NERC Overview and Compliance Update

Transcription

1 NERC Overview and Compliance Update Eric Ruskamp Manager, Regulatory Compliance August 17,

2 Agenda NERC Overview History Regulatory Hierarchy Reliability Standards Compliance Enforcement Compliance Update Noteworthy Changes Standards Activity 2

3 NERC History How long has NERC been around? a) 5 years b) 14 years c) 22 years d) 32 years e) 50 years 3

4 NERC History How long has NERC been around? a) 5 years b) 14 years c) 22 years d) 32 years e) 50 years 4

5 NERC History The Event Nov 9, 1965 A single wrongly set relay in Ontario caused a key 345kV transmission line to open Escalating line overloads Within 5 minutes, islanding across much of the Northeast 25 Million people (80,000 square miles) were without electricity lasting up to 12 hours Reason: varying operating standards developed somewhat independently 5

6 NERC History The Result North American Electric Reliability Council (NERC) formed on June 1, 1968 under the Electric Power Reliability Act of 1967 Began developing Operating Policies Adopted Planning Standards in

7 NERC History Major Outages 1969 Florida, 2m people 1977 New York, 9m people 1981 Utah, 1.5m people 1982 California, 5m people 1985 Florida, 4.5m people 1996 Western US and Canada, 7.5m people 7

8 NERC History August 14, 2003 Largest Blackout in North American history Originated in Akron, OH Affected 50 million people Financial loses estimated at $6 Billion Trees! Line Overloads Lost 21 power plants in 3 min 8

9 NERC History

10 NERC History Enforcement Needed EPACT 2005 signed by President Bush on August 8, 2005 Authorized the creation of the Electric Reliability Organization (ERO) to span North America with FERC oversight in the US... North American Electric Reliability Corporation (NERC) June 18, 2007 Mandatory Enforcement began 10

11 NERC Reliability Standards generation-load balance contingency reserves communication protocols cyber security physical security system restoration emergency operations interconnection requirements vegetation management facility ratings operating limits transmission loading relief outage coordination real-time assessments model development system operator training system protection underfrequency load shedding generator capability coordination operations planning transmission planning voltage control 11

12 NERC Reliability Standards Functional Entity Registration Balancing Authority Distribution Provider Generation Owner Generation Operator Planning Coordinator Reliability Coordinator Transmission Owner Transmission Operator Transmission Planner Transmission Service Provider Resource Planner Reserve Sharing Group 12

13 NERC Reliability Standards Functional Entity Registration Balancing Authority Distribution Provider Generation Owner Generation Operator Planning Coordinator Reliability Coordinator Transmission Owner Transmission Operator Transmission Planner Transmission Service Provider Resource Planner Reserve Sharing Group 13

14 NERC Reliability Standards 14

15 NERC Reliability Standards 15

16 NERC Reliability Standards 16

17 NERC Reliability Standards FAC Facility Ratings Purpose - To ensure that Facility Ratings used in the reliable planning and operation of the Bulk Electric System (BES) are determined based on technically sound principles. Applies to Transmission and Generation 8 Requirements, 27 sub Requirements - Development and implementation of methodology 1,632 Transmission Elements 95 Generation Elements 17

18 NERC Reliability Standards NERC Reliability Standards 101 enforceable 79 applicable to LES 500+ Requirements 300+ applicable to LES An additional 1,100 sub Requirements within the standards (not counting bullet points and attachments) 18

19 NERC Regulatory Hierarchy FERC Provides oversight & direction NERC SERC FRCC RFC MRO TRE WECC NPCC 19

20 NERC Regulatory Hierarchy FERC NERC Develops & Enforces Reliability Standards SERC FRCC RFC MRO TRE WECC NPCC 20

21 NERC Regulatory Hierarchy FERC NERC SERC FRCC RFC MRO TRE WECC NPCC Audits the NERC Reliability Standards 21

22 NERC Regulatory Hierarchy NERC Regional Entities 22

23 NERC Regulatory Hierarchy MRO - Regional Entity Compliance & Enforcement Registration & Certification Seasonal and Long-term Assessments Data Submittals 23

