Term, Termination, and Disconnection3.1 Effective DateThis Agreement shall become effective upon execution by the Parties.3.2 Term of Agreement20

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005This Agreement shall become effective on the Effective Date and shallremain in effect for a period of ten years from the Effective Date or suchother longer period as the Customer may request and shall beautomatically renewed for each successive one-year period thereafter,unless terminated earlier in accordance with Article 3.3 of this Agreement.3.3 TerminationNo termination shall become effective until the Parties have complied withall Applicable Laws and Regulations applicable to such termination,including the filing with the NJBPU of a notice of termination of thisAgreement (if required.3.3.1 The Customer may terminate this Agreement at any time by givingPSE&G 20 Business Days written notice.3.3.2 Either Party may terminate this Agreement after Default pursuantto Article 6.6.3.3.3 Upon termination of this Agreement, the Customer-generatorFacility will be disconnected from PSE&G’s Distribution System.The termination of this Agreement shall not relieve either Party ofits liabilities and obligations, owed or continuing at the time of thetermination.3.3.4 This provisions of this Article shall survive termination orexpiration of this Agreement.3.4 Temporary DisconnectionTemporary disconnection shall continue only for so long as reasonablynecessary under Good Utility Practice.3.4.1 Emergency Conditions—“Emergency Condition” shall mean acondition or situation: (1) that in the judgment of the Party makingthe claim is imminently likely to endanger life or property; or (2)that, in the case of PSE&G, is imminently likely (as determined ina non-discriminatory manner) to cause a material adverse effect onthe security of, or damage to the Distribution System, PSE&G’sInterconnection Facilities or any Affected Systems; or (3) that, inthe case of the Customer, is imminently likely (as determined in anon-discriminatory manner) to cause a material adverse effect onthe security of, or damage to, the Customer-generator Facility orthe Customer’s Interconnection Facilities. Under EmergencyConditions, PSE&G may immediately suspend interconnection21

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005service and temporarily disconnect the Customer-generatorFacility. PSE&G shall notify the Customer promptly when itbecomes aware of an Emergency Condition that may reasonably beexpected to affect the Customer’s operation of the CustomergeneratorFacility. The Customer shall notify PSE&G promptlywhen it becomes aware of an Emergency Condition that mayreasonably be expected to affect PSE&G’s Distribution System orother Affected Systems. To the extent information is known, thenotification shall describe the Emergency Condition, the extent ofthe damage or deficiency, the expected effect on the operation ofboth Parties’ facilities and operations, its anticipated duration, andthe necessary corrective action.3.4.2 Routine Maintenance, Construction, and Repair - PSE&G mayinterrupt interconnection service or curtail the output of theCustomer-generator Facility and temporarily disconnect theCustomer-generator Facility from PSE&G’s Distribution Systemwhen necessary for routine maintenance, construction, and repairson PSE&G’s Distribution System. PSE&G shall provide theCustomer with five Business Days notice prior to suchinterruption. PSE&G shall use reasonable efforts to coordinatesuch reduction or temporary disconnection with the Customer.3.4.3 Forced Outages - During any forced outage, PSE&G may suspendinterconnection service to effect immediate repairs on PSE&G’sDistribution System. PSE&G shall use reasonable efforts toprovide the Customer with prior notice. If prior notice is not given,PSE&G shall, upon request, provide the Customer writtendocumentation after the fact explaining the circumstances of thedisconnection.3.4.4 Adverse Operating Effects - PSE&G shall notify the Customer assoon as practicable if, based on Good Utility Practice, operation ofthe Customer-generator Facility may cause disruption ordeterioration of service to other customers served from the sameelectric system, or if operating the Customer-generator Facilitycould cause damage to PSE&G’s Distribution System or AffectedSystems. Supporting documentation used to reach the decision todisconnect shall be provided to the Customer upon request. If, afternotice, the Customer fails to remedy the adverse operating effectwithin a reasonable time, PSE&G may disconnect the CustomergeneratorFacility. PSE&G shall provide the Customer with fiveBusiness Day notice of such disconnection, unless the provisionsof Article 3.4.1 apply.22

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 20053.4.5 Modification of the Customer-generator Facility - The Customermust receive written authorization from PSE&G before makingany change to the Customer-generator Facility that may have amaterial impact on the safety or reliability of the DistributionSystem. Such authorization shall not be unreasonably withheld.Modifications shall be done in accordance with Good UtilityPractice. If the Customer makes such modification withoutPSE&G’s prior written authorization, the latter shall have the rightto temporarily disconnect the Customer-generator Facility.3.4.6 Reconnection - The Parties shall cooperate with each other torestore the Customer-generator Facility, Interconnection Facilities,and PSE&G’s Distribution System to their normal operating stateas soon as reasonably practicable following a temporarydisconnection.Article 4.Cost Responsibility for Interconnection Facilities and DistributionUpgrades4.1 Interconnection Facilities4.1.1 The Customer shall pay for the cost of the InterconnectionFacilities itemized in Attachment 2 of this Agreement. If aFacilities Study was performed, PSE&G shall identify itsInterconnection Facilities necessary to safely interconnect theCustomer-generator Facility with PSE&G’s Distribution System,the cost of those facilities, and the time required to build and installthose facilities.4.1.2 The Customer shall be responsible for its share of all reasonableexpenses, including overheads, associated with (1) owning,operating, maintaining, repairing, and replacing its ownInterconnection Facilities, and (2) operating, maintaining,repairing, and replacing PSE&G’s Interconnection Facilities.4.2 Distribution UpgradesPSE&G shall design, procure, construct, install, and own any DistributionUpgrades. The actual cost of the Distribution Upgrades, includingoverheads, shall be directly assigned to the Customer.Article 5.Billing, Payment, Milestones, and Financial Security23

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 20055.1 Billing and Payment Procedures and Final Accounting5.1.1 PSE&G shall bill the Customer for the design, engineering,construction, and procurement costs of Interconnection Facilitiesand Upgrades contemplated by this Agreement on a monthly basis,or as otherwise agreed by the Parties. The Customer shall pay eachbill within 30 calendar days of receipt, or as otherwise agreed to bythe Parties.5.1.2 Within ninety (90) calendar days of completing the constructionand installation of PSE&G’s Interconnection Facilities andDistribution Upgrades described in the Attachments to thisAgreement, PSE&G shall provide the Customer with a finalaccounting report of any difference between (1) the Customer’scost responsibility for the actual cost of such facilities andDistribution Upgrades, and (2) the Customer’s previous depositand aggregate payments to PSE&G for such InterconnectionFacilities and Distribution Upgrades. If the Customer’s costresponsibility exceeds its previous deposit and aggregatepayments, PSE&G shall invoice the Customer for the amount dueand the Customer shall make payment to PSE&G within thirty (30)calendar days. If the Customer’s previous deposit and aggregatepayments exceed its cost responsibility under this Agreement,PSE&G shall refund to the Customer an amount equal to thedifference within thirty (30) calendar days of the final accountingreport.5.2 Customer DepositAt least twenty (20) Business Days prior to the commencement of thedesign, procurement, installation, or construction of a discrete portion ofPSE&G’s Interconnection Facilities and Distribution Upgrades, theCustomer shall provide PSE&G with a deposit equal to 50% of the costestimated for its Interconnection Facilities prior to its beginning design ofsuch facilities.Article 6.Assignment, Liability, Indemnity, Force Majeure, ConsequentialDamages, and Default6.1 AssignmentThis Agreement may be assigned by either Party upon fifteen (15)Business Days prior written notice, and with the opportunity to object bythe other Party; provided that:24

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 20056.1.1 Either Party may assign this Agreement without the consent of theother Party to any affiliate of the assigning Party with an equal orgreater credit rating and with the legal authority and operationalability to satisfy the obligations of the assigning Party under thisAgreement;6.1.2 The Customer shall have the right to assign this Agreement,without the consent of PSE&G, for collateral security purposes toaid in providing financing for the Customer-generator Facility,provided that the Customer will promptly notify PSE&G of anysuch assignment.6.1.3 Any attempted assignment that violates this Article is void andineffective. Assignment shall not relieve a Party of its obligations,nor shall a Party’s obligations be enlarged, in whole or in part, byreason thereof. An assignee is responsible for meeting the sameobligations as the Customer. Where required, consent toassignment will not be unreasonably withheld, conditioned ordelayed.6.2 Limitation of LiabilityEach Party’s liability to the other Party for any loss, cost, claim, injury,liability, or expense, including reasonable attorney’s fees, relating to orarising from any act or omission in its performance of this Agreement,shall be limited to the amount of direct damage actually incurred. In noevent shall either Party be liable to the other Party for any indirect, special,consequential, or punitive damages, except as authorized by thisAgreement.6.3 Indemnity6.3.1 This provision protects each Party from liability incurred to thirdparties as a result of carrying out the provisions of this Agreement.Liability under this provision is exempt from the generallimitations on liability found in Article 6.2.6.3.2 The Parties shall at all times indemnify, defend, and hold the otherParty harmless from, any and all damages, losses, claims,including claims and actions relating to injury to or death of anyperson or damage to property, demand, suits, recoveries, costs andexpenses, court costs, attorney fees, and all other obligations by orto third parties, arising out of or resulting from the other Party’saction or failure to meet its obligations under this Agreement onbehalf of the indemnifying Party, except in cases of grossnegligence or intentional wrongdoing by the indemnified Party.25

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 20056.3.3 If an indemnified person is entitled to indemnification under thisArticle as a result of a claim by a third party, and the indemnifyingParty fails, after notice and reasonable opportunity to proceedunder this Article, to assume the defense of such claim, suchindemnified person may at the expense of the indemnifying Partycontest, settle or consent to the entry of any judgment with respectto, or pay in full, such claim.6.3.4 If an indemnifying party is obligated to indemnify and hold anyindemnified person harmless under this Article, the amount owingto the indemnified person shall be the amount of such indemnifiedperson’s actual loss, net of any insurance or other recovery.6.3.5 Promptly after receipt by an indemnified person of any claim ornotice of the commencement of any action or administrative orlegal proceeding or investigation as to which the indemnityprovided for in this Article may apply, the indemnified personshall notify the indemnifying party of such fact. Any failure of ordelay in such notification shall not affect a Party’s indemnificationobligation unless such failure or delay is materially prejudicial tothe indemnifying party.6.4 Consequential DamagesOther than as expressly provided for in this Agreement, neither Party shallbe liable under any provision of this Agreement for any losses, damages,costs or expenses for any special, indirect, incidental, consequential, orpunitive damages, including but not limited to loss of profit or revenue,loss of the use of equipment, cost of capital, cost of temporary equipmentor services, whether based in whole or in part in contract, in tort, includingnegligence, strict liability, or any other theory of liability; provided,however, that damages for which a Party may be liable to the other Partyunder another agreement will not be considered to be special, indirect,incidental, or consequential damages hereunder.6.5 Force Majeure6.5.1 As used in this Article, a Force Majeure Event shall mean “any actof God, labor disturbance, act of the public enemy, war,insurrection, riot, fire, storm or flood, explosion, breakage oraccident to machinery or equipment, any order, regulation orrestriction imposed by governmental, military or lawfullyestablished civilian authorities, or any other cause beyond a Party’scontrol. A Force Majeure Event does not include an act ofnegligence or intentional wrongdoing.”26

