Standards. Mark Lauby, Vice President and Director of Standards Board of Trustees Meeting November 7, 2013

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1 Standards Mark Lauby, Vice President and Director of Standards Board of Trustees Meeting November 7, 2013

2 Geomagnetic Disturbance Operations EOP Reliability benefits Enhance operating response to geomagnetic disturbance events by implementing entity-specific coordinated operating procedures Action Adopt EOP Geomagnetic Disturbance Operations and implementation plan 2

3 Protection System Maintenance and Testing-Phase 2 PRC Reliability benefits Provides maintenance requirements for reclosing relays that can affect the reliability of the Bulk Electric System (BES) Action Adopt PRC Protection System Maintenance and Testing-Phase 2 and associated documents 3

4 Transmission Relay Loadability PRC Reliability benefits Moved generation criteria to PRC Generator Relay Loadability Establishes bright line between PRC (transmission) and PRC (generation) All BES lines that connect generation are now covered Action Adopt PRC Transmission Relay Loadability and associated documents 4

5 Interpretation of CIP for Consumers Energy Clarification CIP Senior Manager assignment is per registered entity, not per registered function Action Adopt the interpretation of CIP for Consumers Energy Corporation (Consumers Energy) and authorize staff to file with applicable regulatory authorities 5

6 Interpretation of CIP for ITC Clarification The use of and in Requirement R5 indicates the entity must implement both technical and procedural controls to collectively achieve the sub requirements within Requirement R5, but both are not necessary for each sub requirement individually Interpretation is aligned with the common understanding and implementation of the requirement Action Adopt the interpretation of CIP for ITC and authorize staff to file with applicable regulatory authorities 6

7 Southwest Power Pool Regional Entity Withdrawal of PRC-006-SPP-01 Reason for Action All of the requirements included in the Southwest Power Pool (SPP) Regional Standard are included in the UFLS plan that will be adopted by SPP pursuant to the continent-wide standard PRC Withdrawal of the SPP Regional Standard will not affect reliability Action Withdraw the November 7, 2012 adoption of PRC-006-SPP-01 Automatic Underfrequency Load Shedding and associated documents 7

8 Reliability Standards Development Plan (RSDP) RSDP approach Supports Reliability Standards transformation to steady-state Progress on 2013 project activities Collaboration between the Standards Committee (SC) and the Reliability Issues Steering Committee (RISC), prioritizing future projects into high, medium, low, and pending technical committee input categories Action Adopt the RSDP and direct staff to file with applicable regulatory authorities 8

9 Definition of Bulk Electric System- Phase 2 Summary of changes from Phase 1 Planning Committee and drafting team studies on definition threshold variables (75 MVA, 20 MVA) concluded no changes necessary From FERC Orders 773 and 773-A o Addressed FERC s concerns on dispersed power producing resources collector systems (Inclusion I4b) o Applied directive on inclusion of generator interconnection facilities (Exclusions E1 radial systems and E3 local networks) o Applied directive to remove floor from local network (Exclusion E3) o Adopted equal and effective response to directive on loop flow in radial systems with introduction of 50 kv threshold value (Exclusion E1) Action None at this time information only 9

10 COM-003: Procedural History Prior to August Board meeting: Board approved COM-002 standard and interpretations and directed SC to develop COM-003 standard Industry unable to achieve consensus on COM-003 standard August Board Meeting Board directed questions regarding COM standards to RISC, Independent Experts Review Panel (IERP), and NERC Management, with responses due Sept. 6 o Responses were to be submitted to standard drafting team (SDT) and Operating Committee (OC) for comment Board indicated it would consider responses in determining how to move forward including whether to invoke Section 321 of NERC Rules of Procedure 10

11 COM-003: Procedural History September Reponses to Board question posted Standards Oversight and Technology Committee (SOTC) considered legal advice during closed meeting, and approved recommendations to Board regarding potential future actions, to be considered by Board at an open meeting October On October 9, 2013, Board published SOTC recommendations and summary of comments, and requested industry input on next steps On October 9, 2013, SDT, after release of MRC policy input letter, determined to post combined COM standard On October 17, 2013, SC approved process waiver Draft Reliability Standard Audit Worksheet (RSAW) posted 11

