wecc board of directors gnc presentation december 5, 2012 draft

WECC Board of DirectorsGNC PresentationDecember 5, 2012

Draft

2

• Technical Session – 12/5o Just the facts and collected informationo No debate o Q&A for clarification

• Strategic Planning Session – 12/6-7o Director debate o Resolutionso Next Steps

Board of Director Meetings

Previously Approved

Resolutions

Previously Approved Resolution – Regional Entity GovernanceResolved, That the Western Electricity Coordinating Council (WECC) Board of Directors (Board) directs the Chief Executive Officer to work with staff, the Governance and Nominating Committee, the Finance and Audit Committee, and the Human Resources and Compensation Committee to complete work on a governance model for the new Regional Entity Company based on an Independent Board with a strong Member Advisory Committee. Work should commence immediately and advance so that sufficient details of this governance structure are available to the Board at the December 2012 Board meeting to permit further approvals and actions which would lead to final work products needed for membership approval at the 2013 Annual Meeting.

Previously Approved Resolution – Non-Regional Entity GovernanceResolved, That the Western Electricity Coordinating Council (WECC) Board of Directors (Board) directs the Chief Executive Officer to work with staff, the Governance and Nominating Committee, the Finance and Audit Committee, and the Human Resources and Compensation Committee to complete work on a governance model based on a Hybrid Board with one vote per Member Class, said Board and voting to be structured so that the Independent Director votes comprise a majority of the total number of votes eligible to be cast. Work should commence immediately and advance so that sufficient details of this governance structure are available to the Board at the December 2012 Board meeting to permit further approvals and actions which would lead to final work products needed for membership approval at the 2013 Annual Meeting. The intent of this motion is that prior to the December 2012 Board meeting, the GNC will make a recommendation to the Board on either a hybrid or independent board structure based on then-current information.

Previously Approved Resolution – StructureResolved, That the Western Electricity Coordinating Council (WECC) Board of Directors (Board) determines that WECC should pursue bifurcation into two separate and distinct companies – one Regional Entity Company containing Regional Entity functions (for example, Compliance Monitoring and Enforcement, Standards Development, and Event Analysis) and other functions as appropriate to the mission of that company as a Regional Entity, and a second Registered Entity Company containing the current WECC Registered Entity functions (Reliability Coordinator and Interchange Authority) and other functions as appropriate to the mission of that company. The Board directs the Chief Executive Officer to work with staff, the Governance and Nominating Committee, the Finance and Audit Committee, and the Human Resources and Compensation Committee to take all necessary action so that full details regarding the mission, functional allocation and organizational structure of both companies are available to the Board at the December 2012 Board meeting to permit further approvals and actions which would lead to final work products needed for membership approval at the 2013 Annual Meeting.

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• GNC held 12 meetings since Sept 7 – focus has been on the Board delegation

• Outreacho All meetings open to allo Open invitation to all to commento Alternative recommendations heard by GNCo All call listeners asked to commento Library of public comments availableo Ad hoc Member Advisory Group inputo Members presentations to members organizations (e.g. CREPC)

• Options/Issues Structureo Documented existing processeso Secured Management recommendationso Consumed all inputs from all sources o New Resolutions based on GNC majority vote

GNC Process - 1

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• Discussion including majority and minority opinions Paper• Discussion and observations related to pending Board decisions• Minority GNC opinions noted in slides and discussed more fully in

the White paper• Cut and paste this to your browser - http://bit.ly/V0pDuv• Or right-click here - http://bit.ly/V0pDuv and select “Open

Hyperlink”• It is important for each Board member to have read the White

paper prior to any debate as some of the Resolutions have elements that have less than total support and the Board may want to consider modifications to the proposed Resolutions included in this presentation.

GNC Process - 2

http://bit.ly/V0pDuv

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• The role of the GNC is to process all available information related to decision points and then to make recommendations to the Board, with associated information to assist the Board in final decision making.

• GNC members reserve the privilege of altering their recommendations should new information or insight surface in the Board discussion

• GNC members will participate as individual Board members in decision point debate.

GNC Process - 3

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• Project Management: John Stout, David Godfrey, Kwin Peterson

• Management: Mark Maher, Steve Goodwill, many others• GNC: Keith Casey, Bill Chamberlain, Paul Feldman, Nancy

Kelly, Les MacLaren, Jim Shetler, John Stout, • Member Recommendations Group: Laura Beane, Michele

Beck, Ric Campbell, Robert Dintelman, Daniel Froetscher, Michael Gianunzio, Maude Grantham-Richards, Tim Haines, Martin Huang, Russell Noble, Diana Pommen, Julia Prochnik, Stewart Ramsay, John Savage, Gary Tarplee, Brian Theaker

• Comments by other interested parties: some, but not as many as we would have liked

Credits and Blame

11

• GNC heard alternative NRE proposals and will leave further action up to the Board:o Selected Class Members – alternative proposal for a

member driven process For information on this, right-click here http://bit.ly/V982Ri

o Joint Guidance Committee team – trifurcation and other options For information on this, right-click here http://bit.ly/TkDxaY

Other Governance Related Initiatives

http://bit.ly/TjKd9D


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• HB – Hybrid Board• MAC – Members Advisory Committee –

members only class structured advisory group to the Board of Directors

• RE – Regional Entity – NERC functions, plus…

• NRE – Non-regional Entity – Reliability Centers, plus…

Definitions

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• The GNC requested input from the Membership as to MAC structure, governance, etc.

• A Workgroup was formed:o GNC solicited a group consisting of 2

members representing each current class

• The Workgroup “owns” the Workgroup slides.

RE MAC – Workgroup

Recommendations spanning RE / NRE

scenarios

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• Establish strategy and policy, track implementation & progress

• Budget approval, ensuring adequate finances

• CEO selection and performance review• Accountability to the goal of “pubic welfare”o Accountability to the organization’s membership

• Maintenance of the organization’s bylaws• General organization oversight

Board of Director Functions and Responsibilities

Corporate Form Considerations - 1

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• RE – GNC Unanimous Recommendation – 501(c)(4) – to promote social welfare in the region. *

• NRE – GNC Unanimous Recommendation – 501(c)(4) – to promote social welfare in the region. *

• Note – current corporate form = 501(c)(6)

Corporate Form Considerations - 2

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• Maintain Classes 1-5 - GNC Unanimous Recommendation *

• Delay discussion of Class 6 pending Management discussions with involved entitieso (Resolutions assume Class 6 in the RE and Class 6

folded into the other Classes as a placeholder)

Class Issues (apply to RE & NRE)

19

• Eliminate Class 7 as a member class• Modify the definition of Class 3 to include developers,

consultants, and members at large with a business interest in WECC

• Existing class 7 members would reapply for Class 3 membership

• Modify WECC bylaws to state that members who are classified as inactive for over 12 months will be removed from membership

• Allow access to WECC data by non-members who can demonstrate a legitimate business need for the data, pay the incremental cost of providing the data, and sign a universal Data Access NDA

Class 7 Representation – RE & NREGNC Unanimous Recommendation

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1. The purpose of providing a process for establishing sub-classes is to allow a WECC member class to designate slots for directors or MAC members that reflect a specific intra-class perspectives. If a class elects to establish subclasses, only members of the applicable subclass will vote for the director/MAC member associated with that subclass.

a. The process will be initiated by a petition of class member representatives.

b. A simple majority of the class is needed to validate the petition.

c. The petition will specify in detail the proposed qualifications of membership for each proposed subclass.

d. The maximum number of subclasses is 3.

e. Not more than one director/MAC member will be assigned per subclass, leaving the possibility open for “member-at-large” directors or MRC members to be elected by members of the class not assigned to a subclass.

f. If all members of the Class are included in one of two subclasses, then the entire class may elect a third member-at-large to the MAC.