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 20056.5.2 If a Force Majeure Event prevents a Party from fulfilling anyobligations under this Agreement, the Party affected by the ForceMajeure Event (Affected Party) shall promptly notify the otherParty of the existence of the Force Majeure Event. The notificationmust specify in reasonable detail the circumstances of the ForceMajeure Event, its expected duration, and the steps that theAffected Party is taking to mitigate the effects of the event on itsperformance, and if the initial notification was verbal, it should bepromptly followed up with a written notification. The AffectedParty shall keep the other Party informed on a continuing basis ofdevelopments relating to the Force Majeure Event until the eventends. The Affected Party will be entitled to suspend or modify itsperformance of obligations under this Agreement (other than theobligation to make payments) only to the extent that the effect ofthe Force Majeure Event cannot be reasonably mitigated. TheAffected Party will use reasonable efforts to resume itsperformance as soon as possible.6.6 Default6.6.1 No Default shall exist where such failure to discharge an obligation(other than the payment of money) is the result of a Force MajeureEvent as defined in this Agreement, or the result of an act oromission of the other Party. Upon a Default, the non-defaultingParty shall give written notice of such Default to the defaultingParty. Except as provided in Article 6.6.2, the defaulting Partyshall have 60 calendar days from receipt of the Default noticewithin which to cure such Default; provided however, if suchDefault is not capable of cure within 60 calendar days, thedefaulting Party shall commence such cure within 20 calendar daysafter notice and continuously and diligently complete such curewithin six months from receipt of the Default notice; and, if curedwithin such time, the Default specified in such notice shall cease toexist.6.6.2 If a Default is not cured as provided for in this Article, or if aDefault is not capable of being cured within the period providedfor herein, the non-defaulting Party shall have the right toterminate this Agreement by written notice at any time until cureoccurs, and be relieved of any further obligation hereunder and,whether or not that Party terminates this Agreement, to recoverfrom the defaulting Party all amounts due hereunder, plus all otherdamages and remedies to which it is entitled at law or in equity.The provisions of this Article will survive termination of thisAgreement.27

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Article 7.InsuranceGeneral Liability Insurance coverage is not required under New Jersey’sNet Metering regulations. However, the Customer still has responsibilityand/or liability for any damage(s) or injury(ies) caused by the CustomergeneratorFacility and/or the Customer’s Interconnection Facilities..Article 8.Miscellaneous8.1 Governing Law, Regulatory Authority, and RulesThe validity, interpretation and enforcement of this Agreement and eachof its provisions shall be governed by the laws of the State of New Jersey,without regard to its conflicts of law principles. This Agreement is subjectto all Applicable Laws and Regulations. Each Party expressly reserves theright to seek changes in, appeal, or otherwise contest any laws, orders, orregulations of a Governmental Authority.8.2 AmendmentThe Parties may amend this Agreement by a written instrument dulyexecuted by both Parties.8.3 No Third-Party BeneficiariesThis Agreement is not intended to and does not create rights, remedies, orbenefits of any character whatsoever in favor of any persons, corporations,associations, or entities other than the Parties, and the obligations hereinassumed are solely for the use and benefit of the Parties, their successorsin interest and where permitted, their assigns.8.4 Waiver8.4.1 The failure of a Party to this Agreement to insist, on any occasion,upon strict performance of any provision of this Agreement will not beconsidered a waiver of any obligation, right, or duty of, or imposed upon,such Party.8.4.2 Any waiver at any time by either Party of its rights with respect tothis Agreement shall not be deemed a continuing waiver or a waiverwith respect to any other failure to comply with any other obligation,right, duty of this Agreement. Termination or default of this Agreementfor any reason by Customer shall not constitute a waiver of theCustomer’s legal rights to obtain an interconnection from PSE&G. Anywaiver of this Agreement shall, if requested, be provided in writing.28

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 20058.5 Entire AgreementThis Agreement, including all Attachments, constitutes the entireAgreement between the Parties with reference to the subject matter hereof,and supersedes all prior and contemporaneous understandings oragreements, oral or written, between the Parties with respect to the subjectmatter of this Agreement. There are no other agreements, representations,warranties, or covenants which constitute any part of the consideration for,or any condition to, either Party’s compliance with its obligations underthis Agreement.8.6 Multiple CounterpartsThis Agreement may be executed in two or more counterparts, each ofwhich is deemed an original but all constitute one and the sameinstrument.8.7 No PartnershipThis Agreement shall not be interpreted or construed to create anassociation, joint venture, agency relationship, or partnership between theParties or to impose any partnership obligation or partnership liabilityupon either Party. Neither Party shall have any right, power or authority toenter into any agreement or undertaking for, or act on behalf of, or to actas or be an agent or representative of, or to otherwise bind, the other Party.8.8 SeverabilityIf any provision or portion of this Agreement shall for any reason be heldor adjudged to be invalid or illegal or unenforceable by any court ofcompetent jurisdiction or other Governmental Authority, (1) such portionor provision shall be deemed separate and independent, (2) the Partiesshall negotiate in good faith to restore insofar as practicable the benefits toeach Party that were affected by such ruling, and (3) the remainder of thisAgreement shall remain in full force and effect.8.9 Environmental ReleasesEach Party shall notify the other Party, first orally and then in writing, ofthe release any hazardous substances, any asbestos or lead abatementactivities, or any type of remediation activities related to the CustomergeneratorFacility or the Interconnection Facilities, each of which mayreasonably be expected to affect the other Party. The notifying Party shall(1) provide the notice as soon as practicable, provided such Party makes agood faith effort to provide the notice no later than 24 hours after suchParty becomes aware of the occurrence, and (2) promptly furnish to the29

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005other Party copies of any publicly available reports filed with anygovernmental authorities addressing such events.8.10 SubcontractorsNothing in this Agreement shall prevent a Party from utilizing the servicesof any subcontractor as it deems appropriate to perform its obligationsunder this Agreement; provided, however, that each Party shall require itssubcontractors to comply with all applicable terms and conditions of thisAgreement in providing such services and each Party shall remainprimarily liable to the other Party for the performance of suchsubcontractor.8.10.1 The creation of any subcontract relationship shall not relieve thehiring Party of any of its obligations under this Agreement. Thehiring Party shall be fully responsible to the other Party for the actsor omissions of any subcontractor the hiring Party hires as if nosubcontract had been made; provided, however, that in no eventshall PSE&G be liable for the actions or inactions of the Customeror its subcontractors with respect to obligations of the Customerunder this Agreement. Any applicable obligation imposed by thisAgreement upon the hiring Party shall be equally binding upon,and shall be construed as having application to, any subcontractorof such Party.8.10.2 The obligations under this Article will not be limited in any way byany limitation of subcontractor’s insurance.Article 9.Notices9.1 GeneralUnless otherwise provided in this Agreement, any written notice, demand,or request required or authorized in connection with this Agreement(“Notice”) shall be deemed properly given if delivered in person,delivered by recognized national currier service, or sent by first class mail,postage prepaid, to the person specified below:If to Customer:Customer: ____________________________________________Attention: _________________________________Address: __________________________________________________________30

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005City: _______________________________ State:______________ Zip:_______Phone: ________________ Fax: _________________If to PSE&G:Attention: _________________________________Address: __________________________________________________________City: _______________________________ State:______________ Zip:_______Phone: ________________ Fax: _________________31

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 20059.2 Billing and PaymentBillings and payments shall be sent to the addresses set out below:Customer: ____________________________________________Attention: _________________________________Address: __________________________________________________________City: _______________________________ State:______________ Zip:_______9.3 Designated Operating RepresentativeThe Parties may also designate operating representatives to conduct thecommunications which may be necessary or convenient for theadministration of this Agreement. This person will also serve as the pointof contact with respect to operations and maintenance of the Party’sfacilities.Customer’s OperatingRepresentative:____________________________________________Attention: _________________________________Address: __________________________________________________________City: _______________________________ State:______________ Zip:_______Phone: ________________ Fax: _________________PSE&G’s Operating Representative:____________________________________________Attention: ________________________________Address: _________________________________________________________City: _______________________________ State:______________ Zip:______Phone: ________________ Fax: ________________9.4 Changes to the Notice Information32

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Either Party may change this information by giving five Business Dayswritten notice prior to the effective date of the change.Article 10.SignaturesIN WITNESS WHEREOF, the Parties have caused this Agreement to beexecuted by their respective duly authorized representatives.For PSE&G:Name: ___________________________________________Title: ____________________________________________Date: ____________________________________________For the CustomerName: ___________________________________________Title: ____________________________________________Date: ____________________________________________33

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Attachment 1Glossary of TermsAffected System – An electric system other than PSE&G’s Distribution System that maybe affected by the proposed interconnection.Applicant – A person who has filed an application to interconnect a Customer-generatorFacility to PSE&G’s Distribution System, sometimes also referred to as the “Customer”.Applicable Laws and Regulations – All duly promulgated applicable federal, State andlocal laws, regulations, rules, ordinances, codes, decrees, judgments, directives, orjudicial or administrative orders, permits and other duly authorized actions of anyGovernmental Authority.Business Day – Monday through Friday, excluding Federal Holidays.Class I Renewable Energy – has the meaning assigned to this term in N.J.A.C. 14:4-8.2.Customer – Any entity that proposes to interconnect its Customer-Generating Facilitywith PSE&G’s Distribution System.Customer-generator – A residential or small commercial customer that generateselectricity on the Customer's side of the meter, with a generating facility that does notexceed 2 MW in size.Customer-generator Facility – The Customer’s device for the production of electricityidentified in the Interconnection Application, but shall not include the Customer’sInterconnection Facilities.Default – The failure of a breaching Party to cure its Breach under the terms of thisInterconnection Agreement.Distribution System – The PSE&G facilities and equipment used to deliver electricityfrom transformation points on the Transmission System to points of connection at aCustomer's premisesDistribution Upgrades – The additions, modifications, and upgrades to PSE&G’sDistribution System at or beyond the Point of Common Coupling to facilitate theinterconnection of the Customer-generator Facility. Distribution Upgrades do not includeInterconnection Facilities.Equipment Package – A group of components connecting an electric generator with anelectric distribution system, and includes all interface equipment including switchgear,inverters, or other interface devices. An equipment package may include an integratedgenerator or electric source.34

