NERC as the ERO Craig Lawrence Manager of Organization Registration, Certification, and Compliance Monitoring
Dec 29, 2015
NERC as the ERO
Craig LawrenceManager of Organization
Registration, Certification, and Compliance Monitoring
U.S. Energy Policy Act of 2005
Reliability Legislation● One industry self-regulatory ERO● FERC oversight
Delegates authority to set and enforce mandatory standards to ERO
ERO delegates authority to regional entities
● Standards apply to all owners, operators, and users of bulk power system
● Independent governance and Compliance Program
Electric Reliability Organization Overview
United StatesFederal Energy
Regulatory Commission
MexicoComision Reguladora
de Energia
Canada NEB, Alberta, British
Columbia, Manitoba, Ontario, New Brunswick, Nova Scotia, Quebec, and Saskatchewan
Electric ReliabilityOrganization
RegionalEntities
Other ERO Members
Other ERO Members Bulk Power System
Owners, Operators, Users
Bulk Power System Owners, Operators, Users
ReliabilityStandards
ComplianceEnforcement
Reliability Assessment
Government Oversight
ERO Implementation● Aug. 2005: Energy Policy Act● Feb. 2006: FERC Implementing Rule● April 2006: NERC ERO Application Filing
NERC Standards Filing● July 2006: ERO Certification Order● Oct. 2006: NERC Compliance Filing
FERC Standards NOPRBudget Approval Order
● Nov. 2006 Uniform Compliance Program FilingRegional Delegation Agreements Filed
● Jan. 2007 Standards NOPR Comments FilingsNERC Non-Governance Order
● Mar. 2007 Order on Standards Response to January 18 FERC Order
● Apr. 2007 Order on Compliance Programand Delegation Agreements
● Summer 2007 – Mandatory Compliance
NERC Organization
President& CEO
President& CEO
Members’ Forums
Members’ Forums
Compliance&
OrganizationCertification
Compliance&
OrganizationCertification
Situation Awareness & Infrastructure
Security
Situation Awareness & Infrastructure
Security
StandardsStandards
ReliabilityReadiness & Improvement
ReliabilityReadiness & Improvement
Training, Education & Personnel
Certification
Training, Education & Personnel
Certification
Information Technology
Information Technology
Legal & Regulatory
Legal & Regulatory
Finance & Accounting
Finance & Accounting
Reliability Assessment & Performance
Analysis
Reliability Assessment & Performance
Analysis
Human Resources
Human Resources
Regional Entities
Regional Delegation Agreements
● Delegated functions Compliance Standards Organization registration Reliability assessment Reliability readiness and improvement
● Regional consistency is key Transparency Predictability Uniform outcomes
ERO Program Areas
● Standards● Compliance● Reliability Performance● Reliability Readiness
and Improvement● Training and Education● Situation Awareness &
Infrastructure Security● Members Forums
Funding
● Funding for ERO and regional delegated functions allocated to load-serving entities Bulk power system users Based on Net Energy for
Load (NEL)● ERO will fund regions for
delegated functions● Penalties offset costs
Funded regardless of penalty collections
Questions
NERC Standards Development Process and Standards Work Plan
Standards Establish the Basis
Elected StandardsCommittee
StandardsRequestors
StandardsProcessManager
SAR & StandardDrafting Teams
BallotPools
Established by the IndustryANSI-accredited process
ERO Standards Process
● ANSI-accredited open process● Registered ballot body of stakeholders
vote on standards● Elected standards committee● Participation is encouraged:
It’s free Provide comments and vote remotely online Go to www.nerc.com and click on Standards
Standards Work Plan: Overview
● Work plan filed December 1, 2006● Dynamic management tool
Communicate vision Coordinate work Measure progress
● 31 projects grouped by subject matter● Aggressive but achievable schedule● Detailed project descriptions listing ‘to
dos’● More efficient use of drafting teams● Integrates ‘fill-in-the-blank’ plan
Standards Work Plan: Inputs
● FERC NOPR on reliability standards● FERC staff assessment of standards● Version 0 comments● Comments on other standards
projects● Comments from missing compliance
elements and risk factor teams● Blackout report● Other reports and references
Projects Started in 2006
● 2006-01 System Personnel Training● 2006-02 Transmission Assessments & Plans● 2006-03 System Restoration and Blackstart● 2006-04 Backup Facilities● 2006-05 Phase III & IV Field Tests● 2006-06 Reliability Coordination● 2006-07 ATC, TTC, CBM, and TRM● 2006-08 Transmission Loading Relief● 2006-09 Facility Ratings
Projects Starting in 2007
● 2007-01 Underfrequency Load Shedding● 2007-02 Operating Personnel Communications● 2007-03 TOP and BA Operations● 2007-04 Certifying System Operators● 2007-05 Balancing Authority Controls● 2007-06 System Protection● 2007-07 Vegetation Management● 2007-08 Emergency Operations● 2007-09 Generator Verification● 2007-10 Modeling Data● 2007-11 Disturbance Monitoring
Projects Starting in 2008
● 2008-01 Voltage and Reactive Control● 2008-02 Undervoltage Load Shedding● 2008-03 Demand Data● 2008-04 Protection Systems● 2008-05 Cyber Security● 2008-06 Phasor Measurement Units● 2008-07 Resource Adequacy Assessments
Projects Starting in 2009/10
● 2009-01 Disturbance/Sabotage Reporting● 2009-02 Facility Connections● 2009-03 Interchange Information● 2010-01 Support Personnel Training
Representative Changes to Standards● Concise title/purpose with a reliability
value● Applicability
More specific with regard to entity, facilities, and responsibilities
Changes from Functional Model Remove RRO (RE remains compliance
monitor)● Compliance elements
Measures, violation severity levels, risk factors, time horizons, etc.
