PLANNING COMMITTEE MEETING - NERC Highlights and Minutes DL...Planning Committee Meeting Minutes March 18, 2003 2 On behalf of the PC, Vice Chairman Ross thanked outgoing Multiregional

Phone 609-452-8060 ¡ Fax 609-452-9550 ¡ URL www.nerc.com

N O R T H AM E R I C A N E L E C T R I C R E L I A B I L I T Y C O U N C I L Princeton Forrestal Village, 116-390 Village Boulevard, Princeton, New Jersey 08540-5731

PLANNING COMMITTEE MEETING

The Wynfrey Hotel Birmingham, Alabama

Tuesday, March 18, 2003 — 8:10 a.m. to 5 p.m.

MINUTES

Planning Committee Vice Chairman Glenn B. Ross, on behalf of PC Chairman David A. Whiteley, presided over the meeting of the NERC Planning Committee (PC) held Tuesday, March 18, 2003 from 8:10 a.m. to 5 p.m in Birmingham, Alabama. The meeting notice, agenda, and list of attendees are attached as Exhibits A, B, and C, respectively. Of the PC’s 43 members, 29 were in attendance of which 26 were voting members. With at least 23 voting members present, the quorum requirement was met. Meeting guests totaled 26. Introduction and Chairman’s Remarks PC Vice Chairman Ross welcomed all members and guests to the meeting. Proxies attending the meeting for absent PC members included: Dennis W. Chastain (TVA) for Gregory M. Vincent (federal), David Little (Nova Scotia Power Inc.) for Chris Huskilson (Canada), Stanley E. Kopman (Northeast Power Coordinating Council) for H. Kenneth Haase (RRO-NPCC), William F. Reinke (Southeastern Electric Reliability Council) for a portion of the meeting for R. Douglas Powell (RRO-SERC), Edward A. Schwerdt (NPCC) for Carmine Marcello (RRO-Canada East), Donald D. Taylor (Westar Energy) for Richard A. Dixon (RRO-SPP), and Edward M. Kremzier (National Grid USA) for John M. Adams (ISO/RTO).

Self-introductions of all meeting attendees followed. Vice Chairman Ross mentioned that the NERC Antitrust Compliance Guidelines were

included in the agenda package and that each PC member was to become familiar with NERC’s policy and practice pertaining to the antitrust laws. Questions on these guidelines are to be directed to NERC’s General Counsel and Vice President David N. Cook.

Planning Committee Meeting Minutes March 18, 2003

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On behalf of the PC, Vice Chairman Ross thanked outgoing Multiregional Modeling Working Group Chairman Larry E. Brusseau (MAPP) for his services over the last two years. He also announced that Robert J. O’Keefe (American Electric Power) was the new MMWG chairman, effective January 1, 2003.

The PC passed a resolution recognizing Chairman Whiteley (in absentia) for his outstanding leadership and services to the PC and NERC over the last two years. Mr. Whiteley’s chairmanship ends on June 30, 2003.

Vice Chairman Ross next reminded the PC members that it was important for them to vote on

proposed changes to the existing NERC operating policies and planning standards. The PC voting members, along with the voting members of the Operating Committee and Market Interface Committee, comprise the voting membership for NERC’s transitional process used to make revisions to existing policies and standards. A quorum of at least 50% of the voting members of the NERC standing committees must submit a voting response in addition to a two-thirds majority of votes cast to affirm or negate a proposed change. Mr. Ross indicated that he will suggest that the NERC staff use consistent and clear wording in the subject line of the emails requesting such voting by the standing committee members. Review of Agenda

With no proposed changes to or comments on the PC agenda, the PC, on the motion of Armando (Armie) J. Perez, approved the March 18, 2003 meeting agenda. Approval of November 19, 2002 PC Meeting Minutes On the motion of Bernard (Bernie) M. Pasternack, the minutes of the November 19, 2002 PC meeting were approved as submitted. Highlights of NERC Stakeholders Committee Meeting and Board of Trustees Meeting The PC members had no questions on the highlights of the NERC Stakeholders Committee’s February 10, 2003 meeting or the NERC Board’s February 11, 2003 meeting. Harlow R. Peterson, chairman of the PC’s Compliance Review Subcommittee, reported that PC Chairman Whiteley did an excellent job in representing the PC’s position regarding two NERC standing committees during the Board’s discussion on the future role of the NERC standing com-mittees. PC Vice Chairman Ross also commented that the Board’s vote regarding the standing committees would be reviewed under PC agenda item 5. PC Subgroup and Liaison (Written) Reports Hearing no questions or concerns from the PC members, Vice Chairman Ross declared the subgroup (Planning Standards Subcommittee, Interconnection Dynamics Working Group, ATC


