* Subject to review by the Commission at the request of the Customer. Such costs can include the total costs for upgrades to ensure the adequacy of the distribution system which would not have been necessary but for the interconnection of the net metered DG resource (as per PSL §66-l(3)(c)(iii)).

** Residential and Non-Residential Wind Customers with a total rated capacity up to 25 kW, Farm Wind may be required to also pay for feeder line upgrades that would not be required but for the interconnection of the net metered DG resource. Residential and Non-Residential Wind, and Farm Wind Customers are responsible for all feeder line upgrade costs if the total nameplate rating of the generating equipment exceeds 20% of the rated capacity of the feeder line (as per PSL §66-l(5)(c)(ii)). Farm Wind Customers are responsible for 50% of feeder line upgrade costs if the total nameplate rating of the generating equipment does not exceed 20% of the rated capacity of the feeder line (as per PSL §66-l(2)).

*** For Farm Wind projects with a total nameplate rating of the generation equipment that does not exceed 20% of the rated capacity of the local feeder line to which the project will connect, that portion of the CESIR costs related to transformers or other equipment installed at the customer's site is included in the $5,000 limitation; however, the customer is also responsible for 50% of the CESIR costs related to feeder line upgrades. Farm Wind projects with a total nameplate rating of the generation equipment that does exceed 20% of the rated capacity of the local feeder line to which the project will connect, CESIR costs related to transformers or other equipment installed at the customer's site is included in the $5,000 limitation; however, Farm Wind customers are responsible for the CESIR costs related to feeder line upgrades.

**** The first project triggering an eligible upgrade will initially bear 100% of the cost, while subsequent projects benefitting from those upgrades will reimburse the first project developer. The share of the costs paid by subsequent developers shall be calculated by the utility as the ratio of the total upgrade cost to the total AC watts the upgrade serves. If a third project uses the upgrade, the utility will perform a new calculation based on the new number of total watts served; the third project will pay its share and the utility will divide the third project’s contribution among the first two projects. Sharing continues according to this formula until the capacity of the upgrade is used up or the net costs to the participating projects falls to $100,000 or lower, whichever comes first. The utilities shall administer the allocation process and track the payments among contributing projects. The utilities are authorized to collect a $750 fee from applicants for processing each reimbursement. The Equipment Upgrade Cost Sharing Requirement is limited in several ways. First, cost sharing only applies to substation 3V0 protection, substation transformer upgrades, and other substation-level shared upgrades. Second, only those upgrades that cost in excess of $250,000 are subject to sharing. Third, projects below 200 kW AC in size are not required to participate.

The cost-sharing provisions herein apply to two categories of system modifications: Utility-Initiated Upgrades and Market-Initiated Upgrades, as defined below, both which utilize a pro rata approach whereby the applicant pays only for the specific distribution hosting capacity assigned to its project for these types of system modifications. A pro rata approach consists of taking the estimated cost of an upgrade and dividing that cost by the total increased Hosting Capacity created by the upgrade, thereby creating a dollar per kW cost which will then be multiplied by an individual project’s AC nameplate rating in kW to determine the applicant’s pro rata cost share. The rules specified in Section I. Application Process will continue to govern applicants’ cost obligations with respect to all other system modifications.

The category of Utility-Initiated Upgrades consists of substation transformer bank (bank) installations or replacements and proactive zero sequence voltage (3V0) installations. Each utility shall identify its proposed Utility-Initiated Upgrades in its annual Capital Investment Plan (CIP). Each year, when the CIP is filed with the Commission, the utility will publish a link to the CIP on its system data portal and a list of those substations included in the CIP that are eligible for cost sharing hereunder as Utility-Initiated Upgrades where the utility plans to complete engineering within the next twenty-four (24) months. The utility will describe the scope of the upgrade to be performed at each such substation by providing planned design/construction schedules and funding estimates required to accommodate additional DG/ESS interconnections. After the established application deadline as defined below, the utility shall determine a pro rata cost per kW for the upgrade at each relevant substation.

A. Bank Upgrades (Proposed Multi-value Distribution Projects)

In the course of its planning process, at the time when the utility identifies the need to install or replace a bank due to asset condition, reliability, safety, resiliency, or capacity requirements, the utility shall consider options for designing the new bank equipment to create greater DG/ESS Hosting Capacity than the baseline installation would create. If the bank can be upgraded to increase Hosting Capacity while solving a pre-existing asset condition, reliability, safety, resiliency, or capacity issue, and if there is market interest that indicates DG/ESS growth above the capacity of the baseline equipment, the utility will identify the enhanced installation or replacement in the next published CIP as a Multi-value Distribution (“MVD”) project. The utility will fund the cost of the baseline project. Participating Projects will fund the difference between the baseline and the MVD project cost.