12 Summary of Input to the Board RISC File COM and revise COM-003 to complement COM Address zero tolerance in compliance approach OC should determine scope of non-emergency communications IERP Combine COM and COM into one standard Must specify clear uniform protocols for Operating Instructions NERC Management Combine COM and COM into one standard Three-part and English required, flexibility in other protocols OC Little evidence that non-emergency communications are a reliability gap New standard drafting team should be formed Refer to OC guidelines 12

13 Potential Board Actions Adopt SOTC recommendations Begin process to invoke Section 321 of NERC Rules of Procedure Instruct NERC management to file existing COM-related standards and interpretation 13

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15 2013 Special Reliability Assessment: Maintaining Bulk Power System Reliability While Integrating VERs to Meet RPS John Moura, Director Reliability Assessment, NERC Clyde Loutan, Senior Advisor Renewable Energy Integration, CAISO

16 Unique Challenges for CAISO ISO s unique operating challenges VERs build out to meet 33% RPS by 2020 ISO 2010 FERC Filing for VERs interconnection requirements NERC/ISO recommended characteristics VER should provide The ISO s plans for integrating renewables Partners to reliably integrate high levels of renewables 2

17 Driven by State Initiatives and Environmental Policies Greenhouse gas reductions to 1990 levels by 2020 Limits on availability of air emission credits for replacement generation 33% of load served by renewable generation by 2020 Possibly 12,000 MW of distributed generation by 2020 Less predictable load patterns rooftop solar, electric vehicles, and smart grid Ban on use of once-through cooling in coastal power plants 3

18 Summary of Grid Operations to Manage a More Complex Grid Increased requirements for regulation up and down Need to manage increased intra-hour flexibility and multiple daily ramps Approx. 3,000 MW of intra-hour load-following Approx. 13,000 MW of continuous up-ramp within a 3 hour time period (almost double current up-ramps) Non-dispatchable resources serving load varies between 12,000 MW to 14,000 MW based on maximum capability of resources Increased instances of over-generation conditions Need to comply with a frequency response obligation following a disturbance (Compliance with BAL-003-1) Impact of DER resources on the BES is still not fully understood 4

19 Load & Net Load (MW) The Need For Flexibility: A Future, Not a Scenario Wind & Solar (MW) Load, Wind & Solar Profiles --- Base Scenario January ,000 32,000 30,000 28,000 26,000 24,000 22,000 20,000 18,000 6,700 MW in 3-hours 7,000 MW in 3-hours 12,700 MW in 3-hours 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 16,000 1,000 14,000 0 Net_Load Load Wind Total Solar 5 Net Load = Load - Wind - Solar Slide 5

20 MW Non-Summer Months - Net Load Pattern Changes Significantly Starting in ,000 CAISO Net Load through ,000 24,000 22,000 Significant Ramps 20,000 18,000 16,000 14,000 12,000 10,000 Potential Over-generation (Actual) 2013 (Actual) Slide 6

21 Non-Flexible Supply Creates Dispatch Issues and Potential Over-Generation Conditions 30,000 28,000 26,000 24,000 22,000 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Minimum Dispatchable Thermal & Hydro Resources Potential Over - generation Conditions Base Load Scenario Small Hydro (RPS) Imports (JOU & Dynamic Schedules) Regulation Down Geothermal Nuclear Gas (QFs) CAISO Net Load 2020 Load Following Down Qualifying Facilities (QFs) Oth QFs Gas QFs Nuclear Geothermal Imports S_Hydro CCGT & Hydro LF Down Reg. Down Net Load 7 IOU Jointly Owned Units Slide 7

22 Operating Reliability Characteristics Four essential characteristics of conventional generation needed to enable a stable and reliable BPS: Capability to provide reactive power support; Capability to increase or reduce energy output automatically, in response to system frequency; Ability to limit power production as needed for the promotion of reliability; and Capability to provide inertial response. CAISO to require VERs to contribute to essential BPS reliability services 8