Member Sub-Classes – MAC onlyGNC Consensus Recommendation - 1

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2. The petition will include the breakdown of the existing class membership into each proposed sub-class.

3. Sub-classes must have a minimum of 3 members to qualify as a valid sub-class.

4. This petition will be sent to all members of the class as notification of the proposal.

5. WECC staff will conduct a vote of that class to determine support for the proposal. Voters will be encouraged to submit their reasons for supporting or not supporting the proposal.

6. Simple majority quorum and approval are required to move the proposal forward for Board consideration.

7. If the class votes to approve the proposal, it will be submitted to the board for final approval, where affected members will be entitled to state their positions directly to the board.

8. Sub-Class designations will automatically expire 5 years after approval, but may be reestablished using this process.

Member Sub-Classes – MAC onlyGNC Consensus Recommendation - 2

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1. Each Class may sub-divide for the purpose of selecting MAC members and member voting.

2. Each Class electing to sub-divide may choose its own methodology for doing so.

3. The method of sub-Class determination will be by Class majority vote.

4. Any group within the total class of that represents at least 33.3% of the Class may not be denied sub-Class status.

5. The GNC will maintain a set of methodologies for sub-class definition based on inputs from the Classes – for use by any Class as desired.

6. The GNC will be the final arbiter of appeals from Class members regarding sub-Class definition, elections, and voting.

7. Above process hard-wired into bylaws.

Member Sub-Classes – MAC onlyGNC Consensus Recommendation alternate

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• Casey, Chamberlain, Shetler(#), Kelly, McLaren(#), Stout: support codification of the described process (slides 20, 21) into the Bylaws

• Feldman, McLaren(#), Shetler(#), Stout: support codification of the described process (slide 22) into the Bylaws

• Both Resolutions are included for Board consideration

Sub-Class ResolutionGNC Individual Recommendations

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• Bylaws 4.3, 6.2.1, and 7.7.1• Consistent with bilateral principles underpinning NERC

as ERO, Class 6 selects 4 directors, at least 1 from Classes 1, 3, and 5

• Class 6 does not vote in selection of other member class directors

• 5th Class 6 director if no Canadian NAD• Class 6 director on GNC

Class 6 StatusWECC Current Process

Class 6 StatusWECC Current Funding

• AESO and BC Hydro pay assessments based on NEL

• However, AESO receives a credit against its NEL assessment resulting in a lower net payment, due to the fact that Alberta does not rely on WECC for enforcement of its standards. Audit and mitigation plan review is however provided by WECC staff.

• The total compliance cost included in the WECC wide NEL allocations is approximately $12.6M. AESO’s NEL share is approximately 6.9%, resulting in an NEL based assessment for compliance cost of $866K.

• AESO receives a credit of approximately 93.5% ($810K) of the Compliance related costs included in their original NEL assessment, resulting in a net compliance payment of approximately $56K.

NERC WECC/WIRAB Total

AESO .5 2.2 2.7

BC Hydro .7 3.2 3.9

2013 NERC and RE/WIRAB Assessments ($M)

26

• RE• Class 6 on MAC

• NRE• Management currently in discussion with Canadian

members regarding future of Class 6 and Canadian participation in the NRE

Class 6 StatusManagement Recommendations

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• Bifurcation provides opportunity to review business arrangements and jurisdictional fit with WECC

• Continue to support/enhance reliability in the WI• More information/discussion required• Current thinking – RE

• Governance frameworks and standards in place in BC and AB• RE will not have jurisdiction in Canada• Value in participation in reliability standards development and opportunity to

follow changes in US compliance management framework• Funding on fee-for-service, not NEL• Participate on RE MAC

• Current thinking – NRE• Concerns on risk/liability vs benefits and tariff/jurisdictional issues • Other Canadian regions have own RC function with compatible systems and

information sharing agreements• Opportunities for fee-for-service in parallel with

the tariff

Class 6 StatusCanadian Member Recommendations

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• GNC directed WECC Management to seek legal advice on how the 2005 arrangements between Canada and the US on formation of the ERO impact WECC bifurcation, including whether there are requirements for Canadian independent director(s) on the RE and NRE.

• GNC recommends that the Board Chair appoint a small team of directors and WECC Management to engage with Class 6 members to develop structures for continued Canadian participation in enhancing reliability in the Western Interconnection under a bifurcated model.

Class 6GNC Recommendations

29

Dec 2012 Resolution 1aSub-Class Option 1

For all resolutions, right-click here http://bit.ly/SrIrV9

Resolved, That the Western Electricity Coordinating Council (WECC) Board of Directors determines that, following the proposed bifurcation into regional (RE) and non-regional (NRE) entities, the Member Classes of the RE and NRE should be permitted to divide into up to three (3) sub-classes for the purpose of electing not more than three (3) Member Advisory Committee (MAC) members to represent their respective sub-class perspectives.

The creation of sub-classes will be initiated by petition, signed by a simple majority of class members; said petition must specify proposed qualifications for membership in each proposed sub-class and a breakdown of existing class membership into each proposed sub-class. Each sub-class must have a minimum of three (3) members. This petition will be sent to all members of the Class as notification of the proposal.


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Dec 2012 Resolution 1aSub-Class Option 1 - Continued


The entire Class will vote on the proposal with a simple majority required to advance the proposal to the Board of Directors (Board) for consideration. The vote will be conducted by the RE and NRE staffs, respectively. The notice of the vote will encourage voters to submit their reasoning in support of or in opposition to the proposal. The Board will hear both majority and minority opinions from affected members prior to approving or denying the petition.

No more than one MAC member will be associated with an individual sub-class. Class members not assigned to a sub-class will vote to select an at-large MAC member for that Member Class. If all members of the Class are included in one of two subclasses, then the entire Class may elect a third member-at-large to the MAC. Only members of the applicable sub-class will vote for the MAC member associated with that sub-class.

Sub-class designations will automatically expire five (5) years after approval, but may be re-established using the process described above.

http://bit.ly/SrIrV9

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Dec 2012 Resolution 1bSub-Class Option 2


Resolved, That the Western Electricity Coordinating Council (WECC) Board of Directors (Board) directs that the bylaws of the regional (RE) and non-regional (NRE) entities should include the following provisions for allowing their respective Member Classes to divide into sub-classes for the purposes of voting at the Member Advisory Committee (MAC) and electing MAC members:

• Each Class electing to sub-divide may choose its own methodology for doing so.

