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Reliability Standards Update Reliability First Corporation RFC Compliance Workshop Columbus, Ohio

Reliability Standards Update Reliability First Corporation RFC Compliance Workshop Columbus, Ohio September 29 & 30, 2008 Presented By: Bob Millard. What’s Up at the Board. The following will be discussed at the RFC Board meeting in Chicago 10/8/08

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Reliability Standards Update Reliability First Corporation RFC Compliance Workshop Columbus, Ohio

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  1. Reliability Standards Update • ReliabilityFirst Corporation • RFC Compliance Workshop • Columbus, Ohio • September 29 & 30, 2008 • Presented By: Bob Millard ReliabilityFirst 3/6/08 RC Meeting

  2. What’s Up at the Board • The following will be discussed at the RFC Board meeting in Chicago 10/8/08 • Automatic Reserve Sharing (BAL-501-RFC-01) • Day One standard approved 12/12/05 • SAR stated “standard” no longer needed for reliability • Map to RTO documents showed complete overlap • Unanimous vote to retirement ReliabilityFirst 3/6/08 RC Meeting

  3. What’s Up at the Board • Operating Reserve (BAL-002-RFC-02) • Day One standard approved 12/12/05 & revised 5/9/07 • Establish optional methodology per NERC BAL-002 • Submitted for NERC/FERC approval process • NERC comments focused on % of spinning fulfilled by interruptible • Recommend reclassify as regional CRITERION until NERC makes a final decision on whether revised BAL-002 needs support by regional standard ReliabilityFirst 3/6/08 RC Meeting

  4. What’s Up at the Board • Disturbance Monitoring (PRC-002-RFC-01) • Regional standard support shown in NERC Standards Work Plan • Referenced in NERC Board approved PRC-002 (a Fill-in-the-Blank standard) • Referenced in FERC approved PRC-018 • Used as a starting point by NERC drafting team • NERC 1st draft still to be posted • RFC standard will replace legacy documents ReliabilityFirst 3/6/08 RC Meeting

  5. What’s Up at the Board • Disturbance Monitoring (continued) • Did not pass 1st or 2nd ballot after 7 comment postings • Major issue: Joint responsibility (TO and GO) for DME installations at generating facility interface • Drafting team proposes to have RFC Board remand back to team to remedy major issue • Drafting team remedy - monitoring provided by owner of monitored equipment (arrangements can still be made as to who owns DME) • Informal survey by team suggests additional posting and ballot would be successful ReliabilityFirst 3/6/08 RC Meeting

  6. RFC Standards • Resource Adequacy (BAL-502-RFC-02) • Day Two standard approved by RFC Board 3/9/06 • ACTION PLAN to revise standard approved by RFC Board 8/9/07 • Based on legal advise • Remove enforcement of requirement to secure resources • Limit enforcement to reserve requirement analysis and assignment ReliabilityFirst 3/6/08 RC Meeting

  7. RFC Standards • Resource Adequacy (continued) • ACTION PLAN included: • Addition of significant improvements from RFC experience & MRO development through MRO Board approval • Modifications to conform to current RFC Standards Procedure (such as Violation Risk Factors) • Supplemental SAR approved after 1st comment posting of proposed revision to revise applicability ReliabilityFirst 3/6/08 RC Meeting

  8. RFC Standards • Resource Adequacy (continued) • 2nd comment posting completed 9/16/08 and included: • Removal of reference to LSE or PRSG due to removal of enforcement of securing reserves • Addition of PC to reflect new focus of standard toward analysis • Revised standard ready for balloting and preparation for action by RFC Board at December meeting ReliabilityFirst 3/6/08 RC Meeting

  9. RFC Standards • Gen MW verification (MOD-024-RFC-01) • Based on 3/10/06 SAR by Day Two team • Replace legacy documents per intent of By-laws • Comply with NERC “fill-in-the-blank” NERC MOD-024-1 • FERC confirmed “warrant continued monitoring” • Provide verification for “planning reserve” analysis • NERC drafting underway but no posting yet • Fill gap until NERC complete (possible 2 years) • Used as starting point for NERC drafting team ReliabilityFirst 3/6/08 RC Meeting

  10. RFC Standards • Gen MW verification (continued) • 4th comment posting completed 9/11/08 • Major applicability issue removed by defaulting to unit size values specifically listed in NERC Compliance Registry Guidelines • SDT reviewing comments to determine next move • Comments now range from “requirements are too detailed” to “not detailed enough” • ULTIMATELY when NERC standard is approved, RFC requirements will be retired or become a variance in the NERC standard ReliabilityFirst 3/6/08 RC Meeting

  11. RFC Standards • Gen MVAR verification (MOD-025-RFC-01) • Based on 3/10/06 SAR by Day Two team • Replace legacy documents per intent of By-laws • Comply with NERC “fill-in-the-blank” NERC MOD-025-1 • FERC confirmed “warrant continued monitoring” • NERC drafting underway but no posting yet (scheduled behind NERC MOD-024-1) • Fill gap until NERC complete ( 2+ years) • Used as a starting point by the NERC drafting team ReliabilityFirst 3/6/08 RC Meeting

