agenda operating reliability subcommittee filings to... · 2012-12-05 · item 13. reliability...

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Agenda Operating Reliability Subcommittee

February 12, 2008 | 1–5 p.m. February 13, 2008 | 8 a.m.– 12 p.m. Westin San Diego 400 West Broadway San Diego, California

1. Administrative a. Arrangements b. Determination of Quorum c. Membership and Guests d. Parliamentary Procedures e. Antitrust Compliance Guidelines f. Review and Approval of Meeting Minutes

i. November 14, 2007 Operating Reliability Subcommittee meeting g. Executive Committee h. Future Meetings

2. Operating Committee Work Plan

3. Real-time Tools Best Practices Task Force Report

4. Operating Personnel Communications Protocols – Reliability Standard Project 2007-02

5. Reliability Coordination - Transmission Loading Relief – Reliability Standard Project 2006-08

6. Reliability Coordination – Reliability Standard Project 2006-06

7. Facilities Ratings – Reliability Standard Project 2008-04


9. Organization Registration and Certification Subcommittee

10. “Gap” Analysis of NERC Standards: SOL and IROL

ORS Meeting Agenda February 12-13, 2007

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11. Market Flow Field Trial Report

12. IDC Change Order 246 (Mid-Hour Market Flow)

13. Reliability Readiness Program

14. Reliability Plans a. Periodic Review of Reliability Plans b. Information Related to Implementing Existing Reliability Plans c. New or Revised Reliability Plans for Endorsement d. Regional Changes

15. Interchange Distribution Calculator Working Group Report a. IDC and SDX Transition to PSS/E Version 30 b. IDC Change Orders

16. Distribution Factor Working Group Report a. Flowgate Management Reference Document b. Book of Flowgates Project

17. Telecommunication Working Group Report

18. Data Exchange Working Group Report

19. Transmission Proxy Flowgates Task Force Report

Item 13. Reliability Readiness Program

Discussion At its March 2007 meeting, the Operating Committee revised its charter to include Subsection 3 (Support to the Reliability Readiness Program). In addition, the OC requested the subcommittee to be its liaison with the Reliability Readiness Program. Richard Schneider, director of reliability readiness, and Mitch Needham, reliability readiness evaluator, will provide the subcommittee an overview of the Reliability Readiness Program draft 3-year plan. They will also highlight the feedback resulting from an industry survey related to the reliability readiness program.

In addition, Mr. Conway, Mr. Needham, and Mr. Schneider (via teleconference) will lead the subcommittee in a discussion of potential areas of program improvement identified by the subcommittee in prior meetings. Those areas include:

1. Confidentiality of reliability readiness reports

2. Dispute resolution

3. Reliability readiness evaluations of local control centers

4. Feedback for the readiness program at a high level – Survey results

5. Archival policy related to out-dated readiness reports and examples of excellence

6. Review of posted examples of excellence to assure continued relevancy

7. Development of program metrics

8. Consistency in performance of evaluations – Team training

9. Review of program questionnaires.

10. Periodicity of evaluations

11. Tracking of evaluation report recommendations

12. Allowing those entities being evaluated to determine, if desired, an area of focus beyond the general evaluation

Lastly, the subcommittee will be presented with several potential examples of excellence.

Background (Excerpt of the Operating Committee charter)

Section 1. Functions

3. Support to the Reliability Readiness Program. Provide technical support, guidance, and advice to NERC’s Reliability Readiness Program (see also NERC Rules of Procedure, Section 700, “Reliability Readiness Evaluation and Improvement program, and Appendix 7, “Reliability Readiness Evaluation and Improvement Program Procedure.”)

a. General

• Develop criteria for measuring program success, and review the program against those criteria.

• Recommend actions to other NERC programs (standards, compliance, assessments, training, etc.) based on lessons learned and trends from readiness evaluations and examples of excellence

b. Readiness Evaluations • Review readiness evaluations for trends and recommend new or different

types of evaluations or changes in processes or metrics, including: Readiness criteria Guidelines for reporting and disclosure, and Guidelines for consistency and relevancy of evaluations:

• Between comparable entities, and • Through time

• Provide guidance to the readiness evaluations process c. Examples of Excellence

• Review and discuss the examples of excellence for lessons learned • Support information exchange within the industry on examples of

excellence

Operating Reliability Subcommittee Operating Reliability Subcommittee –– Reliability Readiness ProgramReliability Readiness Program

Mitch Needham and Kevin Conway

San Diego, CA February 13-14, 2008

Readiness Topics Readiness Topics –– 11

Confidentiality of reliability readiness reports• Appendix 7 of NERC’s Rules of Procedure: “NERC shall have

the primary responsibility for executing the steps in this procedure. The steps are summarized as follows:

Publication of findings”

• Changing this procedure requires NERC BOT action, no such change has been prepared or debated

Evaluation products to the industry include Examples of Excellence and Positive Observations as published

Evaluation products to the entity include assessment by industry experts and constructive feedback

NERC and the Regions have adopted an open and transparent philosophy

Readiness Topics Readiness Topics -- 22

Dispute Resolution• NERC currently accepts report comments by

evaluated entities and posts them alongside the evaluation report.

• Surveys of evaluated entities in 2007 (item 4) were conducted with no mention of any perceived need for dispute resolution.

• Evaluation teams produce the reports and are reminded that their products should reflect a professional evaluation and deliberation.

• Recommendations are essentially voluntary in nature and are tracked by the Regions.


Evaluation of “Local Control Centers”• NERC has altered the reference to LCC and instead

will use ‘Transmission Owners’ in 2008 and forward.

• An examination of previous LCC posted evaluations shows performance of several delegated transmission operator functions and / or tasks.

• Eight TO’s are scheduled for evaluation in 2008, four each in RFC and NPCC, using the TOP evaluation mechanism.


Industry survey responses received from the following (details available if needed):• First Energy

• Edison Electric Institute

• Kansas City Power and Light

• Ontario Independent Electricity System Operator

• PJM Interconnection

• WE Energies

• Lincoln Electric System

• Grant County Public Utility District


Feedback notes:• Better scope definition

• Consistency an issue

• Separation of Readiness and Compliance, timing of evaluations and audits

• Role definition with Transmission Owners and Operators Forum

• Provide stratification for recommendations – major and minor

• Identify new readiness topics based on compliance findings

• Visibility of Examples of Excellence

Readiness Topics Readiness Topics –– 5 and 65 and 6

Archiving of past readiness evaluation reports and examples of excellence• Move evaluation reports to a lower tier of the NERC

website following posting of a more recent report

Maintains transparency of the process

Allows the industry to evaluate consistency

• Revamp the examples of excellence website to reflect the new report format

Identified as a 2008-2009 project

Some archiving may take place


Development of program metrics• Currently tracking the adoption of evaluation team

recommendations as a metric.

Implemented74%

In Progress16%

No Action Taken or Expected

5%Open5%


Consistency in performance of evaluations• Computer based training developed for teams to use in 2008

and beyond

• Six modules developed, total time approximately two hours

Topics include course methods, evaluation process, evaluators’ roles, observation of demonstrations, interview techniques, and course evaluation

As of April 1, all participants will take the training for uniformity and consistency

• Additional training being developed by NERC Training and Education for evaluation leaders and senior regional representatives


Review of program questionnaires / evaluation guides• Questionnaires posted on the NERC website

• Review of onsite materials by NERC staff completed in January

Changes incorporated to resolve redundancy (some redundancy is intentional) and clarify the intent of the questions being asked

• Pilot evaluation using three of the new evaluator guides already completed with good results

• In all, there are seven topical guides, ranging from 30 – 110 individual questions per document


Periodicity of evaluations• Currently on a three-year cycle for all entities being

evaluated

Beginning second year of the Cycle II of the evaluations

• NERC is working with regions to provide for separation of the readiness evaluations from the compliance audits

RFC, SERC, and NPCC have been coordinated


Tracking of evaluation report recommendations• Primary tracking is performed by the Regions

NERC creates database for all of North America

Tracking of implementation results performed by NERC

Assessment of completion status a topic of discussion

• Results periodically reported to BOT (usually background information for the Readiness Program)


Addition of specific focus areas (requested by an entity in advance) in addition to the existing scope• Might require additional time and / or volunteers

• No specific requests have been received

• Entities are invited to provide process input during the evaluation – is there a topic that they want the team to know about?


Examples of Excellence approved for publication following the ORS meeting. (Slide for each)• WEC Planning and Training (adopted prior to ORS

involvement)

• AEP Industry Engagement

• TVA Employee Council

• TVA Dual, Independent State Estimation

• TVA Data Comparison Tool and Automated Model Builder

Examples of ExcellenceExamples of Excellence

One example adopted prior to ORS involvement, WEC

Nominated examples from published reports circulated for ‘voting’• AEP, TVA, IPL

• Used a mix of voting with comments and private voting

NERC process facilitator initiated PEoE tracking and e-mailed forms to review participants• NERC leads, ORS participants

WEC (posted) WEC (posted) –– Succession PlanningSuccession Planning

The WEC personnel succession planning process, “Strategic Workforce Assessment and Planning Model,” when combined with WEC’s annual development of individualized training plans, serves as an outstanding tool to address succession issues for employees at all levels of the corporation.

AEP AEP –– Industry EngagementIndustry Engagement

o AEP has a high level of engagement (having an extensive list of industry committees and working groups) with the industry and a commitment to technology advancement (for example, the e-terravision product and variable frequency transformer project).

TVA TVA –– Employee CouncilEmployee Council

TVA uses an employee group selected by the employees to provide for a formal communication channel within the centralized transmission organization• Monthly meetings supported by corporate

management as a priority

• Group has evolved since inception from dealing with minor issues to facilitating difficult discussions

TVA TVA –– Dual State EstimatorsDual State Estimators

TVA has two independent and redundant state estimators (one associated with the RC and one with the BA/TOP) that share a common model database.• SEs run on independent platforms in two separate

locations

TVA TVA –– Fault Analysis Working GroupFault Analysis Working Group

TVA uses an automated process to identify differences in facility ratings used for system modeling from among several applications, and uses an automated model builder to produce model databases.• Ensures consistence between the RC and BA/TOP

functions, operations planning, long term planning, and associated regional planning groups.

