INDIANA MUNICIPAL POWER AGENCY :INDIANA MUNICIPAL POWER AGENCY Workshop on NERC Reliability Standards February 6, 2007


Agenda :2 Agenda Introduction Registration Requirements & Procedures Overview of Standards Distribution Provider Load Serving Entity Compliance & Delegation Options Next Steps


Introduction :3 Introduction Energy Policy Act of 2005 (EPACT 2005) mandates A single national Electric Reliability Organization (ERO) Mandatory reliability standards developed by the ERO and approved by the Federal Energy Regulatory Commission (FERC) Allows penalties for violation of mandatory standards, including financial penalties


Introduction :4 Introduction The North American Electric Reliability Corporation (NERC) was approved as the ERO in July 2006 NERC has delegated certain authority to regional entities In Indiana, the regional entity is ReliabilityFirst, which was formed by the merger of ECAR, MAAC and MAIN


Roles of NERC and the Regions :5 Roles of NERC and the Regions The Regional Entities will Register entities responsible for standards compliance Monitor the compliance of registered entities May develop regional standards NERC will Develop national standards Audit regional standards implementation Measure regional compliance


Registration Requirements :6 Registration Requirements Under EPACT 2005: All users, owner and operators of the bulk-power system shall comply with reliability standards NERC has defined 14 types of entities required to register as owners, operators or users of the bulk-power system All IMPA members fit two functional categories Distribution Provider Load Serving Entity


Registration Requirements :7 Registration Requirements Some IMPA members may also be Generation Owners/Operators Transmission Owners/Operators There are some exceptions to the registration requirements for these categories of entities


Distribution Provider (DP) :8 Provides and operates the “wires” between the transmission system and the end-use customer. For those end-use customers who are served at transmission voltages, the Transmission Owner also serves as the DP. Thus, the DP is not defined by a specific voltage, but rather as performing the Distribution function. Distribution Provider (DP)


Distribution Provider Exceptions :9 Distribution Provider Exceptions Excluded from registration if do not meet any of the following criteria: System serving peak load > 25 MW and directly connected to bulk power (>100 kV) system Responsible entity that owns, controls or operates a required underfrequency load shedding (UFLS), undervoltage load shedding (UVLS) system, special protection system or a transmission protection system


Load-Serving Entity (LSE) :10 Load-Serving Entity (LSE) Secures energy and transmission service (and related interconnected operations services) to serve the electrical demand and energy requirements of its end-use customers.


Load Serving Entity Exceptions :11 Load Serving Entity Exceptions Excluded from registration if do not meet any of the following criteria: Peak load > 25 MW and directly connected to bulk power (>100 kV) system Responsible entity for a required underfrequency load shedding (UFLS) or undervoltage load shedding (UVLS) system


Generic Exception :12 Generic Exception An entity will not be registered based on the registry criteria if responsibility for compliance with applicable standards or requirements, including reporting requirements, have been transferred by written agreement to another entity that has registered for the transferred functions


Registration Timeline & Procedures :13 Registration Timeline & Procedures ReliabilityFirst has completed an initial registry has identified certain non-registered entities. If not contacted by these entities, ReliabilityFirst will make a determination about their registration by March 2, 2007 (See www.rfirst.org/Compliance/Registration.aspx) Will submit its final registry to NERC by March 3, 2006 To register or contest a registration, contact Glenn Kaht, 1-815-364-1273 or glenn.kaht@rfirst.org Gary Campbell, 1-708-364-1273 or gary.campbell@rfirst.org


Overview of Standards :14 Overview of Standards For Distribution Providers (DPs) and Load Serving Entities (LSEs) Can discuss standards for Generation Owners/Operators and Transmission Owners/Operators individually with affected systems


NERC Mandatory Reliability Rules :15 ERO Timeline January 2007 FERC approves ERO compliance filing March 2007 FERC approves Standards March 2007 FERC approves delegation agreements June 2007 Mandatory Standards apply with financial penalties NERC Mandatory Reliability Rules


