Agenda Board of Directors • Compliance Committee March 18, 2020 • 1:00 PM – 3:00 PM (ET) Click Here to Attend Meeting Password: 03182020 Open Agenda 1. Call to Order and Appoint Secretary to Record Minutes 1:00 PM Presenter: Brenton Greene, Chair 2. Antitrust Statement 1:05 PM Presenter: Brenton Greene, Chair 3. Approve Compliance Committee Meeting Minutes 1:10 PM Presenter: Brenton Greene, Chair Reference: Draft Minutes for the November 20, 2019 Compliance Committee Meeting. Action: Approve Minutes 4. Review of 2019 CMEP Activities and Performance 1:15 PM Presenter: Kristen Senk Description: Ms. Senk will provide an overview of 2019 enforcement data, including violation trends, and an update on recent enforcement-related activity with FERC. Reference: Presentation Action: Information and Discussion 5. Misoperations Update 1:40 PM Presenter: Jeff Mitchell Description: Mr. Mitchell will review trends in Misoperations and Lessons Learned. Reference: Presentation Action: Information and Discussion 6. Next Meeting and Adjourn Open Session 2:00 PM June 3, 2020 • Cleveland, OH
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Agenda Board of Directors • Compliance Committee March 18, 2020 • 1:00 PM – 3:00 PM (ET)
Click Here to Attend Meeting Password: 03182020
Open Agenda
1. Call to Order and Appoint Secretary to Record Minutes 1:00 PM Presenter: Brenton Greene, Chair
3. Approve Compliance Committee Meeting Minutes 1:10 PM Presenter: Brenton Greene, Chair Reference: Draft Minutes for the November 20, 2019 Compliance
Committee Meeting.
Action: Approve Minutes
4. Review of 2019 CMEP Activities and Performance 1:15 PM Presenter: Kristen Senk Description: Ms. Senk will provide an overview of 2019 enforcement data,
including violation trends, and an update on recent enforcement-related activity with FERC.
Reference: Presentation Action: Information and Discussion
5. Misoperations Update 1:40 PM Presenter: Jeff Mitchell
Description: Mr. Mitchell will review trends in Misoperations and Lessons Learned.
Reference: Presentation Action: Information and Discussion
6. Next Meeting and Adjourn Open Session 2:00 PM June 3, 2020 • Cleveland, OH
Brenton Greene, Chair • Independent (2022) Patrick Cass • Vice Chair • Independent (2020) Lisa Barton • AEP (2020) Scott Etnoyer • Talen Energy (2020) Larry Irving • Independent (2021)
Draft Minutes for the November 20, 2019 Compliance
Committee Meeting.
Separator Page
DRAFT Minutes Board of Directors • Compliance Committee November 20, 2019 • Washington, DC
St. Regis Hotel 923 16th and K Street NW • Washington, DC 20006
Open Session
Call to Order – Chair Brenton Greene called to order a duly noticed open meeting of the Compliance Committee on November 20, 2019 at 1:02 PM (ET). A quorum was present, consisting of the following members of the Compliance Committee: Brenton Greene, Chair; Pat Cass, Vice Chair; Kenneth Capps; Larry Irving; and Lou Oberski. A list of others present during the Compliance Committee meeting is set forth in Attachment A. Appoint Secretary to Record Minutes – Chair Greene designated Rob Eckenrod as the secretary to record the meeting minutes. Antitrust Statement – Chair Greene advised all present that this meeting is subject to, and all attendees must adhere to, ReliabilityFirst’s Antitrust Compliance Guidelines. Approve Compliance Committee Meeting Minutes – Chair Greene presented draft minutes for the August 21, 2019 Compliance Committee meeting, which were included with the agenda package. Upon a motion duly made and seconded, the Compliance Committee approved the minutes as presented. Overview of the 2020 ERO Compliance Monitoring and Enforcement Program Implementation Plan – Jim Uhrin led a discussion on the 2020 CMEP Implementation Plan (IP), which will inform ReliabilityFirst’s monitoring activities for 2020. He noted that the ERO Enterprise is using a single CMEP IP this year without Regional appendices. The 2020 CMEP IP describes: (1) the process used to identify the 2020 Risk Elements (i.e., high-level risk priorities), (2) the 2020 Risk Elements; and (3) the Areas of Focus and Reliability Standards associated with the 2020 Risk Elements. Mr. Uhrin discussed changes in the Risk Elements and Areas of Focus from the 2019 CMEP IP to the 2020 CMEP IP, including an increased focus on resource adequacy issues. He also discussed enhancements to the compliance oversight process, which now includes more targeted oversight and enhanced analysis of an entity’s inherent risk and performance profile.
