WHAT YOU NEED TO KNOW ABOUTNERC ERO COMPLIANCE

Louise McCarren

Chief Executive Officer – WECCAPPA National Conference

June 16, 2009

Salt Lake City, Utah

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WECC Compliance Goals

●Improve Reliability for the Western Interconnection

●Transparency

●Consistency

●Professionalism

●Communications

CMEP Roles

●Registration

●Compliance Monitoring

●Mitigation Tracking

●Enforcement

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Compliance Monitoring

● Work with registered entities to resolve violations once identified through one of the eight doors into Compliance

Self ReportsSelf Certifications

Exception ReportingOn-site AuditOff-site AuditSpot Checks

CVIsComplaints

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WECC Compliance Update Audits and Spot-Checks

● On-Site Audits Balancing Authorities and Transmission Operators Three-year cycle

● Off-Site Audits All other entities Six-year cycle

● CIP Spot Checks (beginning July 2009) Depending on region, may double audit work load

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Violation Resolution Processes

● Which process best suits circumstances NAVAPS (NOAV) NOCV Settlement Hearing

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Notice of Alleged Violation and Penalty or Sanction (NAVAPS)● Formerly referred to as a Notice of Alleged

Violation (NOAV)

● Letter that contains: Violations facts Recitation of the record Determination of penalties/sanctions Justification for penalties Notice to registered entity of its options

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Notice of Confirmed Violation (NOCV)

● Can be used rather than a NAVAPS if entity doesn’t contest violation or penalty; or

● May supplement a NAVAPS with any updates to the record

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Notice of Confirmed Violation (continued)

● Contains same level of factual data as NAVAPS Violation facts Recitation of the record Determination of penalties/sanctions Justification for penalties/sanctions PLUS – the statement that entity is not

contesting the violations

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Settlement

● Can be requested at anytime

● Going directly to settlement (skipping NAVAPS and/or NOAV) has proven to be most expeditious route

● End result – a settlement agreement that contains the factual history and the terms of the settlement

● NERC and FERC approval required

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Hearing

● Process spelled out in CMEP

● If parties cannot reach settlement, entities can request hearing

● Formal adjudicative proceeding before hearing officer

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Penalty Determination

●Determine fair and consistent penalties and/or sanctions Risk Factor Severity Level Impact of violation on BES Mitigating/aggravating factors Penalties assessed in similar cases Unique circumstances

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In Summary

● Complex process

● Many moving parts

● Analogy to concurrent engineer/build

● Changes/improvements as we learn

● Commitment to keeping interested stakeholders informed

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WECC ComplianceContinued Outreach

Taud Olsen, WECC Director of Stakeholder Relations and Outreach

● Compliance User Group (CUG)

● CIP User Group (CIPUG)

● Open Mic – Monthly

● Compliance Questions Inbox

http://compliance.wecc.biz

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WECC Compliance Update Questions

Louise McCarrenChief Executive OfficerWestern Electricity Coordinating Council615 Arapeen Drive, Suite 210Salt Lake City, Utah 84108-1262