23 Market Enhancements Help the Integration of Variable Resources CAISO Market Enhancements Active flexible capacity procurement Dynamic transfers Lower bid floor to incentivize economic curtailment Pay-for-performance regulation FERC 764, intra-hour scheduling Proposed enhancements to the California Public Utilities Commission s (CPUC) resource adequacy program Energy Imbalance Market (Regional Coordination) Dispatchable VERs Reliability Tools o Load Following Requirement Tool o Regulation Prediction Tool o VER Forecast Improvements 9 Slide 9

24 All of the Above Generation Storage Wider Operating Range (lower Pmin) Voltage Support Regulation Dispatchable Wind/Solar Fast Ramping Frequency Response Dispatchable Quick Start Over Generation Mitigation Load Shift Peak Load Reduction Demand Response 10 Slide 10

25 Conclusions As an electric system approaches a significant penetration in variable resources Essential reliability services will be strained Technical aspects of the evolving resource mix must be given due consideration at state, federal, and provincial level Solutions sets for maintaining reliability can come from: o Market tools and rules o New technology integration o Standards or requirements Unresolved cost implications can impede solution sets 11

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27 CID Key Activities Status Report Matt Blizard, Director of Critical Infrastructure Protection Board of Trustees Meeting November 7, 2013

28 Agenda Executive Order (EO) and Presidential Policy Directive (PPD) 21 Grid Security Conference (GridSecCon)

29 Executive Order (EO) and Presidential Policy Directive (PPD)-21 EO and PPD-21 is focused on security and resiliency NERC and industry experts fully engaged Six working groups active; two completed, four advancing Focus on National Infrastructure Protection Plan rewrite and Cybersecurity Framework Standards process, product respected ISACs and Coordinating Councils promoted Due dates extended 3

30 GridSecCon 2013 Threats, Policy, Solutions and the Bulk Power System 4

31 GridSecCon 2013 As we examined Threats, Policy, Solutions and the Bulk Power System - transformational, strategic, tactical considerations and areas of concern emerged 5

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33 RISC Update Chris Schwab RISC Chair Vice President and Chief Risk Officer, Dominion Board of Trustees Meeting November 7, 2013

34 Integrating RISC Priorities with ERO Planning NERC Business and Strategic Plan Input into NERC Business and Strategic Planning RISC Priorities are driver for achieving Goals 4 and 5 of ERO Enterprise Strategic Plan * Board-Endorsed RISC Priorities Strategic Framework for Committee Plans Committee Plans are driven by the RISC Priorities and the NERC Business/Strategic Plan Benefits: Coordinated strategy, focused on efficient resource use and effective risk management Enhanced collaboration with third parties Prioritized, risk-based decision making as foundation for the Business Plan 2 * Goal 4: Identify the most significant risks to reliability. Goal 5: Be accountable for mitigating reliability risks.

35 Adaptation and Planning for Change Fundamental Concerns The entire Generation and Transmission system was designed based on regional fuels mixes that were optimum for economics at the time of design. The operational characteristics of this design will be significantly impacted due to economic, regulatory, and policy changes Technology, economic, regulatory, and policy changes are leading to a very different generation mix, with different fundamental characteristics (e.g., frequency response and inertia behavior, protection, just-in-time fuel delivery) Industry is proactively focusing on risk-informed planning, improved modeling, and developing operational strategies to address these changes 3

36 Adaptation and Planning for Change Key NERC and Industry Initiatives to Respond Advocacy and Education Focus on explaining to decision-makers how regulatory and policy changes affect grid design and operational characteristics Communication Improved inter-regional communications, during real-time operations and within the planning process Risk assessment and risk based decision-making NERC efforts within its Reliability Assessment and Performance Analysis, Reliability Initiatives and System Analysis, and Reliability Risk Management departments linked to RISC strategic planning, helping to direct ERO focus on the right issues Probabilistic modeling of changes and how they affect the grid 4

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