Enforcement Activities – Kristen Senk presented and led a discussion on 2019 enforcement activities and trends, and the focus for 2020. She reported that ReliabilityFirst continues to receive a high volume of violations; a majority of which are self-reported and involve CIP-related issues. She stated that there is a continuing trend of minimal risk
Compliance Committee Minutes November 20, 2019
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noncompliances, the bulk of which are processed as compliance exceptions. Ms. Senk noted that ReliabilityFirst is on track to process over 400 violations in 2019. She discussed the enforcement group’s actions to support risk identification, mitigation, and outreach across the organization and the ERO Enterprise. She then presented the 2020 focus areas, including: (1) an enhanced noncompliance communication strategy to align with FERC policies regarding violation postings; (2) ensuring ERO alignment on enforcement practices and strategies; (3) identifying violation processing improvements and efficiencies; and (4) continuing open dialogue and targeted training with entities. FOIA Requests – Ms. Senk provided an update on recent Freedom of Information Act (FOIA) requests relating to CIP violations filed with FERC. She reported that FERC issued a Joint Staff White Paper (in conjunction with NERC and the Regions) on August 27, 2019, which proposed a new format for CIP disposition filings. Specifically, the White Paper proposed that CIP filings should include a public cover letter noting the name of the violator, the applicable Reliability Standard violated (but not the Requirement), and the penalty amount. A separate confidential attachment would contain details regarding the violation and proposed mitigation plan. Several entities submitted comments on the White Paper, most of which generally supported the proposals. Ms. Senk reported that it is expected that FERC will adopt the new process in 2020. Evaluation of the Committee’s Charter and Performance – Mr. Eckenrod led the annual review of the Compliance Committee’s Charter. Aside from fixing small typographical errors, the Compliance Committee identified no changes to the Charter at this time. Mr. Eckenrod also led the annual evaluation of the Compliance Committee’s performance of its duties set forth in the Charter.
CIP-014 Update – Matt Thomas provided an update on ReliabilityFirst’s CIP-014-2 activities. He noted that ReliabilityFirst’s initial assessment of CIP-014 compliance activities included entity CIP-014-2 self-certifications, staff internal analysis, and CIP-014 engagements with entities. Mr. Thomas discussed expectations regarding specific requirements of CIP-014-2, and trends ReliabilityFirst has identified during CIP-014-2 compliance activities. He also highlighted logistical challenges associated with CIP-014-2 audits given the heightened sensitivity of the information, and potential solutions to address these challenges. Regional Risk Assessment – Mr. Sefchik provided an overview of the development and content of the 2019 Reliability Regional Risk Assessment (RRA). He noted that staff focused on making the 2019 RRA report more usable by making the report’s information more concise and relevant for ReliabilityFirst’s day-to-day work. Mr. Sefchik discussed the latest additions and changes to the RRA risk categories, including new resilience and human performance risk categories, and an update to the cyber/physical security risk category.