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Working Group, Multiregional Modeling Working Group, and Disturbance Analysis Working Group) reports and the liaison report on the Operating Committee’s Transmission Subcommittee, as included in item 2 of the March 18, 2003 PC agenda, accepted as submitted. PC Nominating Task Force The NERC staff solicited nominations over the March 6–13, 2003 period in an open process for the officers (chair and vice chair) of NERC’s PC and OC. Based on the nominations received, the PC Nominating Task Force developed a recommended slate of officers for the PC for a two-year term covering the July 1, 2003 to June 30, 2005 period. Scott M. Helyer, a member of the Nominating Task Force, presented the task force’s recommended slate of officers to the PC for its approval. Following a brief discussion of the task force’s recommendations and the nomination of a vice chair candidate from the floor, the PC endorsed the task force’s recommendations of Glenn B. Ross from Dominion Energy Clearinghouse as chair and Armando J. Perez from the California ISO as vice chair of the PC. At the Board’s June 10, 2003 meeting, these PC recommendations will be presented to the NERC Board chair for his consideration in appointing a chair and vice chair of the PC for the July 1, 2003 to June 30, 2005 period. Reliability Assessment Subcommittee George R. Bartlett, chair of the Reliability Assessment Subcommittee (RAS), led a discussion on the reliability issues to be addressed in NERC’s ten-year Reliability Assessment report and the RAS’s proposed changes to that report. He also commented on the status of NERC’s 2003 Summer Assessment report. Mr. Bartlett’s presentation is included as Exhibit D. Mr. Bartlett reported that the RAS proposes to change the name of NERC’s Reliability Assessment 2003–2012 report to the 2003 Long-Term Reliability Assessment report to be more reflective of the report’s content. The RAS, in response to the October 2002 NERC Board’s discussion of the ten-year assessment report, will also refocus the report on Regional and subregional assessments. An interregional studies roadmap of how the Regions, or portions thereof, will be organized to perform interregional studies will be included in the report. The key reliability issues to be addressed in the 2003 Long-Term report fall under the following categories: environmental, transmission, economics/reliability, resources, and system concerns and observations. The PC members commented that the following issues or concerns should also be addressed: gas/electricity interdependency, transmission issues, the lower inertia of new machines and their higher power factors, possible demand-side management issues, and resource adequacy with a consistent method of reporting adequacy (capacity margin and/or reserve margin). Similar to the schedule and process established last year, Vice Chairman Ross requested the RAS to provide a complete draft of the reliability issues chapter for the 2003 Long-Term report by the end of April 2003 to the PC for its review and comment. The PC, in turn, would provide comments to the RAS by mid-May 2003.


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In response to the RAS’s concern about receiving generation data (EIA-860) in a timely manner from the U.S. Department of Energy’s Energy Information Administration, the RAS is to apprise the PC officers by April 1, 2003 of its success in arranging for the generation data with EIA. Ken Wiley, FRCC president and CEO, further suggested that NERC should set the data requirements for its reliability assessments and have the DOE and EIA agree that NERC will develop the necessary databases. To complete RAS’s staffing, Vice Chairman Ross requested the PC members to provide their recommendations for the RAS vice chair to the PC secretary over the next two to three weeks. NERC Standing Committees Armie Perez, WECC representative to the PC and the PC-endorsed vice chair candidate, presided over the PC meeting during the discussion of this “NERC Standing Committees” item at the request of acting PC Chairman Glenn Ross, who was requested by the NERC president and CEO to participate in a one-hour conference call on NERC’s behalf. Gerry W. Cauley, NERC consultant, reviewed the recommendations in the joint executive committees’ final report, “Review of the Future Role of NERC Committees,” (Version 8.1, dated January 23, 2003), that was approved at the February 2003 NERC Board meeting. He also led the PC in a discussion of a number of follow-on items that needed the PC’s and/or the three standing committees’ inputs as described below. Mr. Cauley’s presentation overheads are included as Exhibit E. ♦ Committee Scopes and Staffing On the motion of Edward A. Schwerdt, proxy for

Carmine Marcello (RRO-Canada East), the PC approved the joint executive committees’ recommendation that the PC retain its existing membership composition as shown in Exhibit F. This membership is comprised of 35 voting members, and a number of non-voting regulatory and observer members, including the past committee chair (at the pleasure of the committee chair) and the committee secretary.