  12. RFC Standards • Gen MVAR verification (continued) • 2nd comment posting completed 8/31/08 • Variety of comments reflect the technical complexity of the standard • SDT reviewing comments to determine next move • ULTIMATELY when NERC standard is approved, RFC requirements will be retired or become a variance in the NERC standard ReliabilityFirst 3/6/08 RC Meeting

  13. RFC Standards • Under Frequency Load Shed (PRC-006-RFC-01) • RFC Board approved Day Two standard rescinded early 2006 due to generator requirement ambiguity carried over from legacy documents • Day Two 2/10/06 SAR initiated drafting • Replace legacy documents per intent of By-laws • Comply with NERC “fill-in-the-blank” NERC PRC-006-1 • FERC confirmed “warrant continued monitoring” ReliabilityFirst 3/6/08 RC Meeting

  14. RFC Standards • Under Frequency Load Shed (continued) • NERC initial comment posting completed 8/15/08 stated that regional standard was required • RFC 4th comment posting ends 10/4/08 • Major issues addressed: Applicability goes beyond Compliance Registry Criteria and issues dealing with areas of credible islanding • Direction of RFC draft agrees with NERC initial draft ReliabilityFirst 3/6/08 RC Meeting

  15. Waiting in the Wings • RFC SARs & SDT in queue • Sub-Regional Transmission Adequacy RequirementsSAR • Complements RFC Resource Adequacy standard • Developed with initial Resource Adequacy effort • Intended to provide some level of confidence that transmission will be available for delivery • Considers probability of transmission outage • Establishes deliverability criteria to achieve a transmission import capability level for each sub-region to achieve an acceptable reliability level ReliabilityFirst 3/6/08 RC Meeting

  16. Waiting in the Wings • RFC SARs & SDT in queue (continued) • Special Protection System RequirementsSDT • In line with NERC “fill-in-the-blank” NERC PRC-012-0 • Regional standard support shown in NERC Standards Work Plan • RFC has approved “procedure” today • Also considers need for conditions on installation and duration (already discussed by NERC TPL SDT for consideration in draft) ReliabilityFirst 3/6/08 RC Meeting

  17. Waiting in the Wings • RFC SARs & SDT in queue (continued) • Blackstart Capability Plan SAR • Intended to detail and enhance the system Blackstart Capability Plan (BCP) requirements stated in the NERC EOP standards and RFC EOP-007-RFC-01 • NERC Project 2006-03 well underway covers • EOP-005 — System Restoration Plans • EOP-006 — Reliability Coordination - System Restoration • EOP-007 — Establish, Maintain, and Document a Regional • Blackstart Capability Plan • EOP-009 — Documentation of Blackstart Generating Unit Test • Results ReliabilityFirst 3/6/08 RC Meeting

  18. Waiting in the Wings • RFC SARs & SDT in queue (continued) • Sub-Regional Transmission Adequacy RequirementsSAR • Wait for outcome of Resource Adequacy standard and consider RTO practices • Special Protection System RequirementsSDT • Wait for TPL & NERC Project 2010-05 activity • Blackstart Capability Plan SAR • Since NERC posted 3rd draft Spring 2008, may need to delete & modify related RFC standard ReliabilityFirst 3/6/08 RC Meeting

  19. We continue to evolve • Questions ON RFC “STANDARDS”? Our Goal RELIABILITY FIRST ReliabilityFirst 3/6/08 RC Meeting

  20. Outside RFC Standards • WHAT’S UP AT NERC? • WHAT’S FERC DOING? • WHO’S IN CHARGE? • WHAT DO I WATCH FOR? • CAN I MAKE A DIFFERENCE? ReliabilityFirst 3/6/08 RC Meeting

  21. Understanding Standards Planning Standards Functional Model Operating Manual Version 0 Legal Folksy Purist Gut feel Comfort Zone Out of Box Improvement Reliable System Customer Needs ReliabilityFirst 3/6/08 RC Meeting

  22. Understanding the FM • Functional Model concept • Start from clean slate • Develop a group of “functions” that are needed to make the overall system work • Realize that there can be more than one set of functions that can work • Divorce from corporate structure but make sure they will blend • FM provided basis/guideline for Version 0 ReliabilityFirst 3/6/08 RC Meeting

  23. Understanding the FM • FM continues to evolve • Version 4 completing approval process through Standing Committees and on to NERC Board • Latest Version 4 as presented to Committees includes original proposed changes, i.e. LSE, DP, GOP, etc but fell back to “planning functions” as stated in Version 3 • “Planning functions” will be major focus of Version 5 for next Spring • “Planning functions” did not blend with structure across continent ReliabilityFirst 3/6/08 RC Meeting

  24. Understanding Compliance Registry Guidelines • Registry created to administer technically based requirements established for applicable entities as specified in the standards using the FM as a guide • Registry created to inform entities who will be monitored from a practical stand-point • Registry does not list monitored facilities – but criteria can be used as default or specified in standard based on technical need • Registry criteria can be driven/changed by technical needs of standards ReliabilityFirst 3/6/08 RC Meeting

