Effectiveness and Efficiency Framework

Transcription

1 Effectiveness and Efficiency Framework Michael Walker, Chief Enterprise Risk and Strategic Development Officer Member Representatives Committee Meeting May 9, 2018

2 Background Process improvement now embedded in ERO Enterprise culture Strategic, operational and financial planning Improved planning cycle, coordinated with RISC report, Effectiveness survey Long-term strategy - key focus area Three year operating plan to guide resource planning ERO Enterprise business plans and budgets o Increased transparency, coordination and opportunity for input o Three year projections o Focus on resource allocation, alignment with priorities o Improved approach and rigor around technology investments 2

3 Background Standards Risk-responsive, results-based approach Periodic reviews Cost effectiveness Compliance and Enforcement Risk-based approach Enterprise-wide program alignment and consistency Leverage technology Reliability Assessments and System Analysis Timely assessments to identify emerging risks Effective and efficient risk mitigation Advances in system assessments and modeling 3

4 Background Situation Awareness and Events Analysis Identify risks based on performance analysis of the system Effective and efficient risk mitigation Advances in bulk power system (BPS) reliability risk analysis Consistency in event analysis Increased collaboration and information sharing E-ISAC Industry (Members Executive Committee) oversight and guidance Development of long-term strategy o Engagement o Information Sharing o Analysis 4

5 Structured Approach Opportunity to step back and take a fresh look Stakeholder committee engagement Initial focus on MRC and NERC standing committees Work with other stakeholder groups in later phases Effectiveness of ERO operations Review core programs and processes Engage stakeholder input Efficiency of ERO operations Work within the annual business plan and budget (BP&B) process Enterprise-wide focus Focus on opportunities to reduce costs without impacting effectiveness 5

6 Stakeholder Committee Engagement Review alignment with the ERO Enterprise strategic and operating plans Review mandates, workload, and priorities What synergies or overlaps exist? Opportunities for consolidation? Opportunities to improve the composition? Is additional technical expertise needed? How can meetings be made more effective and efficient? Are there ways to better manage workload? 6

7 ERO Operations Effectiveness Use BP&B process to review resource alignment and allocation Work with standing committees regarding key program area initiatives and opportunities for process improvement Review effectiveness survey results Efficiency Use annual BP&B process to continually review meeting and travel expenses Evaluate opportunities to leverage enterprise-wide buying power Benchmark major operating costs Review opportunities to further leverage technology, centralize services 7

8 Next Steps Develop a consensus around framework Assemble teams Consider and discuss what success looks like Develop metrics to measure progress Provide ongoing updates at future meetings 8

9 9

10 Standards Efficiency Review Howard Gugel, Senior Director of Standards and Education Member Representatives Committee Meeting May 9, 2018

11 Advisory Group Gordon van Welie ISO-New England Greg Ford Georgia Systems Operations Corporation Carol Chinn Florida Municipal Power Agency John Pespisa Southern California Edison Company Amy Casuscelli - Xcel Energy, Inc. Randy Crissman New York Power Authority Ken McIntyre NERC Executive Sponsor 2

12 Advisory Group Role Define project scope and develop review criteria Solicit input for requirement candidate list Solicit candidates for review teams Evaluate review team product to ensure scope conformation Consider modifications to scope based on feedback Control parking lot list of items out of scope for this project 3

13 Accomplishments Created project page on NERC website Finalized project scope, criteria, and approach Solicited and assembled industry experts for review teams Solicited candidate requirements from industry Review teams have completed review of 80% of requirements 4

14 Example Candidate INT Requirement R3 Each Balancing Authority shall only implement or operate a Pseudo-Tie that is included in the NAESB Electric Industry Registry publication in order to support congestion management procedures. Draft justification Failure to comply has minimal impact on reliability Pseudo-Tie coordination in reference document Requirement not identified in Internal Risk Assessment 5

15 Example Candidate MOD Requirement R1 Each Transmission Operator that determines Total Flowgate Capability (TFC) or Total Transfer Capability (TTC) shall develop a written methodology (or methodologies) for determining TFC or TTC values. The methodology (or methodologies) shall reflect the Transmission Operator s current practices for determining TFC or TTC values. Draft justification TTC/TFC are commercially-based values Transmission Operators operate grid to System Operating Limits 6