Readiness Topics Readiness Topics -- NewNew

CIP discussion• Subject to NERC management review of the recent

FERC ruling

• Program Director is currently leaning toward sending the questionnaire

• Only seven new questions

Readiness Program Direction Readiness Program Direction -- NewNew

Strategic direction• Staffing

• Industry Communications

• Reinforce the Program Identity

• Provided Readiness Evaluator Training

• Communications of Examples of Excellence

• Perform Readiness Program Self-Assessments

Questions / Other Topics from ORSQuestions / Other Topics from ORS

Readiness Program FeedbackReadiness Program Feedback

First Energy• NERC needs to provide better scope indications for

interview sessions

• General comments regarding program focus and alignment

Many changes were instituted following the FE evaluation – reworking questionnaires, alignment and order

• Specific comments regarding FE procedures


Edison Electric Institute (responding on behalf of several members)• Formally separate ‘readiness’ from ‘compliance’

• Readiness program scope needs better definition

• Where does Readiness fit with the formation of the Transmission Owners and Operators Forum?

• Training for evaluation team members is needed for consistency

Currently in design, to roll out computer based training prior to the 2008 ‘season’


Kansas City Power and Light• Concern regarding overlap of readiness evaluations

and compliance audits

• Consistency of readiness evaluations is lacking – cites a need for team training

• Evaluation teams should not have to interpret standards

Identified as an industry issue

• Need for linkage to the Transmission Owners and Operators Forum to avoid duplication of efforts


Ontario Independent Electricity System Operator• Current program is too structured and ‘compliance-like’

• The three year cycle should be relaxed due to overburden to the entity

• Would like to strengthen evaluation teams with ‘critical thinkers’

• NERC should provide levels of recommendations – major and minor

• Suggests linkage be established with standards development

• Improve the EoE process (called it Best Practices)

• Perform RC evaluations first, then BA/TOPs within the RC footprint


PJM Interconnection• Present EoEs to the industry via ‘live’ telecasts / broadcasts /

meeting venues

• NERC should analyze compliance violations to identify trends and work that information into the readiness program

• Evaluate the INPO processes (‘Evaluations’ and ‘Assist Visits’) and better train evaluation teams

• Suggests evolving the EoE program into an industry recognized Best Practices format


WE Energies• Identify focus areas with industry input

• Provide benchmarks for all focus areas

• Better define documents to be reviewed onsite

The document review process is being altered immediately

• Questions evaluating the same topics as the first cycle

• Evaluated entities should be able to ask for functional reviews outside the present scope

• Suggests a ‘wrap up’ type report for all entities in an RC footprint


Lincoln Electric System• Interview questions are too wordy

• NERC should provide an indication of the cost for a company to volunteer a team member, and consider reimbursing the expenses

• Suggests additional ‘observers’ for training purposes


Grant County Public Utility District• Evaluation teams need training in compliance issues

• EoEs need to be advertised better

• The order of readiness evaluation and compliance audits should be reversed (cites ‘mixed signals’)

Also need to be separated by more time (GCPUD commented)

• Conduct readiness workshops

• Better visibility of positive notes through a separate web presence

Also need overall advertising for the program


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Minutes Operator Reliability Subcommittee February 13, 2008 Westin San Diego San Diego, CA The Operating Reliability Subcommittee (ORS) met on February 13, 2008 in San Diego, California. The meeting notice, agenda, and attendance list are affixed as Exhibits A, B, and C, respectively.

Administrative Items Chairman David Zwergel presided, and the secretary announced that a quorum was present. Chairman Zwergel summarized the NERC Antitrust Compliance Guidelines.

Minutes The subcommittee approved the minutes of the November 14, 2007 meeting.

Executive Committee Chairman Zwergel stated that Jim Hartwell and Mark Wilson expressed interest in serving on the executive committee. He noted that both candidates were very capable. Following a brief discussion, the subcommittee elected Mr. Wilson to serve on the executive committee.

Tony Jankowski stated that Vice Chairman Dan Boezio has a new work assignment at American Electric Power and may no longer be available to serve on the subcommittee. Chairman Zwergel will contact him.

Future Meetings The secretary reviewed the list of future meetings.

Operating Committee Work Plan Chairman Zwergel reviewed the Operating Committee (OC) work plan. He noted that the OC has assigned or will assign several items on the work plan to the subcommittee. These include 1) time monitor procedures, 2) a voltage and reactive chapter of the Reliability Concepts document, 3) SOL and IROL reliability standards gap analysis, and 4) oversight of the Reliability Readiness program.

Telecommunications Working Group Report Randy Turner, chairman of the Telecommunications Working Group, provided a summary of working group activities (Presentation 1). In 2008 the working group will focus on 1) MPLS

Operator Reliability Subcommittee Meeting Minutes February 13, 2008

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versus frame relay networks, 2) the cost effectiveness of NERCNet, and 3) alternatives to present processes. Mr. Turner also addressed network volume and network outages. NERCNet is now a redundant network. Finally the router replacement project was completed and router-to-router encryption functionality is available.

Reliability Coordination – Reliability Standard Project 2006-06 Mike Hardy, chairman of the Reliability Coordination Standard Drafting Team, provided a summary of the proposed revisions to the IRO and COM reliability standards (Presentation 2). The project scope as reflected in the standard authorization request (SAR) for Project 2006-06 requires the drafting team to review all of the requirements in this set of standards and make a determination, with stakeholders, on wto:

hether

1. Modify the requirement to improve its clarity and measurability while removing ambiguity.

2. Move the requirement into another SAR, standard, or to the certification process.

3. Eliminate the requirement (either because it is redundant or because it doesn’t support bulk power system reliability).

The drafting team would like to post the revised standards for a 45-day comment period in February or March 2008 (see project schedule).

Project ScheduleProject Schedule

Post Revised Documents for 45 day comment period February – March 2008Respond to Comments and revise standards (include measures and VSLs) – April 2008Post Standards for 30 day comment period –May-June 2008

Respond to Comments and revise standards –June-July 200830 day pre-ballot posting July 2008

Operating Personnel Communications Protocols – Reliability Standard Project 2007-02 The secretary stated that the Operating Personnel Communications Protocols Standard Drafting Team is developing the initial version of a new COM-003 reliability standard for posting. Chairman Wilson noted that the Reliability Coordinator Working Group (RCWG) approved extending the pilot program using the “Guideline for Operating State Alert Levels” to June 1, 2008 at the working group’s September 2007 meeting. He requested that the working group revisit the pilot program at its next meeting.

Reliability Coordination – Transmission Loading Relief – Reliability Standard Project 2006-08 Frank Koza, a member of the Reliability Coordination – Transmission Loading Relief Standard Drafting Team, reported that version 4 of IRO-006 was filed at FERC on December 21, 2007. The drafting team continues to draft version 5. In addition, the drafting team developed and posted for comment the “Joint NERC/NAESB System Operator’s TLR Reference Manual.”

ftp://www.nerc.com/pub/sys/all_updl/standards/sar/NERC-NAESB_Operators_Reference_Manual_29Jan08.pdf


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Facilities Ratings – Reliability Standards Project 2008-04 The secretary explained the purpose of the standard authorization request (SAR) for Project 2008-04, which is posted for comment. In Order 705 (Facilities Design, Connections and Maintenance Reliability Standards), issued on December 27, 2007, FERC directed specific revisions to reliability standards FAC-010-1 (System Operating Limits Methodology for the Planning Horizon) and FAC-011-1 (System Operating Limits Methodology for the Operating Horizon).

Facilities Ratings – Reliability Standards Project 2008-05 Eric Senkowicz explained that the purpose of the SAR for Project 2008-05 is to revise FAC-011-1 to require consideration of credible multiple element contingency events for determining SOLs in the operating horizon, as is required by TPL-003-0 and FAC-010-1 for the planning horizon. The SAR was posted for comment through February 22, 2008.

Organization Registration and Certification Subcommittee Lucius Burris, chairman of the Organization Registration and Certification Subcommittee, highlighted the history of the subcommittee’s efforts to develop reliability coordinator, balancing authority, and transmission operator certification standards (Presentation 3). Currently the subcommittee is proposing to revise Section 5 (Organization Registration and Certification) and Appendix 5 (Organization Certification and Registration Manual) of the NERC Rules of Procedure. Industry stakeholders asked the subcommittee to clarify or address the 1) specific requirements for certification, 2) delegation and joint registration organizations, 3) final authority regarding certification and aand 4) multiple region coordination. The subcommittee anticipates posting the revised rules of procedure for comment through April 7, 2008 (see Project Schedule).

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ORCS Project ScheduleORCS Project Schedule

Present Certification Process to the board for approvalMay 12, 2008

45 day public comment due dateApril 7, 2008

Place draft on NERC website for public comments per NERC bylaws Article XI section 2

February 22 , 2008

Present revised Certification Process to the CCC for approval to place on the NERC website for 45 day public comment period

February 14 , 2008

Revise Certification Process based on industry feedbackDec 2007 – Jan 2008

Posted Certification Process for 30 day public comment period

October 25, 2007

Revise Certification Process based on industry feedbackApril 2008

ppeals,

“Gap” Analysis of NERC Standards: SOL and IROL At its November 2007 meeting, the subcommittee formed a task force to review each reliability coordinator’s system operating limit (SOL) methodology for consistency and clarity. Task force chairman Frank Koza highlighted the input received and the preliminary findings (Presentation 4). The task force has received most of the SOL methodologies. Thus far only six reliability coordinators have identified pre-determined IROLs. The task force will continue to gather information and will discuss the SOL methodology similarities and differences.

Market Flow Field Trial Report Frank Koza provided a status report of the on-going market flow field trial (Presentation 5). PJM began participating in the field trial on May 29, 2007. SPP began participation in the field trial on October 1, 2007, followed by MISO on November 1, 2007. Mr. Koza reviewed the


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reasons for conducting the Standards Committee-approved field trial and the preliminary results observed from July through December 2007. He stated that the ORS Market Flow Task Force will decide whether there is sufficient data to end field trial by June 1 or to continue it into the fall.

Real-time Tools Best Practices Task Force Jack Kerr, chairman of the Real-time Tools Best Practices Task Force (RTBPTF), stated that the task force completed its report and that it is posted at http://www.nerc.com/~filez/rtbptf.html. He reviewed the next steps presented in Section 6 of the report, and noted that many of the task force recommendations address revisions to existing reliability standards. The Transmission Operators and Owner Forum formed a real-time reliability tools task force to review the findings and conclusions of the RTBPTF.

Frank Koza moved to accept the RTBPTF report as complete and to thank Jack Kerr for his leadership and the task force for all its hard work. The subcommittee approved the motion.