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Facilities Study – An engineering study conducted by PSE&G (in coordination with anyAffected System) to determine the required modifications to PSE&G’s DistributionSystem, including the cost and the time require to build and install such modifications, asnecessary to accommodate an Interconnection Application.Good Utility Practice – Has the same meaning as assigned to this term in the Amendedand Restated Operating Agreement of the PJM Interconnection (April 2005), as amendedand supplemented, which is incorporated herein by reference. The Operating Agreementcan be obtained on the PJM Interconnection website at www.pjm.com. As of April 28,2005, the Operating Agreement defines this term as "any of the practices, methods and actsengaged in or approved by a significant portion of the electric utility industry during therelevant time period, or any of the practices, methods and acts which, in the exercise ofreasonable judgment in light of the facts known at the time the decision was made, couldhave been expected to accomplish the desired result at a reasonable cost consistent with goodbusiness practices, reliability, safety and expedition. Good Utility Practice is not intended tobe limited to the optimum practice, method, or act to the exclusion of all others, but rather isintended to include acceptable practices, methods, or acts generally accepted in the region."Governmental Authority – Any federal, State, local or other governmental regulatory oradministrative agency, court, commission, department, board, or other governmentalsubdivision, legislature, rulemaking board, tribunal, or other governmental authorityhaving jurisdiction over the Parties, their respective facilities, or the respective servicesthey provide, and exercising or entitled to exercise any administrative, executive, police,or taxing authority or power; provided, however, that such term does not include theCustomer, PSE&G or any affiliate thereof.IEEE Standards – The standards published by the Institute of Electrical and ElectronicsEngineers, available at www.ieee.org.Impact Study – An assessment by PSE&G of (i) the adequacy of PSE&G’s DistributionSystem to accommodate an Interconnection Application, (ii) whether any additional costsmay be incurred in order to accommodate an Interconnection Application, and (iii) withrespect to an Interconnection Application, an estimate of the Customer’s costresponsibility for PSE&G’s Interconnection Facilities.Interconnection Agreement – This agreement between the Customer-generator andPSE&G, which governs the connection of the Customer-generator Facility to PSE&G’sDistribution System, as well as the ongoing operation of the Customer-generator Facilityafter it is connected to PSE&G’s system.Interconnection Facilities – PSE&G’s Interconnection Facilities and the Customer’sInterconnection Facilities. Collectively, Interconnection Facilities include all facilitiesand equipment between the Customer-generator Facility and the Point of CommonCoupling, including any modification, additions or upgrades that are necessary tophysically and electrically interconnect the Customer-generator Facility to the PSE&G’sDistribution System. Interconnection Facilities are sole use facilities and shall not includeDistribution Upgrades.35

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Interconnection Application – The Customer’s request, in accordance with the Tariff, tointerconnect a new Customer-generator Facility, or to increase the capacity of, or make amaterial modification to, the operating characteristics of an existing Customer-generatorFacility that is interconnected with PSE&G’s Distribution System.Net Metering – A system of metering electricity in which PSE&G:1. Credits a Customer-generator at the full retail rate for each kilowatt-hourproduced by a Class I renewable energy system not to exceed 2 MW in size,installed on the Customer-generator’s side of the electric revenue meter, up to thetotal amount of electricity used by that Customer during an annualized period; and2. Compensates the Customer-generator at the end of the annualized period for anyremaining credits, at a rate equal to the electric supplier’s or BGS provider'savoided cost of wholesale power.NJBPU – The New Jersey Board of Public Utilities, or any such successor agency havingsimilar jurisdiction.Operating Requirements – Any operating and technical requirements that may beapplicable due to PJM or PSE&G’s requirements, including those set forth in thisInterconnection Agreement.Party or Parties – PSE&G, Customer or any combination of the two.PJM or PJM Interconnection – the PJM Interconnection, L.L.C., or such successorregional transmission organization to which PSE&G is electrically connected andcoordinates operations with.Point of Common Coupling – Has the same meaning as assigned to this term in IEEEStandard 1547 Section 3.0 (published July 2003), as amended and supplemented, whichis incorporated herein by reference. IEEE standard 1547 can be obtained through theIEEE website at www.ieee.org. IEEE Standard 1547 Section 3.0 defined this term as"the point in the interconnection of a Customer-generator Facility with an electricdistribution system at which the harmonic limits are applied."PSE&G – The Public Service Electric and Gas Company, an electric public utility as theterm is defined in N.J.S.A. 48:2-13, that transmits or distributes electricity to end userswithin New Jersey.Tariff – The PSE&G electric Tariff and its Standard Terms and Conditions as filed withthe NJBPU, and as amended or supplemented from time to time, or any successor tariff.Transmission Owner – PSE&G, unless referring to the owner of transmission facilitiesin an Affected System.36

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Transmission System – The facilities owned, controlled or operated by PSE&G oranother Transmission Owner that are used to provide transmission service under the PJMOpen Access Transmission Tariff.37

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Attachment 2One-line Diagram Depicting the Customer-generator Facility, InterconnectionFacilities, Metering Equipment, and Upgrades38

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Attachment 3Description, Costs and Time Required to Build and Install PSE&G’sInterconnection FacilitiesPSE&G’s Interconnection Facilities shall be itemized and a best estimate itemized cost,including overheads, of the cost of its Interconnection Facilities will be provided from theFacilities Study.Also, and a best estimate for the time required to build and install PSE&G’sInterconnection Facilities will be provided from the Facilities Study.39

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Attachment 4Additional Operating Requirements for PSE&G’sDistribution System and Affected Systems Needed to Supportthe Customer’s NeedsIf required, PSE&G shall also provide requirements that must be met by the Customerprior to initiating parallel operation with PSE&G’s Distribution System, as listed below.40

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Interconnection ApplicationandTerms and ConditionsforUnits Over 10 kW up to 2,000 kWLevel 3General InformationThe following process and procedures were developed in accordance with NewJersey Administrative Code (“N.J.A.C.”) Section 14:4-9, the “Net Metering andInterconnection Standards for Class I Renewable Energy Systems.” Additional detailsmay be seen in Public Service Electric and Gas PSE&G’s (“PSE&G’s”) “Information andRequirements for Electric Service” document, which is generally known to all electricalcontractors doing business in PSE&G’s service area, and is available from any PSE&GWiring Inspection Department.To qualify for Net Metering, a Customer must meet the following conditions:a. Will generate electricity on the customer’s side of the meter using a Class 1renewable energy resource as defined in N.J.A.C. 14:4-9.2;b. Has an annual peak demand or peak load contribution, before accounting forthe effects of the Customer’s generating system, that is less than 10megawatts;c. Has a generating system sized no larger than what is allowed in N.J.A.C. 14.4-9.3(a) for the Customer’s residence or facility, as applicable;d. Has a generating system that is limited to a maximum size of 2,000 Kilowatts;ande. Meets all other requirements of N.J.A.C. 14:4-9.Please refer to PSE&G’s Tariff and the general terms and conditions for netmetering for additional information on applicable rates1.0 Application Process:a. Prior to the electrical contractor or solar installer beginning installation,Customer submits this Interconnection Application (“Application”) to PSE&Gfilled out completely.1

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005b. PSE&G evaluates the Application for completeness and notifies the Customerwithin 3 business days of receipt of the Application whether or not it iscomplete and, if not, advises the Customer of what is incomplete or missing inthe Application.c. Customer’s solar installer or electrical contractor must (i) contact PSE&G’slocal Wiring Inspection Department, (ii) complete the Application for WiringInspection, and (iii) obtain a DWMS job number prior to submitting suchApplication for Wiring Inspection.d. PSE&G shall conduct an initial review of the application and shall offer theCustomer an opportunity to meet with PSE&G staff to discuss the application.At the meeting, PSE&G shall provide pertinent information to the Customer,such as the available fault current at the proposed interconnection location, theexisting peak loading on the lines in the general vicinity of the CustomergeneratorFacility, and the configuration of the distribution lines at theproposed Point of Common Coupling.e. PSE&G shall provide an Impact Study Agreement to the Customer, attachedas Appendix 3, which shall include a good faith cost estimate of the cost foran Impact Study to be performed by PSE&G. The Impact Study is anengineering analysis of the probable impact of the Customer-generatorFacility on the safety and reliability of PSE&G's electric distribution system.The Impact Study shall be conducted in accordance with Good UtilityPractice, and shall:1. Detail the impacts to PSE&G’s electric distribution system thatwould result if the Customer-generator Facility was interconnectedwithout modifications to PSE&G’s electric distribution system;2. Identify any modifications to PSE&G’s electric distribution systemthat would be necessary to accommodate the proposedinterconnection; and3. Focus on power flows and utility protective devices, includingcontrol requirements.f. If the proposed interconnection may affect electric transmission or deliverysystems other than that controlled by PSE&G (“Affected Systems”), operatorsof these other systems may require additional studies to determine thepotential impact of the interconnection on these systems. If such additionalstudies are required, PSE&G shall coordinate the studies but shall not beresponsible for their timing. The Customer shall be responsible for the costsof any such additional studies required by an Affected System. Such studiesshall be conducted only after the Customer has provided written authorization.After the Customer has executed the Impact Study Agreement and has paid2