If the utility determines, in its sole discretion, that there is sufficient time in the CIP project schedule (where “sufficient time” is baseline project specific and includes baseline projects where final design and engineering is not complete and prior to procurement) to allow additional DG/ESS developers to submit interconnection applications, the utility will publish a deadline for such applications on its system data portal with the link to the CIP. The utility notice will describe the baseline installation to be performed and the corresponding design/construction plan for the proposed baseline project. Within thirty (30) Business Days after the application deadline, the utility will calculate a cost per kW1 for the upgrade for each project with an approved application to participate in the MVD Project Study and will provide that information and an invoice for MVD Project Study costs to each applicant. Applicants will have 10 Business Days to pay their share of the study costs; applicants who make this payment on time will be considered Participating Projects. Once Participating Projects commit to participate in the MVD Project Study, which requires the payment of their respective MVD Project Study cost share, Participating Projects will also be subject to CESIR payment timelines for project specific non-shared costs as per Section I-D. The utility will start the MVD Project Study and Participating Project CESIRs once the MVD Project Study and CESIR payments are received. If Participating Projects do not meet payment timelines and are withdrawn from queue, the pro rata cost per kW remains the same for remaining Participating Projects, and the Utility will have discretion on whether enough is collected to justify proceeding with the MVD project. The utility will have one hundred (100) Business Days to complete both the MVD Project Study and each Participating Project’s CESIR.

The MVD Project Study result will include an indication of the incremental project equipment, Hosting Capacity enabled, preliminary milestone schedule, and revised cost per kW required to interconnect Participating Projects as part of the proposed MVD project. If the MVD Project Study indicates that the aggregate Participating Project capacity exceeds the capacity of the MVD project, the capacity will be assigned by interconnection queue position. After the MVD Project Study results are provided to the Participating Projects, for those Participating Projects where the MVD Study confirms available increased Hosting Capacity, a non-refundable full MVD Qualifying Upgrade payment for the shared costs of proceeding with the MVD project will be due within ninety (90) Business Days from each of the Participating Projects that want to proceed. If projects are withdrawn from the queue such that additional Participating Projects in queue can now benefit from Hosting Capacity created by the Qualifying Upgrade, the utility will send invoices to additional Participating Projects where the MVD project can now meet their Hosting Capacity needs. Applicants who receive an invoice under this provision shall pay the invoice within 30 Business Days or be withdrawn from the queue.

Based on the number of DG/ESS applicants that pay the non-refundable MVD Qualifying Upgrade payment and the CIP project schedule, the utility will have the discretion to move ahead with the MVD project. If the utility determines it will not proceed with the MVD project, it will provide notice of its decision and rationale to Participating Projects within fifteen (15) Business Days of receipt of the MVD Qualifying Upgrade payment and will refund those payments via the utility cost reconciliation process per Section 1-C. No MVD Qualifying Upgrade payments will be refunded to Participating Projects that are withdrawn from the queue after making such payments until/unless a subsequent project(s) take their place by making MVD Qualifying Payments that equal or exceed the MVD Qualifying Payments received from those withdrawing Participating Projects.

B. Proactive 3V0 Upgrades

The CIP will identify substations at which the utility plans to install 3V0 upgrades. Following the utility’s filing of the CIP, additional applicants may apply for interconnection at the identified substations. The utility will accept applications at a substation designated for a 3V0 upgrade up to the maximum capacity available at the site for reliable and safe operation. The utility will have the discretion to proceed where 3V0 upgrades are feasible. Payments will be due in accordance with CESIR payment timelines as per Section 1-D.

This section addresses cost-sharing for Qualifying Upgrades identified in the course of the interconnection application process.

The utility will create a Capital Project Queue at the substation or feeder level for each Utility-Initiated Upgrade and Market-Initiated Upgrade identified under these rules where utility construction will take longer than twenty-four (24) months. The utility will note on its Hosting Capacity map that the station/feeder is impacted by the Capital Project Queue due to future work.

Applications pending at the time a Capital Project Queue is created will be placed into the queue if the applicant consents. New applications will be placed into a Capital Project Queue following the Preliminary Screening Analysis. The payment timelines in Section 1-D will be suspended for applications assigned to a Capital Project Queue, except as provided otherwise in this Section.