IDC Change Order 246 (Mid-Hour Market Flow) Mark Wilson reported that MISO, IESO, and PJM have not met to discuss IDC CO-246 (Mid-Hour Market Flow).

Reliability Readiness Program Chairman Zwergel stated that Jim Castle will replace him on the ORS task force (Jim Hartwell, Frank Koza, and Jim Castle) working with the reliability readiness program staff. The task force was created to fulfill the Operating Committee’s charge, as presented in its charter, to support the reliability readiness program by 1) developing criteria for measuring program success, 2) reviewing readiness evaluations for trends, and 3) reviewing and discussing examples of excellence for lessons learned. Chairman Zwergel suggested that, since reliability coordinators, balancing authorities, and transmission operators are subject to compliance audits, the reliability readiness program focus on helping an entity to identify areas when changes to processes, procedures, or practices could lead to a reliability improvement.

Reliability readiness evaluators, Mitch Needham and Kevin Conway, provided a reliability readiness program update, which included a review of several topics previously identified by the subcommittee for further discussion and/or resolution (Presentation 6). The presentation also reviewed several examples of excellence and the feedback received in an industry survey.

Reliability Plans Chairman Zwergel noted that there were no reliability plans to review at this meeting. However, he asked how the subcommittee should put reliability coordinators on notice that their reliability plan is coming due for its three-year review. Jim Hartwell asked if the subcommittee could approve non-significant reliability plan changes without having to make a recommendation to the Operating Committee. The subcommittee consensus was that it could approve such plans. Those reliability coordinators with reliability plans due for review in 2008 include ERCOT, NPCC, FRCC, and VACAR-S.

http://www.nerc.com/%7Efilez/rtbptf.html


5

Interchange Distribution Calculator Working Group Report Jim Busbin, chairman of the IDC Working Group, provided a status report of recent working group activities (Presentation 7).

1. IDC and SDX Transition to PSS/E Version 30 ⎯ This is a significant transition for the industry, which will impact not only the IDC and SDX, but also many “back-end” systems. The IDCWG formed an information technology task force to implement the required changes in automated processes. The target date for the transition is June 3, 2008 when the 2008 summer model is uploaded to the IDC and the SDX.

2. IDC Change Orders ⎯ Chairman Busbin noted that IDC change orders 249 (Re-configure IDC front end hardware), 238 (SaskPower reliability coordinator), and 211 (Provide SPP with IDC tag curtailment data via webData) were implemented. Change orders 226 (Sub-priority re-dispatch relief recognition) and 242 (Change to target net market flow to allow market flow reliability cap) were developed and tested and await approval to implement.

Distribution Factor Working Group Report Jim Busbin, chairman of the Distribution Factor Working Group (DFWG), provided an overview of working group activities (Presentation 8), including:

1. Flowgate Administration Reference Document ⎯ Chairman Busbin explained that the DFWG approved a revision to the Flowgate Administration Reference Document, which addresses the extension of temporary flowgates beyond the IDC model update and the deletion of commercial flowgates.

Mark Wilson moved to approve the revised Flowgate Administration Reference Document. The subcommittee approved the motion.

2. Book of Flowgates Project ⎯ Chairman Busbin reported that the DFWG conducted initial Book of Flowgates (BoF) database testing in November 2007. The DFWG anticipates placing the new web based BoF database into production on April 1, 2008.

ReliabilityFirst Request for IDC Access The secretary stated that ReliabilityFirst Corporation (RFC), in order to meet its situation awareness responsibilities, indicated a desire to obtain IDC access. The subcommittee suggested that the information RFCt is seeking is also available from other sources such as the NERC CRC and/or RCIS. The secretary will discuss these other options with RFC.

Time Monitor Reference Document The secretary provided an overview of the Time Monitor Reference Document approved by the Reliability Coordinator Working Group (Exhibit D). Mike Taniwha noted that the reference document does not address the eventuality that a reliability coordinator does not volunteer to become the time monitor to replace the time monitor that is unwilling or unable to fulfill its responsibilities. Following a brief discussion, the subcommittee did not modify the reference document; therefore, Mr. Taniwha suggested that this potential gap be brought to the Operating Committee’s attention.

Mike Taniwha moved to approve the Time Monitor Reference Document. The subcommittee


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approved the motion.

Midwest ISO Balancing Authority Chairman Zwergel reported that the MISO balancing authority certification team is writing its report. The final certification report is due on March 14, 2008, and the MISO balancing authority is scheduled to startup on June 1, 2008.

Earth Day Mark Wilson noted that March 29, 2008 is Earth Day. In Canada, the recognition of Earth Day is getting increased publicity. The proposal being communicated with all municipals within Ontario is to turn off all lights and appliances for one-hour beginning at 8 p.m. local time. Many municipals are supporting this initiative.

Agenda Items Not Discussed Data Exchange Working Group report Transmission Proxy Flowgates Task Force Report Next Meeting The next meeting of the Operating Reliability Subcommittee will be on May 7–8, 2008 in Charleston, South Carolina.

Adjourn The meeting was adjourned at 5:22 p.m.

Larry Kezele Larry Kezele Secretary


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February 13, 2008 | 8 a.m.–5 p.m. February 14, 2008 | 8 a.m.–12 p.m. Westin San Diego 400 West Broadway San Diego, California


i. November 14, 2007 Operating Reliability Subcommittee meeting g. Executive Committee h. Future Meetings

2. Operating Committee Work Plan

3. Real-time Tools Best Practices Task Force Report



6. Reliability Coordination – Reliability Standard Project 2006-06



9. Organization Registration and Certification Subcommittee


Exhibit B

ORS Meeting Agenda February 12-13, 2007

2





15. Interchange Distribution Calculator Working Group Report a. IDC and SDX Transition to PSS/E Version 30 b. IDC Change Orders

16. Distribution Factor Working Group Report a. Flowgate Management Reference Document b. Book of Flowgates Project




Operating Reliability Subcommittee Meeting Attendance February 13, 2008 San Diego, California

ORS Members

Chairman (NYISO) David Zwergel

NCEMC Richard McCall

NYISO Jim Castle

PJM Frank Koza

Southern Company Generation Cliff Shepard

IESO Mark Wilson

ERCOT Colleen Frosch

ISO-NE Michael Taniwha

NBSO Alden Briggs

CMRC Greg Tillitson

NPCC Jim Hartwell

E On Us Bob Tallman

TVA Stuart Goza

WE Energies Tony Jankowski

SPP Don Shipley (proxy for Lanny Nickell)

FRCC Frank Prieto

WAPA Steve Sanders (via speakerphone)

Duke Energy Greg Stone (via speakerphone)

Exhibit C

ORS Meeting Attendance February 13, 2008 San Diego, California

- 2 -

GUESTS:

Name Organization

Mike Hardy Southern Company

Melinda Montgomery Entergy

Eric Senkowicz FRCC

Thanh Luong FERC

Paul Bleuss CMRC

Tim Beach American Transmission Company

Steve Corbin Southern Company

Robert Legault Hydro Quebec TransEnergie

Randy Turner SPP

Jim Busbin Southern Company

NERC Staff

Larry Kezele

Kevin Conway

Mitch Needham

Steve Crutchfield


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May 7, 2008 | 8 a.m.–5 p.m. May 8, 2008 | 8 a.m.–12 p.m. Sheraton North Charleston 4770 Goer Drive Charleston, South Carolina


i. February 13, 2008 Operating Reliability Subcommittee meeting ii. March 27, 2008 Operating Reliability Subcommittee Executive Committee

conference call meeting iii. April 3, 2008 Operating Reliability Subcommittee Executive Committee

conference call meeting iv. April 10, 2008 Operating Reliability Subcommittee Executive Committee

conference call meeting v. April 24, 2008 Operating Reliability Subcommittee Executive Committee

conference call meeting g. Election of Vice Chair h. Future Meetings – Duration i. Future Meetings – Location


3. NERC Board of Trustees Technology Committee

4. Curtailment of Intra-Balancing Authority Interchange Transactions

ORS Meeting Agenda May 7-8, 2008

2

5. Use of IDC to Implement Local Area Procedures

6. SPP Balancing Authority

7. Requests for Interpretations of Standards a. EOP-002-2 b. EOP-001-0



10. Operate Within Interconnection Reliability Operating Limits

11. Future Path of Transmission Loading Relief – A Proposal





16. Interchange Distribution Calculator Working Group Report a. IDC and SDX Transition to PSS/E Version 30 b. IDC Change Orders c. SDX Status Report

17. Distribution Factor Working Group Report a. Book of Flowgates Project




Item 15. Reliability Readiness Program

Discussion At the March 2008 Operating Committee meeting, Kevin Conway and Jim Castle reported that the ORS and the Readiness program will develop a white paper that further explores the identified concerns and that details the role of the program stakeholders (e.g., the Board of Trustees, the regional entities, and the OC). This white paper will be used for discussion and to solicit input to further enhance the value of the program. The subcommittee will discuss a draft of the white paper.

Background (Excerpt from the March 2008 Operating Committee Meeting Minutes) Kevin Conway, reliability readiness evaluator, reviewed the Reliability Readiness Program work plan and outlined the program’s strategic direction to address 1) staffing, 2) industry communications, 3) reinforcement of the program’s identity, 4) readiness evaluator training, 5) communications of examples of excellence, and 6) performance of readiness program self-assessments (Presentation 8). Mr. Conway stated that the Operating Reliability Subcommittee (ORS) and a small committee of the OC and ORS has identified several areas of potential improvement and is developing recommendations to address those concerns (as shown at right).

…

Vice Chair Holeman suggested that the tone and focus of the evaluation review process has changed since its inception following the 2003 blackout. He believes that the evaluations should address fewer topics, but in greater depth, and that the entity being evaluated should expect to receive benefit from the evaluation. The committee also discussed:

1. Compliance staff participation on readiness evaluations

2. Extensiveness of system operator questions, especially if only one operator is available to participate in the evaluation

3. Need to trend recommendations and identify lessons learned

4. Whether the readiness evaluations are mandatory

5. Encourage broad input into readiness program evaluation and improvement process

6. Participation of observers during evaluations for training purposes

ORS ConcernsORS Concerns

Tracking of Recommendations

Interviewing of Staff by ComplianceEvaluation Timing with Compliance AuditsPeriodicity

Process to Identify TOs who should be evaluatedEoE Approval Process

Compliance Staff Participation on EvaluationsReporting of Compliance ViolationsConfidentiality

Chair Mayo encouraged the development of the white paper and expressed the committee’s desire for status report at its June 2008 meeting.