• The method of sub-division will be determined by majority vote of the Class.

• Any group within the Class that represents at least 33.3% of the Class shall be entitled to sub-Class status.


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Dec 2012 Resolution 1bSub-Class Option 2 - Continued


• The Governance and Nominating Committee (GNC) will maintain a set of methodologies for sub-class definition based on inputs from the Classes – for use by any Class as desired.

• The GNC will be the final arbiter of appeals from Class members regarding sub-Class definition, elections, and voting.

Sub-class designations will automatically expire five (5) years after approval, but may be re-established using the process described above.


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• Bylaws 6.2 -- Recently revised to permit the Board to make the CEO a member of the Boardo Intended to attract more qualified candidates, enable

more effective leadershipo CEO may not cast tie-making or tie-breaking vote, may

not be a member of Board Committees

RE & NRE - CEO on the BoardWECC Current Process

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• Management Considerationso Same as those that led to revision of WECC Bylaws

Desire to attract most qualified CEO candidates, provide CEO effective voice at Board level, enhance CEO leadership role

Preserve independence of Board decisions

• Management Recommendationo Board retain authority to make the CEO a member of

the Board, subject to voting and committee membership limitations current within WECC

RE & NRE - CEO on the BoardManagement Recommendations

35

• Board retains authority to make the CEO a member of the board, subject to voting and committee membership limitations *o Casey, Chamberlain, MacLaren: support for

consistency with the NERC structureo Feldman, Stout: supports because it may be helpful in

attracting a good CEO candidate and clears the way for peer participation

• CEO not permitted to be on boardo Kelly, Shetler: - do not support board membership for

CEO due to belief that the CEO should not be on a board he/she reports to.

RE & NRE - CEO on the BoardGNC Individual Recommendations

36

• States/provinces are considering options for a State-Provincial Advisory Board to the NRE (WIRAB is the State-Provincial Advisory Committee to the RE under Section 215)

• Options appear to be –o WIRAB (may be able to advise the NRE on some 215-

related topics, subject to FERC’s approval of the WIRAB budget)

o A committee analogous to state advisory committees to Eastern RTOs (e.g., OMS, SPP’s RSC, OPSI, NESCOE)

Regulators Advisory Board

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• Some governance areas are conceptually equivalent between the RE and NRE companies, and GNC Recommendations and Dissenting opinions apply in both:o Independent Board items, except Director

qualification poolso MAC items except for certain matters

concerning Independent Director elections if there is a MAC in the NRE Hybrid Structure

Recommendation Portability

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• Structured into debatable, semi-autonomous chunkso GNC majority vote drives published Resolution

wordingo Discussion including majority and minority

opinions in GNC White Paper – right-click here - http://bit.ly/V0pDuv and select “Open Hyperlink”

o All Resolutions in Paper – right-click here – http://bit.ly/SrIrV9 and select “Open Hyperlink”

Resolutions



Regional Entity = NERC +

Previously Approved Resolution – Regional Entity GovernanceResolved, That the Western Electricity Coordinating Council (WECC) Board of Directors (Board) directs the Chief Executive Officer to work with staff, the Governance and Nominating Committee, the Finance and Audit Committee, and the Human Resources and Compensation Committee to complete work on a governance model for the new Regional Entity Company based on an Independent Board with a strong Member Advisory Committee. Work should commence immediately and advance so that sufficient details of this governance structure are available to the Board at the December 2012 Board meeting to permit further approvals and actions which would lead to final work products needed for membership approval at the 2013 Annual Meeting.

41

• Reliability through independent, unbiased oversight aligned with FERC, NERC and other jurisdictional requirements and expectations

• Consistent, fair monitoring and enforcement activities• Focus on results and outcomes• High performance organization• Clear responsibility and accountability• Robust stakeholder input• Efficient decision making• Balance budget control with getting the job done

appropriately

RE - AspirationsManagement Recommendation

42

[Regional Entity Name] is the steward of reliability for the Western Interconnection. To accomplish this role, [Regional Entity Name] will:o Provide impartial and independent review and analysis,o Incorporate system experience and knowledge into

standards development,o Ensure the delivery of consistent and fair monitoring

and enforcement activities, ando Identify root causes and lessons learned from system

events.

RE - Mission StatementManagement Recommendation

43

Re - FunctionsManagement Recommendation

CEO

Compliance Monitoring and Enforcement

Reliability Assessments &

Performance Analysis

General CounselCorporate Services

· Legal Services · Corporate Secretary

· Registration · Auditing · Enforcement · Training/Outreach

· Administration · Communications · Human Resources · Information Technology · Accounting/Finance

· Standards Development (NERC)

· Standards Development (Regional)

· Regional Criteria Development

· Reliability Assessments and Data Collection

· Bulk Electric System Exception Process

· Transmission Planning Oversight

· System Performance Analysis

· Entity Certification· Event Analysis· Situational Awareness· Grid Performance Analysis· Remedial Action Scheme

Database· Variable Generation Analysis

and Oversight

44

• Governance and Nominating• Finance and Audit• Human Resources and Compensation• Standards• Compliance• Reliability Policy Issues• Member Representatives

RE - CommitteesManagement Recommendation

45

• See Management Paper http://bit.ly/TjKd9D

RE – Functions – Management Recommendation - 1

http://bit.ly/TkDxaY

46




47




48

• Place holder for the Member Workgroup comments on allocation of functions.

• Dave is meeting this Thursday and will have an update to insert in the deck.

RE & NRE – Company functionsMember Workgroup input

49

• We will re-engage in a discussion of this item on 12/3/2012 where we will have input from the Members Workgroup.

• Placeholder slide for GNC recommendations

RE & NRE – Company functionsGNC Individual Recommendations

50

Resolved, That the Western Electricity Coordinating Council (WECC) Board of Directors (Board) determines that, following the proposed bifurcation into regional (RE) and non-regional (NRE) entities, the RE should be structured and governed such that it may qualify for IRS 501(c)(4) status as a public welfare corporation, acting as the steward of reliability in the Western Interconnection.

The mission of the RE will be to:oProvide impartial and independent review and analysis.

oIncorporate system experience and knowledge into standards development.

oEnsure the delivery of consistent and fair monitoring and enforcement activities.

oIdentify root causes and lessons learned for major system events.

The RE Board of Directors (REBOD) will create committees of the REBOD as determined by the REBOD, and these shall address: Governance and Nominating; Finance and Audit; Human Resources and Compensation; Standards; Compliance; and Reliability Policy Issues.

The functions of the RE will be those described in Slides 45-47 of the 12/5/12 GNC Presentation to the Board.

Dec 2012 Resolution 2RE Corporate Matters



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• Bylaws 6.5.1.2—Candidates nominated by GNC• Bylaws 6.5.2.1—Candidates may also be nominated

“upon the submittal of a nomination to the Chief Executive Officer signed by no fewer than 10 Members, including at least 3 from each of two different Member Classes. The Chief Executive Officer must receive such nomination at least thirty (30) days before the Annual Meeting.”