NERC Mandatory Reliability Rules :16 Why June 1, 2007?? Wanted the ability to levy financial penalties for non-compliance As per FERC Policy Statement on Enforcement (issued October, 2005) – needed a start date Prior to summer 2007 peaking season Desire to apply Standards fairly across the North American grid (yet allow for regional variations) as soon as possible NERC Mandatory Reliability Rules


NERC Mandatory Reliability Rules :17 Current state of Standards approval: 83 Proposed for Approval 24 On hold pending further information Regional “fill-in-the-blank” standards Compliance with these expected as “good utility practice” 8 Pending (Cyber Security Standards) 3 Pending (System Limits Standards) 118 Total Standards expected (but not limited to only these) NERC Mandatory Reliability Rules


NERC Mandatory Reliability Rules :18 These are “living Standards” and represent the best “first-effort” Standards process is ANSI-accredited Elected Standards Committee Registered ballot body of stakeholders All Standards subject to change/revision/modification as needed New Standards may be added as industry conditions warrant NERC Mandatory Reliability Rules


NERC Mandatory Reliability Standards :19 Why mandatory standards now?? Recommended after the Blackout of 2004 Utilities cited for non-compliance of voluntary standards Penalty process – modeled market-manipulation penalty process NERC Mandatory Reliability Standards


NERC Reliability Standards :20 NERC Reliability Standards The good news – not all Standards apply to each Utility Registration Other


NERC Reliability Standards :21 The bad news If you’ve been invited by Gayle – you may be subjected to a portion of these Standards ! NERC Reliability Standards


NERC Reliability Standards :22 Best source of current information on standards – the NERC website http://www.nerc.com/~filez/standards/ Reliability_Standards.html or www.nerc.com NERC Reliability Standards


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NERC Reliability Standards :25 Standards Format At the top of each page will be the Standard Title A. Introduction (will contain the following) 1. Title (e.g. Reliability Coordination – Responsibilities and Authorities) 2. Number (IRO-001-1) 3. Purpose (what the stated purpose of this standard is – brief overview) 4. Applicability (Who/what entities will this Standard apply to) 4.1 Reliability Coordinators 4.2 Load-Serving Entities 4.3 And so on………… 5. Effective Date: January 1, 2007 NERC Reliability Standards


NERC Reliability Standards :26 Standards Format (continued) B. Requirements R1. (lists generic requirements that make up this Standard and the entity it applies to) R2. R3. “……………… as follows:” R3.1. (more detail on the above requirement) R3.2. Etc. NERC Reliability Standards


NERC Reliability Standards :27 Standards Format (continued) C. Measures M1. (used to determine compliance with the Standard – typically if documentation may be requested, record-keeping, etc.) M2. M3. etc. D. Compliance 1. Compliance Monitoring Process 1.1. Compliance Monitoring Responsibility (e.g. RRO) 1.2.Compliance Monitoring and Reset Time Frame (will indicate what methods will be used to assess compliance, e.g. Self-certification, Spot Check Audits, etc.) NERC Reliability Standards


NERC Reliability Standards :28 Standards Format (continued) 1.3. Data Retention (will indicate if documents are to be available, if historical data is required and how far back it needs to go, etc.) 1.4 Additional Compliance Information (will contain any additional information if needed) 2. Levels of Non-Compliance for xxxxx: (will list for each entity shown in A4.) 2.1. Level 1: 2.2. Level 2: 2.3. Level 3: 2.4. Level 4: NERC Reliability Standards


NERC Reliability Standards :29 Standards Format (continued) E. Regional Differences (as applicable) Version History (will have a Table showing the history of the document) At the bottom of the page it will indicate when the Standard was Adopted by the Board of Trustees, the effective date of the Standard, and page _ of _. NERC Reliability Standards


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NERC Reliability StandardsDP’s and LSE’s :31 NERC Reliability StandardsDP’s and LSE’s


Resource and Demand BalancingBAL Series :32 Resource and Demand BalancingBAL Series


NERC Reliability StandardsDP’s and LSE’s :33 NERC Reliability StandardsDP’s and LSE’s


Critical Infrastructure ProtectionCIP Series :34 Critical Infrastructure ProtectionCIP Series


NERC Reliability StandardsDP’s and LSE’s :35 NERC Reliability StandardsDP’s and LSE’s