Background (Excerpt of the Operating Committee charter)

Section 1. Functions

3. Support to the Reliability Readiness Program. Provide technical support, guidance, and advice to NERC’s Reliability Readiness Program (see also NERC Rules of Procedure, Section 700, “Reliability Readiness Evaluation and Improvement program, and Appendix 7, “Reliability Readiness Evaluation and Improvement Program Procedure.”)

a. General • Develop criteria for measuring program success, and review the program against

those criteria. • Recommend actions to other NERC programs (standards, compliance,

assessments, training, etc.) based on lessons learned and trends from readiness evaluations and examples of excellence

b. Readiness Evaluations • Review readiness evaluations for trends and recommend new or different types of

evaluations or changes in processes or metrics, including: Readiness criteria Guidelines for reporting and disclosure, and Guidelines for consistency and relevancy of evaluations:

• Between comparable entities, and • Through time

• Provide guidance to the readiness evaluations process c. Examples of Excellence

• Review and discuss the examples of excellence for lessons learned • Support information exchange within the industry on examples of excellence


609.452.8060 | www.nerc.com

Minutes Operator Reliability Subcommittee May 7–8, 2008 Charleston, South Carolina The Operating Reliability Subcommittee (ORS) met on May 7–8, 2008 in Charleston, South Carolina. The meeting notice, agenda, and attendance list are affixed as Exhibits A, B, and C, respectively.


Minutes The subcommittee approved the minutes of the February 13, 2008 meeting and the minutes of the March 27, 2008, April 3, 2008, April 10, 2008, and April 24, 2008 executive committee meeting minutes. Chairman Zwergel explained the executive committee’s interpretations of reliability standards EOP-001 (Emergency Operations Planning) and EOP-002 (Capacity and Energy Emergencies). The subcommittee expressed concern that the executive committee addressed issues (reliability standards interpretations and changes to the market flow field trial) that perhaps the full subcommittee should have addressed.

Election of Vice Chairman Chairman Zwergel stated that, due to a job reassignment, Dan Boezio has resigned as vice chairman. Mark Wilson nominated Frank Koza as vice chairman. By unanimous consent the subcommittee elected Frank Koza as vice chairman.

Chairman Zwergel stated that Mr. Boezio’s resignation also creates an opening on the executive committee. Tony Jankowski and Alden Briggs were nominated to serve on the executive committee. Messrs. Jankowski and Briggs were excused, and, following a brief discussion, the subcommittee elected Mr. Jankowski to serve on the executive committee.

Future Meetings The secretary reviewed the list of future meetings. He also suggested that the subcommittee schedule one-day meetings as opposed to one and half day meetings. However, the subcommittee expressed reservations in moving to one-day meetings. The subcommittee also suggested potential meeting locations for its 2009 meetings.

Operator Reliability Subcommittee Meeting Minutes May 7–8, 2008

2

Reliability Plans Colleen Frosch reviewed the revised ERCOT reliability plan. Greg Tillitson moved that the Operating Reliability Subcommittee concludes that the revised Reliability Plan for the ERCOT Reliability Coordinator Area meets NERC reliability standards. The subcommittee approved the motion.

Linda Perez provided an overview of the revised WECC Reliability Coordinator Plan (Presentation 1). WECC will remain as a single reliability coordinator but with two fully redundant operating desks. The WECC Board will consider the revised reliability coordinator plan at its July 2008 meeting. Chairman Zwergel requested that the subcommittee provide Ms. Perez with comments and/or suggested revisions to the plan.

Chairman Zwergel summarized revisions to the MISO Regional Transmission Organization (RTO) Reliability Plan. He stated that NERC approved MISO’s request for balancing authority certification and that the MISO balancing authority is scheduled to begin operations on September 9, 2008. In addition, Duquesne Light Company is scheduled to move from the PJM reliability coordinator footprint to the MISO footprint on October 1, 2008. Vice Chairman Koza moved that the Operating Reliability Subcommittee concludes that the revised MISO Regional Transmission Organization Reliability Plan meets NERC reliability standards. The subcommittee approved the motion. The revised MISO reliability plan is posted at http://www.nerc.com/~filez/reliaplans.html.

NERC Board of Trustees Technology Committee Chairman Zwergel stated that the Operating Committee requested each of its subcommittees to review and comment on a proposed reliability tool development process flow diagram. The subcommittee suggested 1) including funding exclusions for ERCOT, WECC and HQ-TE, 2) consideration of critical infrastructure protection reliability standards in the development and maintenance of reliability tools, and 3) inclusion of an appeals process.

Curtailment of Intra-Balancing Authority Interchange Transactions Don Shipley stated that, because the transfer distribution factor for an intra-balancing authority interchange transaction is 0%, such transactions are not subject to curtailment by the IDC in the TLR procedure. Thus, the implementation of a TLR level 5 (curtailment of firm transactions and network and native load) will not impact non-firm intra-balancing authority interchange transactions. The subcommittee suggested the development of a NERC standard authorization request or a NAESB request for business practice revision to address this reliability concern.

Use of IDC to Implement Local Area Procedures Vice Chairman Koza stated that PJM and VACAR-S are considering entering into a local area agreement that would selectively curtail non-firm interchange transactions down to a 3% curtailment threshold. The proposed procedure was filed at FERC and may become effective on July 1, 2008. Chairman Zwergel asked that the involved entities provide a summary of the agreement’s usage at the next subcommittee meeting.

http://www.nerc.com/%7Efilez/reliaplans.html


3

Future Path of Transmission Loading Relief – A Proposal Tom Mallinger reviewed a proposal to enhance the TLR procedure in the Eastern Interconnection to improve 1) the wide-area view of reliability coordinators such that they better understand the current operating state of the bulk power system and 2) the accuracy of the assignment of relief obligations during periods of congestion (Presentation 2). The subcommittee’s concerns related to this proposal included the determination of the flow calculation methodology and its uniformity in application, the embedded equity issues, and the potential requirement to revise transmission tariffs.

Market Flow Field Trial Report Vice Chairman Koza provided a status report of the on-going market flow field trial (Presentation 3). The Standards Committee approved extending the field trial to October 31, 2008 and increasing the market flow curtailment threshold from 3% to 5% effective June 1, 2008. He also highlighted an extensive analysis of the data captured since the field trial’s inception on June 1, 2007.

The subcommittee questioned the rationale for moving the market flow curtailment threshold from 3% to 5% and suggested that the full subcommittee should have considered this proposal and not just the executive committee. Chairman Zwergel will provide a market flow field trial status report to the Operating Committee at its June 2008 meeting.

Reliability Readiness Program Mitch Needham, reliability readiness evaluator, provided a progress report of efforts to develop the reliability readiness evaluation program white paper (Presentation 4). He reviewed an outline of the white paper, which will contain program overview, origin and history, evolution, and future direction sections. Mr. Needham also reported that, effective May 1, 2008, NERC has a new director of readiness evaluation and benchmarking.

Operating Committee Vice Chairman Sam Holeman stated that it is increasingly evident that the scope and focus of the readiness evaluation program must change to meet the needs of a changing industry.

On behalf of the ORS task force assigned to work with representatives of the readiness evaluation program, Jim Castle summarized (Presentation 5) the state of discussions related to:

1. Consistency in performance of readiness evaluations

2. Criteria for determination of recommendations for improvement

3. Tracking of readiness evaluation report recommendations

4. Examples of Excellence

5. Confidentiality of readiness evaluation reports

6. Creation of objective program metrics


4

SPP Balancing Authority Don Shipley highlighted Southwest Power Pool’s plans to consolidate balancing authority functions (Presentation 6). The Consolidated Balancing Authority Steering Committee’s implementation time line reflects receiving NERC balancing authority certification in mid-2009.

Adjourn and Reconvene The subcommittee adjourned at 5:17 p.m. EST and reconvened the following morning at 8:00 a.m.

Operating Personnel Communications Protocols – Reliability Standard Project 2007-02 The secretary stated that the Operating Personnel Communications Protocols Standard Drafting Team is continuing its work on developing the initial version of a new COM-003 reliability standard for posting. Mark Wilson reported that the Reliability Coordinator Working Group approved extending the pilot program using the “Guideline for Operating State Alert Levels” to June 1, 2009 or until a reliability standard is approved and implemented which would replace the pilot program, whichever comes first.

Reliability Coordination – Transmission Loading Relief – Reliability Standard Project 2006-08 Frank Koza, a member of the Reliability Coordination – Transmission Loading Relief Standard Drafting team, reported that the team continues its work to develop version 5 of IRO-006. The secretary reported that on April 21, 2008, FERC issued a notice of proposed rulemaking in Docket No. RM-08-7-000 (Modification of Interchange and Transmission Loading Relief Reliability Standards; and Electric Reliability Organization Interpretation of Specific Requirements of Four Reliability Standards). Paragraphs 35 through 57 address the filing of IRO-006-4.

Transmission Proxy Flowgates Task Force Chairman Zwergel reported that the TLR Standard Drafting Team is addressing the assignment to the Transmission Proxy Flowgates Task Force. Tom Mallinger and the Distribution Factor Working Group will jointly develop a standard authorization request related to the creation and use of proxy flowgates for discussion at the subcommittee’s next meeting.

Operate Within Interconnection Reliability Operating Limits Tony Jankowski, a member of the Operate Within Interconnection Reliability Operating Limits Standard DraftingTeam, highlighted proposed revisions to several EOP, TOP, and IRO reliability standards. The drafting team posted the proposed revisions for a 30-day comment period beginning March 26, 2008. Mr. Jankowski’s expectation is that, following the team’s review of the comments, it will ask to post the revised standards for a 30-day pre-ballot review.

“Gap” Analysis of NERC Standards: SOL and IROL At its November 2007 meeting, the subcommittee formed a task force to review each reliability coordinator’s system operating limit (SOL) methodology for consistency and clarity. Task force chairman Frank Koza highlighted the input received and the preliminary findings (Presentation 7). Mr. Koza reviewed a draft standard authorization request that proposes to establish required operational scenarios and criteria that need to be considered in the determination of IROLs.


5

Chairman Zwergel asked Mr. Koza to present the task force’s initial findings and conclusions to the Operating Committee.

IDC Change Order 246 (Mid-Hour Market Flow) Mark Wilson reported that MISO, IESO, and PJM have not met to discuss IDC CO-246 (Mid-Hour Market Flow).