• Bylaws 6.5.2.3--NADs elected by members at Annual Meeting

• Management believes this process has been efficient, successful in obtaining qualified NADs for the Board

RE - Nomination/Election of DirectorsWECC Current Process

52

• Management Considerationso Efficiency—nomination and election processes should not be

burdensome to administero Consistency—maintaining process similar to WECC’s

deemed beneficial given the pace/scope of organizational change; but must recognize MAC role/task force recommendation

o Quality—current WECC process results in high-quality NADs

• Management Recommendationso Committee of Board and MAC members nominates slate of

Independent Director candidateso MAC votes on slate of candidates for membership voteo Elected by membership at Annual Meeting

RE - Nomination/Election of DirectorsManagement Recommendations

53

• Nomination of Directorso The MAC will be heavily involved in the nomination processo MAC members will comprise 50% of nomination committee

• Election of Directorso The slate of candidates can have more than one qualified candidate

per open sloto The MAC will vote on slate of candidates, with the ability to remand

the slate to the nomination committeeo The entire membership will elect individual directors by those

candidates receiving the most votes

• Bylaws Changeso The MAC will approve changes to the bylaws prior to Board approval

RE MACWorkgroup Recommendations

54

o Nominating Committee consisting of Board and MAC members *

o Board Chair appoints X (5 or 6 tbd) members to the Nominating Committee * At least 1 MAC member from Classes 1 or 2 or 3 At least 1 MAC member from Classes 4 or 5 Nominating Committee may put forward 1 candidate to the

Board if in the case of an existing Director, otherwise 2 candidates.

The Board will select 1 candidate for each opening to put before the Membership for a vote. *

Membership will vote on each Director opening individually

RE (& NRE) - Nomination of DirectorsGNC Unanimous Recommendation

55

• Nominating Committee: 3 Independents + 3 MAC *o Committee must break its own tieso Casey, Chamberlain, Shetler, Kelly, MacLaren, Stout,

support to promote consensus and electability• Nominating Committee: 3 Independents + 2 MAC

o Feldman supports to optimize board productivity; and observes this model is successfully used; and provides deference to the Board who has superior information on individual member performance.

• See white paper page 5 - right-click here - http://bit.ly/V0pDuv and select “Open Hyperlink”

RE (& NRE) - Nomination of DirectorsGNC Individual Recommendations

http://bit.ly/V982Ri

56

• Directors elected directly by the Membership as a whole – each opening separate voting: *o GNC unanimous recommendation based on: MAC is

represented on the Nominating Committee; avoids a potential cycle of vetoes by MAC; MAC can express their view by holding an advisory vote; and reinforces MAC as an advisory role

• No MAC remand authority on proposed slateo The MAC is free to take and issue an advisory vote.

RE - Election of DirectorsGNC Unanimous Recommendation

57

• Management Considerationso Efficiency/Expertise—balance between efficient Board operations and

breadth of Director expertiseo Cost—smaller size results in less Director expenseo Board Committees—ensure sufficient number of Directors to populate

Board Committees; don’t spread Directors too thino Term rotation/overlap—adequate number and term to maintain

experienced Board

• Management Recommendationo 7 Independent Directors

• GNC, FAC, HRCC, WSC & WCC – each with 3 Directors, no Director having to serve on more than 2 committees

o 3-year terms• After initial election cycle, permits at least 2 Director

vacancies/elections per year, while retaining at least 2 Directors with two years’ experience, and 4 Directors with one year’s experience

RE - Number and Term of DirectorsManagement Recommendations

58

• Nine Directors *

RE - Number of DirectorsGNC Unanimous Recommendation

59

Dec 2012 Resolution 3RE Director Items


Resolved, That the Western Electricity Coordinating Council (WECC) Board of Directors (Board) determines that, following the proposed bifurcation into regional (RE) and non-regional (NRE) entities, the RE Board of Directors (REBOD) will be comprised of nine (9) Independent Directors with three-year staggered terms. The REBOD may appoint the RE Chief Executive Officer to the REBOD in a manner similar to that described and conditioned by the current WECC Bylaws.

Election of Directors:

• The REBOD Chair will appoint a Nominating Committee consisting of three (3) Member Advisory Committee (MAC) members, with at least one (1) from Member Classes 1 through 3 and at least one (1) from Member Classes 4 or 5, and three (3) Independent Directors not standing for re-election.


60

Dec 2012 Resolution 3RE Director Items – Continued


• The Nominating Committee will put forth two (2) names for each vacant Director position, recommending one (1) of the two (2) nominees to the full REBOD for consideration; except that the Nominating Committee may elect to put forward only one (1) name for consideration in the case of an existing Independent Director standing for re-election.

• The REBOD will select one candidate for each vacant position and present the Membership with a slate of one (1) candidate per vacancy. The membership will vote on each position separately.

• A nominee will be elected to the REBOD upon majority vote of the members as a whole, as well as by a majority of the RE Member Classes.


61

• Bylaws 6.5.1 -- may not be affiliated with any Entity that is a Member of WECC or is eligible for membership in Classes 1 through 3 of WECC; will not be qualified to serve as a Director if the candidate, or the spouse or a minor child of the candidate, derives any of his or her annual income from a Member of WECC, an Entity that is eligible for membership in Classes 1 through 3, or a bulk power user in the Western Interconnection.

RE – Director QualificationsWECC Current Process

62

• Bylaws 6.5.1.2 -- objective of having at least one Non-Affiliated Director with expertise in electric transmission operations and planning; also, 1) experience in corporate leadership at the senior management or board of directors level; 2) leadership experience in law, finance, economics, accounting, engineering, regulation, natural resources or commercial commodity markets and associated risk management; 3) experience representing a substantial number of end users or a substantial number of persons interested in the impacts of electric systems on the public or the environment; 4) a well-developed understanding of the distinct operational, resource, political, and interest-based characteristics of various regions within the Western Interconnection; and 5) a well-developed understanding of Canadian power systems or Canadian regulatory issues.

Re - Director QualificationsWECC Current Process

63

• Management Considerationso Achieve strict independence to avoid any conflict of interest

concernso Maintain sufficient breadth/depth of Director

expertise/experience

• Management Recommendationo Adopt current WECC NAD qualifications as a starting point

• WECC experience shows these qualification guidelines have produced qualified candidates/Directors

o No affiliation with a Registered Entity for whom WECC serves as Compliance Enforcement Authority• COI concerns are a primary driver for bifurcation; RE will primarily be a

regulatory body; regulator should not be governed by Directors affiliated with regulated entities

RE - Director QualificationsManagement Recommendations

64

• Mandatory Qualifications:o 4 Directors with Transmission Planning, Transmission

Operations, or Generation experience, and each qualification category represented by at least one director

• Desirable Qualifications:o Regulatory/Legal; Accounting/Finance/Economics;

Environmental; Compliance/Standards; International; Public Sector Rep; Distribution/Retail Provider; Energy/Commodity Markets

• See white paper page 2 – right-click here - http://bit.ly/V0pDuv and select “Open Hyperlink”

RE - Director QualificationsGNC Unanimous Recommendation


65

• With respect to allowed affiliations: Exclude any full-time employee of any Registered Entity. Include others previously excluded that are not associated with

a WECC registered entity.