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005PSE&G the amount of the good faith estimate required under (e) above,PSE&G shall conduct the Impact Study and shall notify the Customer of theresults as follows:1. If the Impact Study indicates that only minor modifications toPSE&G’s electric distribution system are necessary to accommodatethe proposed interconnection, PSE&G shall send the Customer anInterconnection Agreement, attached as Appendix 6, that details thescope of the necessary modifications and an estimate of their cost; or2. If the Impact Study indicates that substantial modifications toPSE&G’s electric distribution system are necessary to accommodatethe proposed interconnection, PSE&G shall provide an estimate ofthe cost of the modifications, which, barring unknown conditions,shall be accurate to within plus or minus 25%. In addition, PSE&Gshall offer to conduct a Facilities Study at the Customer's expense,which will identify the types and costs of equipment needed to safelyinterconnect the Customer-generator Facility.g. If a Customer requests a Facilities Study under (f)(2) above, PSE&G shallprovide a Facilities Study Agreement, attached as Appendix 4. The FacilitiesStudy Agreement shall describe the work to be undertaken in the FacilitiesStudy and shall include a good faith estimate of the cost to the Customer forcompletion of the study. Upon the execution by the Customer of the FacilitiesStudy Agreement, PSE&G shall conduct a Facilities Study, which shall: (i)identify the facilities necessary to safely interconnect the Customer-generatorFacility with PSE&G's electric distribution system; (ii) the cost of thosefacilities; and, (iii) the time required to build and install those facilities, basedupon the Customer’s estimated construction schedule.h. Upon completion of the Facilities Study, PSE&G shall provide the Customerwith the results of the study and an executable Interconnection Agreement.The Agreement shall list the conditions and facilities necessary for theCustomer-generator Facility to safely interconnect with PSE&G's electricdistribution system, as determined by the Facilities Study.i. If the Customer wishes to interconnect, it shall: (i) execute the InterconnectionAgreement; (ii) provide a deposit of 50% of the cost of the PSE&G facilitiesidentified in the Facilities Study; (iii) complete installation of the CustomergeneratorFacility; and, (iv) agree to pay PSE&G the actual amount expendedto design, construct, and commission the PSE&G facilities needed tointerconnect the Customer-generator Facility, less the amount of the up-frontdeposit.j. After installation, the local electrical inspection authority having jurisdictionmust inspect the work, and submit a Certificate of Approval to the local3

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005PSE&G Wiring Inspection Department. Within 15 business days after noticefrom the Customer that the Customer-generator Facility has been installed,and receipt of the Certificate of Approval, PSE&G shall inspect the CustomergeneratorFacility and shall arrange to witness any of the Customer’scommissioning tests required under IEEE Standard 1547 (“Witness Test”).PSE&G and the Customer shall select a date by mutual agreement for PSE&Gto witness commissioning tests.k. Provided that the Customer-generator Facility passes any requiredcommissioning tests satisfactorily, PSE&G shall notify the Customer inwriting as per (m) below, within three business days after the tests, of one ofthe following:l. The interconnection is approved and the Customer-generator Facilitymay begin operation; or2. The Facilities Study identified necessary PSE&G construction thathas not been completed, the estimated date upon which theconstruction will be completed and the estimated date when theCustomer-generator Facility may begin operation.l. If the commissioning tests are not satisfactory, the Customer-generator shallrepair or replace the unsatisfactory equipment and reschedule acommissioning test pursuant to (j) above.m. Provided that the Customer-generator Facility now passes any requiredcommissioning tests satisfactorily, PSE&G then notifies the Customer inwriting that interconnection of the Customer’s facility is authorized bysending a signed copy of the Certificate of Completion to the Customer. If noWitness Test is satisfactory, PSE&G has the right to disconnect theCustomer’s facility. The Customer has no right to operate in parallel until aWitness Test has been successfully performed. PSE&G will not attend theWitness Test until receipt of another Certificate of Approval, if re-inspectionwas required by the jurisdictional inspection authority.2.0 Contact Information:Customer must provide the contact information for the legal Customer (i.e. theCustomer-generator as defined in N.J.A.C. 14:4-9). If another party is responsible forinterfacing with PSE&G, you should provide that contact information as well.3.0 Ownership Information:Please enter the legal names of the owner or owners of the Customer’s facility(i.e. the Customer-generator Facility as defined in N.J.A.C. 14:4-9), including theirpercentage ownership.4

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 20054.0 Customer-Generator Facility Certification Requirements:To qualify under this specific Application process, the Customer-Generator’s applicableequipment must be:UL1741 Listed - This standard (“Inverters, Converters, and Controllers for Use inIndependent Power Systems”) addresses the electrical interconnection design of variousforms of generating equipment. Many manufacturers choose to submit their equipmentto a Nationally Recognized Testing Laboratory (“NRTL”) that verifies compliance withUL1741. This “listing” is then marked on the equipment and supporting documentation.IEEE 1547 Compliant - This standard (“Interconnecting Distributed Resourceswith Electric Power Systems”) contains additional requirements for the design ofdistributed generation equipment, and includes requirements for installationpractices and testing. (IEEE 1547 includes, by reference, IEEE 929.)5.0 Interconnection Fees in accordance with N.J.A.C. 14:4-9.10:For a Level 3 interconnection review, PSE&G shall charge a fee of $100 plus $2per kilowatt of the Customer-Generator Facility's capacity, as well as charges for actualtime spent on any Impact and/or Facilities Studies required under N.J.A.C. 14:4-9.9.Costs for engineering work done as part of an Impact Study or Facilities Study shall notexceed $100 per hour. If PSE&G must install facilities in order to accommodate theinterconnection of the Customer-generator Facility, the cost of such facilities shall be theresponsibility of the Applicant. Level 3 projects utilize the Interconnection Agreementattached to the Interconnection Application as Appendix 6.5

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Appendix 2Interconnection ApplicationforCustomer-generator FacilitiesGreater than 10 kVA up to 2,000 kVACustomer:Name: _____________________________ Phone: (___)__________Address:_____________________________ Municipality: ________________Consulting Engineer or Contractor:Name: _____________________________ Phone: (___)__________Address:_____________________________Estimated In-Service Date: ________________________________Existing Electric Service:Capacity: __________Amps Voltage: __________VoltsService Character: Single Phase Three Phase Secondary3 Phase Transformer Connection Wye DeltaLocation of Protective Interface Equipment on Property:(include address if different from customer address)IEEE 1547 Listed? Yes No (If yes, attach manufacturer’s cutsheet showing IEEE 1547 listing)UL 1741 Listed? Yes No (If yes, attach manufacturer’s cutsheet showing UL 1741 listing)6

Energy Producing Equipment/Inverter Information:Manufacturer: ____________________________________________Model No. ________________ Version No. ____________________Synchronous Induction Inverter Other _________Rating: __________ kW Rating: __________ kVARated Output: VA Rated Voltage: VoltsRate Frequency: Hertz Rated Speed: RPMEfficiency: % Power Factor: ________ %Rated Current: Amps Locked Rotor Current: AmpsSynchronous Speed: RPM Winding Connection:Min. Operating Freq./Time:Generator Connection: Delta Wye Wye GroundedSystem Type Tested (Total System): Yes No; attach productliteratureOne Line Diagram attached: Yes NoInstallation Test Plan attached: Yes NoFor Synchronous Machines:Submit copies of the Saturation Curve and the Vee CurveSalient Non-SalientTorque: _____lb-ft Rated RPM: _______ Field Amperes: ________ at ratedgenerator voltage and current and ________% PF over-excitedType of Exciter: ________________________________________________Output Power of Exciter: _________________________________________Type of Voltage Regulator: _______________________________________Direct-axis Synchronous Reactance (Xd) _______ohmsDirect-axis Transient Reactance (X'd) _______ohmsDirect-axis Sub-transient Reactance (X"d) _______ohmsFor Induction Machines:Rotor Resistance (Rr)_____ohms Exciting Current ____AmpsRotor Reactance (Xr)_____ohms Reactive Power Required:Magnetizing Reactance (Xm)_____ohms ___VARs (No Load)Stator Resistance (Rs)_____ohms ___VARs (Full Load)Stator Reactance (Xs)_____ohmsShort Circuit Reactance (X"d)_____ohmsPhases: Single Three-PhaseFrame Size: ____________ Design Letter: ____ Temp. Rise: ____________ O C.

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005For Inverters:Manufacturer:_______________________ Model: ____________________Type: Forced Commutated Line CommutatedRated Output _________ Amps ________ VoltsEfficiency ________%Customer Signature:_____________________________ __________________________ _________CUSTOMER TITLE DATE8

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Appendix 3Impact Study AgreementThis Impact Study Agreement (“Agreement”) is made and entered into this ___day of ______ by and between __________________, a _____________ organized andexisting under the laws of the State of _____________, (‘‘Customer,’’) and PublicService Electric and Gas PSE&G, a company existing under the laws of the State of NewJersey, (‘‘PSE&G’’). Customer and PSE&G each may be referred to as a ‘‘Party,’’ orcollectively as the ‘‘Parties.’’Recitals:Whereas, Customer is proposing to develop a Customer-generator Facility orgenerating capacity addition to an existing Customer-generator Facility consistent withthe Interconnection Application completed by Customer on ________________; andWhereas, Customer desires to interconnect the Customer-generator Facility withPSE&G’s Distribution System;Whereas, PSE&G has completed an initial review and provided the results ofsaid study to Customer; andWhereas, Customer has requested PSE&G to perform an Impact Study to assessthe impact of interconnecting the Customer-generator Facility to PSE&G’s DistributionSystem;Now, therefore, in consideration of and subject to the mutual covenantscontained herein the Parties agreed as follows:1.0 When used in this Agreement, with initial capitalization, the terms specified shallhave the meanings indicated. Terms used in this Agreement with initialcapitalization but not defined in this Agreement shall have the meanings specifiedin Attachment 1 of the Customer-generator Interconnection Agreement.2.0 Customer elects and PSE&G shall cause to be performed an InterconnectionSystem Impact Study consistent with Section (e) of the InterconnectionApplication.3.0 The scope of this Impact Study shall be subject to the assumptions set forth inAttachment A to this Agreement.4.0 The Impact Study will be based upon the results of the initial review and thetechnical information provided by Customer in the Interconnection Application.PSE&G reserves the right to request additional technical information fromCustomer as may become reasonably necessary consistent with Good UtilityPractice during the course of the Impact Study. If Customer modifies its9

