2004 NERC, NPCC & New England Compliance Programs

1. 2004NERC, NPCC & New EnglandCompliance Programs John Norden Manager, Operations Training, Documentation & Compliance August 31, 2003 RC Meeting

2. NERC 2004 Program Changespost-blackout

3. Near-Term Actions to Assure Reliable Operations • Request from NERC on 10/15/2003 to Reliability Coordinators and Control Areas to review reliability practices to ensure compliance with NERC and regional reliability council standards and established good utility practices • Surveyed Participant practices for two issues • Ensure all interconnected generators that have automatic voltage regulation (AVR) and are operating under AVR; and • Ensure high voltage transmission line rights of way are free of vegetation and other obstructions that could contact an energized conductor within the normal and emergency ratings of each line

4. Compliance Template Task Force (CTTF) • Recommendation 2 of NERC Final Blackout Report: “Strengthen the NERC Compliance Enforcement Program” • NERC Formed the CTTF in order to make more clear the existing requirements and develop any additional measures as were identified as contributing factors to the Blackout • 12 additional measures and more clear requirements replace what was in the existing 2004 Compliance Enforcement Program

5. 38 “New” Compliance Templates • On April 2, 2004 the NERC BOT approved a set of 38 revised compliance templates that strengthen and clarify existing standards • 18 Planning Measures • 20 Operating Measures • Reporting required as of June 1, 2004 • Many requirements are “upon occurrence” as opposed to scheduled reporting

6. Major Additions • Protection System Maintenance and Testing • NPCC Document A-4, Bulk Power System Protection Minimum Maintenance already in the Enforceable Program • Inter-Area Coordination (outages & Interchange) • NPCC does a very good job • Operator Training • Vegetation Management • New England Transmission Maintenance and Construction Task Group will be revising OP #3 Appendix C and D and asking the RC for approval as a separate Operating Procedure • Loss of Primary Control Facility

7. NERC Version 0 Update

8. “Version 0” NERC Standards • “Plan for Accelerating the Adoption of NERC Reliability Standards” – June 15, 2004 • How does this effect the Version 1 process • Translation from existing requirements • Existing Planning Standards, including post-blackout Compliance Template revisions • Existing Operating Policies, including post-blackout Policy 5,6, and 9 revisions

9. Why “Version 0”? • The August 14 blackout has challenged NERC and the industry to demonstrate that its reliability standards are unambiguous and measurable – now. • Recommendation 25 of the U.S./Canada Power System Outage Task Force final report: “NERC should reevaluate its existing reliability standards development process and accelerate the adoption of enforceable standards.” • An April 14, 2004 order of FERC states a policy objective addressing “the need to expeditiously modify [NERC] reliability standards in order to make these standards clear and enforceable.”

10. Why “Version 0”? (cont’d.) • The continued use of multiple formats, processes and forums for developing and maintaining reliability rules is an inefficient dilution of industry and staff resources. • The transition to new standards and retiring of existing operating policies and planning standards will be too complex for industry implementation if taken one standard at a time over several years.

11. “Version 0” Status • Posted for Industry Comment on July 11th • Over 400 pages of documentation to review • Only 30 days to review, compile & submit comments • Comment period closed on August 9th • Approximately 100 entities submitted written comments • ISO-NE, NPCC and ISO/RTO Council reviewed all material and issued comments including issues with Phase III and IV Planning standards regarding generation testing. • ISO-NE also has issues with implementation plans

12. “Version 0” Next Steps • Drafting Team met again August 18-20 • Comments considered • Standards revised, as appropriate • Second draft to be posted by August 30th • 45 days review period • During September and October, several regional workshops will be held to hear comments and answer questions about the Version 0 reliability standards and the registration of reliability functions • Committee action during November 9-11 meetings • Present to NERC BOT in February 2005 and implementation upon approval

13. 2004 Program Status Report

14. Reporting • Participants report on all Participant Compliance requirements to the ISO • The ISO reports both Participant and Area Compliance for NPCC and NERC Measures through NPCC • Regions (NPCC) report on Regional Compliance (a compilation of all Areas’ and all Area’s Participant compliance) to NERC for the NERC Measures

15. 2004 NERC Requirements • 41 Requirements in the Final 2004 Program • 22 “Planning” (4 of which are operational) • 19 Operations • 12 Covered by NPCC Compliance requirements; no double-reporting • 6 Regional (NPCC) reporting requirements • 15 Area/Reliability Coordinator reporting requirements • 8 Participant reporting requirements • All surveyed and reported on for the 2004 Program

16. 2004 NPCC NRAP(non-enforceable) • Five Requirements • One Planning – Participant reporting on Generator Underfrequency Tripping • Four Operations • One Participant Reporting - Testing Requirements for critical components associated with key facilities (Document A-03, Section 4.10) • To be Reported in Early 2005 • Three Area reporting requirements

17. 2004 NPCC RCEP(enforceable) • Eight Requirements • Three Planning – Two are Participant reporting requirements • Minimum BPS Maintenance • Area Automatic UFLS requirements • Five Operations • One Participant Reporting – Annual blackstart testing requirement (Document A-03) • Reported from previous year

18. 2004 NPCC & NERC Reporting Status • Partial non-compliance reported NPCC-wide on the NRAP non-enforceable measure for Testing Requirements for critical components associated with key facilities • May be due to requiredclarification to uniformly address some of the specific testing requirements contained in Section 4.10.1 of Document A-03 • Critical requirements following August 14th Blackout • Several testing requirements will be enforceable in next year’s program • Need to stress importance to Industry Participants that compliance with NPCC Criteria, whether enforceable or not, is required by the Restated NEPOOL Agreement!

19. 2004 New England • Two Requirements identified to-date • NEPOOL Operating Procedure No. 17, ‘Load Power Factor Correction’ • NEPOOL Operating Procedure No. 13, ‘Standards For Voltage Reduction and Load Shedding Capability’ – 5% Voltage Reduction

20. 2005 NPCC RCEP(Document A-08) • Report on the “Restoration of the NPCC Areas Following the Power System Collapse of August 14, 2003” recommends additional requirements of this Program • NPCC Document A-03, ‘Emergency Operation Criteria,’ Section 4.10 • Make several tests enforceable with penalties • Blackstart Generating Station Testing (“BS-1”); and • Control Center and Telecommunication Center Facility Testing (“CC-1” through “CC-7”)

21. Questions