RE - Director QualificationsGNC Unanimous Recommendation

66

Dec 2012 Resolution 4RE Director Qualifications


Resolved, That the Western Electricity Coordinating Council (WECC) Board of Directors (Board) determines that, following the proposed bifurcation into regional (RE) and non-regional (NRE) entities, an RE Independent Director may not be affiliated with any Registered Entity registered within the Western Interconnection or be an employee of any Registered Entity in North America. The term “affiliated” means: 1) An employee of, 2) a contractor for, 3) an employee of a contractor for, or 4) an equity owner of. These affiliation restrictions also include the spouse or minor child of the RE Independent Director.


67

Dec 2012 Resolution 4RE Director Qualifications – Continued


The Board of Directors shall ensure that the RE Board includes at least four (4) Directors with transmission operations, transmission planning, and generation experience. The remaining five (5) directors shall be selected to include experience from the areas of Regulatory/Legal, Accounting/Finance/Economics, Environmental, Compliance/Standards, International, Public Sector, Distribution/Retail Provider, and Energy/Commodity Markets; with each of the five (5) representing a different area of experience.


68

• Relationship to the Boardo The MAC will be a committee that reports to the Boardo Board members are encouraged to attend MAC meetingso The MAC will advise and offer recommendations to the Board on:

Program priorities Budget Standards and Criteria Compliance activities Policy

o The MAC will meet separately from the Board A quorum is required for the MAC to take any action The MAC will vote on recommendations, by a simple majority, and then pass

those recommendations to the Board The Chair or Vice-chair of the MAC will sit at the table with the Board, as a

non-voting participant, to give advice and clarificationo Others MAC members may be invited to Board

meetings to give advice and clarification

RE MAC - Roles and Responsibilities – 1Workgroup Recommendations

69

• Relationship to Memberso Member Committees

The MAC will develop a member committee structure as needed

The MAC will act as a liaison between the Board and member committees

o General Membership The MAC will act as a liaison to member classes Members of the MAC will represent the best interest

of the Interconnection from their class perspective

RE MAC - Roles and Responsibilities – 2Workgroup Recommendations

70

• MAC and not the membership as a whole will vote on certain bylaws changes *• Kelly, Stout: supports because the MAC is a balanced voting

body…a single member class cannot control the outcome as they could in a membership vote

• Chamberlain: support with the proviso that organization is chartered for public good rather than as a trade organization

• Casey, Kelly, MacLaren, Shetler support with the proviso that members have a path to petition the board regarding bylaws changes

• Feldman: Does not support: The MAC is an advisory body and should not have approval authorities and should not displace the membership in bylaws changes.

RE MAC - Roles and ResponsibilitiesGNC Individual Recommendations - 1

71

• However, which Bylaws can be approved by which group (Board, MAC, Membership) is work in process

• MAC chair or designee will sit at the Board table as a non-voting participant to provide advice or clarification *

RE MAC - Roles and ResponsibilitiesGNC Individual Recommendations - 2

72

• GNC Unanimous recommendation: MAC Members have a responsibility to expose all minority opinions to the Board

• Note: MAC votes signal the degree of MAC support for a recommendation to Management or the Board.

• Supported by: Casey, Chamberlain, Kelly, McLaren, Shetler, o Members of the MAC will vote according to their own

judgment as to what is in the best interest of the public good• Supported by Feldman; Stout

o Members of the MAC will vote as a representative of the Class they represent.

• See White Paper page 11- http://bit.ly/V0pDuv

RE MAC - Roles and ResponsibilitiesGNC Individual Recommendations


73

• Class representationo The MAC will be structured to align with the existing classes 1-7o There will be three (3) representatives from each class

• Diversityo Each class will determine the need for diversity, e.g., geographic,

stakeholder issues, etc.

• Leadershipo The leadership of the MAC will consist of a Chair and Vice-chairo The MAC leadership will be elected by the membership of the

MACo The Chair and Vice-chair of the MAC cannot be from the same

class or company

RE MAC - Composition and LeadershipWorkgroup Recommendations

74

• GNC agrees with workgroup recommendations except that the GNC recommends no Class 7.

RE MAC – Roles and ResponsibilitiesGNC Unanimous Recommendation

75

• Nominating members to the MACo Nominations can only be made by members of their respective classeso Member representatives will be from the class they represent

• Term of MAC memberso Each representative will serve for a 3-year termo Terms will be staggeredo No term limits

• Electionso Each class will have a quorum to elect MAC representativeso MAC elections will be held at the annual meeting (in person or by

electronic means)o MAC members will be elected by the nominee(s) receiving the most

voteso Members of each class will elect their

MAC member

RE MAC - Nomination/Election of MembersWorkgroup Recommendations

76

• Regarding affiliation of a MAC member with the class they represent:o GNC recommends that each Class nominate and elect

their members to the MAC as they see fit.

RE MAC - Nomination/Election of MembersGNC Unanimous Recommendation

77

Dec 2012 Resolution 5RE MAC


Resolved, That the Western Electricity Coordinating Council (WECC) Board of Directors (Board) determines that, following the proposed bifurcation into regional (RE) and non-regional (NRE) entities, the Member Advisory Committee (MAC) will be a Committee reporting to the RE Board of Directors (REBOD). The MAC will advise the REBOD on any matter the MAC deems appropriate, as well as when requested by the Board. MAC members will vote in the best interests of the public welfare. The MAC will have three (3) members per Member Class, elected by their respective Class without limitation as to affiliation or qualification. The MAC will elect a Chair and Vice-Chair, provided that the serving Chair and Vice Chair may not be affiliated with the same Member Class.


78

Dec 2012 Resolution 5RE MAC – Continued


The MAC will meet in open session separately from the REBOD; REBOD members may attend and participate. The MAC will develop its own subcommittees and work groups as needed. The MAC is expected to liaise with the membership to ensure majority and minority opinions are available to the REBOD. It is expected that the MAC will vote on certain (yet to be determined) bylaws amendments much as the WECC Membership votes on certain Bylaws amendments today. The MAC Chair or designees will sit at the REBOD table to provide advice on matters before the REBOD and respond to Director questions.


Non-Regional Entity (NRE) =

Reliability Centers +

Previously Approved Resolution – Non-Regional Entity GovernanceResolved, That the Western Electricity Coordinating Council (WECC) Board of Directors (Board) directs the Chief Executive Officer to work with staff, the Governance and Nominating Committee, the Finance and Audit Committee, and the Human Resources and Compensation Committee to complete work on a governance model based on a Hybrid Board with one vote per Member Class, said Board and voting to be structured so that the Independent Director votes comprise a majority of the total number of votes eligible to be cast. Work should commence immediately and advance so that sufficient details of this governance structure are available to the Board at the December 2012 Board meeting to permit further approvals and actions which would lead to final work products needed for membership approval at the 2013 Annual Meeting. The intent of this motion is that prior to the December 2012 Board meeting, the GNC will make a recommendation to the Board on either a hybrid or independent board structure based on then-current information.