Interchange Distribution Calculator Working Group Report Jim Busbin, chairman of the IDC Working Group (IDCWG), provided a status report of recent working group activities (Presentation 8).

1. IDC and SDX Transition to PSS/E Version 30 ⎯ This is a significant transition for the industry, which will impact not only the IDC and SDX, but also many “back-end” systems. The IDCWG formed an information technology task force to implement the required changes in automated processes. The target date for the transition is June 3, 2008 when the 2008 summer model is uploaded to the IDC and the SDX.

2. IDC Change Orders ⎯ Chairman Busbin noted that the working group approved implementation of IDC change orders 242 (Change to Target Net Market Flow Reliability Cap) and 247 (Changes to TLR Cross Reference Display) on March 1, 2008. Chairman Busbin also informed the subcommittee of change orders being tested and of those in the development queue.

3. SDX Change of Scope 019 ⎯ The SDX SDWT approved CoS-019 (Conversion of the SDX to PSS/E Revision 30 Format) for development.

Distribution Factor Working Group Report Jim Busbin, chairman of the Distribution Factor Working Group (DFWG), provided an overview of working group activities (Presentation 9), including:

1. Vice Chairman ⎯ The DFWG elected Vic Howell, Duke Energy and VACAR-S reliability coordinator, as vice chairman. Richard McCall moved to appoint Vic Howell as vice chairman of the Distribution Factor Working Group. The subcommittee approved the motion.

2. Book of Flowgates (BoF) Project ⎯ The Web-based BoF database management system went into production on April 1, 2008.


6

Next Meeting The next meeting of the Operating Reliability Subcommittee will be on September 17–18, 2008 in Vancouver, British Columbia.

Adjourn The meeting was adjourned at 10:49 a.m. EDT.


NERC Reliability Readiness ProgramNERC Reliability Readiness Program

White Paper Development

Joint NERC / Operating Reliability Subcommittee

May 7, 2008

Ad Hoc Review Group Formed• Four NERC employees

• Three ORS representatives

• One OC representative

• One Regional Entity representative

Met March 6, 2008, in Charlotte, NC

Subsequent teleconference on April 16, 2008

Pre-ORS meeting telecon on May 1, 2008

Progress ReportProgress Report

Items Attempted So FarItems Attempted So Far

Outline of proposed white paper developed

Additional subjects added

Initial drafts developed and combined• One from NERC staff

• One from ORS member

• Additional input also received, various conversations

Combined effort out for review April 25, 2008

NERC has a new Director of Readiness Evaluation and Benchmarking as of May 1, 2008

Program FutureProgram Future

NERC has appointed a new Director of Readiness Evaluation and Benchmarking• Combines two existing functions within NERC

• Provides good impetus to continue to grow and evolve the readiness program

• Will lead to a proactive development of partnerships among evaluated entities

• Cycle III will begin a new emphasis on the evaluation products

Program Assessment part of the 2008 work plans

White Paper OutlineWhite Paper Outline

Program Overview

Program Origin / History

Program Evolution• Readiness / Compliance

• Examples of Excellence Process

• Addition of Transmission Owners

• NERC Staffing and Communications

• Program Consistency

Program Future

White Paper Outline White Paper Outline -- continuedcontinued

Topics for Discussion• Program Identity

• Confidentiality of Readiness Evaluation Reports

• Focus / Scope of Readiness Evaluations

• Consistency of EvaluationsRecommendations

Examples of Excellence

• Industry Assistance (aka Mentoring)

Program OverviewProgram Overview

Purpose

Approach

Focus

Scope

Results

Program Origin / HistoryProgram Origin / History

August 14, 2003 blackoutRecommendation 18 – “Support and strengthen NERC’sReliability Readiness Program.”NERC adapted the WECC compliance and evaluation program.• First Readiness Audit performed the week of March 8, 2004• Three year cycle due to large demand on industry participants

(rather than proposed 2 year cycle)

Principles of the program: Open, Fair, Transparent, Inclusive• Reports are published on the NERC website sans critical

infrastructure information

Program EvolutionProgram EvolutionCompliance or Readiness?Compliance or Readiness?

Confusion with respect to compliance audits• Changed to ‘Evaluations’ in 2007

• De-emphasis of standards and hard evidenceShifted to a more conversational model

• Program redefined in 2007 based on five primary program groupings

Corporate Culture; Fundamentals of Operations; Fundamentals of Maintenance; Fundamentals of Operational Planning; Fundamentals of Training

Focusing on control center activities and related infrastructure

Program EvolutionProgram EvolutionExamples of ExcellenceExamples of Excellence

Codify and communicate process• Including alternative nomination process (self nomination)

• Consideration of a fall ‘Reliability Summit’ where presentations could be made for EoEs

Emphasis on technology and tools

Allow process to better recognize regional and sub-regional practices and tools

Allow EoE process to consider entities with similar characteristics

Better archive and update EoEs

Program EvolutionProgram EvolutionAddition of Transmission OwnersAddition of Transmission Owners

Originally referred to as ‘Local Control Centers’• Term has specific meaning in one Regional Entity

Generally involved in performing delegated functions

Increased program scope via registration information• Debate is currently underway with regard to the

frequency of evaluations – for TOs as well as some other entities

Program EvolutionProgram EvolutionNERC Staffing and CommunicationsNERC Staffing and Communications

Better communications needed as indicated from feedback received from NERC staff, Regional Entities, team volunteers, and companies• Identification of team products for the entity as well as

the industry

• Increased presence at industry meetings

Staffing increased at the end of 2007 to a total of five full time readiness evaluators

Program EvolutionProgram EvolutionProgram ConsistencyProgram Consistency

NERC has developed computer based training modules for evaluation team volunteers• Modules include interview skills, observation

techniques, dealing with different personalities

Objective is to increase the consistence given the diverse nature of the individual evaluation teams• Without limiting debate and forward thinking

Topics for DiscussionTopics for DiscussionProgram IdentityProgram Identity

Timing of readiness evaluations and compliance audits• Schedules are determined in conjunction with the Regional

Entities

• Inference of compliance based on a readiness evaluation is not a viable planning process

• For entities seeing their first round of evaluations and audits,readiness might be a good way to guide preparation

Compliance personnel on evaluation teams• NERC relies on industry volunteers and Regional Entities to field

evaluation teams

Discussion Topics Discussion Topics Program Identity (Continued)Program Identity (Continued)

Identification of probable compliance violations during a readiness evaluation• The NERC Rules of Procedure, as approved, require reporting

for resolution through the Regional Entity• Self reporting during the onsite visit is encouraged• Teams do not seek evidence of violations• Not part of the evaluation report unless a recommendation is

associated

Recommendation Tracking• Seeking to determine the value of the process• Prior recommendations are not formally discussed as part of a

current evaluation

Discussion TopicsDiscussion TopicsConfidentialityConfidentiality

Should readiness evaluation results be shared only with the evaluated entity?• Implication that better, more open communications

would take place during an evaluation

• Contrary to the NERC principles – open, fair, transparent, inclusive

• Team products are important to the industryCritical infrastructure information is always redacted from the published report

Discussion TopicsDiscussion TopicsProgram Focus and ScopeProgram Focus and Scope

Larger, more experienced entities already perform at a high level – but might appreciate a more narrowly focused evaluation• Narrow but deep evaluation might be requested by an

entity in addition to the standard process – part of the NERC business plan for Cycle III

• Completion of Cycle II of the evaluations will provide a good baseline of experiences

Discussion TopicsDiscussion TopicsConsistencyConsistency

Common themes from feedback include overall consistency, recommendations, examples of excellence, program metrics• Training and continuity of leadership will improve

consistencyTraining is now required of all evaluation team members

• Team leaders and regional representatives must help evaluation teams develop meaningful recommendations and examples of excellence

Team discussions are very dynamic, and based largely on the expertise of the team members

Discussion TopicsDiscussion TopicsIndustry AssistanceIndustry Assistance

There is a need for a mechanism to partner entities receiving recommendations with high performers in the specific program area• Development of a higher level report format is suggested

NERC should conduct technical conferences to present examples of excellence to the industry• Requires care to identify the correct audience

Previous reports and outdated examples of excellence should be archived on the NERC website• Under development at the present time – would archive prior

report when a new one is posted, and archive examples of excellence after a certain period of time from the posting date

Additional NotesAdditional Notes

Items not covered previously

1. Consistency in performance of evaluations

2. Criteria for Recommendations For Improvement

3. Tracking of evaluation report recommendations

4. Examples Of Excellence

5. Confidentiality of reliability readiness reports

6. Objective program metrics and assessment

7. Reliability focus

8. Others?

DISCUSSION TOPICS

1. Consistency in performance of evaluations

What?To maximize success of the Readiness Review program it is important to

strive to attain and maintain a high degree of consistency between evaluation teams, and between evaluations themselves.

Thoughts on How• Training for the team leadership and the teams.

Remain focused on reliability issues and industry norms

• Oversight of the Readiness Evaluation Program.Ensure that the teams and their leadership remain focused onreliability issues and how processes and procedures are beingexecuted.

DISCUSSION TOPICS

2. Criteria for Recommendations For Improvement

What?Recommendations For Improvement (RFI) should be meaningful and have a

direct bearing on enhanced reliability. Criteria to guide an RFI decision could be as follows:

Thoughts on How1. What is the risk to reliability addressed by this RFI at this entity?2. Project currently under development do not rise to the level of an RFI? 3. A recommendation to “consider” something is not an RFI. 4. If implemented, would there be a measurable reduction in reliability risk?5. Is there evidence of this recommendation being effective at other

entities?6. Is there team consensus that this is a valid recommendation?

DISCUSSION TOPICS

3. Tracking of evaluation report recommendationsRecommendations are not compliance violations, they are simply

recommendations with appropriate action completely up to the entity under review.

What?Is it necessary to track RFI’s and for what purpose?

Thoughts on How

DISCUSSION TOPICS

4. Examples Of Excellence Conceptually, the Examples Of Excellence (EOE) has the potential to be the

catalyst for meaningful technical discussions that could enhance the operational excellence in the electric industry.

Further developing the concept to realize its full potential would require expanding an EOE process beyond the Readiness Review program to maximize issue exposure, discussion and gain industry consensus and support that a proposal raises to the level of an EOE.

It stands to reason that other avenues exist to identify where EOEs may exist.

