Agenda Annual Meeting of the Members November 21, 2019 • 9:00 AM – 10:15 AM (ET)

St. Regis Hotel 923 16th and K Street NW • Washington, DC 20006 Room: Andrew Jackson Attire: Business

Open Agenda

1. Call to Order and Appoint Secretary to Record Minutes 9:00 am Presenter: Lisa Barton, Chair

2. Antitrust Statement 9:00 am Presenter: Rob Eckenrod Reference: Antitrust Compliance Guidelines

3. Chair’s Remarks and Welcome 9:05 am Presenter: Lisa Barton, Chair

4. Keynote Speaker 9:10 am Presenter: Robert Clarke, Board of Trustees, NERC Reference: Biography

5. President’s Report 9:25 am Presenter: Tim Gallagher

6. Election of At-Large Director and Independent Director 9:45 am Presenter: Lisa Barton, Chair Description: Chair Barton will oversee the election of an At-Large Director and

Independent Director Reference: a) At-Large Nominee Joe Trentacosta

b) Independent Director Nominee Brenton GreeneAction: a) Elect At-Large Director

b) Elect Independent Director

7. 2019 Financial Position of ReliabilityFirst 9:55 am Presenter: Ray Palmieri Description: Mr. Palmieri will provide an overview of the 2019 financial position

of ReliabilityFirst. Reference: Presentation Action: Information and Discussion

8. Comments from Members 10:05 am

9. Future Meeting for 2020December 3, 2020 • Washington, DC (Tentative)

10:15 am

10. Adjourn 10:15 am

Annual Meeting of Members • Agenda

November 21, 2019

2

Roster • Board of Directors

Roster • Large LSE Sector

Roster • Medium LSE Sector

Roster • Regional Transmission Organization (RTO) Sector

Roster • Small LSE Sector

Roster • Supplier Sector

Roster • Transmission Sector

Antitrust Compliance Guidelines

Separator Page

Forward Together • ReliabilityFirst

ANTITRUST COMPLIANCE GUIDELINES

I. GENERAL It is ReliabilityFirst’s policy and practice to obey the antitrust laws and to avoid all conduct that unreasonably restrains competition. This policy requires the avoidance of any conduct which violates, or which might appear to violate, the antitrust laws. Among other things, the antitrust laws forbid any agreement between or among competitors regarding prices, availability of service, product design, terms of sale, division of markets, allocation of customers or any other activity that unreasonably restrains competition. It is the responsibility of every ReliabilityFirst participant and employee who may in any way affect ReliabilityFirst’s compliance with the antitrust laws to carry out this policy. Antitrust laws are complex and subject to court interpretation that can vary over time and from one court to another. The purpose of these guidelines is to alert ReliabilityFirst participants and employees to potential antitrust problems and to set forth policies to be followed with respect to activities that may involve antitrust considerations. In some instances, the ReliabilityFirst policy contained in these guidelines is stricter than the applicable antitrust laws. Any ReliabilityFirst participant or employee who is uncertain about the legal ramifications of a particular course of conduct or who has doubts or concerns about whether ReliabilityFirst’s antitrust compliance policy is implicated in any situation should consult ReliabilityFirst’s President. The President will consult with legal counsel as appropriate. II. PROHIBITED ACTIVITIES Participants in ReliabilityFirst activities (including those of its committees and task groups) should refrain from the following when acting in their capacity as participants in ReliabilityFirst activities (e.g., at ReliabilityFirst meetings, conference calls and in informal discussions):

Discussions involving pricing information, especially margin (profit) and internal cost information and participants’ expectations as to their future prices or internal costs.

Discussions of a participant’s marketing strategies.

Discussions regarding how customers and geographical areas are to be divided among actual or potential competitors.

2

Discussions concerning the exclusion of actual or potential competitors from markets.

Discussions concerning boycotting or group refusals to deal with competitors, vendors or suppliers.

III. ACTIVITIES THAT ARE PERMITTED There are a number of restrictions guiding and defining permissible activities. In order to avoid antitrust issues, decisions and actions by ReliabilityFirst (including its committees and task groups) should only be undertaken for the purpose of promoting and maintaining the reliability and adequacy of the bulk electric supply system. If you do not have a legitimate purpose consistent with this objective for discussing a matter, please refrain from discussing the matter during ReliabilityFirst meetings and in other ReliabilityFirst -related communications.

