Ken Wilson Kim Israelsson WECC Staff

1. Ken WilsonKim IsraelssonWECC Staff Bulk Electric System (BES) Definition Update June 4, 2014 CUG Meeting, Salt Lake City

2. Overview • “Core” BES Definition: • What is it? • How do I apply it? • What actions if any need to be taken? • Is there an Appeal Process? • What is a BES Self-Determined Notification? • What is an BES Exception Request? • Important Dates

3. BES Definition • Consistent, uniform way to determine BES assets • Effective 7/1/2014 • Transition period through 7/2016 • ERO enterprise common process and tool for implementation • Documents and training readily available

4. BES “Core” Definition Bulk Electric System (BES): Unless modified by the lists shown below, all Transmission Elements operated at 100 kV or higher and Real Power and Reactive Power resources connected at 100 kV or higher. This does not include facilities used in the local distribution of electric energy. • Establishes the overall demarcation point between BES and non-BES Elements.

5. How to Apply the BES Definition, Inclusions and Exclusions Consistent methodology outlined in the BES Definition Reference Document • STEP 1: CORE DEFINITION • STEP 2: INCLUSIONS • STEP 3: EXCLUSIONS STEP 3: EXCLUSIONS should be applied in the following sequence: • E2 Retail Generation (supersedes I2 Real Power Resources) • E4 Retail Reactive Power Devices (supersedes I5 Reactive Power Resources) • E3 Local Networks (does not exclude interconnection facilities or generators) • E1 Radial Systems (does not exclude interconnection facilities or generators)

6. BES Notifications • Applies to newly self-identified inclusions to and exclusions from the BES • Assures that entities are appropriately implementing the revised definition • Compliance obligations cease for facilities excluded from the BES • 24-month implementation period to bring newly-identified Facilities included in the BES into compliance

7. Inclusions: I1 - BES Transformers

8. Inclusions: I2 – Real Power Resources

9. Inclusions: I2 – Real Power Resources

10. Inclusions: I3 - Blackstart Resources Resources identified in the Transmission Operator’s restoration plan, regardless of voltage.

11. Inclusions: I4 Dispersed Power Producing Resources

12. I5. Reactive Power Resources

13. Exclusions: E1. Radial Systems

14. Exclusions: E1. Radial Systems Generation Limits There are two conditions under which generation resources can prevent a radial system from qualifying for Exclusion E1: • Any generation within the radial system in question is identified in Inclusion I2, I3, or I4; or • The aggregate nameplate capacity of the non‐retail generation capacity within the radial system in question exceeds 75 MVA. • If either of these conditions applies, the radial system does not qualify for Exclusion E1.

15. Exclusions: E1. Radial Systems

16. Exclusions: E1. Radial Systems

17. Exclusions: E1. Radial Systems

18. Exclusions: E2. Retail Generation

19. Exclusions: E3. Local Networks

20. Exclusions: E4. Reactive Power Devices • Reactive Power devices installed for the sole benefit of a retail customer(s).

21. Self-Determination Notification Information Requirements Each notification should at a minimum include the following: • Current one-line diagrams • For E2 Retail Generation Exclusion notifications • Net Capacity Transactional Data (12 months of hourly data) • Standby, back-up and maintenance power service documentation • For E3 Local Network Exclusion notifications • Power Flow Transactional Data (24 months of hourly data)

22. Questions • How do I submit a Self-Determined Notification? • Self-Determined Notifications must be submitted via the BESnetapplication. • Do I have to submit Self-Determined Notifications on July 1, 2014? • No, there is a two-year implementation period for newly identified elements. • Notification is an ongoing process to report BES status changes. • Is Bulk Upload available? • No, however multiple (like) elements can be submitted on the same request. • Are registration changes made immediately upon submittal of a Self-Determined Notification via the BESnet application? • No, each Region has a separate form to request changes in registration. • Please utilize the WECC Registration Form to notify WECC Compliance of a change in registration.

23. Rules of Procedure Exception Process

24. Rules of Procedure Exception Process • “ Elements may be included or excluded on a case-by-case basis through the Rules of Procedure exception process.” • Exceptions requests (i.e., Exclusion/Inclusion) will only be considered after there is determination as to whether the network/element is or is not part of the BES by application of the definition.

25. Ongoing RoP Exception Process Activities (a) Exclusion Exception • An entity may request and obtain Approval from NERC for an Exclusion Exception on the grounds that the Element(s) for which the Exception Request is filed is included within the BES based on application of the BES Definition but is not necessary for the Reliable Operation of the interconnected bulk-power transmission system as evidenced by Required Information provided pursuant to Detailed Information to Support an Exception Request (Section III.B of the Exception Request Form).

26. Ongoing RoP Exception Process Activities (b) Inclusion Exception • An entity may request and obtain Approval from NERC for an Inclusion Exception on the grounds that the Element(s) for which the Exception Request is filed is not included within the BES based on application of the BES Definition but is necessary for the Reliable Operation of the interconnected bulk-power transmission system as evidenced by Required Information provided pursuant to Detailed Information to Support an Exception Request (Section III.B of the Exception Request Form).

27. Federal Power Act • Section 215 of the FPA states: • ‘‘(4) The term ‘reliable operation’ means operating the elements of the bulk-power system within equipment and electric system thermal, voltage, and stability limits so that instability, uncontrolled separation, or cascading failures of such system will not occur as a result of a sudden disturbance, including a cybersecurity incident, or unanticipated failure of system elements.”