To qualify for an EOE an issue should fit certain criteria filtering that is consistent with the RFI criteria filtering team guideline.

DISCUSSION TOPICS

4. Examples Of Excellence - continued

Thoughts for EOE – Guideline 1. What is the enhancement to reliability addressed by this process?

2. Is this a unique process that would benefit the industry?

3. Is this a process that could be implemented in a practical manner else ware

4. If widely implemented, what would be the measurable enhancement to reliability?

DISCUSSION TOPICS


Thoughts for EOE – Process

1. Readiness Review team may continue to identify Potential EOEs. These can be included in the Readiness Review report as Potential EOEs and encourage the entity to pursue full EOE status.

2. Other entities such as NERC, Regions, TOOF, the entity itself can also identify Potential EOEs and pursue full EOE status without a Readiness Review.

3. The entity with the Potential EOE develops the Potential EOE into a white

paper format and submits it to the ORS for review and leads a discussion.

4. ORS takes formal action. If ORS supports the paper as an EOE, ORS recommends OC approval.

DISCUSSION TOPICS


Thoughts for EOE – Process

5. If OC approves the paper as an EOE, NERC publishes the paper as an EOE giving credit to the entity and maximizes exposure to the industry.

6. NERC conducts periodic technical conferences presenting the EOE whitepapers to the industry.

7. Care must be taken in the development of the white paper to identify relevant parameters where the EOE may be effective. For example an EOE might work for a TO but not an RC, or it might work for a market system not a bilateral system, etc.

8. NERC should post the EOE paper for a one year period to provide industry exposure, then archive the paper in a way that would provide access by the industry if desired.

DISCUSSION TOPICS

5. Confidentiality of reliability readiness reportsPromoting operational excellence through the Readiness Evaluation

Program requires honest and meaningful discussion between the review team and the individuals representing the entity being reviewed.

Should readiness evaluation be confidential. Confidential reports could pave the way to more meaningful and candid discussions.

Confidential reports could also defeat one of the major benefits of the readiness review program, information sharing.

Are consolidated readiness reports updated in a way that maintains confidentiality, but shares information a possible solution?.

DISCUSSION TOPICS

6. Objective program metrics and assessmentObjective program metrics are essential to yielding a quality assessment of

any program or process.

Are RFIs a meaningful program metric?

Are individual post evaluation surveys a meaningful program metric?

Are there other metric possibilities?

DISCUSSION TOPICS

7. Reliability focus Many entities that are being evaluated in the Readiness Review Program

are very experienced in the functions they are performing.

For those entities a general Readiness Evaluation may be of value for the industry by confirming processes and procedures are being executed properly by their neighbors.

However, an experienced entity may benefit by having a more focused evaluation.

DISCUSSION TOPICS

NERC Reliability Readiness ProgramNERC Reliability Readiness Program

White Paper Development Update

Joint NERC Readiness Program /Operating Reliability Subcommittee

June 4-5, 2008

2

ObjectiveObjective

Mission of Readiness Program• Promote reliability and operations excellence

Continuous Improvement• Develop performance-based criteria

• Provide assistance (reliability information help desk, on-site consultation, webinars, reliability conference)

• Database search through NERC website

• Seek OC support and guidance

3

OC SupportOC Support

Provide technical support, guidance and advice to the Readiness Program

Develop criteria for measuring program success, and review the program against those criteria

Review readiness evaluations for trends and recommend new or different types of evaluations or changes in processes or metrics

4

On-Site Evaluations

Alliance/PartnershipIntegrated ReliabilityHelp Desk

Information Sharing

Ag

OC Guidance and Advice

- Needs or risk-based- Requested by entities seeking specific assistance

- Web-based database- Webinars- Reliability Conference

- Coordinate with REs- Provide complete and accurate answers- Not a Compliance Hotline- No legal advice

- Collaborative relationship- Promote dialogue on reliability

Details available at: ftp://ftp.nerc.com/pub/sys/all_updl/bot/finance/FAC-0530cca.pdf

5

Ad Hoc Review Group Formed• Four NERC employees

• Three ORS representatives

• One OC representative

• One Regional Entity representative

Met March 6, 2008, in Charlotte, NC

Subsequent teleconference on April 16, 2008

Pre-ORS meeting telecon on May 1, 2008

ORS meeting status update on May 7, 2008

Progress ReportProgress Report

6

Progress to DateProgress to Date

Outline of proposed white paper developed

Additional subjects added

Initial drafts developed and combined• One from NERC staff

• One from ORS member

• Additional input also received, various conversations

Combined effort reviewed April 25, 2008

Collected additional ORS input from the May 7th meeting

7

Readiness Evaluation and BenchmarkingReadiness Evaluation and Benchmarking

Combines two existing functions within NERC

Provides good impetus to continue to grow and evolve the readiness program

Will lead to a proactive development of partnerships among evaluated entities

Cycle III will begin a new emphasis on the evaluation products

Program assessment was part of the 2008 work plans

8

Initial ORS ObservationsInitial ORS Observations

The ORS consensus is:• That the program provides a valuable contribution to

reliability

• Industry should work together in a cooperative effort to improve the program

9

Key Items for DiscussionKey Items for Discussion

Program Identity

Confidentiality of Readiness Evaluation Reports

Focus / Scope of Readiness Evaluations

Consistency of Evaluations• Recommendations for improvement (raise the bar)

• Examples of Excellence

Industry Assistance (aka Mentoring)

10


Program Overview

Program Origin / History

Program Evolution• Readiness / Compliance

• Examples of Excellence Process

• Addition of Transmission Owners

• NERC Staffing and Communications

• Program Consistency

11


Program Future

Topics for Discussion• Identity

• Confidentiality

• Focus/Scope

• Consistency

• Industry Assistance

Conclusion

12

Program OverviewProgram Overview

Purpose — evaluates the quality and effectiveness of entity operations and processes

Approach — conducted by industry peers serving as subject matter experts

Focus — focuses on evaluating the quality of entity practices

Scope — broad review of system operations functions

Result — highlights positive observations; offers recommendations to entities for improving practices.

13

Program OriginProgram Origin

August 14, 2003 blackoutRecommendation 18 – “Support and strengthen NERC’s Reliability Readiness Program.”NERC adapted the WECC RMS compliance and evaluation program.• First Readiness Audit performed the week of March 8, 2004• Three year cycle due to large demand on industry participants

(rather than proposed 2 year cycle)

Principles of the program: Open, Fair, Transparent, Inclusive• Reports are published on the NERC website sans critical

infrastructure information

14

Evolution in an Environment of Evolution in an Environment of Mandatory ComplianceMandatory Compliance

Perception with respect to compliance audits• Changed to ‘Evaluations’ in 2007

Audit relies on evidence

Evaluation asses performance

• De-emphasis of standards and hard evidenceShifted to a more conversational model

• Program redefined in 2007 based on five primary program groupings

Corporate Culture; Fundamentals of Operations; Fundamentals of Maintenance; Fundamentals of Operational Planning; Fundamentals of Training

Focusing on control center activities and related infrastructure

15

Program EvolutionProgram EvolutionAddition of Transmission OwnersAddition of Transmission Owners

Originally referred to as ‘Local Control Centers’• Term has specific meaning in one Regional Entity

Generally involved in performing delegated functions

Increased program scope via registration information• Debate is currently underway with regard to the

frequency of evaluations

16

Program EvolutionProgram EvolutionNERC Staffing and CommunicationsNERC Staffing and Communications

Better communications needed as indicated from feedback received from NERC staff, Regional Entities, team volunteers, and companies• Identification of team products for the entity as well as

the industry

• Increased presence at industry meetings

Staffing increased at the end of 2007 to a total of five full time readiness evaluators

17

Program EvolutionProgram EvolutionProgram ConsistencyProgram Consistency

NERC has developed computer based training modules for evaluation team volunteers• Modules include interview skills, observation

techniques, dealing with different personalities

Objective is to increase the consistence given the diverse nature of the individual evaluation teams• Without limiting debate and forward thinking

18

Program FutureProgram Future

2009 to 2011 business plan• Staffing

• Identity

• Training

• Examples of Excellence

• Self Assessment

• Industry Assistance

• Communications

19

Topics for DiscussionTopics for DiscussionProgram IdentityProgram Identity

Timing of readiness evaluations and compliance audits• Schedules are determined in conjunction with the Regional

Entities

• Inference of compliance based on a readiness evaluation is not a viable planning process

• For entities seeing their first round of evaluations and audits,readiness might be a good way to guide preparation

Compliance personnel on evaluation teams• NERC relies on industry volunteers and Regional Entities to field

evaluation teams

20

Program IdentityProgram Identity

Identification of probable compliance violations during a readiness evaluation• The NERC Rules of Procedure, as approved, require reporting for

resolution through the Regional EntitySelf reporting during the onsite visit is encouraged

Teams do not seek evidence of violations

Not part of the evaluation report unless a recommendation is associated

Recommendation from the ORS to alter the NERC rules of procedure to remove the reference to probable violations (Paragraph C.3, page 5)

Recommendation Tracking• Seeking to determine the value of the process

• Prior recommendations are not formally discussed as part of a current evaluation

21

Resolution on ConfidentialityResolution on Confidentiality

Posting a report is appropriate• Process is open, and transparent

What should be included in the posting?• Team products are important to the industry

Critical infrastructure information is always redacted from the published report

Provide better access to information (better database or tool)

22

Program Focus and ScopeProgram Focus and Scope

Flexibility to request a more targeted evaluation• Narrow but deep evaluation might be requested by an

entity (perhaps) in addition to the standard evaluation process – part of the NERC business plan for Cycle III

• Completion of Cycle II of the evaluations will provide a good baseline of experiences

23

ConsistencyConsistency

Common themes from feedback include overall consistency, recommendations, examples of excellence, program metrics• Training and continuity of leadership will improve

consistencyTraining is now required of all evaluation team members

• Team leaders and regional representatives must help evaluation teams develop meaningful recommendations and examples of excellence

Team discussions are very dynamic, and based largely on the expertise of the team members

24

Industry AssistanceIndustry Assistance

There is a need for a mechanism to partner entities receiving recommendations with high performers in the specific program area• Development of a higher level report format is

suggested

NERC should conduct technical conferences to present examples of excellence to the industry• Requires care to identify the correct audience

25

Industry AssistanceIndustry AssistanceExamples of ExcellenceExamples of Excellence

Codify and communicate process• Including alternative nomination process (self nomination)• Consideration of a fall ‘Reliability Summit’ where presentations

could be made for EoEs• Establish criteria for nomination

Emphasis on technology and toolsAllow process to better recognize regional and sub-regional practices and toolsAllow EoE process to consider entities with similar characteristicsBetter archive and update EoEs

26

ConclusionConclusion

Identify those areas of consensus and agreement

Highlight areas where the industry should continue to debate and give input

Create a roadmap for the future, that can be incorporated into the next set of NERC business plans

27

In SummaryIn Summary

Cooperative Effort• Directed by the NERC OC

• Knowledgeable small group

• Significant ORS input

Provides a good base for continued discussion

Memorializes information about the program

Will result in better service to the industry

28

Questions?

