Jeffery J. Gust

IOWA INDUSTRIAL ENERGY GROUPFALL CONFERENCE

Tuesday, October 14, 2014

MidAmerican Energy Company

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• Introduction• Background - Bulk Electric System• Reliability of the Bulk Electric System• Resiliency of the Bulk Electric System• Addressing Reliability and Resiliency• Questions

Reliability and Resiliency of the Bulk Electric System

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Eight Regions of NERC

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North America Electric Power Markets

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• The Federal Regulatory Energy Commission (FERC) has authority for the development, review and enforcement of mandatory reliability and security standards of the bulk electric system.

• FERC approved the North American Electric Corporation (NERC) as the electric reliability organization to develop mandatory standards and enforce these standards.

• NERC has delegated the enforcement activity to eight regional entities in North America.

• Each owner and/or operator of the bulk electric system must register with a region and comply with all of the requirements of the mandatory standards.

• Any violations of these requirements must be reported up through the region.

• Violation remedies will range from mitigation plans to civil penalties.

Bulk Electric System Reliability

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• Transmission Operations• Communications• Transmission Planning• System Protection and Control• Interchange Scheduling and

Coordination• Resource and Demand

Balancing• Facilities Design, Connection

and Maintenance• Modeling, Data and Analysis• Emergency Preparedness and

Operation

• Cyber Security Management Controls

• Electronic Security Perimeters• System Security Management• Incident Reporting and

Response Management• Cyber System Recovery Plans• Configuration Change

Management and Vulnerability Assessment

• Information Protection• Physical Security

Categories of Reliability Standards

Compliance and Operational Excellence

• Operational excellence• Regulatory integrity• Employee commitment• Customer service• Environmental respect• Financial strength

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• Ability to prepare for and adapt to changing conditions and withstand and recover rapidly from disruptions, including deliberate attacks, accidents or naturally occurring incidents

• Increasing focus of resilience on emerging hazards versus weather events

• The growing consensus for regulators: resilience should focus on especially severe events

Bulk Electric System Resiliency

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• Natural Hazards– Earthquakes (New Madrid, Cascadia, Hayward, etc.)– Major geomagnetic disturbances– Major storms (Katrina, Sandy)

• Manmade Threats– Potential adversary nations and terrorist groups– Electromagnetic pulse attack (EMP)– Combined cyber/physical attack

Resiliency Threats

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• Protection against major hazards that impact resiliency– More attention to physical and cyber security beyond

critical equipment– More drills to practice responding to major events– Better coordination with other critical infrastructure

(transportation, communication, local responders, etc.)

• Regulatory awareness• Prudent Investments– Spare equipment– Hardening certain facilities– Improving overall grid transfers

Improving Resiliency

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• CIP-014 will become effective late this year• Requires owners to complete risk assessment and

develop security plans to address vulnerabilities• Many comments have indicated the regulation is

not enough• We expect future changes to regulation that will

expand scope• MidAmerican is committed to securing our critical

facilities

FERC Approved New Physical Security Standard

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Hardening Facilities

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• Improve or enhance perimeter security• Improve or enhance surveillance• Improve or enhance equipment protection• Enhance spare equipment

• Complete this work as part of our capital investment plan

Hardening Critical Facilities

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MISO Multi-Value Projects

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Iowa Multi-Value Projects

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• MVP-4• The Iowa Utilities Board approved the franchise for the Black Hawk to Hazleton

segment.• Construction has begun at substation and line. Structures are assembled and new

conductor is being strung. Work is expected to be completed for this segment by December 2014.

• The line segment from Black Hawk to Killdeer is currently under state review. Final route and franchise approval is expected early next year.

• MVP-3• The Iowa Utilities Board approved all six franchises for the Obrien to Kossuth to

Webster segment.• Construction has begun near Webster and Kossuth substations.

• MVP-16• MidAmerican filed for the Certificate of Public Convenience and Necessity pursuant to

Section 8-406 of the Public Utilities Act in Illinois, which would authorize MidAmerican to construct, operate and maintain a double circuit 345 kV line from Oak Grove, IL to Galesburg, IL.

• The regulatory approval process in Illinois is expected to be completed by August 2015.

Progress to Date