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005designated Point of Common Coupling, Interconnection Application, or thetechnical information provided therein is modified, the time to complete theImpact Study may be extended.5.0 The Impact Study report shall provide the following information:a) Identification of any required minor modifications necessary to allow forthe interconnection of the Customer-generator Facility; andb) Description and non-binding, good faith estimated cost of facilitiesrequired to interconnect the Customer-generator Facility to PSE&G’sDistribution System and to address the identified minor modificationsrequired.c) An Impact Study shall include the following elements, as applicable:1. Load flow study;2. Short-circuit study;3. Circuit protection and coordination study;4. Impact on the operation of PSE&G’s electric distribution system;5. Stability study (and the conditions that would justify including thiselement in the Impact Study);6. Voltage collapse study (and the conditions that would justifyincluding this element in the Impact Study); and7. Additional elements, if approved in writing by Board staff prior tothe Impact Study.6.0 PSE&G requires an up-front deposit of the good faith estimated study costs.7.0 The Impact Study shall be completed based on a mutually agreed upon schedule,unless the schedule is extended due to additional information being required fromthe Customer during the course of the study.8.0 Study fees shall be based on actual costs and will be invoiced to Customer withinninety (90) days from when the study is transmitted to Customer.9.0 Customer shall pay any actual study costs that exceed the deposit without interestwithin thirty (30) calendar days of receipt of the invoice. PSE&G shall refund anyexcess amount without interest within thirty (30) calendar days of the invoice.In witness whereof, the Parties have caused this Agreement to be duly executedby their duly authorized officers or agents on the day and year first above written.PSE&G Signature: Title: Date:Customer Signature: Title: Date:10

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Attachment A to Impact Study AgreementAssumptions Used in Conducting the Impact StudyThe Impact Study shall be based upon the results of PSE&G’s initial review, subject toany modifications, and the following assumptions:(1) Designation of Point of Common Coupling and configuration to be studied.(2) Designation of alternative Points of Common Coupling and configuration.Items (1) and (2) are to be completed by Customer. Other assumptions (listed below) areto be provided by Customer and PSE&G.11

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Appendix 4Facilities Study AgreementThis Facilities Study Agreement (“Agreement”) is made and entered into this ___day of ______ by and between __________________, a _____________ organized andexisting under the laws of the State of _____________, (‘‘Customer,’’) and PublicService Electric and Gas Company, a company existing under the laws of the State ofNew Jersey, (‘‘PSE&G’’). Customer and PSE&G each may be referred to as a ‘‘Party,’’or collectively as the ‘‘Parties.’’Recitals:Whereas, Customer is proposing to develop a Customer-generator Facility orgenerating capacity addition to an existing Customer-generator Facility consistent withthe Interconnection Application completed by Customer on _______________; andWhereas, Customer desires to interconnect the Customer-generator Facility withPSE&G’s Distribution System;Whereas, PSE&G has completed an Impact Study and provided the results ofsaid study to Customer; andWhereas, Customer has requested PSE&G to perform a Facilities Study tospecify and estimate the cost of the equipment, engineering, procurement andconstruction work needed to implement the conclusions of the Impact Study, inaccordance with Good Utility Practice, in order to physically and electrically connect theCustomer-generator Facility to PSE&G’s Distribution System.Now, therefore, in consideration of and subject to the mutual covenantscontained herein the Parties agreed as follows:1.0 When used in this Agreement, with initial capitalization, the terms specified shallhave the meanings indicated. Terms used in this Agreement with initialcapitalization but not defined in this Agreement shall have the meanings specifiedin Attachment 1 of the Customer-generator Interconnection Agreement.2.0 Customer elects and PSE&G shall cause an Interconnection Facilities Studyconsistent with Section (g) of the Interconnection Application.3.0 The scope of the Facilities Study shall be subject to data provided in AttachmentA to this Agreement.4.0 The Facilities Study report shall: (i) provide a description of the PSE&G facilitiesrequired; (ii) the estimated cost of such facilities (consistent with Attachment A);(iii) a schedule for installation of PSE&G’s required facilities to interconnect the12

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Customer-generator Facility to PSE&G’s Distribution System; and (iv) shalladdress the short circuit, instability, and power flow issues identified in theImpact Study.5.0 PSE&G requires an up-front deposit of the good faith estimated study costs.6.0 In cases where no additional information is required from the Customer, theFacilities Study shall be completed and the results shall be transmitted toCustomer on a mutually agreed upon schedule7.0 Study fees shall be based on actual costs and will be invoiced to Customer afterthe study is transmitted to Customer.8.0 Customer shall pay any actual study costs that exceed the deposit without interestwithin thirty (30) Calendar Days from receipt of the invoice. PSE&G shall refundany excess amount without interest within thirty (30) Calendar Days of theinvoice.In witness whereof, the Parties have caused this Agreement to be duly executedby their duly authorized officers or agents on the day and year first above written.PSE&G Signature: Title: Date:Customer Signature: Title: Date:13

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Attachment A to Facilities Study AgreementData To Be Provided by Customer With the Facilities Study Agreement1) Provide location plan and simplified one-line diagram of the Customer-generatorFacility and Interconnection Facilities. For staged projects, please indicate futuregeneration, etc.2) On the one-line diagram, indicate the generation capacity attached at eachmetering location. (Maximum load on CT/PT)3) On the one-line diagram, indicate the location of auxiliary power. (Minimum loadon CT/PT) Amps4) One set of metering is required for each generation connection to a new ring busor existing PSE&G station. Number of generation connections: ________5) Will an alternate source of auxiliary power be available during CT/PTmaintenance? Yes No6) Will a transfer bus on the generation side of the metering require that each meterset be designed for the total plant generation? Yes No (Please indicate onthe one-line diagram).7) What type of control system or PLC will be located at the Customer-generatorFacility?_______________________________________________________________8) What protocol does the control system or PLC use? ____________________9) Please provide a 7.5-minute quadrangle map of the site. Indicate the CustomergeneratorFacility and Interconnection Facilities, and property lines.10) Physical dimensions of the proposed Customer-generator Facility andInterconnection Facilities substation: ________________11) Bus length from generation to interconnection station: ____________________12) Interconnection Facilities line length from Customer-generator Facility toPSE&G’s Distribution System. ______________________13) Nearest distribution pole tag number observed in the field.: ________________14) Number of third party easements required for Distribution lines*:__________________* To be completed in coordination with PSE&G.14

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 200515) Is the Customer-generator Facility located solely in PSE&G’s service area?Yes No If No, please provide name of other provider:__________________16) Please provide the following proposed schedule dates:Begin Construction Date: ________________Generator step-up transformers receive back feed power Date: _______________Generation Testing Date: _________________Commercial Operation Date: ___________________15

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Appendix 5Certificate of CompletionInstallation Information:Check if owner-installedCustomer-generator: _________________________Contact Person:Mailing Address:Location of Facility (if different from above):______________________________________________________City: State: Zip Code:Telephone (Daytime):Facsimile Number:Electrical Contractor:Name:Mailing Address:(Evening):E-Mail Address:City: State: Zip Code:Telephone (Daytime):Facsimile Number:(Evening):E-Mail Address:License number: ____________________________________Date Interconnection Application was approved by the PSE&G:_______________________Application ID number: ______________________________Electrical Inspection:The system has been installed and inspected in compliance with the localBuilding/Electrical Code of(appropriate governmental authority)Signed (Local Electrical Wiring Inspector, or attach signed electrical inspection):___________________________Name (printed):Date: ___________16

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Person/Entity Installing the Customer-generator Facility:Name:___________________________PSE&G:___________________________________Mailing Address:City: State: Zip Code:Telephone (Daytime):Facsimile Number:(Evening):E-Mail Address:As a condition of interconnection you are required to send/fax a copy of this form alongwith a copy of the signed electrical permit to (insert the PSE&G associate’s name below):Name: _____________________PSE&GMail 1:_____________________Mail 2:_____________________City, State ZIP: ______________Fax No.:_____Final Approval of Interconnection ApplicationThe Certificate of Completion has been received and final approval to interconnect theCustomer-generator Facility is granted.PSE&G Signature: Title: Date:17

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Appendix 6CUSTOMER-GENERATORINTERCONNECTION AGREEMENT(For Customer-Generator Facilities No Larger Than 2 MW)18

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005STANDARD CUSTOMER-GENERATOR INTERCONNECTION AGREEMENTFOR INTERCONECTION OF NEW CUSTOMER-GENERATOR FACILITIESWITH A CAPACITY OF 2 MVA OR LESSThis Agreement is made and entered into this ___ day of ______ by and between__________________, a _____________ organized and existing under the laws of theState of _____________, (‘‘Customer,’’) and Public Service Electric and Gas, a companyexisting under the laws of the State of New Jersey, (‘‘PSE&G’’). Customer and PSE&Geach may be referred to as a ‘‘Party,’’ or collectively as the ‘‘Parties.’’Recitals:Whereas, Customer is proposing to develop a Customer-generator Facility, orgenerating capacity addition to an existing Customer-generator Facility, consistentwith the Interconnection Application completed by Customer on________________; andWhereas, Customer desires to interconnect the Customer-generator with PSE&G’sDistribution System;Whereas, PSE&G has completed an initial review and provided the results of saidreview to Customer;Whereas, Customer requested PSE&G to perform an Impact Study to assess theimpact of interconnecting the Generating Facility to PSE&G’s Distribution System;Now, therefore, in consideration of and subject to the mutual covenants containedherein, the Parties agreed as follows:Article 1.Scope and Limitations of Agreement1.1 This Agreement shall be used for all Interconnection Applicationssubmitted under the terms of the New Jersey Administrative Code(“N.J.A.C.”) Section 14:4-9, the “Net Metering andInterconnection Standards for Class I Renewable Energy Systems,”except for those submitted under the Level I application processoutlined in such regulations for 10 kW and under inverter-basedprojects.1.2 This Agreement governs the terms and conditions under which theCustomer-generator Facility will interconnect to, and operate inparallel with, PSE&G’s Distribution System.1.3 This Agreement does not constitute an agreement to purchase ordeliver the Customer’s power.19

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 20051.4 Nothing in this Agreement is intended to affect any otheragreement between PSE&G and the Customer.1.5 Responsibilities of the Parties1.5.1 The Parties shall perform all obligations of this Agreementin accordance with all Applicable Laws and Regulations,Operating Requirements, and Good Utility Practice.1.5.2 The Customer shall construct, interconnect, operate andmaintain its Customer-generator Facility, and construct,operate, and maintain its Interconnection Facilities inaccordance with the applicable manufacturer’srecommended maintenance schedule, in accordance withthis Agreement, and with Good Utility Practice.1.5.3 PSE&G shall construct, own, operate, and maintain itsDistribution System and Interconnection Facilities inaccordance with this Agreement, and with Good UtilityPractice.1.5.4 The Customer agrees to construct its facilities or systems inaccordance with applicable specifications that meet orexceed those provided by the National Electrical Code,National Electrical Safety Code, the American NationalStandards Institute, IEEE, Underwriters Laboratories, anyOperating Requirements in effect at the time ofconstruction, and other applicable national and State codesand standards. The Customer agrees to design, install,maintain, and operate its Customer-generator Facility so asto reasonably minimize the likelihood of a disturbanceadversely affecting or impairing the system or equipment ofPSE&G or Affected Systems.1.5.5 Each Party shall operate, maintain, repair, and inspect, andshall be fully responsible for the facilities that it now orsubsequently may own unless otherwise specified in theAttachments to this Agreement. Each Party shall beresponsible for the safe installation, maintenance, repairand condition of their respective lines and appurtenances ontheir respective sides of the point of change of ownership.PSE&G and the Customer, as appropriate, shall provideInterconnection Facilities that adequately protect PSE&G’sDistribution System, personnel, and other persons fromdamage and injury. The allocation of responsibility for thedesign, installation, operation, maintenance and ownership20