When the upgrade for a given substation is within eighteen (18) months of the expected completion date, applications will be removed from in the Capital Project Queue and will advance through the remaining SIR steps based on their original application completion date. Any project that was placed in the Capital Project Queue after the CESIR was complete will need to go through the CESIR process again due to potential changes to the utility’s electric power system, unless the utility determines that a restudy is not needed.

Utilities will continue to collect contributions from Participating Projects up to five (5) years after a Qualifying Upgrade is placed in service, or all available Hosting Capacity from a Qualifying Upgrade is used, whichever occurs first.

If the Triggering Project and initial Sharing Project(s) have met the minimum threshold to begin the upgrade, but the available Hosting Capacity has not been completely filled and thus utility customers contribute to the unassigned costs (either through the establishment of a deferred regulatory asset or in base rates), then any additional Sharing Projects that use available Hosting Capacity up to five (5) years after the upgraded asset is placed in service will be required to fund their pro rata share prior to interconnection, and utility customers shall receive the benefit provided by those additional Sharing Project(s). At the time additional Sharing Project(s) provide contributions for Qualifying Upgrades under this scenario, the following utility customer protections shall apply:

i. For Qualifying Upgrades that are in service but NOT included in base rates, the utility shall cease deferring the return on, and return of, investment associated with contributions from subsequent Sharing Projects. Additionally, the Qualifying Upgrade is to be excluded from the utility’s net plant, or capital expenditure, tracking mechanism until it is included in base rates.

ii. For Qualifying Upgrades that are in service AND included in base rates, the utility is required to reduce plant in service by the funds provided by additional Sharing Project(s). The utility’s net plant, or capital expenditure, tracking mechanism will provide utility customers with the benefit of funds received from the additional Sharing Project(s).

If the additional Hosting Capacity needs of the Triggering Project and initial Sharing Project(s) are below the minimum subscription threshold, and the Triggering Project and initial Sharing Project(s) (if any), agree to fund shares beyond their capacity needs so that the minimum subscription threshold criterion is met, then the Triggering Project and initial Sharing Project(s) have provided contributions in excess of the Capacity Increase Shared Cost rate multiplied by their respective Hosting Capacity. Under this scenario the cost of unsubscribed capacity is being borne by the Triggering Project, previously paid Sharing Project(s) (if any), and utility customers.

Additional Sharing Projects that connect to the upgraded station/feeder will be required to contribute such that the Triggering Project, initial Sharing Project(s) (if any), and additional Sharing Projects have provided funding at an equal dollar per kW of Hosting Capacity. Triggering Projects and previously paid Participating Projects are to be provided refunds (from the utility) as a result of the additional contribution of Sharing Project(s). Refunds shall be provided to the Triggering Project and previously paid Sharing Project(s) until the Participating Projects have provided funding at a level that is equivalent to their Capacity Increase Shared Cost multiplied by their respective Hosting Capacity level. If additional Sharing Projects provide funding, the utility customer protections described in Scenario 1 (sections i and ii) shall apply.

The Utility will reimburse Participating Projects for the costs of Qualifying Upgrades in advance of the final project cost reconciliation process established in section 1.C, Step 11 of the SIR, as provided in this section. These reimbursements will be based on the cost estimates provided by the utility.

For upgrades involving the DG Encumbered Line mechanism, Triggering Projects and previously paid Sharing Projects shall be reimbursed by the utility when later Sharing Projects make their full payments, with contributions to be calculated based on project size and footage utilized. Once the Triggering Project and Sharing Project(s) have paid 100% of their respective payments, the utility will reimburse Sharing Projects’ estimated costs to the Triggering Project within sixty (60) Business Days. When the final utility costs for all participating projects on a DG Encumbered Line are known, both the Triggering Project and any Sharing Projects will be billed or refunded by the utility as provided in the SIR.

When any Triggering Project or Sharing Projects pay more than their pro rate cost shares in order to reach a mobilization threshold, as provided in section D.3 above, payments from additional Sharing Projects received after the mobilization threshold is reached will be first applied to the Triggering Project and initial Sharing Project(s) that paid more than their pro rata cost share, until the Triggering Project and Sharing Projects’ contributions are equal to the pro rata share of each project based on capacity needs. When the final costs are known, the Triggering Project and Sharing Projects will be billed or refunded based on the actual costs per the SIR. Applications held in the interim queues pursuant to the Commission’s March 21, 2021 Order Directing Interim Modifications to the New York State Standardized Interconnection Requirements that pay the full cost of a Qualifying Upgrade shall treated as Triggering Projects and shall be reimbursed in accordance with the rules stated in the preceding paragraph.