The Michigan Public Service Commission (PSC) first adopted interconnection standards for distributed generation (DG) in September 2003. The original standards provided for 5 levels of interconnection with cutoffs at 30 kilowatts (kW), 150 kW, 750 kW, and 2 megawatts (MW), but left many details of the interconnection process up to the utilities. In October 2008 Michigan enacted Public Act 295 (P.A. 295), creating a renewable portfolio standard (RPS) and authorizing the development of a mandatory, statewide net-metering program. In May 2009, the PSC issued an order formally adopting new net metering rules and revised interconnection rules to implement P.A. 295 of 2008. The rules do not apply to municipal electric utilities, which are not regulated by the PSC.

The revised rules are somewhat similar to the version adopted in 2003, but offer improved detail and customer protections in some areas. Certain aspects of the newly adopted rules apply only to net metered systems, but the rules generally apply to all distributed generation. The revised rules provide for the following interconnection categories:

• Category 1: Certified, inverter-based systems of 20 kW or less;
• Category 2: Systems greater than 20 kW but not more than 150 kW*;
• Category 3: Systems greater than 150 kW in capacity, but not more than 550 kW;
• Category 4: Systems greater than 550 kW in capacity, but not more than 2 (MW); and
• Cateogry 5: Systems greater than 2 MW

Certified systems are defined as those that use equipment certified by a nationally recognized testing laboratory to IEEE 1547.1 testing standards and in compliance with UL 1741. Utilities have some leeway in how they evaluate requests in that the rules are generally silent on the appropriate technical screens, engineering, and operational requirements for different categories of interconnection request. However, the rules do offer customer-generators the following protections against unreasonable requirements.

• Additional insurance requirements are prohibited for category 1 & 2 projects and utilities may not require the customer to name the utility as an additional insured party. Category 3-5 projects are required to have general liability insurance of at least $1 million.
• Application and review fees are subject to PSC approval and Category 1 fees are limited in total to an application fee of $75.
• The rules contain specific time lines for the processing and review of interconnection requests for different categories of system.
• Utilities must designate and maintain points of contact for initial information requests and must designate a point of contact for each interconnection applicant to address inquiries about technical issues and the status of interconnection requests (contact information for individual utilities is available on the program web site).
• Disputes may be resolved through the PSC and technical disputes may be put before a panel of independent experts. Utilities are responsible for reasonable expenses incurred by the expert panel in their investigation.
• Utilities must provide standardized interconnection applications and agreements to customers, with a simplified version for Category 1 requests.

Customer-generators are not required to install an external disconnect switch, although the PSC declined to prohibit utilities from making such a requirement. Utilities are generally prohibited from establishing additional fees; requiring additional equipment or insurance; or making other requirements not specifically authorized by the standard rules.

In December 2012, the PSC finalized Category 1 and Category 2 (projects of less than 150 kW or less) interconnection and net metering forms, agreements, and procedures. The forms and procedures are available on the program web site. Categories 3-5 will be addressed in a future order.

*The PSC has indicated (see March 2009 PSC Order approving revised interconnection rules) that Category 2 should be used for systems of 20 kW or less, but that are not inverter-based (and hence not eligible for Category 1 treatment).