MEETING AGENDA Standards Committee Meeting May · PDF fileSince June 18, 2007, ... Representative Committee (MRC) meeting NERC staff introduced a new pilot ... Status of Standards

Meeting Agenda MRO Standards Committee

May 12, 2016

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MEETING AGENDA Standards Committee Meeting

May 12, 2016 | 9:00 – 3:00 pm MRO Offices, St. Paul, MN

AGENDA ITEM ACTION

1 Call to Order Robert Thompson, Chair a. Determination of Quorum b. Standards of Conduct and Anti-Trust Guidelines c. Additions to the Agenda

2 Introduction Howard Gugel, Director Standards, NERC Russ Mountjoy, MRO

Information Item

3 Standards Manager Report Russ Mountjoy, MRO

Information Item

4 Status of Standard Application Guides submitted to NERC Richard Burt, MRO

Information Item

5 Status of Standards Process Manual Five Year Review submitted to NERC Russ Mountjoy, MRO

Information Item

6 Standards Committee Subgroup Reports a. NERC Standards Review Forum Report

Joe DePoorter, NSRF Chair b. CIP-003-6

Lori Frisk, Liaison c. PRC-004

Andy Pusztai, Liaison

Discussion Item

7 NERC Reports a. Standards Committee

Andrew Pusztai, Observer for MRO b. Critical Infrastructure Protection Committee

Marc Child, MRO Representative on NERC Critical Infrastructure Protection Committee

Information Items

8 Standards Committee List of Action Items Emily Rousseau, MRO

Information Item

9 Security Conference Update Emily Rousseau, MRO

Information Items

10 Adjourn

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AGENDA 1

Call to Order

a. Determination of Quorum Midwest Reliability Organization

2015 Standards Committee Roster

Name Sector Company Term Robert Thompson Chair

Investor Owned Utility Xcel Energy 12/31/2016

Wayne Guttormson Vice Chair

Canadian Utility Saskatchewan Power 12/31/2017

Andrew Pusztai Transmission System Operator American Transmission Company

12/31/2017

David Rudolph Cooperative Utility Basin Electric Power Cooperative

12/31/2016

George Brown Generator and/or Power Marketer

Acciona Energy 12/31/2017

Joe Knight Cooperative Utility Great River Energy 12/31/2017

Lori Frisk Investor Owned Utility Minnesota Power 12/31/2017

Mark Buchholz Federal Power Marketing Agency Western Area Power Administration

12/31/2016

Michael Moltane Transmission System Operator ITC Holdings 12/31/2016 Todd Komplin Municipal Utility WPPI Energy 12/31/2017 Open Generator and/or Power

Marketer

Open Municipal Utility

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AGENDA 1

Call to Order

b. Standards of Conduct and Anti-Trust Guidelines

Standards of Conduct Reminder: FERC Standards of Conduct prohibit MRO staff, committee, subcommittee, and task force members from sharing non-public transmission sensitive information with anyone who is either an affiliate merchant or could be a conduit of information to an affiliate merchant. Anti-trust Reminder: Participants in Midwest Reliability Organization meeting activities must refrain from the following when acting in their capacity as participants in Midwest Reliability Organization activities (i.e. meetings, conference calls, and informal discussions):

• Discussions involving pricing information; and • Discussions of a participants marketing strategies; and • Discussions regarding how customers and geographical areas are to be divided among

competitors; and • Discussions concerning the exclusion of competitors from markets; and • Discussions concerning boycotting or group refusals to deal with competitors, vendors or

suppliers.

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AGENDA 1

Call to Order

c. Additions to the Agenda

The Standard Committee Chair will ask meeting attendees for any additional items to the agenda.

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AGENDA 2

Introduction Howard Gugel, Director Standards, NERC

Russ Mountjoy, MRO will lead this discussion at the meeting.

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AGENDA 3

Standards Manager Report

Russ Mountjoy, MRO will provide a report at the meeting.

Date: May 12, 2016

To: MRO Standards Committee

From: Russ Mountjoy, Standards, Certification & Registration Manager

Subject: MRO Standards Manager Report

Grading of Standards

As part of its Enhanced Periodic Review Process, the NERC Standards Committee (SC) has implemented a “Grading of Standards” process based upon the metrics used during the Independent Experts Review in 2013, with the addition of one quality question related to cost-effectiveness. The evaluation is separated into two separate criteria: content and quality. As part of the content review, the NERC SC Standing Review Team is determining if the content is technically correct, the correct functional entities are identified, and the appropriate actions have been addressed. Characteristics being assessed in the quality review include: clarity of expectations, whether the standard has a technical basis of support, and whether compliance with the standard measurable.