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005of Interconnection Facilities shall be delineated in theAttachments to this Agreement.1.5.6 PSE&G shall coordinate with any Affected Systems tosupport the interconnection as contemplated under theterms of the New Jersey Administrative Code (“N.J.A.C.”)Section 14:4-9(d).1.6 Parallel Operation ObligationsOnce the Customer-generator Facility has been authorized to commenceparallel operation, the Customer shall abide by all pertinent rules andprocedures pertaining to the parallel operation of the Customer-generatorFacility, including, but not limited to; 1) the rules and proceduresconcerning the operation of generation set forth in the Tariff or byPSE&G’s Distribution System operations personnel; and, 2) anyOperating Requirements set forth in Attachment 3 of this Agreement.1.7 MeteringThe Customer shall be responsible for the cost for the purchase,installation, operation, maintenance, testing, repair, and replacement ofmetering and data acquisition equipment specified in Attachments 2 and 3of this Agreement.1.8 Reactive PowerThe Customer shall design its Customer-generator Facility to maintain acomposite power delivery at continuous rated power output at the Point ofCommon Coupling at a power factor within the range of 0.95 leading to0.95 lagging, unless PSE&G has established different requirements thatapply to all similarly situated generators in the control area on acomparable basis. The requirements of this paragraph shall not apply towind generators.1.9 Capitalized TermsCapitalized terms used herein shall have the meanings specified in theGlossary of Terms in Attachment 1 or the body of this Agreement.Article 2.Inspection, Testing, Authorization, and Right of Access2.1 Equipment Testing and InspectionThe Customer shall test and inspect its Customer-generator Facility andInterconnection Facilities prior to interconnection, and in accordance with21

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005the requirements of IEEE 1547.1. The Customer shall notify PSE&G ofsuch activities no fewer than fifteen (15) days (or as may be agreed to bythe Parties) prior to such testing and inspection. Testing and inspectionshall occur on a Business Day. The PSE&G may, at its own expense, sendqualified personnel to the Customer-generator Facility site to inspect theinterconnection and observe the testing. The Customer shall providePSE&G a written test report when such testing and inspection iscompleted.2.2 Authorization Required Prior to Parallel OperationThe Customer shall not operate its Customer-generator Facility in parallelwith PSE&G’s Distribution System without prior written authorization ofPSE&G. PSE&G will provide such authorization once PSE&G receivesnotification that the Customer has complied with all applicable paralleloperation requirements. Such authorization shall not be unreasonablywithheld, conditioned, or delayed.2.3 Right of Access2.3.1 Upon reasonable notice, PSE&G may send a qualified person tothe premises of the Customer to inspect the interconnection, andobserve the commissioning of the Customer-generator Facility(including any required testing), startup, and operation for a periodof up to three Business Days after initial start-up of the unit. Inaddition, the Customer shall notify PSE&G at least fifteen (15)days prior to conducting any on-site verification testing of theCustomer-generator Facility.2.3.2 Following the initial inspection process described above, atreasonable hours, and upon reasonable notice, or at any timewithout notice in the event of an emergency or hazardouscondition, PSE&G shall have access to the Customer’s premisesfor any reasonable purpose in connection with the performance ofthe obligations imposed on it by this Agreement or if necessary tomeet its legal obligation to provide service to other customers.Article 3.Effective Date, Term, Termination, and Disconnection3.1 Effective DateThis Agreement shall become effective upon execution by the Parties.3.2 Term of Agreement22

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005This Agreement shall become effective on the Effective Date and shallremain in effect for a period of ten years from the Effective Date or suchother longer period as the Customer may request and shall beautomatically renewed for each successive one-year period thereafter,unless terminated earlier in accordance with Article 3.3 of this Agreement.3.3 TerminationNo termination shall become effective until the Parties have complied withall Applicable Laws and Regulations applicable to such termination,including the filing with the NJBPU of a notice of termination of thisAgreement (if required.3.3.1 The Customer may terminate this Agreement at any time by givingPSE&G 20 Business Days written notice.3.3.2 Either Party may terminate this Agreement after Default pursuantto Article 6.6.3.3.3 Upon termination of this Agreement, the Customer-generatorFacility will be disconnected from PSE&G’s Distribution System.The termination of this Agreement shall not relieve either Party ofits liabilities and obligations, owed or continuing at the time of thetermination.3.3.4 This provisions of this Article shall survive termination orexpiration of this Agreement.3.4 Temporary DisconnectionTemporary disconnection shall continue only for so long as reasonablynecessary under Good Utility Practice.3.4.1 Emergency Conditions—“Emergency Condition” shall mean acondition or situation: (1) that in the judgment of the Party makingthe claim is imminently likely to endanger life or property; or (2)that, in the case of PSE&G, is imminently likely (as determined ina non-discriminatory manner) to cause a material adverse effect onthe security of, or damage to the Distribution System, PSE&G’sInterconnection Facilities or any Affected Systems; or (3) that, inthe case of the Customer, is imminently likely (as determined in anon-discriminatory manner) to cause a material adverse effect onthe security of, or damage to, the Customer-generator Facility orthe Customer’s Interconnection Facilities. Under EmergencyConditions, PSE&G may immediately suspend interconnection23

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005service and temporarily disconnect the Customer-generatorFacility. PSE&G shall notify the Customer promptly when itbecomes aware of an Emergency Condition that may reasonably beexpected to affect the Customer’s operation of the CustomergeneratorFacility. The Customer shall notify PSE&G promptlywhen it becomes aware of an Emergency Condition that mayreasonably be expected to affect PSE&G’s Distribution System orother Affected Systems. To the extent information is known, thenotification shall describe the Emergency Condition, the extent ofthe damage or deficiency, the expected effect on the operation ofboth Parties’ facilities and operations, its anticipated duration, andthe necessary corrective action.3.4.2 Routine Maintenance, Construction, and Repair - PSE&G mayinterrupt interconnection service or curtail the output of theCustomer-generator Facility and temporarily disconnect theCustomer-generator Facility from PSE&G’s Distribution Systemwhen necessary for routine maintenance, construction, and repairson PSE&G’s Distribution System. PSE&G shall provide theCustomer with five Business Days notice prior to suchinterruption. PSE&G shall use reasonable efforts to coordinatesuch reduction or temporary disconnection with the Customer.3.4.3 Forced Outages - During any forced outage, PSE&G may suspendinterconnection service to effect immediate repairs on PSE&G’sDistribution System. PSE&G shall use reasonable efforts toprovide the Customer with prior notice. If prior notice is not given,PSE&G shall, upon request, provide the Customer writtendocumentation after the fact explaining the circumstances of thedisconnection.3.4.4 Adverse Operating Effects - PSE&G shall notify the Customer assoon as practicable if, based on Good Utility Practice, operation ofthe Customer-generator Facility may cause disruption ordeterioration of service to other customers served from the sameelectric system, or if operating the Customer-generator Facilitycould cause damage to PSE&G’s Distribution System or AffectedSystems. Supporting documentation used to reach the decision todisconnect shall be provided to the Customer upon request. If, afternotice, the Customer fails to remedy the adverse operating effectwithin a reasonable time, PSE&G may disconnect the CustomergeneratorFacility. PSE&G shall provide the Customer with fiveBusiness Day notice of such disconnection, unless the provisionsof Article 3.4.1 apply.24

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 20053.4.5 Modification of the Customer-generator Facility - The Customermust receive written authorization from PSE&G before makingany change to the Customer-generator Facility that may have amaterial impact on the safety or reliability of the DistributionSystem. Such authorization shall not be unreasonably withheld.Modifications shall be done in accordance with Good UtilityPractice. If the Customer makes such modification withoutPSE&G’s prior written authorization, the latter shall have the rightto temporarily disconnect the Customer-generator Facility.3.4.6 Reconnection - The Parties shall cooperate with each other torestore the Customer-generator Facility, Interconnection Facilities,and PSE&G’s Distribution System to their normal operating stateas soon as reasonably practicable following a temporarydisconnection.Article 4.Cost Responsibility for Interconnection Facilities and DistributionUpgrades4.1 Interconnection Facilities4.1.1 The Customer shall pay for the cost of the InterconnectionFacilities itemized in Attachment 2 of this Agreement. If aFacilities Study was performed, PSE&G shall identify itsInterconnection Facilities necessary to safely interconnect theCustomer-generator Facility with PSE&G’s Distribution System,the cost of those facilities, and the time required to build and installthose facilities.4.1.2 The Customer shall be responsible for its share of all reasonableexpenses, including overheads, associated with (1) owning,operating, maintaining, repairing, and replacing its ownInterconnection Facilities, and (2) operating, maintaining,repairing, and replacing PSE&G’s Interconnection Facilities.4.2 Distribution UpgradesPSE&G shall design, procure, construct, install, and own any DistributionUpgrades. The actual cost of the Distribution Upgrades, includingoverheads, shall be directly assigned to the Customer.Article 5.Billing, Payment, Milestones, and Financial Security25