You should also ensure that ReliabilityFirst procedures, including those set forth in the ReliabilityFirst Agreement and the ReliabilityFirst Documents, are followed in conducting ReliabilityFirst business. In addition, all discussions in ReliabilityFirst meetings and other ReliabilityFirst -related communications should be within the scope of mandate for or assignment to the particular ReliabilityFirst committee, task group or other group, as well as within the scope of the published agenda for the meeting. No decisions should be made nor any actions taken in ReliabilityFirst activities for the purpose of giving an industry participant or group of participants a competitive advantage over other participants. In particular, decisions with respect to setting, revising, or assessing compliance with NERC and ReliabilityFirst reliability standards should not be influenced by anti-competitive motivations. Subject to the foregoing restrictions, participants in ReliabilityFirst activities may discuss:

Reliability matters relating to the bulk power system, including operation and planning matters such as establishing or revising operating and planning standards and other reliability criteria, special operating procedures, operating transfer capabilities, and plans for new facilities.

Matters relating to the impact of reliability standards for the bulk electric supply system on electricity markets, and the impact of electricity market operations on the reliability of the bulk electric supply system.

Proposed filings or other communications with state or federal regulatory authorities or other governmental entities.

3

Matters relating to the internal governance, management and operation of ReliabilityFirst , such as nominations for vacant committee positions, budgeting and assessments, and employment matters; and procedural matters such as planning and scheduling meetings.

Any other matters that do not clearly fall within these guidelines should be reviewed with ReliabilityFirst’s President before being discussed. The President will consult with legal counsel as appropriate.

Biography

Separator Page

Robert G. Clarke Board of Trustees, NERC

Robert G. Clarke was elected to the Board of Trustees of the North

American Electric Reliability Corporation in February 2013. Mr.

Clarke is the chair of the Finance and Audit Committee and serves on

the Corporate Governance and Human Resources, Enterprise-wide

Risk, and Nominating Committees. Mr. Clarke previously served as

vice chair of the Board of Trustees.

From 2000 to 2009, Mr. Clarke served as chancellor of the Vermont

State Colleges. From 1999 to 2000, he served as interim chancellor.

Prior to that, he served as president of Vermont Technical College.

Mr. Clarke served as member of the Board of Directors of Central

Vermont Public Service and as chair of the Board of Vermont Electric

Power Company, Inc. and Vermont Electric Transmission Company, Central Vermont affiliates,

from 1997 to 2012. He was chair of the Board's Audit Committee and a member of both the

Executive and Corporate Governance Committees. Additionally, Mr. Clarke served on the Board

of TD Banknorth Group, Inc. from 2003 to 2009. He also served as a director of the Richard E.

and Deborah L. Tarrant Foundation (a charitable giving foundation).

Mr. Clarke earned a bachelor's in Occupational Education from Southern Illinois University, a

master's in Occupational Education from Central Washington State College, and a doctorate in

Administration and Supervision from Lehigh University.

a) At-Large Nominee Joe Trentacosta

Separator Page

JOE TRENTACOSTA

AT-LARGE DIRECTOR NOMINEE

Joe Trentacosta is Senior Vice President and Chief Information Officer (CIO) for

Southern Maryland Electric Cooperative (SMECO). He directs SMECO's Customer and

Enterprise Services Department consisting of the Information Technology (IT), Customer

Service, Security, and Safety divisions. This includes managing the development and

maintenance of the IT infrastructure and all IT business systems, implementing IT support

strategies, and negotiating technology support and maintenance contracts.

Mr. Trentacosta is also responsible for the overall development and maintenance of the

SMECO’s security/compliance and safety programs, managing the operation of SMECO’s 24/7 customer care

center, and directing the corporate credit and collections function.

Mr. Trentacosta serves on the IT Program Advisory Council for both the College of Southern Maryland (CSM)

and St. Mary’s County Public Schools. Most recently, he served as Board President for the Center for Children.

He has also served on the Marcey House Advisory Board, the St. Mary’s County Human Services Council, the

Father Andrew White School Advisory Board (Chairman), and the Calvert Career Center Local Advisory

Council. Mr. Trentacosta holds an MBA in Finance from New York University, a BS in Information Systems

from Fordham University and is a graduate of the Leadership Maryland Class of 2011.