28. BESnet Application • NERC developed the Bulk Electric System Exception and Notification Tool (BESnet) • BESnet is used for submitting • Self-Determined Notification of ‘Bright-Line’ BES Facilities changes • Bulk Electric System (BES) Exception Evaluations

29. BES Exception Requests • Considerations: • Applicable to all Exception Requests • Applicable to specific Elements or groups of Elements Must demonstrate that the requested facilities are (for inclusions) or are not (for exclusions) necessary for the reliable operation of the interconnected transmission system

30. Who can Submit an Exception Request? • Owner of the Element(s) • Regional Entity • Entity with Scope of Responsibility for the Element(s) under consideration: • Regional Entity • Planning Authority • Reliability Coordinator • Transmission Operator • Transmission Planner • Balancing Authority

31. The Exception Request Process Submitting Entity prepares Exception Request RE initial screening and applicable entity input Appeal of Rejection based on completeness Up to 75 days RE substantive review and recommendation Technical Review Panel input (if applicable) Up to 6 months NERC Panel Review and Decision Challenge of NERC Decision (Rule 1703) Up to 120 days

32. Initial Screening • Complete screening either 60 days after initial receipt or 15 days after receiving owner’s response, whichever is later • Assign unique identifier • Review for whether: • Submitting entity was eligible • Required information was submitted • Send notice to submitter • Regional Entity can accept or reject in whole or in part

33. Substantive Review • Complete within six months of acceptance • Regional Entity may request additional info • Regional Entity develops recommendation • If recommendation is for disapproval, engage a TRP • Not involved in original review • Regional Entity not bound by recommendation of TRP • Submitting entity or owner may supplement the request at any time

34. Approval or Disapproval • Complete 90 days after NERC receives Recommendation • NERC develops team of three subject matter experts to review request • NERC may request interviews with Regional Entity, submitting entity, or owner • NERC President makes final decision within 30 days of NRP decision

35. Detailed Information to Support an Exception Request • Entities are required to supply the data and studies needed to support their submittal. Studies should: • Be based on an Interconnection-wide base case; • Clearly document all assumptions; • Address key performance measures of BES reliability through • steady-state power flow; • transient stability analysis; • post-Contingency voltage analysis; • Supporting statements for the submitted position from other reliability entities are encouraged.

36. Available Resources • Bulk Electric System Definition Reference Document Describes the application of the BES Definition • BES Notification Review Guidelines Describes how ERO Enterprise staff will review Self-Determined Notifications submitted through BESnet • BES Exception Request Evaluation Guidelines Describes how ERO Enterprise staff will review Exception Requests submitted through BESnet • BES Implementation Reference Document Outlines standards applicability and registration expectations • BESnet Application Users Guide Manual for the online BESnet application

37. For Additional Information • Go to www.nerc.com • Under Program Areas and Departments, click Reliability Assessment and Performance Analysis • From there, click Bulk Electric System (BES) Definition, Notification, and Exception Process Project

38. General Considerations for Evaluation • Part of a major transfer path • Part of Nuclear Plant Off-Site Power Supply • Effects of not requiring the Element(s) to comply with requirements assigned to BES Elements • The role and extent to which the Element(s) are necessary for Reliable Operation

39. General Considerations for Evaluation • Impact of outage(s) • Is rationale dependent on correct operation of a SPS? • Potential effects of faults, including protection system failures • Short circuit currents at the bus(es) to which connected • Extent to which loading is affected by changes in generation dispatch or outages of other Elements

40. General Considerations for Evaluation • Aggregate effect of excluding Element(s) • Inter-regional transmission Elements will have a single BES status • Any unique characteristics in relation to the system and topology

41. Local Distribution • Submit requests directly to FERC • FERC will use the 7 Factor Test (Order 888) to determine applicability • Submitting entities are to notify the Regional Entity of any requests for Local Distribution • The Regional Entity may delay an Exception Request until after FERC decision

42. BESnet Training Schedule • BESnet Training Schedule (tentative) • May 15-30 – NERC will post • BESnet Video Training Modules • BESnet User Guides • BES Business Process Video Training Modules • June 5 – BES Business Process Q&A Webinar

43. BESnet Schedule • May 12, 2014: BESnet system available for each registered entity’s BESnet Administrator to create an ERO Platform account and/or request access to BESnet • Access requests will be reviewed by Regional BESnetAdministrators • May 30, 2014: BESnet system available for each registered entity’s BESnet users to create an ERO Platform account and/or request access to BESnet • Access requests will be reviewed by Entity BESnetAdministrators • July 1, 2014: BESnet system available to users to submit Self-Determined Notifications and Exception Requests • Notifications and Exceptions will be processed by Regions and NERC

44. WECC Staff Contacts • Application of “Core” Definition and Definitional Exclusion Submittals, De-registration Process • Notification of Self-Determinations • Rules of Procedure Exception Process • Contacts • WECC Support • Support@wecc.biz, Tel. (801) 883-6879, or • Kenneth Wilson • Email: ken@wecc.biz, Tel. (801) 883-6886

45. Kenneth Wilson – ken@wecc.biz Kim Israelsson – kisraelsson@wecc.biz Questions?