The PC Nominating Task Force will develop a membership slate for the above PC

membership model for approval at the June 10, 2003 NERC Board meeting. The PC members will be selected from the nominations received by April 30, 2003 in response to an open solicitation for member candidates to be posted by the NERC staff on or about

March 28, 2003. To help ensure continuity of future PC activities, half of the new PC members will have staggered one-year terms and the other half two-year terms both beginning July 1, 2003.

While the PC generally agreed with the joint executive committees’ proposed PC scope,

the PC requested that its comments be incorporated into a revised scope for PC review and approval by mail ballot vote within the next two weeks. The PC’s comments on its scope are included in Exhibit G.


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PC Vice Chairman Ross suggested that any additional comments on the PC’s scope be provided to the PC secretary by March 26, 2003. A revised PC scope will be distributed for PC approval by mail ballot during the week of March 31, 2003.

The comments of the PC members on the proposed scopes of the OC and the Market

Committee are also included in Exhibit G. ♦ PC Subcommittee Scopes The PC members briefly commented on the proposed PC

subcommittee scopes (Exhibit H). Their comments are included in Exhibit G. The members were also invited by PC Vice Chairman Ross to provide any additional comments on these scopes to the PC secretary by April 4, 2003. These comments will be used by the PC Executive Committee in the coordination of subcommittee scopes by the joint executive committees of the standing committees at their April 15, 2003 meeting.

♦ Revised Procedures Manual The PC members briefly commented on the draft March 11, 2003 “Organization and Procedures Manual for NERC Technical

Committees,” which was provided under separate cover for agenda item 5 of the March 18, 2003 PC meeting. The members were generally concerned that consistency in the selection of committee members, the voting procedures, and the size of the executive committees be maintained among the standing committees. The members’ comments are summarized in Exhibit G.

The PC members are to provide any additional comments on the draft Organization and

Procedures Manual to the PC secretary by March 28, 2003. Based on the comments received from the PC, the OC, and the MIC, a revised draft manual will be posted on the NERC website on or about April 1, 2003 for a 30-day public review and comment period. Following the posting period, a final draft manual will be developed for approval by the PC, OC, and MIC by mail ballot. If approved by the PC, OC, and MIC, the manual will be presented for Board approval at the June 10, 2003 Board meeting.

WECC’s Progress on Breaker Failure Studies Marvin J. Landauer, federal representative to the PC from Bonneville Power Administration, reported on WECC’s progress in evaluating the impact of bus section breaker failures on bulk electric system reliability. The impacts are evaluated against Planning Standard I.A. S3, M3 (Categories C.2 and C.9) to determine system performance. Mr. Landauer’s presentation overheads are included as Exhibit I. The PC agreed that transient or voltage instability as well as thermal overloads need to be addressed in evaluating the system impacts. It was also recommended that reference to mitigation within 20 minutes when addressing thermal overloads be changed to an appropriate emergency rating of the facility in question.