Emergency Preparedness and OperationsEOP Series :36 Emergency Preparedness and OperationsEOP Series


NERC Reliability StandardsDP’s and LSE’s :37 NERC Reliability StandardsDP’s and LSE’s


Facilities Design, Connections, and MaintenanceFAC Series :38 Facilities Design, Connections, and MaintenanceFAC Series


NERC Reliability StandardsDP’s and LSE’s :39 NERC Reliability StandardsDP’s and LSE’s


Interchange Scheduling and CoordinationINT Series :40 Interchange Scheduling and CoordinationINT Series


NERC Reliability StandardsDP’s and LSE’s :41 NERC Reliability StandardsDP’s and LSE’s


Interconnection Reliability Operations and CoordinationIRO Series :42 Interconnection Reliability Operations and CoordinationIRO Series


NERC Reliability StandardsDP’s and LSE’s :43 NERC Reliability StandardsDP’s and LSE’s


NERC Reliability StandardsDP’s and LSE’s :44 NERC Reliability StandardsDP’s and LSE’s


NERC Reliability StandardsDP’s and LSE’s :45 NERC Reliability StandardsDP’s and LSE’s


Modeling, Data, and Analysis MOD Series :46 Modeling, Data, and Analysis MOD Series


NERC Reliability StandardsDP’s and LSE’s :47 NERC Reliability StandardsDP’s and LSE’s


NERC Reliability StandardsDP’s and LSE’s :48 NERC Reliability StandardsDP’s and LSE’s


NERC Reliability StandardsDP’s and LSE’s :49 NERC Reliability StandardsDP’s and LSE’s


Protection and Control PRC Series :50 Protection and Control PRC Series


Protection and Control PRC Series :51 Protection and Control PRC Series


NERC Reliability StandardsDP’s and LSE’s :52 NERC Reliability StandardsDP’s and LSE’s


Protection and Control PRC Series :53 Protection and Control PRC Series


NERC Reliability StandardsDP’s and LSE’sSummary :54 NERC Reliability StandardsDP’s and LSE’sSummary


NERC Reliability StandardsDP’s and LSE’sSummary :55 NERC Reliability StandardsDP’s and LSE’sSummary


NERC Reliability Standards :56 NERC Reliability Standards Suggestions: Even if a Standard doesn’t apply at this time it should be documented as such and signed off by someone in a Senior Management position at your Utility Standards should be reviewed at least yearly for applicability – each time it is reviewed it should be documented and signed/dated again It is critical to document every step of the process and maintain proper records If interested you can subscribe to an automatic Standards update notification process (on the NERC website)


NERC Reliability Standards :57 Suggestions: If a Standard does change it will need to be reviewed for applicability and signed/dated On the summary sheet there are several Standards that need procedures/forms created – it may be advantageous to do this as a group (these are indicated in the “Form a Workgroup” column) This is NOT a time to “chest-thump” about your system to RFC/NERC – several of the registration categories have extremely tough standards (e.g. Transmission Operator). If there is any question about registering, check with Gayle/IMPA for clarification first. NERC Reliability Standards


NERC Reliability Standards :58 Where to go from here??? NERC Reliability Standards


Compliance & Delegation Options :59 Compliance & Delegation Options Members likely will need to register and take responsibility for compliance with certain standards IMPA may be able to take responsibility for other standards pursuant to a written agreement


Next Steps :60 Next Steps Identify who needs to be registered – MUST be completed before March 2 For those members, divide standards into Member responsibility or IMPA responsibility Develop written delegation agreement spelling out responsibilities


Upcoming Seminar :61 Upcoming Seminar APPA, EEI, NRECA, EPSA and ReliabilityFirst are planning a standards workshop in Indianapolis tentatively scheduled for March 7 or 6 Will focus on the compliance obligations and concerns of smaller entities


Information Resources :62 Information Resources NERC: www.nerc.com For Standards, click on “Standards” in the yellow bar across the top of the page For Registration, click on “Organization Registration” in the list on the left of the page For Membership, click on the “Become a NERC Member” button ReliabilityFirst: www.reliabilityfirst.com Click on “Compliance” and then “Compliance Registry”


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