16 Schedule Review teams compile candidate list of standards and/or requirements (2018 Q2) Review teams submit draft Standard Authorization Requests (SARs) to industry for comment (2018 Q3) Standards Committee solicit for standard drafting team(s) for SARs (2018 Q3) Industry ballots on proposed retirements/modifications to standards (2018 Q Q1) Propose balloted standards to NERC Board of Trustees (2019 Q1 Q2) 7

17 Considerations Coordination between teams on overlaps Moving requirements to programs (e.g. Certification) Combining requirements 8

18 9

19 Distribution Provider Reference Document For Directly Connected Determinations Ken McIntyre, Vice President and Director of Standards and Compliance Member Representatives Committee Meeting May 9, 2018

20 Risk Based Registration On March 19, 2015, the Federal Energy Regulatory Commission (FERC) approved revisions to NERC s Rules of Procedure (ROP) to implement the Risk Based Registration (RBR) initiative One of the approved RBR revisions was to the Distribution Provider (DP) criteria DP system serving >75 MW of peak load that is directly connected to the Bulk Electric System (BES): Load threshold increased from 25 MW to 75 MW System connection changed from bulk power system (BPS) to BES 2

21 Reference Document ROP revisions and FERC Order granting South Louisiana Electric Cooperative Association (SLECA) appeal Need to promote consistent ERO Enterprise application of the DP criteria with emphasis on determining whether DP system and load is directly connected to the BES Analogous to a practice guide produced by the ERO Enterprise Shared with the Organization Registration Certification Subcommittee Publicly posted along with NERC webinar Requested informal feedback NERC received feedback on process and one request for clarification of the language in the document 3

22 Next Steps Posted since March Comments will inform the need for revisions revisions would be made following the May 2018 MRC meeting Regional Entities are working with impacted registered entities to ensure consistent registration approaches NERC is developing a documented process for registration reference documents that is identical to that used for Compliance Monitoring and Enforcement Program practice guides NERC and Regional Entity registration departments are available to discuss specific cases 4

23 5

24 Resilience Framework Peter Brandien, Reliability Issues Steering Committee Chair Mark Lauby, Senior Vice President and Chief Reliability Officer Member Representatives Committee Meeting May 9, 2018

25 Framework Develop common framework, understanding, and definition of the key elements of bulk power system (BPS) resilience National Infrastructure Advisory Council s (NIAC s) resilience framework o Robustness, Resourcefulness, Rapid Recovery, Adaptability Adequate Level of Reliability definition and technical report Understand how key elements of BPS resilience fit in the existing ERO framework Identified current activities within the four framework constructs Evaluate whether additional steps are needed to address key elements of BPS resilience within the ERO framework 2

26 Inputs Discussion at February 2018 MRC meeting RTO/ISO FERC filing ERO Enterprise Standing Committees Compliance and Certification Committee Critical Infrastructure Protection Committee Operating Committee Personnel Certification and Governance Committee Planning Committee Standards Committee 3

27 Understanding and Defining Resilience National Infrastructure Advisory Council s (NIAC s) resilience framework with adjustments in red: Robustness to absorb shocks and continue operating Resourcefulness detect and manage a crisis as it unfolds Rapid Recovery get services back as quickly as possible in a coordinated and controlled manner Adaptability incorporate lessons learned from past events to improve resilience 4

28 ERO Enterprise Activities Supporting Framework Robustness Risk, event, and performance monitoring Reliability and emerging risk assessments Technical committee work, including special projects System operator training, certification, and credential maintenance Reliability Standards and Reliability Guidelines E-ISAC information-sharing programs Resourcefulness Situational awareness and industry coordination Government coordination Cross-sector information sharing Reliability Standards Functional Model and Reliability Guidelines System operator training, certification, and credential maintenance 5

29 ERO Enterprise Activities Supporting Framework Rapid Recovery Situational awareness and industry coordination Government coordination Cross-sector information sharing Reliability Guidelines System operator training, certification, and credential maintenance Adaptability Reliability and emerging risk assessments Event analysis, forensics, and Lessons Learned Reliability Guidelines System operator training, certification, and credential maintenance Periodic reviews 6

30 Additional Activities Suggested by Standing Committees Revisions to standards process templates and training materials Increased communication of NERC s ongoing resilience and risk mitigation efforts Additional compliance monitoring focus on standards supporting resilience Recommending additional focus on areas such as: Operational impacts of distributed energy resources Fuel assurance and security to promote resilience Quality of emergency preparedness 7