81

• Reliability through planning and operations • Pursue tasks that can be performed at a lower

cost centrally that relate to appropriate reliability• Focus on results and outcomes• High performance organization• Clear responsibility and accountability• Robust stakeholder input• Efficient decision making• Business Case focus and Benefit/Cost ratios drive

budget

NRE - Opportunity StatementsManagement Aspirations

82

[Non-regional Entity Name]’s mission is to ensure reliability in the Western Interconnection and create value for its membership through cost-effective and efficient services and practices including:

o Real-time, interconnection-wide independent oversight* of the BES

o Coordinated system planning and modeling in all time-horizons,

o Secure sharing of critical data, ando Robust stakeholder forums.

* e.g., the Reliability Coordinator function.

NRE - Mission StatementManagement Recommendations

83

NRE - FunctionsManagement Recommendations

CEO

Reliability Coordinator Operations & PlanningGeneral Counsel Corporate Services

· Legal Services · Corporate Compliance · Corporate Secretary

· Reliability Coordination · EMS Engineering · EMS Applications · Information Technology· Interchange Authority

· Administration · Communications · Human Resources · Information Technology· Accounting/Finance

· Regional Business Practices Development

· Economic Planning Studies and Interconnection-wide Plans

· Economic Data and Models· Power Flow and Dynamic

Model Development· Support for Dynamic Model

Development· Maps· Planning Coordination and

Studies· Project Coordination and

Path Rating Process· webSAS – USF Congestion

Management Tool· System Operator Training· Unscheduled Flow Mitigation

Plan· Market Interface· Variable Generation

Processes and Guides

plus WREGIS

84

• Governance and Nominating• Finance and Audit• Human Resources and Compensation• Transmission Expansion Planning Policy• Reliability Practices Issues• Market Interface• Planning Coordination• Operating• Western Renewable Energy Generation Information

System

NRE - CommitteesManagement Recommendations

85

Dec 2012 Resolution 6NRE Corporate Matters


Resolved, That the Western Electricity Coordinating Council (WECC) Board of Directors (Board) determines that, following the proposed bifurcation into regional (RE) and non-regional (NRE) entities, the NRE should be structured and governed such that it may qualify for IRS 501(c)(4) status as a public welfare corporation. The NRE Mission is to ensure reliability in the Western Interconnection and create value for its membership through cost-effective and efficient services and practices including: real-time, interconnection-wide independent oversight of the Bulk Electric System through such activities as its Reliability Coordinator Function; coordinated system planning and modeling in all time horizons; secure sharing of critical reliability data, and robust stakeholder forums. The NRE Board of Directors (NREBOD) will create committees of the NREBOD as determined by the NREBOD, but these shall address: Governance and Nominating; Finance and Audit; Human Resources and Compensation; Transmission Expansion Planning Policy; Reliability Practices and Issues; Market Interface, Planning Coordination; Operating, and the Western Renewable Electric Generation Information System.


86

• GNC agreed to evaluate an Independent only Board for the NRE

• No declared support yet: Hybrid ...• Feldman, McLaren, Stout: Independent Board

preferred - the RCs are an organization overseeing Member operations. Etc.

• Chamberlain will decide 12/3/12 or before• Casey, Kelly, Shetler: withholding opinion until full

Board discussion on all options, including member proposals

• See White Paper page 10 - http://bit.ly/V0pDuv

NRE - Independent Board vs. Hybrid BoardGNC Individual Recommendations


87

Dec 2012 Resolution 7a – NRE Board Structure and Direction – Hybrid


Resolved, That the Western Electricity Coordinating Council (WECC) Board of Directors (Board), having reconsidered the option of establishing an Independent Board for the non-regional entity (NRE) as a component of the proposed bifurcation into regional (RE) and non-regional entities, reaffirms its support for a Hybrid Board governance model for the NRE. To effectuate the proposed bifurcation in accordance with this and other Board resolutions, the Board directs WECC management and the appropriate Board Committees to complete WECC Bylaws revisions and any other necessary actions requiring Member approval prior to the 2013 Annual Membership Meeting, and to update the Board and seek necessary Board approvals on any substantive matters at each Board Meeting or in Special Board Meetings prior to the 2013 Annual Membership Meeting, as necessary and determined by the Board Chair or respective Board Committee Chairs.


88

Dec 2012 Resolution 7b – NRE Board Structure and Direction – Independent


Resolved, That the Western Electricity Coordinating Council (WECC) Board of Directors (Board), having reconsidered the option of establishing an Independent Board for the non-regional entity (NRE) as a component of the proposed bifurcation into regional (RE) and non-regional entities, supports the implementation of an Independent Board governance model for the NRE. To effectuate the proposed bifurcation in accordance with this and other Board resolutions, the Board directs WECC management and the appropriate Board Committees to complete WECC Bylaws revisions and any other necessary actions requiring Member approval prior to the 2013 Annual Membership Meeting, and to update the Board and seek necessary Board approvals on any substantive matters at each Board Meeting or in Special Board Meetings prior to the 2013 Annual Membership Meeting, as necessary and determined by the Board Chair or respective Board Committee Chairs.


NRE HybridBoard Option

90

Dec 2012 Resolution 8a NRE Director Items – Hybrid


Resolved, That the Western Electricity Coordinating Council (WECC) Board of Directors (Board) determines that, following the proposed bifurcation into regional (RE) and non-regional (NRE) entities, the NRE Board of Directors (NREBOD) will be comprised of Independent Directors and member class directors with three-year staggered terms. The number of independent directors will equal the number of member classes plus one (1). The NREBOD may appoint the NRE Chief Executive Officer to the NREBOD in a manner similar to that described and conditioned by the current WECC Bylaws.


• The NREBOD Chair will appoint a Nominating Committee consisting of three (3) Member Class Directors, with at least one (1) from Member Classes 1 through 3 and at least one (1) from Member Classes 4 or 5, and three (3) Independent Directors not standing for re-election.


91

Dec 2012 Resolution 8a NRE Director Items – Hybrid - Continued


• The Nominating Committee will put forth two (2) names for each vacant Director position, recommending one (1) of the two (2) nominees to the full NREBOD for consideration; except that the Nominating Committee may elect to put forward only one (1) name for consideration in the case of an existing Independent Director standing for re-election.

• The NREBOD will select one candidate for each vacant position and present the Membership with a slate of one (1) candidate per vacancy. The membership will vote on each position separately.

• A nominee will be elected to the NREBOD upon majority vote of the members as a whole, as well as by a majority of the NRE Member Classes.


92

• GNC unanimous recommendationo The Board will elect its own chair *

• Chair can be selected from all Directorso Casey, Chamberlain, Kelly, Stout, Shetler support: and

observe no reason to limit pool to just Independents.