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WECC was requested by the PC in March 2002 to complete its bus section breaker studies by March 2003. To date, WECC had evaluated 39 stations (29%) of a total of 133 stations. The PC encouraged WECC to complete the requested studies as quickly as possible. After a brief discussion, and the addition of a friendly amendment to the WECC motion, the PC agreed to extend a waiver to WECC from compliance with Planning Standard I.A. S3, M3 (Categories C.2 and C.9) for another year to March 2004 while WECC completes further studies. It also requested that WECC provide a schedule for completion and study updates at the July and November 2003 PC meetings. Gas/Electricity Interdependency Task Force Ken Wiley, chair of the Gas/Electricity Interdependency Task Force, presented an update on the task force’s activities. He reported that the PC in January 2003 and the NERC Board in February 2003 approved the task force’s scope. He also mentioned that a NERC website was set up for the task force under the PC. The task force kick-off meeting is scheduled for early April 2003 in Houston, Texas. At that meeting, the task force will hear a presentation on gas pipeline planning and operating procedures, and an update on the Northeast gas study. Mr. Wiley asked that any recent gas pipeline events that had the potential to or did impact electric system reliability should be brought to the attention of the task force. Mr. Wiley also emphasized that the task force will not address the adequacy of gas supplies for gas-fired electrical generation, gas markets, or gas pricing. The purpose of the task force is to deter-mine the interdependency between gas pipeline operation and planning and electric system operation and planning reliability over the next ten years. The task force expects to complete its Phase I activity within the year. Planning Reliability Model Task Force Michael C. Raezer, chair of the PC’s Planning Reliability Model Task Force, briefed the PC on the status of the NERC Functional Model from the planning perspective. His presentation overheads are included as Exhibit J. An updated version of the Functional Model that included Resource Planning, Transmission Planning, and Planning Authority functions was posted for public comment over the January 7–February 14, 2003 period. The main issues raised during this review from a planning perspective pertained to certification of the Planning Authority function, the time frame of the planning functions, and the extent of the Planning Authority functions.

The PC generally agreed that the Planning Authority did not require certification and requested the task force to further review the Planning Authority boundary relationships, the inclusion of Regional Council criteria in the function definitions, and the use of both functional and entity terminology to describe the model, which continues to be confusing.


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Mr. Raezer also clarified that the Functional Model is not a standard, but rather a framework for developing reliability standards and certification requirements. Any reliability standards and certification requirements based on the model will be developed through the NERC standards process. The reliability standards may deviate from the model framework. In fact, the standards will “trump” the model.

Any additional comments on the model are to be provided to the task force by April 1, 2003.

The NERC standing committees will be asked to approve the revised Functional Model at their July 2003 meetings. They may also be asked to approve a “roll-up” document in July that describes how the functions of the model roll up into organizations. NERC Project Management Robert W. Cummings, Director-Projects, Analysis & Data Services, reported on the results of a 2002 survey of transmission providers, the majority of which agreed to expand the PC’s Spare Transformer Database to include other electric system equipment. The survey was conducted by a work team of the Critical Infrastructure Protection Advisory Group (CIPAG). The results of that survey are summarized in Exhibit K. The CIPAG, at its November 2002 meeting, endorsed the expansion of the NERC Spare Transformer Database to include other equipment. Funding for an on-line version of the existing database and an expansion to include other electric system equipment and contact lists is included in the 2003 NERC budget under a PC-pending project item. Participation in the existing database and the proposed expanded database is voluntary. The PC needs to determine if the responsibility for the data handling and accessibility policy for the expanded equipment database should be transferred from the PC to the CIPAG. Critical Infrastructure Protection Advisory Group James Silk, representative of the Institute of Defense Analyses, presented an overview of the activities being undertaken by a Congressional Commission to assess the nature and magnitude of potential high-altitude electromagnetic pulses (EMPs) and their impacts on U.S. military and civilian systems. The Commission to Assess the Threat from High Altitude Electromagnetic Pulse was established by the U.S. Congress through Title XIV of Public Law 106-398. Discussions in the EMP area could lead to the creation of a NERC EMP task force, or the participation of NERC representatives in the work of the Commission, to help assess the impacts of EMP on the electric systems. Kevin B. Perry, chair of the Critical Infrastructure Protection Advisory Group, next informed the PC that the CIPAG was proposing an urgent action cyber security SAR and standard to codify the Federal Energy Regulatory Commission’s cyber security requirements as a NERC standard. This proposed standard was vetted for comments through responses to Appendix G of the FERC Standard Market Design NOPR. Mr. Perry’s presentation is included as Exhibit L.


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The Commission expects substantial compliance with this NERC standard by January 1, 2004 and full compliance by January 1, 2005. A permanent cyber security SAR and standard will also be initiated to replace the urgent action cyber security SAR and standard, which, as an urgent action standard, will have a one-year life. NERC Compliance Enforcement Program Harlow R. Peterson, chair of the PC’s Compliance Review Subcommittee, presented an overview of the proposed Compliance and Certification Organization, which is based on the formation of a Compliance and Certification Committee and a Personnel Certification Governance Committee. The Compliance and Certification Organization Task Force developed this proposal to expand on the compliance and certification area that was identified in the report of the joint executive committees, “Review of the Future Role of NERC Committees,” (version 8.1, dated January 23, 2003), which the NERC Board approved at its February 2003 meeting. Mr. Peterson’s presentation overheads are included as Exhibit M.