31 NERC s Definition of Reliability NERC s view of reliability for the bulk power system consists of two fundamental and aspirational concepts: Adequacy is the ability of the electric system to supply the aggregate electric power and energy requirements of electricity consumers at all times, taking into account scheduled and reasonably expected unscheduled outages of system components. Operating reliability is the ability of the electric system to withstand sudden disturbances such as electric short circuits or unanticipated loss of system components. 8

32 A Reliable System is a Resilient System The 2005 Federal Power Act requires NERC to develop and enforce Reliability Standards that: Support Reliable Operations Provide for an adequate level of reliability. System with an Adequate Level of Reliability is resilient Industry has designed a reliable Bulk Power System that is robust, resourcefully operated, and rapidly recovers Lessons learned are actively considered during and after an event 9

33 Resilience is a Characteristic of a Reliable System NERC Reliability Assessments and Performance Analysis Reliability Assessments System Analysis Events Analysis Performance Analysis Situational Awareness Operator Training Bulk Power System Reliability and Security Bulk Power System Resilience* E-ISAC NERC Reliability Assurance Standards Compliance Enforcement Registration Certification 10 Bulk Electric System Reliability *Solely the Bulk Power System. Does not include local distribution systems.

34 Adequate Level of Reliability R(t) Reliability R 100% Reliable R Target R ALR-Nadir Reliable Operation Risk Tolerance Low-Risk/High-Cost Adequate Level of Reliability: No instability, uncontrolled separation, cascading, or voltage collapse Frequency is maintained within defined parameters Voltage is maintained within defined parameters Adverse Reliability Impacts beyond design criteria are managed Restoration after major system disturbances is coordinated and controlled T disruption T rebound T recovered t 11

35 R(t) Disruption on BPS Reliability R 100% Reliable R Target R ALR-Nadir Disruptive Event If Detectable, Pre-Position Reliable Operation Recovered Steady- State T disruption T rebound T recovered t 12

36 Resilience Framework R(t) Reliability R 100% Reliable R Target R ALR-Nadir Disruptive Event If Detectable, Pre-Position Reliable Operation Recovered Steady- State Robustness Disaster Prevention and Maintenance Period Resourcefulness Resistance Period Coordinated & Controlled Recovery Recovery Period Adaptability Lessons Learned and Implementation Period T disruption T rebound T recovered t 13

37 Resilience Indicators R(t) Disruptive Event Degradation Recovery Recovery State Reliability R 100% Reliable R Target If Detectable, Pre-Position Amplitude Improved Stable Deteriorated R ALR-Nadir Robustness T disruption T rebound T recovered t 14

38 Reliability R(t) R 100% Reliable R Target R ALR-Nadir Disruptive Event If Detectable, Pre-Position Reliable Operation Ensuring ALR Avoid & Control (e.g. serve critical load) Recovered Steady- State Avoid & Control (e.g. serve critical load) T disruption T rebound T recovered t 15

39 Next Steps Industry s reply comments on FERC s resilience proceeding due May 9 Monitor FERC response to comments Discuss suggested additional activities Present recommendations to Board of Trustees in August How resilience fits into NERC s mission Any additional work that should be addressed within NERC s jurisdiction 16

40 17

41 NERC Operating Committee Lloyd Linke, Operating Committee Chair Member Representatives Committee Meeting May 9, 2018

42 NERC Operating Committee Provides subject matter expertise relating to operating reliability matters across all four Interconnections Publishes Reliability Guidelines and Reference Documents on subjects relevant to industry Monitors operating conditions or activities and addresses emerging issues as they arise 2

43 NERC Operating Committee Current membership consists of: 33 members from the U.S. and Canada representing 12 industry sectors and each Regional Entity Sectors include entities ranging from small end-users to large ISO/RTOs, as well as federal, provincial and state representation Maintains a work plan that prioritizes existing and future work of the committee and its subgroups consistent with the business and strategic plans of NERC 3

44 Reliability Guidelines 4

45 Reliability Guidelines Since January 1, 2017, the Operating Committee (OC) has published six Reliability Guidelines Situational Awareness for the System Operator Generating Unit Winter Weather Readiness Area Control Error (ACE) Diversity Interchange Inadvertent Interchange Operating Reserve Management Gas and Electrical Operational Coordination Considerations 5

