In April 2008, Kentucky enacted legislation which required the Kentucky Public Service Commission (PSC) to develop interconnection and net metering guidelines for all retail electric suppliers operating in Kentucky (excluding TVA utilities). The Kentucky PSC adopted those guidelines on January 8, 2009 (Order 2008-00169).

The PSC's rules set forth a two-tiered approach to simplify the interconnection process:

• Level 1: applies to inverter-based systems up to 30 kilowatts (kW) in capacity, certified to the UL 1741 and complying with IEEE 1547. Systems cannot require the utility to make modifications to its system in order to be interconnected (the PSC guidelines provide additional technical requirements that must be met for Level 1 applications; see the order for details). Utilities must notify the customer within 20 business days whether the interconnection application has been approved or denied. There are no application fees or related fees for Level 1 interconnection.
• Level 2: applies to systems that are not inverter-based or that use equipment not certified as meeting UL 1741 or for systems that fail to meet the other technical requirements outlined for Level 1 Applications. The utility has 30 business days to process a Level 2 application. Utilities may require customers to submit an application fee of up to $100 for processing and inspection purposes. If the utility determines that an impact study is needed, the customer is responsible for costs up to $1,000 for the initial impact study.

Utilities, at their own discretion, may require an external disconnect switch or waive the requirement for systems approved at either application level. In addition, customers must maintain general liability insurance coverage (e.g., a standard homeowner’s or commercial policy) for their systems. The PSC has ruled that the customer retains any and all renewable-energy credits (RECs) associated with the generation of renewable energy.

Note: A utility may negotiate a contract for interconnection with a merchant or co-generation electric generating facility with a capacity of up to 10 megawatts. This customer would most likely incur some significant initial costs for equipment, possible grid/line upgrades, safety devices, and insurance, for example. By law, larger systems may establish interconnection, however only after receiving approval from the PSC/Siting Board (See KRS § 278.212. KY PSC Order 2008-00169 only covers interconnection as it applies to net-metered systems).