Reliability Readiness TransitionReliability Readiness Transition

Jessica Bian and Kevin Conway

Reliability Readiness TransitionReliability Readiness Transition

July 2008 NERC Board of Trustees meeting –version 3 of the budget approved

Readiness Program will be phased out, coming to a close at the end of the first quarter of 2009

All RCs, BAs, and TOPs initially scheduled for an evaluation between September and December have been cancelled• 2 Transmission Owners are still scheduled, as they

have never had a readiness evaluation

Need for Additional EvaluationsNeed for Additional EvaluationsProvisional Certification ProcessProvisional Certification Process

After becoming the ERO, NERC provisionally certified all RCs, BAs, and/or TOPs that were already performing the functions for which they were registered

RCs, BAs, and TOPs will become NERC certified upon completion of a NERC readiness evaluation and a regional entity or NERC compliance audit**

All registered RCs, BAs, and TOPs that have never had a readiness evaluation need to be scheduled for one before the close of the program

**More details on the Provisional Certification Process can be found at http://www.nerc.com/files/Provisional_Certification_20080620.doc

http://www.nerc.com/files/Provisional_Certification_20080620.doc

Status of Scheduling Additional Status of Scheduling Additional EvaluationsEvaluations

•By mid-September —Finish scheduling the remaining evaluations

•By March 2009 — Complete all evaluations

Comments — There are no evaluations to be scheduled for certification within NPCC, ERCOT, or SPP. The five entities in WECC and one entity in RFC that are not yet scheduled are currently under review.

Status of Evaluations for Certification

0

1

2

3

4

5

6

7

8

9

FRCC SERC RFC WECC

Number ofEntities to beEvaluated

Number ofEvaluationsScheduled

Questions?Questions?


609.452.8060 | www.nerc.com


September 17, 2008 | 8 a.m.–5 p.m. September 18, 2008 | 8 a.m.– 12 p.m. Marriott Vancouver Pinnacle Downtown 1128 West Hastings Street Vancouver, British Columbia 604-684-1128


i. May 7-8, 2008 Operating Reliability Subcommittee meeting ii. July 16, 2008 Operating Reliability Subcommittee Executive Committee

conference call meeting iii. August 20, 2008 Operating Reliability Subcommittee conference call

meeting g. Future Meetings

2. Reliability Plans a. Periodic Review of Reliability Plans b. Information Related to Implementing Existing Reliability Plans c. New or Revised Reliability Plans for Endorsement

i. VACAR-S Reliability Plan ii. VACAR Subregion Reliability Plan iii. FRCC Reliability Plan

d. Regional Changes

3. Use of IDC to Implement Local Area Procedures

4. SPP Consolidated Balancing Authority

ORS Meeting Agenda September 17-18, 2008

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5. Requests for Interpretations of Standards a. EOP-002-2 (Capacity and Energy Emergencies) b. EOP-001-0 (Emergency Operations Planning)



8. Future Path of Transmission Loading Relief



11. Market Flow Hold Procedure

12. Frequency of Updating Marginal Zones

13. NAESB Time and Inadvertent Interchange Management


15. NERC Readiness Evaluation and Improvement Program a. Examples of Excellence b. Future of the Reliability Readiness Evaluation and Improvement Program c. Benchmarking Dashboard

16. Interchange Distribution Calculator Working Group Report a. IDC Change Orders b. SDX Status Report

17. Distribution Factor Working Group Report



20. Roundtable Discussion

Item 15. NERC Readiness Evaluation and Improvement Program

Jessica Bian, director of Reliability Readiness and Benchmarking, and Kevin Conway, reliability readiness evaluator, will provide a status report of the Readiness Evaluation and Improvement Program. In addition, Ms. Bian will also review the implementation of the benchmarking dashboard.

Item 15.a Examples of Excellence

Discussion and Approval Mr. Conway will review several potential examples of excellence resulting from recent readiness evaluations.

Item 15.b Future of the Readiness Evaluation and Improvement Program

Information Version 3.0 of the NERC Business Plan and Budget approved by the Board of Trustees indicated that the Readiness Evaluation and Improvement Program has reduced the remaining 2008 evaluations scheduled based on a criteria developed to bring the program to a close by the end of the first quarter of 2009.

Background (Excerpt from the Board of Trustees Approved 2009 NERC Business Plan and Budget) The NERC Readiness Evaluation and Improvement Program began in response to FERC directives following the August 14, 2003 blackout. The goal was to increase transparency on operating practices and to assess the industry’s overall preparedness to minimize the likelihood of another major blackout.

When FERC approved NERC as the electric reliability organization and began adopting NERC standards as mandatory in the United States, NERC created an associated compliance audit program (Compliance Monitoring and Enforcement Program — CMEP). The readiness program, which had been asking compliance-type questions, shifted its full effort to encouraging entities to improve reliability performance and achieve excellence in their assigned functions and responsibilities.

The readiness program has been working with industry experts to conduct on-site evaluations of all balancing authorities, transmission operators, reliability coordinators, and other entities that support the reliable operation of the bulk power system in North America to determine their readiness to maintain safe and reliable operations.

While feedback from entities that have participated in readiness evaluations has generally been favorable, industry comments on the first draft of the NERC 2009 Business Plan and Budget suggest that: (1) the value of the readiness program is diminishing; (2) the focus and resources of NERC should be squarely on standards and compliance particularly during this critical time; and (3) the mandatory enforcement role at NERC creates a conflicted environment for the readiness program, suggesting the role can be better undertaken by others (such as the Transmission Owners and Operators Forum). This leads to the overall conclusion that the assessment-oriented evaluation process in its current form be discontinued.

Based on the direction provided by the NERC Board’s Finance and Audit Committee, the readiness evaluation program will complete the remaining scheduled readiness reviews and close at the end of the first quarter of 2009.

Item 15.c Benchmarking Dashboard

Discussion Ms. Bian will review the implementation of the NERC Benchmarking Dashboard (http://www.nerc.com/page.php?cid=4|37).


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17-

Minutes Operator Reliability Subcommittee September 17, 2008 Vancouver, British Columbia The Operating Reliability Subcommittee (ORS) met on September 17, 2008 in Vancouver, British Columbia. The meeting notice, agenda, and attendance list are affixed as Exhibits A, B, and C, respectively.


Minutes The subcommittee approved the minutes of the May 7–8, 2008 meeting, the minutes of the July 16, 2008 subcommittee’s executive committee conference call meeting, and the minutes of the August 20, 2008 conference call meeting.

Future Meetings The secretary reviewed the dates and locations of future subcommittee meetings.

NERC Readiness Evaluation and Improvement Program Kevin Conway, reliability readiness evaluator, summarized the expected transition of the reliability readiness program through the first quarter of 2009 (Presentation 1). In July 2008, the Board of Trustees approved version 3 of the NERC budget, thus approving the phase out of the reliability readiness program by the end of the first quarter of 2009. All reliability coordinator, balancing authority, and transmission operator reliability readiness evaluations scheduled during the fourth quarter of 2008 were cancelled.

Mr. Conway also reviewed several potential examples of excellence identified during reliability coordinator, balancing authority, or transmission operator reliability readiness evaluations (Presentation 2). Those approved examples of excellence include:

Florida Power & Light P-V Curve Display ⎯ FPL calculates and displays for its operators real-time P-V curve data for key locations.

Operator Reliability Subcommittee Meeting Minutes September 17, 2008

2

PJM Smartlog Program ⎯ A vendor-developed software program, which automatically captures EMS data in an operator log entry format, for post-event analysis, reporting, and shift-change information sharing.

1. Partnership between Western Area Power Administration and Bismarck State College ⎯ This partnership is an important development for the industry. It was designed with industry input as a tool to identify new candidates and train them as employees to be system operators.

2. Pacific Northwest Security Coordinator Phasor Measurements in State Estimator ⎯ The use of phasor measurements in the state estimation process enhances state estimator solutions and increases the observability and accuracy of the solution estimates.

3. Dominion Virginia Power Team Track Software ⎯ Virginia Power implemented an innovative “Team Track Software” tool that includes an attributes database, links to manufacturer’s manuals, a graphical user interface, and other value-added options to provide enhanced management of the switchyard maintenance program at its nuclear power plants.

4. Midwest Energy Relay Misoperation Process ⎯ Midwest Energy developed a systematic approach to identify and analyze relay misoperations and documented it in its Analysis of Protection System Misoperations guide. This unique guide provides a flow chart that enables protection engineers to quickly determine the cause of a relay misoperation and take appropriate corrective actions to remedy the problem.

5. Entergy Services Transmission Reliability Application ⎯ Entergy Services developed an analysis tool called the Transmission Reliability Application enabling the system operator to create a historical record of flowgate loadings and remedial actions taken to resolve these loadings. Additionally, this system enforces the EES congestion management policy. The information contained in the application is used by operators and planners to evaluate system response for similar operating conditions.

Reliability Plans The secretary reviewed proposed revisions to the reliability standards and to the Functional Model that may negate the need to create Regional or reliability coordinator reliability plans in the future. Jack Bernhardsen noted that the value of a reliability plan was in describing how entities were expected to coordinate their operational reliability responsibilities, and Chairman Zwergel suggested the development of a template upon which to create a Regional or reliability coordinator reliability plan. He assigned Jim Hartwell and Jack Bernhardsen to develop a recommendation related to the development of Regional or reliability coordinator reliability plans.

Colleen Frosch stated that during its compliance audit ERCOT determined that it needed to revise its reliability plan. Ms. Frosch will send the revised ERCOT reliability plan to the secretary for ORS executive committee action.