46 Reliability Guidelines Three additional Reliability Guidelines currently under review Generating Unit Operations During Complete Loss of Communications Loss of Real-Time Reliability Tools Capability/Loss of Equipment Significantly Affecting ICCP Data Primary Frequency Control Three additional Reliability Guidelines currently under initial development Cyber Intrusion Guide for System Operators Methods for Establishing IROLs Inverter-based Resource Performance 6

47 Reference Documents 7

48 Reference Documents Three Reference Documents published since January 1, 2017 Dynamic Tag Exclusion Reference Document Pseudo-Tie Coordination Reference Document Risks and Mitigations for Losing Energy Management Systems (EMS) Functions Two additional Reference Documents currently under initial development Reliability Coordinator Plan Reference Document Change in Balancing Authority (BA) Footprint Reference Document 8

49 Operating Committee Current Organizational Chart NERC Operating Committee (OC) Operating Committee Executive Committee (OC ExCom) Event Analysis Subcommittee (EAS) Operating Reliability Subcommittee (ORS) Personnel Subcommittee (PS) Resources Subcommittee (RS) Energy Management Systems Working Group (EMSWG) Interchange Distribution Calculator Working Group (IDCWG) Continuing Education Review Panel (CERP) Reserves Working Group (RWG) Joint OC/PC Task Forces / Working Groups Frequency Working Group (FWG) Inverter-Based Resource Performance Task Force (IRPTF) Methods for Establishing IROLs Task Force (MEITF) Essential Reliability Services Working Group (ERSWG) Inadvertent Interchange Working Group (IIWG) 9

50 Event Analysis Subcommittee 10

51 Event Analysis Subcommittee Coordinates the Event Analysis Process with industry stakeholders and examines events that occur on the bulk power system (BPS) and helps determine their causes Analysis of some events results in the development of a Lessons Learned Supports development of Lessons Learned, promotes industrywide sharing of event causal factors, and assists NERC in implementation of related initiatives to lessen reliability risks to the Bulk Electric System (BES) Produced 12 Lessons Learned for industry knowledge since January 1,

52 Category of Lessons Learned Published to Date Three NERC Lessons Learned published to date in Generation Facilities 1 Communications 1 Transmission Facilities Nine NERC Lessons Learned published in Communications 1 Facilities Design, Commission, and Maintenance 3 Generation Facilities 1 Transmission Facilities 12

53 EMS Working Group Analyzes events that affect EMS and the ability to monitor, control, and have situational awareness of the BES Holds an annual Monitoring and Situational Awareness Conference to highlight EMS related events, educate stakeholders, and promote industry awareness and knowledge Developed a Reference Document: Risks and Mitigations for Losing EMS Functions. The purpose of this document is to: Identify and discuss the risk of losing EMS functions Analyze the causes of EMS events Share mitigation strategies to reduce these risks 13

54 Operating Reliability Subcommittee 14

55 Operating Reliability Subcommittee Provides operational guidance to industry Facilitates operating reliability coordination by fostering realtime communication among registered entities, especially Reliability Coordinators Promotes the exchange of operational data and modeling data among registered entities Reviews and approves Reliability Coordinator reliability plans This process is found in the Reliability Coordinator Reliability Plan Reference Document 15

56 Interchange Distribution Calculator Working Group Responsible for implementing NERC s IDC and other tools in support of the NERC Reliability Coordinators Provides ongoing base case modeling and maintains a distribution factor calculation methodology suitable for use with the NERC congestion management tools Acts as the owner and reviewer for all files related to the NERC congestion management tools and assists in technical issues relating to congestion management tools and their enhancements 16

57 Cyber Intrusion Guideline for System Operators 17

58 Cyber Intrusion Guideline for System Operators ORS is coordinating with the Critical Infrastructure Protection Committee (CIPC) to develop a Reliability Guideline: Cyber Intrusion Guide for System Operators to assist System Operators in detecting and responding to potential cyber security incidents Will be delivered to the OC for their approval in June 18

59 Personnel Subcommittee 19

60 Personnel Subcommittee Responsible for developing and maintaining NERC Continuing Education Program requirements for system operators This includes development and maintenance of a process to approve continuing education providers, as well as the performance of periodic audits of those providers Worked with NERC staff to roll out the System Operator Certification and Continuing Education Database (SOCCED). Developed a new Reliability Guideline: Situational Awareness for the System Operator to provide information on Situational Awareness (SA) and its applicability to real-time operation 20