Compliance Committee Minutes November 20, 2019
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Registration Trends, Align and CORES Updates – Mr. Sefchik provided an overview of registration trends and the status of the ERO Enterprise-wide CORES and Align tools. He noted that there are 243 entities registered in ReliabilityFirst, and the majority of registered entities are generator owners and operators. Mr. Sefchik also reported on the progress of registration and certification initiatives, including the development of the CORES tool and collaborating with stakeholder groups on NERC Rules of Procedure modifications relative to registration activities. He reported that the CORES tool, which provides greater alignment across the ERO for registration activities, went live in July 2019 with pilot registered entities. To date, approximately 25% of ReliabilityFirst registered entities have deployed CORES or are near deployment. Mr. Sefchik noted that NERC plans to release new version updates and offer CORES to additional registered entities in the coming months. He then provided an update on the Align project, which provides a common portal for registered entities to submit and obtain information related to compliance and risk activities. Mr. Sefchik reported that while the Align project is still moving forward, release 1 of the tool has been delayed until 2020 to ensure data security, refine business processes, and address stakeholder concerns.
Next Meeting – Chair Greene noted that the next Compliance Committee meeting will occur in March 2020, at the ReliabilityFirst offices. At 2:38 pm, Chair Greene moved the Compliance Committee into closed session. All guests recused themselves at this time.
Closed Session
Confidential Compliance & Enforcement Matters – Jeff Craigo led a discussion on confidential Compliance and Enforcement matters.
Adjourn – Upon a motion duly made and seconded, Chair Greene adjourned the Compliance Committee meeting at 3:17 pm (ET).
As approved on this xxx day of March, 2020 by the Compliance Committee, Robert V. Eckenrod Vice President General Counsel & Corporate Secretary
Compliance Committee Minutes November 20, 2019
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Attachment A
Others Present During the Compliance Committee Meeting Kevin Ball • DTE Energy Carol Baskey • ReliabilityFirst Lisa Barton • AEP Larry Bugh • ReliabilityFirst Robert Clarke • NERC Board of Trustees Jeff Craigo • ReliabilityFirst, Vice President Jennifer Curran • MISO Michael Del Viscio • PJM Rob Eckenrod • ReliabilityFirst, VP and General Counsel Scott Etnoyer • Talen Energy Ben Felton • DTE Energy Dwayne Fewless • ReliabilityFirst Tim Gallagher • ReliabilityFirst, President & CEO Rich Heidorn • ERO Insider Nick Henery • FERC Deandra Williams-Lewis • ReliabilityFirst Bob Mattiuz • FirstEnergy Jeff Mitchell • ReliabilityFirst Lou Oberski • Dominion Ray Palmieri • ReliabilityFirst, Senior Vice President and Treasurer Chris Scanlon • Exelon Ray Sefchik • ReliabilityFirst Kirsten Senk • ReliabilityFirst Susan Sosbe • Wabash Valley Power Association Jennifer Sterling • Exelon Matt Thomas • ReliabilityFirst Jody Tortora • ReliabilityFirst Jim Uhrin • ReliabilityFirst Wendy Weaver • ReliabilityFirst Becky Webb • ReliabilityFirst Simon Whitelocke • ITC Lynnae Wilson • CenterPoint Energy
Presentation
Separator Page
Enforcement Activity Update
Kristen Senk, Managing Enforcement Counsel
March 18, 2020
Cleveland, OH
Forward Together • ReliabilityFirst
RF Annual Violation Intake
2
0
100
200
300
400
500
600
2016 2017 2018 2019
Annual Violation Intake
Self-Report/Log Audit/Spot
• Continued high volume of identified noncompliance (425 in 2019)
• Majority of the issues were self-reported, but there were more audit findings in 2019
than in prior years
• RF continues to process high volume to keep up with intake (processed 418 in 2019
(compared to 329 in 2018 and 369 in 2017))
Forward Together • ReliabilityFirst
RF 2019 Intake by Type
3
0
50
100
150
200
250
300
350
CIP Ops
CIP/OPS Violations
Self-Report/Log Audit/Spot Check
• 72% of the noncompliance identified in 2019 was CIP
• Audit findings increased for both CIP and OPS Requirements