24 NERC Enforcement The MRO monitors, assesses, and enforces compliance with Reliability Standards using eight monitoring processes: Compliance Audits Self-Certifications Spot Checking Compliance Violation Investigations Self-Reporting Periodic Data Submittals Exception Reporting Complaints 24

25 NERC Enforcement The MRO monitors, assesses, and enforces compliance with Reliability Standards using eight monitoring processes: Compliance Audits Self-Certifications Spot Checking Compliance Violation Investigations Self-Reporting Periodic Data Submittals Exception Reporting Complaints 25

26 NERC Enforcement Compliance Oversight Plans (COPs) Performed by MRO 26

27 NERC Enforcement Compliance Audits May 2017 onsite audit (every 3 years) Preceded by offsite compliance review 21 NERC Standards 2,238 evidentiary files provided May 2019 offsite audit (every 2 years) 2020 onsite audit Audits typically led by MRO 2 Teams Ops & Planning Audit CIP Audit 27

28 NERC Enforcement Guided Self Certifications 1. List all facilities 2. Perform random sample 3. Create population 4. Documentation for identified Requirements Reqs Reqs Reqs 28

29 NERC Enforcement Self Reporting Expectation to self identify and Self Report matters of potential noncompliance 1. Issues reported to internal RC Dept. 2. RC Dept. investigates 3. Formal report and presentation provided to LES Compliance Committee LES Board and MRO notified 29

30 Annual Internal Review 450 Tracking Records Compliance narrative Supporting evidence 40 SMEs 12 Group Managers Regulatory Compliance 30

31 Compliance Update Compliance Reviews Performance of LES Inherent Risk Assessment in 2019 Offsite audit in May 2019 Onsite audit in guided Self Certs in

32 Compliance Update SPP RE Dissolution 32

33 Compliance Update NERC and MRO Dues $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 MRO NERC Total $40,000 $20,000 $ MRO dues to reduce 14.6% NERC dues to increase 10.3% 33

34 Compliance Update Leadership changes Jim Robb President & CEO of NERC, April 2018 Sara Patrick President & CEO of MRO, June 2018 Peak Reliability dissolution Ending Reliability Coordinator services end of 2019 SPP and Cal ISO are exploring RC certification 34

35 Compliance Update Large Financial Penalty An unidentified entity received a $2.7 million penalty for the violation of 2 NERC requirements. A third-party contractor exceeded its authorized access by improperly copying data from the entity to its own server. Though trained, the contractor failed to properly protect the data which included 30,000 asset records, including IP addresses, server host names, cryptographic information for usernames and passwords (which could aid a malicious attacker in decoding passwords). The data was accessible online without user ID or password for 70 days. A white hat security researcher notified the entity of the exposure. Logs indicate that only the white hat researcher downloaded the data. 35

36 Compliance Update New/Revised Standards FERC directives Reliability needs Clarifications/improvements Drafting teams comprised of industry volunteers Develop and provide comments and voting recommendations o 66.66% approval needed Implement new standards before enforcement date 36

37 Compliance Update Standards Under Development 13 Projects o Establishing System Operating Limits o Single Points of Failure o Supply Chain Management o Training Standards Efficiency review Standards being implemented 7 implementation plans o Generator Modeling and Testing o Communications Testing 37

38 Compliance Update NERC 2018 Summer Assessment Texas has a generation shortfall due in part to 5,000 MW of generation retirements since last summer. The projected reserve margin is 11%, 3% below their recommended level. California is facing a limit on natural gas output due to Aliso Canyon storage facility constraints. Anticipated below normal hydro generation and the need for fast-ramping generation based on high penetration of renewables will also challenge California. SPP footprint does not have any emerging reliability issues that are considered unique. 38

39 Compliance Update NERC 2018 State of Reliability Report The report looks back over the previous year with a view toward solving future problems. In 2017, the bulk power system was able to maintain reliable operations during two Category 5 events (hurricanes Harvey and Irma) and the areas affected from storm-related damage recovered in record time. The bulk power system experienced no loss-of-load due to cyber or physical security events despite continually evolving threats. Transmission outages caused by failed protection system equipment, substation equipment, or human error all show a decreasing trend for the last five years. 39

40 NERC Overview and Compliance Update Eric Ruskamp Manager, Regulatory Compliance 40