ERO Enterprise Strategic Planning Redesign
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1 ERO Enterprise Strategic Planning Redesign Mark Lauby, Senior Vice President and Chief Reliability Officer Member Representatives Committee Meeting February 10, 2016
2 Strategic Planning Redesign Current strategic planning documents: Three-year Electric Reliability Organization (ERO) Enterprise Strategic Plan ERO Enterprise and Corporate Metrics ERO Enterprise Longer-term Strategic Planning Considerations Strategic planning process continues to mature: Consolidate documents Clarify linkages between the goals and metrics Enhance metrics to be outcome and risk-based Increase industry input on content 2
3 Strategic Planning Redesign January 2016: policy input on development of strategic planning framework May 2016: framework to Member Representatives Committee July 2016: policy input on strategic planning content October 2016: policy input on draft documents November 2016: documents to NERC Board of Trustees 3
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5 Cost Effectiveness Method and Pilot Proposal Howard Gugel, Director of Standards Member Representatives Committee Meeting February 10, 2016
6 Background Desire for cost consideration in development Ballot was indirect method Need expressed by some for direct measurement Order of magnitude approach Specific entity cost difficult to estimate Flexibility in how to comply Balance of cost versus risk 2
7 Cost Considerations Risk Focus Two questions to address What is level of cost versus reliability benefit? Can the most cost effective solution be used? 3
8 Proposal Two phases Standard Authorization Request drafting phase Standard development phase Pilot Project : Single Points of Failure TPL-001 Two directives o Risk that six-month threshold could exclude planned maintenance outages o Spare equipment strategy for stability analysis Two questions o What is the risk? o Can it be mitigated cost effective? 4
9 Policy Input Summary Three questions asked Input received February 2,
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11 Supply Chain Management Technical Conference Marc Sachs, Senior VP & Chief Security Officer Member Representatives Committee Meeting February 10,
12 Summary FERC Technical Conference held on January 28, 2016 Purpose was to clarify issues, share information, and determine proper response to address FERC s concerns about security and risk Marc Sachs, NERC s SVP and CSO was a panelist Conference overview Staff Presentation: Supply Chain Efforts by Certain Other Federal Agencies Panel 1: Need for a New or Modified Reliability Standard Panel 2: Scope and Implementation of a New or Modified Standard Panel 3: Current Supply Chain Risk Management Practices and Collaborative Efforts 2
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14 Bulk Electric System Notification and Exception Process Update John Moura, Director, Reliability Assessment and System Analysis Member Representatives Committee Meeting February 10, 2016
15 Process Maturing Advancing Electric Reliability Organization coordination on processing determinations Applying risk-based assessment Considering case-by-case facts and circumstances Identifying potential alternative courses of action, as applicable 2
16 Statistics as of January 15, 2016 Exclusion Exceptions 7 disapproved 3 approved Inclusion Exceptions 34 approved Self-Determined Notifications 597 inclusions accepted 496 exclusions accepted 30 exclusions rejected 3 inclusions rejected by application of the Bulk Electric System radial system exclusion Awaiting NERC action 4 exception requests 58 self-determined notifications NERC will update and release quarterly statistics and case notes, which will be posted on the NERC website: 3
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18 Clean Power Plan NERC Assessments Status Update Thomas Coleman, Director, Reliability Assessments Member Representatives Committee Meeting February 10, 2016
19 Reliability Considerations for Clean Power Plan Development Released January 27, 2016 Conducting outreach and coordination with states Continuously update assessments as state plans emerge Engage state regulators Coordinate with Regional Entities Distribute assessment and educational materials Conduct annual periodic reliability assessment, multi-plan integration, and interconnection-wide analysis 2
20 Phase II Scenario Analysis Provide resource adequacy analysis and serve as a framework for more localized and granular studies Two contractors selected to model resource adequacy Input assumptions for NERC scenarios finalized Provide overview of existing regional studies 3
21 Project Timeline October 1, 2015 October through December December 2015 January 2016 Tentatively March 31, 2016 Brief NERC Board of Trustees on preliminary plan and scope Planning Committee Advisory Group work on Clean Power Plan (CPP) Completion of Reliability Considerations Outreach and coordination CPP Phase II Report 4
22 CPP Phase II Scenarios Reference Case No CPP Constrained Interstate Trading Intrastate trading develops, interstate constrained Full Trading Full intrastate and interstate trading High Renewables High penetration of renewables Nuclear retirements Accelerated retirement of nuclear units 5
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24 Outreach and Follow-up of Reliability Assessment Reports Janet Sena, Senior Vice President and Director of Policy and External Affairs John Moura, Director of Reliability Assessment and System Analysis Member Representatives Committee Meeting February 10, 2016
25 Development of Outreach Plan Objective to establish dialogue on: Technical challenges Recommendations for action Forming a feedback loop Identification of target audience Most effective communication platforms Industry NERC Board of Trustees ERO Enterprise Other Policy Makers 2
26 Development of Outreach Plan (cont.) Outreach prior to report release Feedback often incorporated into report Outreach after report release Reinforcement of key messages Support for a new or revised Reliability Standard Emerging reliability risk Reliability considerations Advocacy for reliability in policy setting Enhancements to planning or operations Follow-up through annual long-term reliability assessments 3
27 Example of Coordination of Essential Reliability Services (ERS) Recommendation Board of Trustees Approving recommendations Continue to monitor through special and long-term reliability assessments FERC Working closely to establish needed changes within its authority Addressing recommendations through changes to interconnection requirements, market provisions 4
28 Example of Coordination of ERS Recommendation (cont.) State regulators Ongoing conversation through Member Representatives Committee, Regional Entities, and National Association of Regulatory Utility Commissioners Ensure understanding of policy influence and implications of resource mix changes Industry Incorporation of recommended industry practices Planning and Operating Committee Form Distributed Energy Resources Task Force to identify risks to Bulk Power System and potential solutions Reliability Guidelines to establish performance requirements 5
29 ERO-Enterprise Outreach and Coordination with States on Clean Power Plan Continuously update assessments as state plans emerge Engage state regulators Coordinate with Regional Entities Distribute assessment and educational materials Conduct annual periodic reliability assessment, multi-plan integration, and interconnection-wide analysis 6
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31 Compliance Guidance Implementation Patti Metro, Compliance and Certification Committee Chair Steven Noess, Director of Compliance Assurance Member Representatives Committee Meeting February 10, 2016
32 Compliance Guidance Policy Implementation Guidance Developed by industry Examples for implementing a standard Compliance Monitoring and Enforcement Program (CMEP) Practice Guides Developed by the Electric Reliability Organization (ERO) Enterprise Provide direction to ERO Enterprise CMEP staff on approaches to carry out compliance and enforcement activities 2
33 Recommendations Review of existing documents to submit for endorsement List to be submitted by March 31, 2016 Also developing process to approve new organizations as pre-qualified Review of section 11 of the Standard Processes Manual Being reviewed by the Standards Committee Process Subcommittee Review of measures and Reliability Standard Audit Worksheets To be coordinated 3
34 Recommendations (cont.) Development of CMEP Practice Guide on deference Currently being developed One-stop shop on NERC website Link to spreadsheet added to standards homepage Will include links to endorsed Implementation Guidance and CMEP Practice Guides 4
35 Additional Information NERC website being updated Pre-qualified organizations may submit vetted Implementation Guidance to 5
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