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 20055.1 Billing and Payment Procedures and Final Accounting5.1.1 PSE&G shall bill the Customer for the design, engineering,construction, and procurement costs of Interconnection Facilitiesand Upgrades contemplated by this Agreement on a monthly basis,or as otherwise agreed by the Parties. The Customer shall pay eachbill within 30 calendar days of receipt, or as otherwise agreed to bythe Parties.5.1.2 Within ninety (90) calendar days of completing the constructionand installation of PSE&G’s Interconnection Facilities andDistribution Upgrades described in the Attachments to thisAgreement, PSE&G shall provide the Customer with a finalaccounting report of any difference between (1) the Customer’scost responsibility for the actual cost of such facilities andDistribution Upgrades, and (2) the Customer’s previous depositand aggregate payments to PSE&G for such InterconnectionFacilities and Distribution Upgrades. If the Customer’s costresponsibility exceeds its previous deposit and aggregatepayments, PSE&G shall invoice the Customer for the amount dueand the Customer shall make payment to PSE&G within thirty (30)calendar days. If the Customer’s previous deposit and aggregatepayments exceed its cost responsibility under this Agreement,PSE&G shall refund to the Customer an amount equal to thedifference within thirty (30) calendar days of the final accountingreport.5.2 Customer DepositAt least twenty (20) Business Days prior to the commencement of thedesign, procurement, installation, or construction of a discrete portion ofPSE&G’s Interconnection Facilities and Distribution Upgrades, theCustomer shall provide PSE&G with a deposit equal to 50% of the costestimated for its Interconnection Facilities prior to its beginning design ofsuch facilities.Article 6.Assignment, Liability, Indemnity, Force Majeure, ConsequentialDamages, and Default6.1 AssignmentThis Agreement may be assigned by either Party upon fifteen (15)Business Days prior written notice, and with the opportunity to object bythe other Party; provided that:26

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 20056.1.1 Either Party may assign this Agreement without the consent of theother Party to any affiliate of the assigning Party with an equal orgreater credit rating and with the legal authority and operationalability to satisfy the obligations of the assigning Party under thisAgreement;6.1.2 The Customer shall have the right to assign this Agreement,without the consent of PSE&G, for collateral security purposes toaid in providing financing for the Customer-generator Facility,provided that the Customer will promptly notify PSE&G of anysuch assignment.6.1.3 Any attempted assignment that violates this Article is void andineffective. Assignment shall not relieve a Party of its obligations,nor shall a Party’s obligations be enlarged, in whole or in part, byreason thereof. An assignee is responsible for meeting the sameobligations as the Customer. Where required, consent toassignment will not be unreasonably withheld, conditioned ordelayed.6.2 Limitation of LiabilityEach Party’s liability to the other Party for any loss, cost, claim, injury,liability, or expense, including reasonable attorney’s fees, relating to orarising from any act or omission in its performance of this Agreement,shall be limited to the amount of direct damage actually incurred. In noevent shall either Party be liable to the other Party for any indirect, special,consequential, or punitive damages, except as authorized by thisAgreement.6.3 Indemnity6.3.1 This provision protects each Party from liability incurred to thirdparties as a result of carrying out the provisions of this Agreement.Liability under this provision is exempt from the generallimitations on liability found in Article 6.2.6.3.2 The Parties shall at all times indemnify, defend, and hold the otherParty harmless from, any and all damages, losses, claims,including claims and actions relating to injury to or death of anyperson or damage to property, demand, suits, recoveries, costs andexpenses, court costs, attorney fees, and all other obligations by orto third parties, arising out of or resulting from the other Party’saction or failure to meet its obligations under this Agreement onbehalf of the indemnifying Party, except in cases of grossnegligence or intentional wrongdoing by the indemnified Party.27

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 20056.3.3 If an indemnified person is entitled to indemnification under thisArticle as a result of a claim by a third party, and the indemnifyingParty fails, after notice and reasonable opportunity to proceedunder this Article, to assume the defense of such claim, suchindemnified person may at the expense of the indemnifying Partycontest, settle or consent to the entry of any judgment with respectto, or pay in full, such claim.6.3.4 If an indemnifying party is obligated to indemnify and hold anyindemnified person harmless under this Article, the amount owingto the indemnified person shall be the amount of such indemnifiedperson’s actual loss, net of any insurance or other recovery.6.3.5 Promptly after receipt by an indemnified person of any claim ornotice of the commencement of any action or administrative orlegal proceeding or investigation as to which the indemnityprovided for in this Article may apply, the indemnified personshall notify the indemnifying party of such fact. Any failure of ordelay in such notification shall not affect a Party’s indemnificationobligation unless such failure or delay is materially prejudicial tothe indemnifying party.6.4 Consequential DamagesOther than as expressly provided for in this Agreement, neither Party shallbe liable under any provision of this Agreement for any losses, damages,costs or expenses for any special, indirect, incidental, consequential, orpunitive damages, including but not limited to loss of profit or revenue,loss of the use of equipment, cost of capital, cost of temporary equipmentor services, whether based in whole or in part in contract, in tort, includingnegligence, strict liability, or any other theory of liability; provided,however, that damages for which a Party may be liable to the other Partyunder another agreement will not be considered to be special, indirect,incidental, or consequential damages hereunder.6.5 Force Majeure6.5.1 As used in this Article, a Force Majeure Event shall mean “any actof God, labor disturbance, act of the public enemy, war,insurrection, riot, fire, storm or flood, explosion, breakage oraccident to machinery or equipment, any order, regulation orrestriction imposed by governmental, military or lawfullyestablished civilian authorities, or any other cause beyond a Party’scontrol. A Force Majeure Event does not include an act ofnegligence or intentional wrongdoing.”28

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 20056.5.2 If a Force Majeure Event prevents a Party from fulfilling anyobligations under this Agreement, the Party affected by the ForceMajeure Event (Affected Party) shall promptly notify the otherParty of the existence of the Force Majeure Event. The notificationmust specify in reasonable detail the circumstances of the ForceMajeure Event, its expected duration, and the steps that theAffected Party is taking to mitigate the effects of the event on itsperformance, and if the initial notification was verbal, it should bepromptly followed up with a written notification. The AffectedParty shall keep the other Party informed on a continuing basis ofdevelopments relating to the Force Majeure Event until the eventends. The Affected Party will be entitled to suspend or modify itsperformance of obligations under this Agreement (other than theobligation to make payments) only to the extent that the effect ofthe Force Majeure Event cannot be reasonably mitigated. TheAffected Party will use reasonable efforts to resume itsperformance as soon as possible.6.6 Default6.6.1 No Default shall exist where such failure to discharge an obligation(other than the payment of money) is the result of a Force MajeureEvent as defined in this Agreement, or the result of an act oromission of the other Party. Upon a Default, the non-defaultingParty shall give written notice of such Default to the defaultingParty. Except as provided in Article 6.6.2, the defaulting Partyshall have 60 calendar days from receipt of the Default noticewithin which to cure such Default; provided however, if suchDefault is not capable of cure within 60 calendar days, thedefaulting Party shall commence such cure within 20 calendar daysafter notice and continuously and diligently complete such curewithin six months from receipt of the Default notice; and, if curedwithin such time, the Default specified in such notice shall cease toexist.6.6.2 If a Default is not cured as provided for in this Article, or if aDefault is not capable of being cured within the period providedfor herein, the non-defaulting Party shall have the right toterminate this Agreement by written notice at any time until cureoccurs, and be relieved of any further obligation hereunder and,whether or not that Party terminates this Agreement, to recoverfrom the defaulting Party all amounts due hereunder, plus all otherdamages and remedies to which it is entitled at law or in equity.The provisions of this Article will survive termination of thisAgreement.29

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Article 7.InsuranceGeneral Liability Insurance coverage is not required under New Jersey’sNet Metering regulations. However, the Customer still has responsibilityand/or liability for any damage(s) or injury(ies) caused by the CustomergeneratorFacility and/or the Customer’s Interconnection Facilities..Article 8.Miscellaneous8.1 Governing Law, Regulatory Authority, and RulesThe validity, interpretation and enforcement of this Agreement and eachof its provisions shall be governed by the laws of the State of New Jersey,without regard to its conflicts of law principles. This Agreement is subjectto all Applicable Laws and Regulations. Each Party expressly reserves theright to seek changes in, appeal, or otherwise contest any laws, orders, orregulations of a Governmental Authority.8.2 AmendmentThe Parties may amend this Agreement by a written instrument dulyexecuted by both Parties.8.3 No Third-Party BeneficiariesThis Agreement is not intended to and does not create rights, remedies, orbenefits of any character whatsoever in favor of any persons, corporations,associations, or entities other than the Parties, and the obligations hereinassumed are solely for the use and benefit of the Parties, their successorsin interest and where permitted, their assigns.8.4 Waiver8.4.1 The failure of a Party to this Agreement to insist, on any occasion,upon strict performance of any provision of this Agreement will not beconsidered a waiver of any obligation, right, or duty of, or imposed upon,such Party.8.4.2 Any waiver at any time by either Party of its rights with respect tothis Agreement shall not be deemed a continuing waiver or a waiverwith respect to any other failure to comply with any other obligation,right, duty of this Agreement. Termination or default of this Agreementfor any reason by Customer shall not constitute a waiver of theCustomer’s legal rights to obtain an interconnection from PSE&G. Anywaiver of this Agreement shall, if requested, be provided in writing.30

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 20058.5 Entire AgreementThis Agreement, including all Attachments, constitutes the entireAgreement between the Parties with reference to the subject matter hereof,and supersedes all prior and contemporaneous understandings oragreements, oral or written, between the Parties with respect to the subjectmatter of this Agreement. There are no other agreements, representations,warranties, or covenants which constitute any part of the consideration for,or any condition to, either Party’s compliance with its obligations underthis Agreement.8.6 Multiple CounterpartsThis Agreement may be executed in two or more counterparts, each ofwhich is deemed an original but all constitute one and the sameinstrument.8.7 No PartnershipThis Agreement shall not be interpreted or construed to create anassociation, joint venture, agency relationship, or partnership between theParties or to impose any partnership obligation or partnership liabilityupon either Party. Neither Party shall have any right, power or authority toenter into any agreement or undertaking for, or act on behalf of, or to actas or be an agent or representative of, or to otherwise bind, the other Party.8.8 SeverabilityIf any provision or portion of this Agreement shall for any reason be heldor adjudged to be invalid or illegal or unenforceable by any court ofcompetent jurisdiction or other Governmental Authority, (1) such portionor provision shall be deemed separate and independent, (2) the Partiesshall negotiate in good faith to restore insofar as practicable the benefits toeach Party that were affected by such ruling, and (3) the remainder of thisAgreement shall remain in full force and effect.8.9 Environmental ReleasesEach Party shall notify the other Party, first orally and then in writing, ofthe release any hazardous substances, any asbestos or lead abatementactivities, or any type of remediation activities related to the CustomergeneratorFacility or the Interconnection Facilities, each of which mayreasonably be expected to affect the other Party. The notifying Party shall(1) provide the notice as soon as practicable, provided such Party makes agood faith effort to provide the notice no later than 24 hours after suchParty becomes aware of the occurrence, and (2) promptly furnish to the31

