After doing some looking I was wrong. You do need to have #1 terminal connected to a switched 12V source. If you don't have the idiot light, you may need a diode on that wire to keep it from back feeding the ignition and keeping the vehicle running.
Apparently you don't technically have to have the #2 wire connected. On the SI alternators, the remote voltage sensing is optional. Without it, the alternator uses the charging post to sense voltage.
I was reading all this here:
https://alternatorparts.com/faq.html