Other Improvements
● Review technical adequacy and performance metrics
● Address fill-in-the-blank standards● Reorganize, streamline standards● Merge in organization certification
standards● References● Variances
Violation Severity Levels
● Level 1: mostly compliant with minor exceptions
● Level 2: mostly compliant with significant exceptions
● Level 3: marginal performance or results
● Level 4: poor performance or results
Questions
NERC Organization Registration Program
Organization Registration
Who Must Comply?● Any entity responsible for any part
of bulk power system reliability Historically defined as control areas
and reliability coordinators
● Functional entities Aligns reliability
requirements with functional unbundling
Functional Responsibilities
ReliabilityCoordinator
TransmissionOperator
GenerationOperator
BalancingAuthority
TransmissionOwner
GenerationOwner
DistributionProvider
Load ServingEntity
PlanningAuthority
PurchasingSellingEntity
RegionalReliability
Organization
ReserveSharingGroup
TransmissionPlanner
TransmissionServiceProvider
ResourcePlanner
RegisteredIn
2005
Owners, Operators, and Users
● Energy Policy Act: All users, owners, and
operators of the bulk-power system shall comply with reliability standards
● FERC Rule All entities subject to the
Commission’s reliability jurisdiction… (users, owners, and operators of the bulk-power system) shall comply with applicable Reliability Standards …
● Who are they?
Organization Registration
● Creates a Compliance Registry Identifies owners, operators, and
users of the bulk power system Separate from funding or
membership
● Establishes scope of Compliance Monitoring Program Notice of compliance responsibility Opportunity to appeal
Bulk Power System Owner, Operator, or User
Minimum Size Criteria
Functional Entities Identified in Reliability Standards
Joint Registration Org.
Registration Selection Criteria
ERO Organization Registration
● Registration process Entities may register directly Regions or NERC may add to the
registration list Others may nominate those with
material impact for registration Entity may challenge placement in
the compliance registry
● Challenge process Entities must demonstrate they are
not a bulk power system owner, operator, or user
Current Regional Registration Data
RegionNumber of
Entities Total Functions
ERCOT 166 215
FRCC 82 253
MRO 97 402
NPCC 239 516
RFC 365 701
SERC 223 616
SPP 126 402
WECC 525 1337
1823 4442
Questions
NERC Compliance Monitoring
Compliance Monitoring Methods
Compliance Monitoring● Periodic reporting● Self-certification● Exception reporting● Investigations● Random spot-checking
or audits● Compliance audits● Self Reporting
Compliance Program – RequirementsFERC Order 672
● Single audit program for rigorous audit activities
● Prompt reporting● Confidentiality provisions● ERO files summary reports to FERC● ERO or region imposes fair penalties
and sanctions● Single appeals process
NERC Sanction Guidelines
ERO Sanction Guidelines● Comparable to levels of threat to reliability ● Promotes compliance with standards● Rewards self-reporting & voluntary
corrective actions● Flexible to adapt to all relevant facts
surrounding the violation ● Consistent application of guidelines● Meets FERC policy statement
Application of Penalties
● Penalties will be applied by the Regional Entity Staff will determine initial penalty or
sanction Regions may reach a settlement – must
be filed with FERC Penalties may be appealed
● Once finalized NERC files “notice of penalty” Penalties may be adjusted by FERC Penalties become effective 31 days
after filing Remedial actions may be applied
immediately to preserve reliability
Questions