The NERC SC Standing Review Team will grade each standard identified for review in 2016 prior to meeting face-to-face to discuss the initial results. Similar to the process for development of Standards, the results of the review will be posted for industry comment followed up by a second face-to-face grading session which will be open to the industry.

This process will be repeated each year until each standard has a Steady State Grade.

The Price for Reliability

With the implementation of any program there is always the question, “Is the cost worth the benefit?” The implementation of the NERC Compliance Monitoring and Enforcement Program (CMEP) is not exempt from this question. Since June 18, 2007, users, owners, and operators of the bulk power system have transitioned from a voluntary regime of standards to mandatory compliance. The Federal Energy Regulatory Commission (FERC), the NERC Board of Trustees, industry stakeholders, and state regulators

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are all asking “Is the price to maintain reliability of the bulk power system worth the price of being compliant with the standards?”

Previously, in 2014, two Cost of Effectiveness Analysis Process (CEAP) programs were implemented to determine the cost effectiveness of reliability standards. Most recently at the January 2016 Member Representative Committee (MRC) meeting NERC staff introduced a new pilot approach called the Cost Effectiveness Pilot and based it upon the two previous programs. This pilot is divided into two phases, the first phase will provide a high level analysis of the risk reduction to the bulk electric system along with the cost of not addressing the risk. The second phase will focus on the cost associated with implementing the standard. For this pilot, NERC has selected reliability standard TPL-001-4 – Transmission System Planning Performance Requirements. On October 17, 2013 FERC issued its Order No. 786 approving TPL-001-4. In its order, FERC expressed concern that in paragraph 40 the six month threshold could exclude shorter, planned outages of significant facilities from future planning assessments which perhaps should be addressed in the assessments. Additionally, FERC expressed concern in paragraph 89 related to the long-lead times for replacement equipment and spare equipment strategies.

As part of phase one of Project 2015-10: Single Points of Failure TPL-001 the Standards Authorization Request (SAR) team is reaching out to industry stakeholders through an Unofficial Comment Form for their input and concerns and to identify the reduction of risk being considered and the potential financial and societal impact of not addressing the risk, comments are due May 26, 2016. For the second phase of the pilot the Standards Drafting Team will seek volunteer entities to provide cost information related to the implementation of the new standard after it has been drafted which will be shared with the balloting body.

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AGENDA 4

Status of Standard Application Guides submitted to NERC

Richard Burt, MRO will lead this discussion at the meeting.

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AGENDA 5

Status of Standards Process Manual Five Year Review submitted to NERC

Russ Mountjoy, MRO will lead this discussion at the meeting.

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AGENDA 6

Standards Committee Subgroup Reports a. NERC Standards Review Forum

Date: May 5, 2016 To: MRO Standards Committee From: Joe DePoorter, NERC Standards Review Forum Chair Subject: MRO NERC Standards Review Forum Status Report Action: None

Mr. Chair,

The NSRF continues to hold a weekly one-hour conference call to discuss NERC Reliability Standards that are either under development or current Reliability Standards that are being updated. The NSRF has received positive feedback from both members and guests that attend our calls. We have been averaging about 25 people per call and have updated our Conference call abilities to allow up to 96 people on our calls, we periodically have over 50 people a call. This includes Mr. Piatt of FERC Staff that usually attends. Though Mr. Piatt does not speak on behalf of the Commission, he is a valuable asset due to his 30 plus years of experience in our industry.

The NSRF has been receiving request from NERC Standards Development Staff and Project Drafting Team members to brief the NSRF on the status of the current Projects under development. We view this as the MRO’s voice is being heard and the Project Staff is looking for support from the NSRF. We will continue to have all Projects brief the NSRF on the status of their Projects.

With the large amount of FERC approved Standards with multiple enforcement dates, the NSRF now has the following link on the MRO web page to assist MRO members. https://www.midwestreliability.org/MRODocuments/New%20and%20Modified%20Standards%20Enforcement%20Dates.pdf

The NSRF has 16 official members receiving NSRF member e-mails ([email protected]) and 108 people on our guest exploder list ([email protected]). Even if MRO members are not directly involved in the NSRF process, they will still receive our written comment forms and balloting recommendations.

The NSRF continues to pool limited resources from MRO member companies in order to review proposed NERC Reliability Standards. Upon completion of review, the NSRF usually has built a consensus amount all NSRF members and guest.

