In December 2005, the Colorado Public Utilities Commission (PUC) adopted standards for net metering and interconnection, as required by Amendment 37, a renewable-energy ballot initiative approved by Colorado voters in November 2004. The PUC standards generally apply to utilities with 40,000 or more customers and all cooperative utilities.* [http://www.leg.state.co.us/CLICS/CLICS2008A/csl.nsf/fsbillcont3/062FC08A... H.B. 1160], enacted in 2008, requires municipal utilities with 5,000 customers or more to adopt interconnection rules that are functionally similar to the PUC's rules. The PUC adopted new rules for net metering in September 2009, as required by [http://www.leg.state.co.us/clics/clics2009a/csl.nsf/fsbillcont3/571064D8... SB 51]. The new rules made significant changes to Colorado's net metering policy, but also relaxed some of the insurance requirements for interconnection, and addressed utility concerns with highly seasonal circuits and voltage flicker.
Colorado’s interconnection rules are based on the Federal Energy Regulatory Commission’s (FERC) interconnection standards for small generators, adopted in May 2005 by FERC Order 2006. Colorado's rules for interconnection include provisions for three levels of interconnection for systems up to 10 MW, based on system complexity. Interconnection requirements, standards and review procedures are divided into three levels:
* '''Level 1 Interconnection''' applies to inverter-based systems with a maximum nameplate capacity of 10 kilowatts (kW). These systems must comply with the IEEE 1547 and UL 1741 standards, and other applicable standards. Liability insurance with a single occurrence limit of $300,000 is required at the customer's expense.
* '''Level 2 Interconnection''' applies to systems with a maximum capacity of 2 MW. These systems also must comply with the IEEE 1547 and UL 1741 standards, and must be connected to a portion of the distribution system that is subject to the utility's tariff. There are specific limitations on a single system's potential impact and the aggregate potential impact on the grid under Level 2 interconnection. If a proposed interconnection fails one of the various screening tests, the customer-generator may need to pay for a supplemental review by the utility. Liability insurance with a single occurrence limit of $1 million is required for systems above 10 kW and up to 500 kW at the customer's expense. Systems above 500 kW and up to 2 MW must carry a $2 million insurance policy.
* '''Level 3 Interconnection''' applies to systems up to 10 MW that do not qualify for either Level 1 or Level 2 interconnection procedures. Level 3 interconnection may require studies involving project scope, feasibility, impact and facilities. The customer may need to make a deposit prior to and incur a portion of the total costs associated with these studies. Insurance levels will be determined on a case-by-case basis by the servicing utility.
Colorado's interconnection rules include provisions for dispute resolution. Interconnection to area networks for systems up to 300 kW in capacity is permitted.
''* Legislation (H.B. 1169) enacted in May 2007 required the state's electric cooperatives to comply with the PUC's interconnection standards and insurance requirements, with an exception that an electric cooperative or municipal utility may reduce or waive any insurance requirements. Electric cooperatives may not "prevent or otherwise unreasonably burden the installation of a customer-generator system if such system includes protective equipment that prevents any export of customer-generated electricity from the customer's side of the meter." Later legislation, H.B. 1160, required the PUC to initiate a new [http://www.dora.state.co.us/pls/real/SB121.Download_file?p_file=F4461/C0... rulemaking] to determine if the PUC's interconnection rules should continue to apply to cooperative utilities in their current form, or if they should be modified. Until a final decision is made, the PUC's rules apply.''