61 Resources Subcommittee 21

62 Resources Subcommittee Responsible for addressing issues in the areas of balancing resources and demand, interconnection frequency, and control performance Performs the Frequency Response Annual Analysis which is an analysis of frequency response performance which contains the annual analysis, calculation, and recommendations for the Interconnection frequency response obligation (IFRO) for each of the four electrical Interconnections in North America Responsible for the determination and issuance of yearly CPS Bounds Report 22

63 Resources Subcommittee Contributes to the development of the balancing standards, addresses inadvertent interchange accounting and payback, and addresses technical issues with automatic generation control, time error correction, operating reserve and frequency response Develops and revises Reliability Guidelines such as Primary Frequency Control Guideline which was referenced in FERC Rule on Requirements for the Provision of Primary Frequency Response 23

64 Joint OC/PC Working Groups and Task Forces The OC provides members to participate and/or lead joint OC/PC task forces and working groups Active joint OC/PC task forces and working groups Essential Reliability Services Working Group Methods for Establishing IROLs Task Force Inverter-Based Resources Performance Task Force 24

65 Inverter-Based Resources Performance Task Force 25

66 Inverter-Based Resources Performance Task Force Formed to build off of the experience and lessons learned from the ad hoc task force created to investigate the loss of solar photovoltaic (PV) resources during the Blue Cut Fire event Has performed studies and is developing a Reliability Guideline to address the issues identified in the Blue Cut Fire Disturbance Report voltaic_resource_/1200_mw_fault_induced_solar_photovoltaic_resourc e_interruption_final.pdf 26

67 Inverter-Based Resources Performance Task Force Loss of Solar Resources during Transmission Disturbances due to Inverter Settings Alert %20of%20Solar%20Resources%20during%20Transmission%20Disturbance. pdf Second significant event occurred October 9, 2017 with a loss of 900 MW as a result of the Canyon 2 Fire 2%20Fire%20Disturbance%20Report/900%20MW%20Solar%20Photovoltai c%20resource%20interruption%20disturbance%20report.pdf 27

68 Links OC web page Reliability Guidelines web page Guidelines.aspx Reference Documents web page 28

69 29

70 Inverter Disconnects during Transmission Disturbances - II Ryan Quint, Senior Manager, Advanced Analytics and Modeling Member Representatives Committee Meeting May 9, 2018

71 Blue Cut Fire Disturbance Event occurred on August 16, 2016 Not a qualified event Entities volunteered to work with ERO Fire caused kv line faults and two 287 kv line faults NERC/WECC ad hoc task force created to identify causes Published disturbance report in June 2017 Key Findings: Use of momentary cessation Frequency-related tripping 2

72 Level 2 NERC Alert: Industry Recommendation Recommended actions: Mitigate erroneous frequency tripping Recovery from momentary cessation Data collection to understand extent of condition 3

73 Clarification and Recommendation for Momentary Cessation 4

74 Canyon 2 Fire Disturbance Event occurred on October 9, 2017 Not a qualified event Entities volunteered to work with ERO NERC/WECC event analysis, NERC Inverter-Based Resources Performance Task Force (IRPTF) technical support Published disturbance report in February 2018 Key Findings: No frequency-related tripping Continued use of momentary cessation Voltage-related tripping 5

75 Canyon 2 Fire Disturbance Aggregate Solar PV Response ~15 minutes Fault 1: = 682 MW Fault 2: = 937 MW 6

76 Key Findings No erroneous frequency tripping Actions from first Level 2 Alert appear to have mitigated identified issue By the Canyon 2 Fire disturbance, 97% of manufacturer s bulk power system (BPS)-connected fleet had been updated Continued use of momentary cessation Most inverters use momentary cessation (V < 0.9 pu) Recovery following momentary cessation varies, relatively slow for grid dynamics Updated recommendation for momentary cessation eliminate the behavior to the greatest extent possible Transient overvoltage tripping and application of the PRC ride-through curve 7

77 Key Finding: Application of Voltage Ride-Through May Trip Zone NOT a Must Trip Zone Curve is a minimum requirement, NOT design criteria. 8