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005other Party copies of any publicly available reports filed with anygovernmental authorities addressing such events.8.10 SubcontractorsNothing in this Agreement shall prevent a Party from utilizing the servicesof any subcontractor as it deems appropriate to perform its obligationsunder this Agreement; provided, however, that each Party shall require itssubcontractors to comply with all applicable terms and conditions of thisAgreement in providing such services and each Party shall remainprimarily liable to the other Party for the performance of suchsubcontractor.8.10.1 The creation of any subcontract relationship shall not relieve thehiring Party of any of its obligations under this Agreement. Thehiring Party shall be fully responsible to the other Party for the actsor omissions of any subcontractor the hiring Party hires as if nosubcontract had been made; provided, however, that in no eventshall PSE&G be liable for the actions or inactions of the Customeror its subcontractors with respect to obligations of the Customerunder this Agreement. Any applicable obligation imposed by thisAgreement upon the hiring Party shall be equally binding upon,and shall be construed as having application to, any subcontractorof such Party.8.10.2 The obligations under this Article will not be limited in any way byany limitation of subcontractor’s insurance.Article 9.Notices9.1 GeneralUnless otherwise provided in this Agreement, any written notice, demand,or request required or authorized in connection with this Agreement(“Notice”) shall be deemed properly given if delivered in person,delivered by recognized national currier service, or sent by first class mail,postage prepaid, to the person specified below:If to Customer:Customer: ____________________________________________Attention: _________________________________Address: __________________________________________________________32

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005City: _______________________________ State:______________ Zip:_______Phone: ________________ Fax: _________________If to PSE&G:Attention: _________________________________Address: __________________________________________________________City: _______________________________ State:______________ Zip:_______Phone: ________________ Fax: _________________33

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 20059.2 Billing and PaymentBillings and payments shall be sent to the addresses set out below:Customer: ____________________________________________Attention: _________________________________Address: __________________________________________________________City: _______________________________ State:______________ Zip:_______9.3 Designated Operating RepresentativeThe Parties may also designate operating representatives to conduct thecommunications which may be necessary or convenient for theadministration of this Agreement. This person will also serve as the pointof contact with respect to operations and maintenance of the Party’sfacilities.Customer’s OperatingRepresentative:____________________________________________Attention: _________________________________Address: __________________________________________________________City: _______________________________ State:______________ Zip:_______Phone: ________________ Fax: _________________PSE&G’s Operating Representative:____________________________________________Attention: ________________________________Address: _________________________________________________________City: _______________________________ State:______________ Zip:______Phone: ________________ Fax: ________________9.4 Changes to the Notice Information34

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Either Party may change this information by giving five Business Dayswritten notice prior to the effective date of the change.Article 10.SignaturesIN WITNESS WHEREOF, the Parties have caused this Agreement to beexecuted by their respective duly authorized representatives.For PSE&G:Name: ___________________________________________Title: ____________________________________________Date: ____________________________________________For the CustomerName: ___________________________________________Title: ____________________________________________Date: ____________________________________________35

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Attachment 1Glossary of TermsAffected System – An electric system other than PSE&G’s Distribution System that maybe affected by the proposed interconnection.Applicant – A person who has filed an application to interconnect a Customer-generatorFacility to PSE&G’s Distribution System, sometimes also referred to as the “Customer”.Applicable Laws and Regulations – All duly promulgated applicable federal, State andlocal laws, regulations, rules, ordinances, codes, decrees, judgments, directives, orjudicial or administrative orders, permits and other duly authorized actions of anyGovernmental Authority.Business Day – Monday through Friday, excluding Federal Holidays.Class I Renewable Energy – has the meaning assigned to this term in N.J.A.C. 14:4-8.2.Customer – Any entity that proposes to interconnect its Customer-Generating Facilitywith PSE&G’s Distribution System.Customer-generator – A residential or small commercial customer that generateselectricity on the Customer's side of the meter, with a generating facility that does notexceed 2 MW in size.Customer-generator Facility – The Customer’s device for the production of electricityidentified in the Interconnection Application, but shall not include the Customer’sInterconnection Facilities.Default – The failure of a breaching Party to cure its Breach under the terms of thisInterconnection Agreement.Distribution System – The PSE&G facilities and equipment used to deliver electricityfrom transformation points on the Transmission System to points of connection at aCustomer's premisesDistribution Upgrades – The additions, modifications, and upgrades to PSE&G’sDistribution System at or beyond the Point of Common Coupling to facilitate theinterconnection of the Customer-generator Facility. Distribution Upgrades do not includeInterconnection Facilities.Equipment Package – A group of components connecting an electric generator with anelectric distribution system, and includes all interface equipment including switchgear,inverters, or other interface devices. An equipment package may include an integratedgenerator or electric source.36

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Facilities Study – An engineering study conducted by PSE&G (in coordination with anyAffected System) to determine the required modifications to PSE&G’s DistributionSystem, including the cost and the time require to build and install such modifications, asnecessary to accommodate an Interconnection Application.Good Utility Practice – Has the same meaning as assigned to this term in the Amendedand Restated Operating Agreement of the PJM Interconnection (April 2005), as amendedand supplemented, which is incorporated herein by reference. The Operating Agreementcan be obtained on the PJM Interconnection website at www.pjm.com. As of April 28,2005, the Operating Agreement defines this term as "any of the practices, methods and actsengaged in or approved by a significant portion of the electric utility industry during therelevant time period, or any of the practices, methods and acts which, in the exercise ofreasonable judgment in light of the facts known at the time the decision was made, couldhave been expected to accomplish the desired result at a reasonable cost consistent with goodbusiness practices, reliability, safety and expedition. Good Utility Practice is not intended tobe limited to the optimum practice, method, or act to the exclusion of all others, but rather isintended to include acceptable practices, methods, or acts generally accepted in the region."Governmental Authority – Any federal, State, local or other governmental regulatory oradministrative agency, court, commission, department, board, or other governmentalsubdivision, legislature, rulemaking board, tribunal, or other governmental authorityhaving jurisdiction over the Parties, their respective facilities, or the respective servicesthey provide, and exercising or entitled to exercise any administrative, executive, police,or taxing authority or power; provided, however, that such term does not include theCustomer, PSE&G or any affiliate thereof.IEEE Standards – The standards published by the Institute of Electrical and ElectronicsEngineers, available at www.ieee.org.Impact Study – An assessment by PSE&G of (i) the adequacy of PSE&G’s DistributionSystem to accommodate an Interconnection Application, (ii) whether any additional costsmay be incurred in order to accommodate an Interconnection Application, and (iii) withrespect to an Interconnection Application, an estimate of the Customer’s costresponsibility for PSE&G’s Interconnection Facilities.Interconnection Agreement – This Agreement between the Customer-generator andPSE&G, which governs the connection of the Customer-generator Facility to PSE&G’sDistribution System, as well as the ongoing operation of the Customer-generator Facilityafter it is connected to PSE&G’s system.Interconnection Facilities – PSE&G’s Interconnection Facilities and the Customer’sInterconnection Facilities. Collectively, Interconnection Facilities include all facilitiesand equipment between the Customer-generator Facility and the Point of CommonCoupling, including any modification, additions or upgrades that are necessary tophysically and electrically interconnect the Customer-generator Facility to the PSE&G’sDistribution System. Interconnection Facilities are sole use facilities and shall not includeDistribution Upgrades.37

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Interconnection Application – The Customer’s request, in accordance with the Tariff, tointerconnect a new Customer-generator Facility, or to increase the capacity of, or make amaterial modification to, the operating characteristics of an existing Customer-generatorFacility that is interconnected with PSE&G’s Distribution System.Net Metering – A system of metering electricity in which PSE&G:1. Credits a Customer-generator at the full retail rate for each kilowatt-hourproduced by a Class I renewable energy system not to exceed 2 MW in size,installed on the Customer-generator’s side of the electric revenue meter, up to thetotal amount of electricity used by that Customer during an annualized period; and2. Compensates the Customer-generator at the end of the annualized period for anyremaining credits, at a rate equal to the electric supplier’s or BGS provider'savoided cost of wholesale power.NJBPU – The New Jersey Board of Public Utilities, or any such successor agency havingsimilar jurisdiction.Operating Requirements – Any operating and technical requirements that may beapplicable due to PJM or PSE&G’s requirements, including those set forth in thisInterconnection Agreement.Party or Parties – PSE&G, Customer or any combination of the two.PJM or PJM Interconnection – the PJM Interconnection, L.L.C., or such successorregional transmission organization to which PSE&G is electrically connected andcoordinates operations with.Point of Common Coupling – Has the same meaning as assigned to this term in IEEEStandard 1547 Section 3.0 (published July 2003), as amended and supplemented, whichis incorporated herein by reference. IEEE standard 1547 can be obtained through theIEEE website at www.ieee.org. IEEE Standard 1547 Section 3.0 defined this term as"the point in the interconnection of a Customer-generator Facility with an electricdistribution system at which the harmonic limits are applied."PSE&G – The Public Service Electric and Gas Company, an electric public utility as theterm is defined in N.J.S.A. 48:2-13, that transmits or distributes electricity to end userswithin New Jersey.Tariff – The PSE&G electric Tariff and its Standard Terms and Conditions as filed withthe NJBPU, and as amended or supplemented from time to time, or any successor tariff.Transmission Owner – PSE&G, unless referring to the owner of transmission facilitiesin an Affected System.38

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Transmission System – The facilities owned, controlled or operated by PSE&G oranother Transmission Owner that are used to provide transmission service under the PJMOpen Access Transmission Tariff.39

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Attachment 2One-line Diagram Depicting the Customer-generator Facility, InterconnectionFacilities, Metering Equipment, and Upgrades40

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Attachment 3Description, Costs and Time Required to Build and Install PSE&G’sInterconnection FacilitiesPSE&G’s Interconnection Facilities shall be itemized and a best estimate itemized cost,including overheads, of the cost of its Interconnection Facilities will be provided from theFacilities Study.Also, and a best estimate for the time required to build and install PSE&G’sInterconnection Facilities will be provided from the Facilities Study.41

DRAFT – FOR DISCUSSION PURPOSES ONLYJune 21 - 2005Attachment 4Additional Operating Requirements for PSE&G’sDistribution System and Affected Systems Needed to Supportthe Customer’s NeedsIf required, PSE&G shall also provide requirements that must be met by the Customerprior to initiating parallel operation with PSE&G’s Distribution System, as listed below.42