• Chair must be selected from Independentso Feldman, MacLaren support: and observe it is a

governance best practice and good optics


NRE HB – Chair ElectionGNC Recommendations


93

• Mandatory Qualifications:o 3 Directors with Transmission Planning, Transmission

Operations, or Generation experience, and each qualification category represented by at least one director

• Desirable Qualifications:o Regulatory/Legal; Accounting/Finance/Economics;

Environmental; Compliance/Standards; International; Public Sector Rep; Distribution/Retail Provider; Energy/Commodity Markets

• See white paper page 2 – right-click here - http://bit.ly/V0pDuv and select “Open Hyperlink”

RE Hybrid – Director QualificationsGNC Unanimous Recommendation


94

Dec 2012 Resolution 9a NRE Director Qualifications – Hybrid


Resolved, That the Western Electricity Coordinating Council (WECC) Board of Directors (Board) determines that, following the proposed bifurcation into regional (RE) and non-regional (NRE) entities, an NRE Independent Director may not be affiliated with any member of the NRE or any entity eligible for membership in classes 1, 2, or 3 of the NRE. The term “affiliated” means: 1) An employee of, 2) a contractor for, 3) an employee of a contractor for, or 4) an equity owner of. These affiliation restrictions also include the spouse or minor child of the NRE Independent Director.

The Board of Directors shall ensure that the NRE Board includes at least three (3) Directors with transmission operations, transmission planning, and generation experience. The remaining four (4) directors shall be selected to include experience from the areas of Regulatory/Legal, Accounting/Finance/Economics, Environmental, Compliance/Standards, International, Public Sector, Distribution/Retail Provider, and Energy/Commodity Markets; with each of the four (4) representing a different area of experience.


95

• Management Considerationso Stability/familiarityo Adequate stakeholder representation in Member

Class/governance structure

• Management Recommendationso NRE membership comprised of current WECC Member

Classes 1-4 & 7 Retention of most WECC Member Classes enables smooth

transition, ensures familiar Member roles State/Provincial interest represented by advisory committee Canadian interest represented by other Member Classes

o Result: Hybrid Board w/5 Mbr Classes

NRE Hybrid – Member Class Structure – 1Management Recommendations

96

• Canadian and Mexican entities represented through other classes, not as a separate class.

NRE HB - Member Class Structure – 2 Management Recommendations

97

• Bylaws 6.4.1o Nominated by member class or GNC; additional

candidates upon submittal to the CEO signed by three (3) Members of the Class, or ten percent (10%) of the total number of Members of the Class, whichever is greater. The CEO must receive such nominations at least thirty (30) days before the Member Class Meeting.

o Elected by member class

NRE HB - Nomination of Member Class DirectorsWECC Current Process

98

• Management Considerationso Mitigate conflict of interest concerns

• Current WECC practice can create perceived/potential conflict of interest between Member interests and WECC interests

o Ensure member class input & representation

• Management Recommendationo Member class submit candidate pool to “GNC”

• Ensures all candidates originate from member class

o “GNC” nominate slate of candidates for each member class• Provides “external” review of slate; broadens responsibility for nominations

o Directors elected by membership as a whole• Mitigates COI concerns by removing direct election by member class

NRE Hybrid – Nomination of Member Class DirectorsManagement Recommendations

99

• Member classes nominate and elect their own directors *

NRE Hybrid – Nomination of Member Class DirectorsGNC Unanimous Recommendation

100

• Bylaws 6.2 – 4 Directors per member Classes 1-6• One vote per Member Class Director

NRE RE - Member Class Director Rep & VotingWECC Current Process

101

• Board Resolution: one vote per member class• Options

o One Director – One Voteo Multiple Directors – One Voteo Multiple Directors – Fractional Vote

• Management Considerationso Efficiency – maintain a reasonable Board sizeo Practicality – ensure Board voting process that is manageable,

relatively easy to recordo Informed decisions – Director decisions appropriately based on

Board discussiono Member Class representation – ensure sufficient representation

of member class views at Director level

NRE Hybrid – Member Class Director Rep & Voting Management Recommendations

102

• Management Recommendationo One Director per Member Class

• Maintains reasonable Board size• Director responsible for obtaining/representing all

member class viewpoints

o One Vote per Director• Ease of conducting, recording votes

o One Alternate Director per Member Class• Provides for member class representation when primary

Director is unavailable

o Result: 5 Member Class Directors, 5 Alternate Member Class Directors

NRE HB - Member Class Director Rep & Voting Management Recommendations

103

• One director option with MAC *o Stout, MacLaren, Casey, Chamberlain, Shetler support to eliminate

fractional voting and provide a wide range of member inputso Kelly supports if multiple director option rejected

• Multiple directors per vote option without MAC• Kelly: allows entire view of the class to be represented

• One Director option without a MACo Feldman: a Hybrid Board has members on the Board and does not

need a MAC reporting to the board. I recommend a members committee to advice the Member Directors however.


NRE HB - Member Class Director Rep & Voting GNC Individual Recommendations


104

• Bylaws 6.4.2 -- may elect any person as a Member Class Director, provided that no Member or group of Affiliated Members may have more than one Director associated with them.

• No other specified qualifications

NRE HB - Member Class Director QualificationsWECC Current Process

105

• Management Considerationso Only one director per member class o Demonstrated ability/expertise

• Management Recommendationo Candidates must be employed by an entity eligible for

membership in the Class they seek to represent• Ensure adequate familiarity with/attachment to the member

class

o Demonstrated experience – for example, executive management/Board level, law, finance, economics, accounting, engineering, operations• Ensure adequate and representative member class director

experience/expertise

NRE Hybrid – Member Class Director QualificationsManagement Recommendations

106

• GNC supports the WECC current process - may elect any person as a Member Class Director, provided that no Member or group of Affiliated Members may have more than one Director associated with them. *

• No other specified qualifications

NRE Hybrid – Member Class Director QualificationsGNC Unanimous Recommendation

107

• GNC Unanimous recommendation: Member Directors are expected to vote based on their perception of the best choice for the public good, without regard to Company or Class affiliation. *

RE Member Directors – Voting ExpectationsGNC Unanimous Recommendation

108

Dec 2012 Resolution 10a – NRE Member Class Directors/MAC – Hybrid


Resolved, That the Western Electricity Coordinating Council (WECC) Board of Directors (Board) determines that, following the proposed bifurcation into regional (RE) and non-regional (NRE) entities, the Member Classes of the NRE will nominate and select their respective Class Director for the NRE Board of Directors (NREBOD) in a manner similar to that used by WECC to select Member Class Directors, except that only one (1) Director per Member Class will serve on the NREBOD at any time. There should be no affiliation or qualification requirements for Member Class Directors. The NREBOD will have a Member Advisory Committee (MAC) similar to that envisioned for the RE, except that the duties assigned to the MAC related to election of RE Independent Directors will be carried out for the NRE by the Member Class Directors.


NRE Independent Board Option

110

Dec 2012 Resolution 8b – NRE Director Items – Independent


Resolved, That the Western Electricity Coordinating Council (WECC) Board of Directors (Board) determines that, following the proposed bifurcation into regional (RE) and non-regional (NRE) entities, the NRE Board of Directors (NREBOD) will be comprised of nine (9) Independent Directors with three-year staggered terms. The NREBOD may appoint the RE Chief Executive Officer to the NREBOD in a manner similar to that described and conditioned by the current WECC Bylaws.