78 Key Finding: Transient Overvoltage Tripping 9

79 Second Level 2 NERC Alert: Industry Recommendation Mitigating actions: Dynamic model improvements Mitigation of momentary cessation Plant control loop coordination Mitigation of voltage-related tripping Information sharing among operating entities Planning and operations studies to ensure no potential stability risks Response to Regional Entity of study findings by December 7,

80 Modeling Notification: Momentary Cessation Existing models largely DO NOT accurately represent installed resource performance Identified issue that must be addressed for models in planning and operations studies Developed notification to help industry in modeling efforts Guidance provided as part of second NERC Alert 11

81 Multi-Pronged Approach Disturbance analyses and reports Blue Cut Fire, Canyon 2 Fire, (and upcoming Angeles Forest) Disturbances Level 2 NERC Alerts Identifying extent of condition, and recommending mitigating actions IRPTF Reliability Guideline Recommended BPS-connected inverter-based resource performance Modeling and simulations Modeling Notifications Leading interconnection-wide stability studies to identify potential risks Industry education webinars and workshops Outreach to BPS-connected non-bulk electric system (BES) resources (e.g., < 75 MVA) Reliance on SGIA, LGIA, and Facility Connection Requirements 12

82 Large BES Solar Resources Operating PV > 75 MW 13 Illustration Purposes Only

83 BPS-Connected Solar Resources Operating PV > 1 MW 14 Illustration Purposes Only

84 15

85 2018 Summer Reliability Assessment Thomas Coleman, Director of Reliability Assessment Member Representatives Committee Meeting May 9, 2018

86 Preliminary Key Findings Projected ERCOT Planning Reserve Margins below Reference Margin Level Typical generator outages expected under normal conditions could minimize operating reserves Extreme condition scenarios indicate higher risk of operational challenges Sufficient reserves projected in MISO, but increased use of operating procedures is expected Operational constraints limit Aliso Canyon output; increasing ramping requirements in California ISO New England implements market rules in effort to positively influence fuel assurance and capacity performance ERO continues to raise awareness on inverter-based resource performance through NERC Alerts and industry outreach 2

87 2017 Compared to 2018 Summer Peak Reserve Margins 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Increased reserve requirements due to increased forced-outage rates 4,300 MW of retired coal generation 2,000 MW of delayed new generation Improvements 2017 Anticipated Reserve Margin % 2018 Anticipated Reserve Margin % 2017 Reference Margin Level 2018 Reference Margin Level Summer Anticipated Reserve Margins Year-to-Year Change 3

88 ERCOT Reserve Margin Drivers Contributing Factors to ERCOT s Reserve Margin Changes Since May 2017 and Operational Risk for Summer ,300 MW Retirements May 2017 December 2017 Preseason Planning Operational Risk Assessment 4

89 Continued Flexibility Needs in CAISO May 2017 CAISO first Stage 1 Emergency in 10 years October 2017 EEA3 (demand response activated; no load shed) March 2018 Record breakers: All-time demand served by transmission-connected solar was 49.95% 3-hour upward net-load ramp was 14,777 MW; 1-Hour 7,545 MW Larger ramps in shoulder seasons; however, supply scarcity more likely during summer conditions 5 Source: CAISO 2018 Flexible Capacity Needs Assessment

90 2018 SRA Schedule Date May 14 May 21 May 24 May 30 Milestone Report sent to PC for acceptance Report sent to NERC Executive Management for approval Final Report sent to Board of Trustees and MRC Report release and public posting 6

91 7

92 State of Reliability Report Preview of Key Findings David Till, Senior Manager, Performance Analysis Member Representatives Committee Meeting May 9, 2018

93 2017: Impacts Must be Delineated Wind Event vs. Water Event Hurricane Ike Wind Hurricane Harvey 2017 Water 2

94 Two Category 5 Events to Analyze Hurricane Harvey s water flooded Houston and would not quit Hurricane Harvey s winds hit South Texas 85 substations damaged 225 transmission line outages Over 850 transmission line structures downed/damaged Over 6000 distribution poles downed/damaged Hurricane Irma was the largest impact storm to ever hit Florida A record 4.45 million customers out of service for Florida Power & Light Previous record was 3.24 million during Hurricane Wilma in 2005 Irma restoration took only 10 days versus 18 days during Wilma 3