This organization proposal was posted on the NERC website on March 15, 2003 for public comment with comments due April 25, 2003. Based on comments received, a final draft proposal will be developed by the task force for approval at the June 10, 2003 NERC Board meeting.

David W. Hilt, NERC director-compliance, presented the results of the 2002 Compliance

Enforcement Program, which included a statistical analysis of compliance with the operating measures based, for the first time, on data covering a full calendar year. The statistical analysis of compliance with the planning measures has not yet been completed. These statistical analyses will also be developed on a Regional basis at the request of the Regional Managers. The 2002 CEP report will be posted on the NERC compliance website at the end of March 2003. Mr. Hilt’s presentation is included as Exhibit N.

Mr. Hilt also indicated that the 2003 CEP includes 17 measures from the operating policies and 24 measures from the planning standards. In addition, an audit of the ERCOT, MAIN, and WECC compliance programs will be conducted, completing the initial cycle of NERC Regional compliance program audits. These audits are expected to be completed by the second quarter of 2003. Virtual RTOs and the SMD Stephen T. Lee, EPRI representative, briefly discussed EPRI’s white paper, “Virtual Regional Transmission Organizations and the Standard Market Design A Conceptual Development with Illustrative Examples,” with a focus on the implications and applications from a planning perspective. Mr. Lee suggested possible roles for the NERC PC related to data reporting requirements, resource adequacy, and regional planning. His presentation is included as Exhibit O.

Mr. Lee will present the full paper at the Joint PC/OC/MIC March 19, 2003 meeting.


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Next Meeting

The first meeting of the newly reconstituted Planning Committee is scheduled for July 15–16, 2003 in Albuquerque, New Mexico. Agenda materials for this July meeting are due at the NERC office on Friday, June 20, 2003. Adjournment With no further business before the PC, Vice Chairman Ross adjourned the meeting at 5 p.m. Respectfully submitted,

Virginia C. Sulzberger Virginia C. Sulzberger PC Secretary and Staff Coordinator

Phone 609-452-8060 Fax 609-452-9550 URL www.nerc.com

North American Electric Reliability Council

Princeton Forrestal Village, 116-390 Village Boulevard, Princeton, New Jersey 08540-5731

January 16, 2003 TO: PLANNING COMMITTEE

OPERATING COMMITTEE MARKET INTERFACE COMMITTEE

Dear Members: Planning Committee, Operating Committee, and Market Interface Committee Meetings March 17–20, 2003

The Planning Committee (PC), Operating Committee (OC), and Market Interface Committee (MIC) meetings are scheduled as

shown on Attachment A for March 17–20, 2003 at the Wynfrey Hotel, 1000 Riverchase Galleria, Birmingham, Alabama 35244 (205-987-1600) (fax 205-987-0454). The meeting agendas will be posted on the NERC web site on or about February 28, 2003. Dress for all meetings is casual. The PC, OC, and MIC meetings are open; however, committee members and interested guests MUST register for the March 2003 meetings by completing the registration form (Attachment B) and returning this form to us by February 20, 2003. The form is also available from the NERC web site (www.nerc.com) under the “Committees” heading. The hotel is reserving a block of sleeping rooms for meeting attendees until February 20, 2003 ($130 single/double). After this date, the hotel will release this block of rooms and accept reservations on a space-available basis. The room rates are effective three days prior to and three days after the meeting dates, if available. To make your room reservation, call 1-800-WYNFREY or the hotel directly at 205-987-1600 and refer to the North American Electric Reliability Council to get the preferred rate and to ensure your reservation is credited to the NERC room block. NERC will pay a penalty if the total rooms blocked for this event are not used. If you use a travel agency for your travel plans, please make sure the agency mentions the North American Electric Reliability Council. Check-in time is 3 p.m. and check-out time is 11 a.m. We encourage you to make your hotel reservations immediately. The Wynfrey Hotel is approximately 20 minutes from Birmingham Airport and offers a complimentary shuttle from Birmingham airport. The white and green shuttle bus stops at the Limousine/Shuttle pick-up, which is located outside the Delta baggage claim area on the lower level of the airport. For Reservations call 1-800-476-7606 x5796 or 205-444-5796. Please contact me if you have any questions.