• The NREBOD Chair will appoint a Nominating Committee consisting of three (3) Member Advisory Committee (MAC) members, with at least one (1) from Member Classes 1 through 3 and at least one (1) from Member Classes 4 or 5, and three (3) Independent Directors not standing for re-election.


111

Dec 2012 Resolution 8b – NRE Director Items – Independent – Continued


• The Nominating Committee will put forth two (2) names for each vacant Director position, recommending one (1) of the two (2) nominees to the full NREBOD for consideration; except that the Nominating Committee may elect to put forward only one (1) name for consideration in the case of an existing Independent Director standing for re-election.

• The NREBOD will select one candidate for each vacant position and present the Membership with a slate of one (1) candidate per vacancy. The membership will vote on each position separately.

• A nominee will be elected to the NREBOD upon majority vote of the members as a whole, as well as by a majority of the NRE Member Classes.


112

Dec 2012 Resolution 9b – NRE Director Qualifications – Independent


Resolved, That the Western Electricity Coordinating Council (WECC) Board of Directors (Board) determines that, following the proposed bifurcation into regional (RE) and non-regional (NRE) entities, an NRE Independent Director may not be affiliated with any member of the NRE or any entity eligible for membership in classes 1, 2, or 3 of the NRE. The term “affiliated” means: 1) An employee of, 2) a contractor for, 3) an employee of a contractor for, or 4) an equity owner of. These affiliation restrictions also include the spouse or minor child of the NRE Independent Director.


113

Dec 2012 Resolution 9b – NRE Director Qualifications – Independent – Continued


The Board of Directors shall ensure that the NRE Board includes at least four (4) Directors with transmission operations, transmission planning, and generation experience. The remaining five (5) directors shall be selected to include experience from the areas of Regulatory/Legal, Accounting/Finance/Economics, Environmental, Compliance/Standards, International, Public Sector, Distribution/Retail Provider, and Energy/Commodity Markets; with each of the five (5) representing a different area of experience.


114

Dec 2012 Resolution 10bNRE MAC – Independent


Resolved, That the Western Electricity Coordinating Council (WECC) Board of Directors (Board) determines that, following the proposed bifurcation into regional (RE) and non-regional (NRE) entities, the NREBOD will have a Member Advisory Committee (MAC) similar to that envisioned for the RE.


115

• Bylaw change authority buckets: Board, MAC, Members.

• Definition of “Majority of Classes” in Director elections – depending on # of Classes

• Process for removal of Directors

GNC items delayed until after Dec Board Meeting

Reference Material

GNC Schedule (all times Mountain)

• Dec 3: Another GNC call• Dec 5: GNC meeting in the morning – finalize deck• Dec 5: Afternoon – Technical Session

118

• Class 1 – Electric line of business entity > 1000 circuit mile of transmission line – 23 members (6%)

• Class 2 – Electric line of business entity < 1000 circuit mile of transmission line – 54 members (15%)

• Class 3 – Electric line of business entity without any distribution or transmission lines – 71 members (20%)

• Class 4 – End-users of significant amount of electricity, as well as organizations that represent end-users or persons interested in the impact of electric system on the public or environment. – 17 members (5%)

• Class 5 – State and Provincial representatives 22 members (6%)• Class 6 – Canadian members – 19 members (5%)• Class 7 – Member at large – 153 members (43%)• Total members 359

Member Classes

119

Cross Reference to Existing Operation & Planning Functions

Existing Organizational Area

Function RE Non-RE

Standards

Participate in NERC Standards Process X X Regional Business Practice Development X Regional Criteria Development X Regional Standards Development X

Transmission Expansion

Economic Data and Models X Economic Planning Studies and Interconnection-wide Plans

X

Reliability Assessments Reliability Assessment and Data Collection

X

Planning Services

Power Flow and Dynamics Data X Bulk Electric System Exception Processing

X

Support for Dynamic Model Development X Map of Principle Transmission Lines and Planned Facilities Map

X

Planning Coordination and Studies X Project Coordination and Path Rating Process

X

Transmission Planning Oversight X System Performance Analysis X

120

Cross Reference to Existing Operation & Planning Functions

Existing Organizational Area

Function RE Non-RE

Operations

Entity Certification (BA/TOP) X Event Analysis (EA) X Interchange Authority and WECC Interchange Tool

X

Situational Awareness (as defined in pro-forma delegation agreement)

X

webSAS – USF Congestion Management Tool

X

Grid Performance Analysis X System Operator Training X Remedial Action Scheme Database X Unscheduled Flow Mitigation Plan (USFMP)

X

Market Interface and Variable Generation

Market Interface X Variable Genertion Analysis and Oversight

X

Variable Generation Processes and Guides

X

121

•

Canada Info

122

Approval Required byDocument or Action WECC Board WECC Members NERC FERC

Bifurcation1 XRE Bylaws Amendments2, 3 X X X X

Delegation Agreement3 X X XNPCC CEA Agreement Termination X X X

Canada & Mexico MOAs XNRE Bylaws X NRE Tariff4 TBD TBD X

NRE Functional Registration XNRE RC Certification5 X

Bifurcation and GovernanceRequired Approvals

123

1. NERC and FERC approval are not required for the decision to bifurcate. However, NERC and FERC retain the ability to terminate WECC’s delegated authority so any action that impacts WECC’s ability to carry out its delegated responsibilities, or its budget for doing so, is subject to NERC and FERC review.

2. WECC Bylaws section 13.1 requires Member approval ONLY for Bylaws sections 6.2-6.10 (Board composition, selection, qualifications and duties), section 8.4 (has been repealed), Appendix C (Dispute Resolution Procedures), and section 13.1 itself.

3. WECC Bylaws are contained at Exhibit B to the Delegation Agreement so RE Bylaws amendments will likely be forwarded for approval as part of a revised Delegation Agreement package.

4. The process for development and approval of the NRE Regional Tariff has not yet been developed. This will likely be a broad, open, participatory process. It may culminate in an effort to obtain stakeholder approval, although formal approval would not be required. The WECC Board may also want to approve the tariff prior to authorizing its filing for FERC approval.

5. Because the RC will be transferring to a new legal entity, NERC may require a new certification effort. Alternately, as it has done for other entities, NERC may view bifurcation as resulting in only an organizational name change since facilities, personnel and RC footprint will remain unchanged. Staff will explore this issue going forward.

Bifurcation and GovernanceRequired Approvals Notes

124

•

To Discuss

125

• GNC directed WECC Management to seek legal advice on how the 2005 arrangements between Canada and the US on formation of the ERO impact WECC bifurcation, including whether there are requirements for Canadian independent director(s) on the RE.

• GNC recommends that the Board appoint a small team of directors and WECC Management to engage with Class 6 members to develop structures for continued Canadian participation in enhancing reliability in the Western Interconnection under a bifurcated model.

Open Requests to Management

Questions?

wecc board of directors gnc presentation december 5, 2012 draft

Documents