95 Event Analysis Key Findings & Recommendations Drones hastened restoration following both Harvey and Irma with unexpected versatility Mutual Assistance agreements provided essential equipment and material for both Harvey and Irma restorations Florida and its utilities shortened Irma restoration time with strong, prior investment in system hardening 4

96 Continued Decline in Average Transmission Outage Severity 5

97 Misoperation Rates Continuing to Decline 6

98 Misoperation Rates Continuing to Decline 7

99 200 kv+ Outages by Cause Code 8

100 State of Reliability 2018 Schedule May 24, 2018 June 8, 2018 June 21, 2018 Report sent to Board of Trustees (Board) and MRC for review Board teleconference and vote to accept report (target date) Target release 9

101 10

102 Recent FERC Activity David Ortiz, Acting Director FERC Office of Electric Reliability May 9, 2018 This is a staff briefing and does not necessarily represent the views of the Commission or any individual Commissioner

103 Primary Frequency Response FERC issued a Final Rule in RM16-6 on 2/15/18 Amends pro forma large and small generator interconnection agreements to require all new generating facilities to install, maintain and operate functioning governor or equivalent controls as a condition of interconnection Also amends pro forma agreements to include minimum operating requirements including maximum droop and deadband parameters, and sustained response provisions Rehearing is pending Effective date 5/15/18 2

104 Final Rule on Security Management Controls FERC issued a Final Rule approving CIP in RM17-11 on 4/19/18 Adopted NOPR proposal directing NERC to develop modifications to address the need to mitigate the risk of malicious code that could result from third-party transient electronic devices Did not adopt NOPR proposal regarding criteria for necessary inbound and outbound communications for Low Impact cyber assets Effective 60 days after publication in Federal Register 3

105 Distributed Energy Resources Paper and Technical Conference DER Technical Conference, RM18-9 and AD18-10, April Diverse group of panelists from a wide range of entities and state commissions addressed DER participation in RTO/ISO markets and potential effects of DERs on the bulk power system FERC staff issued a white paper on DER Technical Considerations for the Bulk Power System Notices inviting post-technical conference comments issued 4/23/18 with comments due in 60 days Commission seeking comment on: Roles and responsibilities of entities on both transmission and distribution systems as penetrations of DERs continue to increase Collection of DER data and modeling of DER 4

106 OER Approves PRC-025-2, Generator Relay Loadability OER approved by delegated letter order PRC in RD18-4 on May 2, 2018 Improves on PRC by better addressing the risk of unnecessary generator tripping when voltage is depressed and the generator is capable of increased reactive power output and voltage support during the voltage disturbance 5

107 Joint Blackstart Report FERC/NERC/Regional Entity Staff Report on Beneficial Practices for Blackstart Capability Planning and Testing, issued 5/2/18 Follow up to Planning Restoration Absent SCADA or EMS (June 2017) Purpose Assess current state of blackstart resource availability and strategies for replacing blackstart resources Verify whether and how entities test blackstart resources Identify methods and practices to improve system restoration plans and training Recommendations for registered entities Develop alternative fuel capability for single-fuel-dependent blackstart generators Coordinate with other entities to: verify accuracy of data for blackstart simulations and expand blackstart cranking path testing Gather and share lessons learned on expanded testing of blackstart cranking paths 7

108 Reform of Generation Interconnection Procedures and Agreements FERC issued a Final Rule in RM17-8 adopting 10 of 14 reforms proposed in NOPR on 4/19/18 Improves certainty for interconnection customers by removing construction limitations and requiring dispute resolution procedures Improves transparency and promotes informed interconnection decisions by making explicit the processes and assumptions regarding studies and including storage as a type of generating facility, among others Enhances efficiency of interconnection process by allowing connections below generating capacity, using surplus capacity, and establishing a process regarding technology changes, among others Effective 75 days after publication in Federal Register Compliance filings due within 90 days of publication in Federal Register 8

109 Status of Grid Resilience Proceeding FERC terminated the DOE NOPR on grid resilience (RM18-1) and opened a new proceeding (AD18-7) on 1/9/18 Directs RTOs/ISOs to provide information to Develop common understanding among Commission, industry and others of what resilience of bulk power system means and requires Understand how each RTO/ISO assesses resilience in its footprint Use this info to evaluate whether additional Commission action on resilience is appropriate RTOs/ISOs submitted information on 3/9/18 Reply comments due on 5/9/18 and encouraged from all interested parties 9