Greg Stone reviewed the VACAR-S reliability plan and the VACAR Subregion reliability plan. Mr. Stone reported that 1) in June 2008, the VACAR Operating Task Force completed its review


3

of the existing VACAR Subregion Reliability Plan, and 2) in July 2008, the VACAR South Member’s Committee completed its review of the existing VACAR South Reliability Plan. Both groups concluded that no changes are necessary to their respective reliability plans. The subcommittee discussed an outstanding issue related to the VACAR balancing authorities having write access to the reliability coordinator information system. Mr. Stone stated that VACAR intends to change an exhibit to the reliability plans, which will address this. VACAR will implement this change on January 1, 2009. Richard McCall moved to approve the VACAR-S Reliability Plan and the VACAR Subregion Reliability Plan as presented. The subcommittee approved the motion. Since neither plan was changed, the secretary was asked to update the posting dates on the ORS Web site.

Frank Prieto provided an overview of the revised FRCC reliability plan. Greg Stone moved that the Operating Reliability Subcommittee approves the revised FRCC reliability plan (Reliability Process for the FRCC Bulk Electric System). The subcommittee approved the motion.

Use of IDC to Implement Local Area Procedures Vice Chairman Koza stated that PJM and Progress Energy-Carolinas (PEC) entered into a local area agreement that selectively curtails non-firm interchange transactions, sourcing and sinking in PJM and PEC, down to a 3% curtailment threshold, before moving to a TLR Level 5. FERC approved the agreement. Vice chairman Koza also reported that neither party has implemented the agreement.

Requests for Interpretation of Standards The secretary reported that the subcommittee’s executive committee developed an interpretation of reliability standard EOP-002-2 (Capacity and Energy Emergencies). The interpretation was posted for comments. In response to comments, the executive committee revised the interpretation. The revised interpretation and the response to comments were posted on August 20, 2008 for a 30-day pre-ballot review.

Chairman Zwergel summarized the revised interpretation of Requirement R1 of reliability standard EOP-001-0 (Emergency Operations Planning). The initial interpretation of Requirement R1 was balloted from June 19, 2008 through July 2, 2008. The executive committee developed a response to comments received during balloting. As a result of the comments received, the executive committee proposed revising the interpretation. Greg Tillitson noted the revised interpretation’s use of the NERC-defined term “Adjacent Balancing Authority,” which is “a balancing authority area that is interconnected to another balancing authority area either directly or via a multi-party agreement or transmission tariff.”

SPP Balancing Authority Don Shipley highlighted Southwest Power Pool’s plans to consolidate balancing authority functions (Presentation 3). The Consolidated Balancing Authority Steering Committee’s implementation time line reflects receiving NERC balancing authority certification in the fall of 2009. The SPP balancing authority startup is targeted for the fist quarter of 2010.


4

Operating Personnel Communications Protocols – Reliability Standard Project 2007-02 The secretary reviewed the Operating Personnel Communications Protocols Standard Drafting Team’s latest draft of COM-003-1 (Operating Personnel Communications Protocols Standard). He noted that the standard drafting team is proposing to eliminate reference to the operating states alert guideline developed by the Reliability Coordinator Working Group (RCWG). The standard drafting team suggests that the subcommittee post the guideline for public comment, and perhaps modify other reliability standards as appropriate to reflect the reporting requirements of transmission emergency alerts and security emergency alerts.

The subcommittee expressed concerns related to the 1) training effort needed by applicable entities identified in the standard, 2) concern that the emergency communications protocols resulted from a 2003 blackout report recommendation, 3) required use of the NATO alphabet, 4) required use of a specific time zone, 5) impact on distribution providers, and 6) definition of interoperability. Chairman Zwergel suggested that subcommittee members submit comments when COM-003-1 is posted.

Reliability Coordination – Transmission Loading Relief – Reliability Standard Project 2006-08 Frank Koza, a member of the Reliability Coordination – Transmission Loading Relief Standard Drafting Team, reported that the team continues its work to develop version 5 of IRO-006. He reported that on July 21, 2008, FERC issued Order No. 713 in Docket RM-08-7-000. Paragraph 50 of Order 713 directs the ERO to provide an explanation regarding the phrase “the TLR procedure alone is an inappropriate and ineffective tool to mitigate an IROL violation.” In its entirety Paragraph 50 states:

50. Therefore, the Commission does not approve or remand IRO-006-4. Rather, the Commission directs the ERO to submit a filing, within 15 days of the effective date of this Final Rule, that provides an explanation regarding Requirements R1 and R1.1 of IRO-006-4. Specifically, in light of the above discussion, the Commission directs the ERO to provide an explanation regarding the phrase “[t]he TLR procedure alone is an inappropriate and ineffective tool to mitigate an IROL violation . . .” Further, the ERO should explain whether Requirements R1 and R1.1 only allow the TLR procedure to be continued when already deployed prior to an actual IROL violation or, alternatively, whether Requirements R1 and R1.1 allow use of the TLR procedure as a tool to address actual violations after they occur. If the latter, the ERO is directed to explain why this application is not contrary to both Blackout Report Recommendation 31 and the Commission’s determination in Order No. 693. The ERO’s filing should include an explanation of those actions that are acceptable, and those that are unacceptable, pursuant to Requirement R1 and R1.1.

Vice chairman Koza stated that NERC has not yet responded to this request for filing.

Future Path of Transmission Loading Relief – A Proposal Chairman Zwergel provided a status report on the future path of transmission loading relief (TLR) (Exhibit D). On August 22, 2008, MISO, PJM, and SPP submitted a revised standard


5

authorization request (SAR) and supporting whitepaper, based on input from the ORS, the RCWG and the TLR standard drafting team, to the Standards Committee. The SAR only addresses the reliability component issues in the future path of TLR proposal (parallel flow visualization, use of static data by the IDC in the network and native load calculation and curtailing non-firm generation-to-load impacts during TLR). MISO, PJM, and SPP asked the Standards Committee to consider assigning this SAR to the TLR Standard Drafting Team. Furthermore, MISO, PJM, and SPP will work with the SAR drafting team to develop a business case, which will include the expected cost to reliability coordinators to report generation-to-load impacts, the expected cost to modify the IDC, and the perceived benefits to reliability coordinators of having improved visualization on the source and magnitude of parallel flows.

“Gap” Analysis of NERC Standards: SOL and IROL At its November 2007 meeting, the subcommittee formed a task force to review each reliability coordinator’s system operating limit (SOL) methodology for consistency and clarity. Vice chairman Koza reviewed a draft standard authorization request that proposes to establish required operational scenarios and criteria that need to be considered in the determination of IROLs. Mark Wilson moved to approve the IROL Development and Management SAR for submission to the Standards Committee. The subcommittee approved the motion. By consensus the subcommittee will ask to be the SAR drafting team.

Market Flow Field Trial Report Vice chairman Koza provided a status report of the on-going market flow field trial (Presentation 4). The Standards Committee approved extending the field trial to October 31, 2008 and increasing the market flow curtailment threshold from 3% to 5% effective June 1, 2008. He also highlighted an extensive analysis of the data captured since the field trial’s inception on June 1, 2007. He noted the need to gather and analyze additional data and suggested that the TLR standard drafting team may request an extension of the field trial.

Market Flow Hold Procedure Chairman Zwergel discussed the impact of implementation of Interchange Distribution Calculator (IDC) CO-242 on market flow during a TLR Level 3A (i.e., the target net market flow sent by the IDC to the MISO, PJM and SPP Unit Dispatch Systems effectively limits market flow to 0%), which means that MISO, PJM and SPP cannot raise its internal generation above 0% to meet its own load requirements (Presentation 5). He noted that CO-242 was originally implemented by the IDC Working Group to address an unintended consequence of the implementation of CO-182. Since IESO, PJM, and MISO have now developed a safe operating mode procedure, wherein the three reliability coordinators will work jointly to address local transmission congestion prior to initiating TLR action, he suggested that the IDC Working Group suspend operation of CO-242. Furthermore, Chairman Zwergel stated that the implementation of CO-242 is causing MISO, PJM and SPP a reliability concern and recommended that the subcommittee support addressing this concern.

Mark Wilson moved to suspend implementation of IDC CO-242 and request that the IDC Working Group develop and recommend an alternative solution to limit market flow change. Following a brief discussion, the subcommittee approved the motion.


6

IDC Change Order 246 (Mid-Hour Market Flow) Mark Wilson reported that MISO, IESO, and PJM continue to meet to discuss IDC CO-246 (Mid-Hour Market Flow).

Frequency of Updating Marginal Zones Chairman Zwergel reported that MISO calculates and uploads to the IDC export and import marginal zones on a 5-minute basis. The export and import marginal zones are used by the IDC to calculate transfer distribution factors (TDFs) for interchange transactions sourcing or sinking in the MISO reliability area. Because the marginal zones may frequently change, the TDFs may also change; hence, during a TLR curtailment an interchange transaction may be subject curtailment one hour and be reloaded the next. Therefore, to avoid this outcome, MISO investigated alternatives to the calculation methodology of marginal zones, and recommends use of a methodology that uses a weighted composition of local balancing areas based on constrained flowgate history. Chairman Zwergel recommends that the IDC Working Group further analyze this potential solution. In addition, he stated that MISO also proposes to grant transmission service based upon this concept as well.

NAESB Time and Inadvertent Interchange Management Tom Vandervort provided an overview of the North America Energy Standards Board’s (NAESB) Time and Inadvertent Interchange Management business practice (Presentation 6). The proposed revision to the business practice will address the 1) number and efficiency of time error corrections, 2) number of frequency excursions (over half of the low frequency excursions occur during time error corrections), 3) FERC request for sanctions on large inadvertent balances, and 4) request by NERC and NAESB to investigate alternatives to present inadvertent payback practices.

Interchange Distribution Calculator Working Group Report The secretary provided a brief overview of IDC Working Group activities.

Distribution Factor Working Group Report The secretary provided a brief overview of Distribution Factor Working Group activities.

NERC Reliability Tools The secretary noted that NERC is in the middle of compliance as a result of providing some reliability tools such as IDC and the reliability coordinator information system. Vice chairman Koza noted that NERC compliance will allow insertion of a statement in a standard stating that if the reliability tool is not available that the compliance sanction can not be assessed.

Roundtable Discussion Chairman Zwergel encouraged subcommittee input related to future agenda topics. Discussion topics included a report from the Integration of Variable Generation Task Force and a report from the System Operating Personnel standard drafting team.

Next Meeting The next meeting of the Operating Reliability Subcommittee will be on November 19–20, 2008 in Austin, Texas.


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Adjourn The meeting was adjourned at 3:06 p.m. PDT.