Sincerely, Rocio E. Wong Rocio E. Wong Meeting Coordinator

cc: Regional Managers Technical Steering Committee

nicastra

Exhibit A


PC, OC, and MIC Meeting Schedules (includes other associated NERC meetings)

The Wynfrey Hotel, Birmingham, Alabama

March 17–20, 2003

Monday, March 17 Tuesday, March 18 Wednesday, March 19 Thursday, March 20 TSC

12-2 RM

2-5

SCEC

2-4

MIC 8-5

MIC Exec 4-6

Joint PC/OC/MIC

8-12

PC Exec 4-6

PC 8-5

PC EXEC

12-1

OC

EXEC 5-7

OC 1-5

OC 8-5

Exec – Executive Committee Joint – Joint PC/OC/MIC Meeting MIC – Market Interface Committee

OC – Operating Committee

PC – Planning Committee RM – Regional Managers

TSC – Technical Steering Committee SCEC-Standing Committees Executive Committes

MONDAY TSC Noon to 2 p.m. Conference Style (or U shape) for 15 SCEC 2 p.m. to 4 p.m. U-Shape for 25 RM 2 p.m. to 5 p.m. U-Shape for 20 PC Exec 4 p.m. to 6 p.m. Conference Style for 15 (PC Agenda Presenters to Attend) MIC Exec 4 p.m. to 6 p.m. U Shape Style for 10 TUESDAY PC 8 a.m. to 5 p.m. See Attached Diagram for 90 MIC 8 a.m. to 5 p.m. See Attached Diagram for 96 Joint PC/MIC Luncheon Noon to 1 p.m. Set rounds for 140 OC Exec 5 p.m.to 7 p.m. U-Shape for 20 WEDNESDAY Joint PC/OC/MIC 8 a.m.to 12 p.m. See Attached Diagram for 200 OC Luncheon (OC attendees only) Noon to 1 p.m. Set rounds for 90 PC Exec Noon to 1 p.m. Reserved table for 8 at OC Luncheon OC 1 p.m. to 5 p.m. See Attached Diagram for 96 THURSDAY OC 8 a.m. to 5 p.m. See Attached Diagram for 96 OC Lunch Noon to 1 p.m. Set rounds for 90

Attachment A


North American Electric Reliability Council Princeton Forrestal Village, 116-390 Village Boulevard, Princeton, New Jersey 08540-5731

January 16, 2003 TO: PLANNING COMMITTEE

OPERATING COMMITTEE MARKET INTERFACE COMMITTEE

Dear Members:

Planning Committee, Operating Committee, and Market Interface Committee Meetings March 17–20, 2003

To assist in planning for the committees’ meetings and luncheons, and to keep meeting costs to a minimum, you MUST complete this form and fax or e-mail it to me by February 20, 2003. If your plans change, please let me know.

In addition, all committee members and guests are required to complete this advanced registration form if they plan to attend the PC, OC, or MIC meetings.

Sincerely, Rocio E. Wong

Rocio E. Wong Meeting Coordinator

* * * * * * * * * * * * * * * * * * * * * *

PC, OC, and MIC Meeting Registration Please indicate your planned attendance by responding “yes” or “no” in all appropriate boxes:

Yes No Market Interface Committee meeting on March 18 Planning Committee meeting on March 18 Joint PC/MIC Luncheon on March 18 Joint PC/OC/MIC meeting on March 19 Operating Committee meeting on March 19 Operating Committee Luncheon on March 19 (OC attendees only) Operating Committee meeting on March 20 Operating Committee Luncheon on March 20

Please type or print. Name: Title: Company: E-mail: Date: Telephone:

TO: Rocio Wong FAX: 609-452-9550 E-MAIL: [email protected] Please respond by February 20, 2003

Attachment B

Phone 609-452-8060 n Fax 6094-452-9550 n URL www.nerc.com

N O R T H AM E R I C A N E L E C T R I C R E L I A B I L I T Y C O U N C I L Princeton Forrestal Village, 116-390 Village Boulevard, Princeton, New Jersey 08540-5731

PLANNING COMMITTEE MEETING

The Wynfrey Hotel

1000 Riverchase Galleria Birmingham, Alabama

Tuesday, March 18, 2003 — 8 a.m. to 5 p.m.

