Some interpret article 702.5(A)(2)as saying that the Auto T/S has to match Service breaker size.
I have a commercial building with a 2500a main breaker, however loads from utility measure half that at max. I was planning to size the generator based on utility load but all wire runs from T/S (Utility and Loads) would be sized for the 2500a. Am I correct?
I would say in this case, the ATS should probably be sized based on the service rating. Since itís on the load side of the service disconnecting means, IMO, it should only be required to be sized by the actual load supplied, but in your case, with all that excess service capacity, what is to stop someone from adding additional load at a later date. As far as I know, service rated indicates that the ATS has the AIC rating and is listed as suitable for use as service equipment, not that it is rated at the size of the service. If itís not likely that the building occupants will need that additional service capacity on the emergency system in the future, one solution might be to install a feeder with OCP sized according to the actual load calculation, or maybe even with some excess capacity, between the existing service and the ATS. Then you could safely size your generator and ATS based on that. You would probably also need to install signage at all panel locations indicating they are also supplied by an emergency standby system.
This arrangement still doesnít prevent someone unqualified from inadvertently adding additional load to the emergency system, but should meet the requirements of the NEC and might save some expense by reducing the size of the ATS, generator, wire size, ground fault indicators, etc. It also leaves the building occupants the option to add additional feeders from the utility supplied side of the service in the future.
This is from the '11 NEC, Article 702; OPTIONAL STANDBY SYSTEMS
"(2) Automatic Transfer Equipment. Where automatic transfer equipment is used, an optional standby system shall comply with (2)(a) or (2)(b). (a) Full Load. The standby source shall be capable of supplying the full load that is transferred by the automatic transfer equipment. (b) Load Management. Where a system is employed that will automatically manage the connected load, the standby source shall have a capacity sufficient to supply the maximum load that will be connected by the load management system"
IF an 'emergency' panel is installed (say 800 amps) calculated to whatever the connected load that requires standby source, then the gen and transfer switch is sized to accomodate that load. IF your intent is to provide 2500 amps of 'gen'; then you need a 2500 amp transfer switch, with proper AIC rating.
More info on the proposed installation would help providing opinions.