  25. Understanding Standards • SO NOW YOU KNOW • Where the terms came from • All the components there had to be considered in drafting • How entities are earmarked for compliance initially • And what you know today may change tomorrow • This presents a real opportunity to test your understanding and flexibility ReliabilityFirst 3/6/08 RC Meeting

  26. What’s Up at NERC • What is NERC’s GRAND SCHEME ? • Reliability Standards Development Plan alias Three year (???) Work Plan: 2009-2011 • Updated annually • Presented by usual e-mail, at Standing Committees, at Standards Workshop • Presented by WEBEX • 8/28/08 slides at NERC website under “About Standards: Development Plan” • Industry comments and suggestions solicited for gaps, priorities, improvement, new items ReliabilityFirst 3/6/08 RC Meeting

  27. “Work Plan” • What is NERC’s GRAND SCHEME ? • Volume I: Overview • Plan Description – high level list of “Projects” • Modifications since last revision • FERC 15 point review list for approving standards • General information on the how, why & what of standards • Industry comments that helped create latest version ReliabilityFirst 3/6/08 RC Meeting

  28. “Work Plan” • What is NERC’s GRAND SCHEME ? • Volume II: List of “Projects” • Tabulation listing each standard and indicating what Project it is part of • Tabulation listing each Project and indicating which standards are included • A selection is allocated to each Project giving its description, status, schedule and issues to be considered ReliabilityFirst 3/6/08 RC Meeting

  29. “Work Plan” • What is NERC’s GRAND SCHEME ? • Volume III: Regional Reliability Standards Projects • Identifies 4 NERC standards anticipated to be supported by regional standards • Project 2007-01 — Underfrequency Load Shedding (PRC-006) • Project 2007-05 — Balancing Authority Controls (BAL-002) • Project 2007-11 — Disturbance Monitoring (PRC-002) • Project 2010-05 — Protection Systems {SPS} (PRC-003) ReliabilityFirst 3/6/08 RC Meeting

  30. “Work Plan” • What is NERC’s GRAND SCHEME ? • Volume III: Regional Reliability Standards Projects • Identifies, by region, the regional reliability standards being developed • NOTE: The term “standard” means that the requirements being developed are expected to be submitted for the regional/NERC/FERC approval process to received enforcement under law • The term “criterion” means that the requirements only apply to members of the region or other contract agreed to membership ReliabilityFirst 3/6/08 RC Meeting

  31. “Work Plan” • What is NERC’s GRAND SCHEME ? • How can I find the latest status of any one Project knowing that there are 39 active teams working right now? • NERC website under “Standards” then under “Standards Under Development” • Dave Taylor, Manager of Standards, prepares a monthly XCEL worksheet “Project Summary” for the NERC Standards Committee • Part of NERC SC minutes (soon to have separate link????) ReliabilityFirst 3/6/08 RC Meeting

  32. Voluntary to Mandate • What’s FERC’s involvement? • Another layer of approval and commenting has been added. • FERC approval process is fairly obvious & related to legal and ERO processes • INDUSTRY PARTICIPANTS MUST BE WATCHFUL FOR COMMENTING ON FERC ORDERS RELATED TO STANDARDS • IF INDUSTRY DOES NOT FILE WITHIN 30 DAYS NOTICE on Directives in Orders to change “standards” or provide for the same intent are considered, IT IS ASSUMED INDUSTRY AGREES. ReliabilityFirst 3/6/08 RC Meeting

  33. Variance • NERC Rules of Procedure and Standards Development Procedure sites “Variance” • Note: The term “difference” was changed August 2006 • A different or alternative way to meet the intent of a NERC standard requirement • If it is the same, then there is no variance • If it is needed not for meeting a NERC requirement, then it’s a local requirement ReliabilityFirst 3/6/08 RC Meeting

  34. Variance • Who may ask for Variances? • An Interconnection (e.g. WECC in FAC standard) • A Region (Regional Entity, not the RRO) • A sub-region • Any entity that does things differently (e.g. MISO, PJM and SPP in the TLR standard) • Variance can be added while drafting is underway • If no drafting in progress, a SAR is needed ReliabilityFirst 3/6/08 RC Meeting

  35. Variance • Example of a Variance? • NERC standard requires at least 5% of “X” to be compliant • An entity, let’s say an RE, requires at least 2% of “X” • Since they both want a % of “X”, the 2% is a Variance • If RFC drafts a standard on Resource Adequacy that is not covered by a NERC standard, it is a regional standard and not a Variance • Request for Variance is a routine question for posting ReliabilityFirst 3/6/08 RC Meeting

  36. NERC Summary • So keep an eye on the NERC Work Plan • Keep an eye on the FERC Orders • Keep an eye on postings for comment • Participate on SDTs to help steer the team • Submit comments, before the ballot, even if you agree, otherwise the draft will go a different way • The opportunities are endless and challenging but once we get over first pass, we will know what we need to do to keep the lights on. ReliabilityFirst 3/6/08 RC Meeting

  37. We continue to evolve • Questions? Our Goal RELIABILITY FIRST ReliabilityFirst 3/6/08 RC Meeting

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