Independent Director Nominee Brenton Greene

Separator Page

BRENTON GREENE

Independent Member – Term Expires 2019

Brenton Greene is the former President & CEO of Applied Communication Services

(formerly Telcordia Advanced Technology Solutions). Mr. Greene joined Telcordia

Technologies in 2010 as President, Advanced Technology Solutions, responsible for the

company's Applied Research, Government and Public Sector, and Cybersecurity groups. The

Applied Research group has a team of over 220 distinguished researchers focused on many

aspects of Internet, wireless, broadband and information networking, and software

technologies. They are renowned for developing such groundbreaking technologies as

ADSL, AIN, ATM, ISDN, Frame Relay, PCS, SMDS, SONET, video-on-demand, and

Internet Telephony. The Government and Public Sector group focuses on information assurance and business

process outsourcing as well as planning and implementing systems engineering solutions for Federal, State and

Local governments. As national security concerns continue to intensify, the Cybersecurity group addresses

critical issues surrounding the vulnerability and survivability of the nation's networks and critical infrastructure.

Mr. Greene previously served in executive positions at Northrop Grumman Information Systems (NGIS) and

Lucent Technologies and Bell Labs Innovations. From 2001-2004, he led the National Communications System

(DHS/NCS) as its Director, responsible for national security and emergency preparedness communications for

the White House, and managing the President’s National Security Telecommunications Advisory Council

(NSTAC). During 9/11, his agency directed and facilitated many aspects of the restoration of key New York

City telecom infrastructures, including communications supporting the recovery of Wall Street, leading to the

NCS being awarded a Joint Meritorious Unit Commendation. During 1996-1997, Mr. Greene served as a

Commissioner on the President’s Commission on Critical Infrastructure Protection (PCCIP), developing

national policy and strategy recommendations for the President and leading to a wide range of national CIP

initiatives and major cyber security initiatives, propelling cyber to national significance. A graduate of the U.S.

Naval Academy, Mr. Greene previously served a career in submarines, including tours as Commanding Officer

of the nuclear attack submarines USS Skipjack and USS Hyman G. Rickover, retiring as a Navy Captain in 1995.

Presentation

Separator Page

2019 Financial Overview

Ray Palmieri, Senior Vice President and Treasurer

November 21, 2019

Washington, DC

Forward Together • ReliabilityFirst

2019 Financial Information

Budget as of September 30, 2019

• $677K under budget; 4.00% under budget

• ERO Enterprise: $4.3M (2.9%) under budget

Year-end Projection

• $600K (2.65%) under budget

• Major Contributors

‒ Personnel Expenses

‒ Computer Hardware and Software

ERO Year End Projections

• Varies from: -1.5% to 28%

• Total ERO Enterprise: $415K, 0.2% over budget

2019 Corporate Budget Goal

• 5% under to 3% over

Forward Together • ReliabilityFirst

2020 Budgets and Assessment

2020 Business Plan and Budget

• Approved by FERC – October 17, 2019

• Budget – 4.4% increase

• Assessment – 5.0% increase

Entity2020Budget

%Change

2020Assessment

%Change

SERC 24,525,013 35.20% 22,459,123 29.30%

MRO 17,540,969 9.80% 16,983,251 9.80%

TRE 13,831,126 5.80% 13,344,128 0.70%

NERC 83,417,476 4.50% 72,011,373 4.50%

RF 23,650,862 4.40% 22,318,623 5.00%

WECC 27,756,089 3.00% 25,282,000 0.00%

NPCC 16,601,647 2.10% 15,338,737 2.10%

Forward Together • ReliabilityFirst

Financial Information

Annual Financial Audits• 2018 Audit report was approved by Finance and Audit Committee in March 2019

‒ No deficiencies identified

• 2019 Audit Process begins late November

Investment Account• Professionally managed by a wealth management firm

• Capital Preservation Strategy

• Investment Income over 6 years: $45k to $175K

Enterprise Risk Management• Process improvement initiative in progress

• Finance and Audit Committee provides oversight of process

Internal Auditing• Multi-departmental activity, supplemented with outside resources

• Enhance efficiencies and provide additional assurance on process effectiveness

• Testing new process with two departments in December

Forward Together • ReliabilityFirst

Questions & Answers

Forward Together ReliabilityFirst