Wednesday, March 19, 2003 — 7:30 a.m. to 12:15 p.m. (Joint MIC/OC/PC Meeting)

(PLEASE BE PREPARED TO STAY FOR THE ENTIRE MEETING.)

AGENDA 1. Administrative Matters a) Introduction and Chairman’s remarks b) Quorum *c) NERC Antitrust Compliance Guidelines d) New members and appointments *e) Planning Committee roster update f) Arrangements — Virginia C. Sulzberger g) Approval of agenda h) Minutes of the November 19, 2002 PC meeting *i) Stakeholders Committee February 10, 2003 meeting highlights *j) NERC Board of Trustees February 11, 2003 meeting highlights *2. PC Subgroup and Liaison (Written) Reports a) Planning Standards Subcommittee b) Interconnection Dynamics Working Group c) ATC Working Group d) Multiregional Modeling Working Group e) Disturbance Analysis Working Group f) PC liaison report on OC’s Transmission Subcommittee *3. PC Nominating Task Force Action Required APPROVE the task force’s recommended slate of officers for the Planning Committee for the

July 1, 2003 to June 30, 2005 period Member of the Nominating Task Force

Casual Attire

nicastra

Exhibit B

AGENDA PC Meeting (cont) March 18, 2003

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*4. Reliability Assessment Subcommittee George R. Bartlett will lead the discussion on the following items: Actions Required

a) Comment on the subcommittee’s draft reliability issues to be included in the 2003 Long –Term Reliability Assessment report.

b) Comment on the proposed new focus and changes to the analysis portion of the 2003 Long –Term Reliability Assessment report.

Informational Status of 2003 Summer Assessment report *5. NERC Standing Committees Gerry W. Cauley will lead the discussion on the following items: Actions Required a) APPROVE the revised Planning Committee scope and membership model. b) Comment on the proposed scopes of the Operating Committee and Market Committee and

the proposed membership of the Market Committee. c) Comment on the proposed Planning Committee subcommittees and their scopes. d) Comment on the revised procedures manual for the standing committees. e) Direct the PC’s Nominating Task Force to develop a Planning Committee membership slate

(excluding committee officers) for review and approval at the June 10, 2003 Board meeting. *6. WECC’s Progress on Breaker Failure Studies Action Required APPROVE the extension of the schedule for the completion of WECC’s studies of the impacts of

bus section breaker failures so that the Planning Standards Subcommittee can make a final waiver recommendation at the March 2004 Planning Committee meeting Marvin J. Landauer

*7. Gas/Electricity Interdependency Task Force Informational Status report on the task force’s activities J. Ken Wiley *8. Planning Reliability Model Task Force Informational Status of the NERC Functional Model from the planning perspective Michael C. Raezer


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*9. NERC Project Management Informational Expansion of the spare transformer database to include other equipment Robert W.

Cummings *10. Critical Infrastructure Protection Advisory Group Informational Status of activities in the electromagnetic pulse area Louis G. Leffler/ Representative from the “U.S. Commission to Assess the Threat from High Altitude Electromagnetic Pulse” *11. Compliance Enforcement Program David W. Hilt will lead the discussion on the following items: Informational a) 2002 Compliance Enforcement Program b) Status of 2003 Compliance Enforcement Program c) Status of Compliance and Certification Organization proposal *12. Virtual RTOs and the SMD White Paper Informational Briefing on EPRI’s white paper, “Virtual Regional Transmission Organizations and the Standard

Market Design A Conceptual Development with Illustrative Examples,” as it relates to planning reliability issues Stephen T. Lee

13. Comments by Public Action Required The public is invited to briefly comment on reliability and related issues of potential interest to the

NERC PC — Non-member PC meeting attendees 14. Comments by Committee Members 15. Future Meetings Informational

a) Next PC meeting is scheduled for July 15, 2003 in Albuquerque, New Mexico. b) Agenda materials for this July PC meeting are due to the NERC staff on June 20, 2003.


