Interconnection Costs Law and Legal Definition

According to 18 CFR 284.262 [Title 18 Conservation of Power and Water Resources; Chapter I Federal Energy Regulatory Commission, Department of Energy; Subchapter I Other Regulations Under The Natural Gas Policy Act of 1978 and Related Authorities; Part 284 Certain Sales and Transportation of Natural Gas Under The Natural Gas Policy Act of 1978 and Related Authorities; Subpart I Emergency Natural Gas Sale, Transportation, and Exchange Transactions], interconnection costs means the reasonable costs of connection, switching, metering, transmission, distribution, safety provisions and administrative costs incurred by the electric utility directly related to the installation and maintenance of the physical facilities necessary to permit interconnected operations with a qualifying facility, to the extent such costs are in excess of the corresponding costs which the electric utility would have incurred if it had not engaged in interconnected operations, but instead generated an equivalent amount of electric energy itself or purchased an equivalent amount of electric energy or capacity from other sources. Interconnection costs do not include any costs included in the calculation of avoided costs.