/S/ Joseph G. DePoorter

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AGENDA 6

Standards Committee Subgroup Reports

b. Subject Matter Expert Team Report – CIP-003-6 - Security Management Controls

Lori Frisk will lead this discussion at the meeting.

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AGENDA 6

Standards Committee Subgroup Reports

c. Subject Matter Expert Team Report – PRC-004-5(i) - Protection System Misoperation Identification and Correction

Andy Pusztai will lead this discussion at the meeting.

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AGENDA 7

NERC Reports

a. Standards Committee

Date: May 5, 2015 To: MRO Standards Committee From: Andrew Pusztai, American Transmission Company, LLC Subject: NERC Standards Committee Report

Action: Information Only

Dear Standards Committee Members:

The North American Electric Reliability Corporation (NERC) Standards Committee (SC) met for a face-to-face meeting on December 9, 2015 in Marina del Rey, CA. Due to the timing of the MRO and NERC meetings for this quarter, a committee report is unavailable; the complete meeting agenda packet will be posted soon at: http://www.nerc.com/comm/SC/Pages/Agendas,Highlights,Minutes.aspx In lieu of a report, the PowerPoint (found below) was presented to the MRO Board of Directors on March 17, 2016. The PowerPoint has since been update and these changes are reflected in the Red Text.

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AGENDA 7

NERC Reports

b. Critical Infrastructure Protection Committee

Marc Child, NERC CIPC Representative will provide a verbal report at this meeting.

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AGENDA 8

Standards Committee List of Action Items Emily Rousseau, MRO will lead this discussion at the meeting.

Action Item

Number

Responsible Party Description of Action Item Brief Description of Action

Taken Due Date

Date Closed

2015-006 SC sub-group (JK, AP, GB, JD)

The sub-group will adopt a plan to identify and develop a SAR.

Will follow up on the outcome of the SAR now that it has been submitted to NERC

2016 Goal

2015-007 MRO SC Determine MRO Security Committee interest.

The MRO SC will participate in a discussion with NERC CIPC representatives to determine interest and need for security support.

TBD 6/16/15

2015-016 MRO Staff MRO Physical and Cyber Security Sub Committee.

Establish a MRO Physical and Cyber Security Sub Committee – Currently with GPC

TBD

2015-019 MRO SC and Staff

Fill Open NERC CIPC Seat Pending board approval on 03.17.16 03.17.16 03.17.16

2016-001 MRO Staff Submit MRO Standard Application Guide to BOD. (There were no changes made.)

Also email Howard & Holly to make sure it is unnecessary to send to NERC

03.17.16 03.17.16

2016-002 MRO Staff Submit 6 SAGS to NERC CIP-002-5.1, FAC-003, FAC-008, PER-005-1, PRC-005-6, and TPL-001.

Submitted – 04/18/16 due date for regions review.

TBD

2016-003 MRO SC and Staff

Create a SMET for CIP-003-6 R 2SAG To expedite process, “The committee may authorize the subgroup to initiate its work prior to the board’s approval of the subgroup’s charter and membership at the board’s next regularly scheduled meeting.”

05.12.16

2016-004 MRO SC and Staff

Create a SMET for PRC-004 Solicit- Newsletter, PCC email and security conference stakeholders

05.12.16

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Standards Committee List of Action Items

Recurring or On Hold Action Items

Responsible

Party Description of Action

Item Brief Description of Action Taken Due Date Closed

1 MRO Review the Standards Process Manual (review every 5 years)

Last review Ver 5 (2011-2012). FERC approved V5 on June 12, 2013. – Guttormson, Brown, Pusztai and Knight volunteered to review,

June 2016

2 MRO Discussion Forum Rollout Evaluate once MRO implements SharePoint. TBD

3 SC Wind Generation Resources, Definition of BES and PRC-005

NERC BOT is reviewing. SC wanted to keep on its radar. SC member George Brown is on drafting team. SC wants to keep this open.

TBD

4 MRO SC and Staff

Review most frequently violated standards

The MRO SC will review the most frequently violated standards during their quarter 1 meetings.

Annually

Q1

5 MRO SC Review MRO’s annual Goals

Review MRO’s annual goals and determine which goals to support during the calendar year.

Annually

Q4

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AGENDA 9

MRO 2016 Security Conference

Emily Rousseau, MRO will lead this discussion at the meeting.

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AGENDA 10

Adjourn