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No Reports at this Meeting Reliability Data, Methods, and Modeling Subcommittee Load Forecasting Working Group Data Coordination Working Group Resources Task Force PC liaison report on OC’s Resources Subcommittee PC liaison report on OC’s Interconnected Operations Services Subcommittee *Background material included.

*In attendance part-time.

ATTENDEES Planning Committee Meeting

March 18, 2003 OFFICERS

Vice Chairman Glenn B. Ross Secretary and Staff Coordinator Virginia C. Sulzberger (non-voting)

MEMBERS VOTING MEMBERS Regional Reliability Organizations ECAR Joseph L. Welch ERCOT Stuart Nelson FRCC Thomas E. Washburn MAAC Richard A. Wodyka MAIN Karl E. Kohlrus MAPP Ken Kuyper NPCC Stanley E. Kopman (for H. Kenneth Haase) SERC William F. Reinke* (for R. Douglas Powell) R. Douglas Powell* SPP Donald D. Taylor (for Richard A. Dixon) WSCC Michael C. Raezer Armando J. Perez Canada (East) Edward A. Schwerdt (for Carmine Marcello)

Canada & Market Segment Reps Canada David Little (for Chris Huskilson) Ron W. Mazur Cooperative Mike Risan Ricky Bittle

Canada & Market Segment Reps (cont) Federal (U.S.) Marvin J. Landauer Dennis W. Chastain (for Gregory M. Vincent) IPP Scott M. Helyer Juan R. Villar IOU Geoffrey P. Gaebe, Sr. Bernard M. Pasternack ISO/RTO Edward M. Kremzier (for John M. Adams) State/Municipal Samuel T. Stryker TDU John D. Martinsen

NONVOTING MEMBERS

Regulators

Observers

NARUC Richard House NRECA Paul McCurley

Exhibit C

ATTENDEES — Planning Committee Meeting (cont) March 18, 2003

*In attendance part-time. 2.

REGIONAL MANAGERS FRCC Ken Wiley MAAC Bruce M. Balmat* SERC William F. Reinke (see prior page)

NPCC Edward A. Schwerdt (see prior page) WECC Dennis E. Eyre*

NERC STAFF David W. Hilt* Rocio Wong* Robert W. Cummings* Timothy Gallagher* Gerry Cauley* Louis G. Leffler* PC SUBGROUP CHAIRMEN George R. Bartlett Vice Chair, Reliability Assessment Subcommittee Armando J. Perez (see prior page) Chair, Planning Standards Subcommittee Harlow R. Peterson Chair, Compliance Review Subcommittee GUESTS Larry E. Brusseau Mid-Continent Area Power Pool Patrick Huntley Southeastern Electric Reliability Council Ray N. Mason Mid-American Interconnected Network, Inc. Stephen T. Lee* Electric Power Research Institute Jeff Mitchell East Central Area Reliability Coordination Agreement Ray Palmieri East Central Area Reliability Coordination Agreement Jeff Mueller Public Service Electric and Gas Company Steven R. Herling PJM Interconnection, LLC Edward M. Kremzier (see above) National Grid USA Scott Henry Duke Power Company Stanley E. Kopman (see above) Northeast Power Coordinating Council Terry Crawley Southern Company James Silk* Institute for Defense Analyses Kevin B. Perry* Chair, Critical Infrastructure Protection Advisory Group Carl A. Monroe* Southwest Power Pool Rick Stegehuis Wisconsin Electric Power

1


Reliability Assessment Subcommittee ReportPlanning Committee MeetingBirmingham, ALMarch 18-19, 2003


2003 Long-Range Reliability Assessment Report

n RAS is re-titling the report to reflect its current content

n RAS to refocus on Regional / Subregional information in response to October 2002 Board discussions

nicastra

Exhibit D

2


NPCC-CanadaOntario

NPCC-CanadaMaritimes

NPCC-U.S.NY ISO

NPCC-U.S.ISO NE

NPCC-CanadaQuébec

WECC-CanadaMAPP-Canada

EASTERNINTERCONNECTION

WESTERNINTER-

CONNECTION

MAPP-U.S.

SERCEntergy

ERCOT

ERCOTINTERCONNECTION

FRCC

SERCSouthern

MAAC

SERCTVA

SERCVACAR

MAIN

WECCNWPP

WECCRMPA

WECCCA

WECCAZN

373940

232726

162625

182623

131312

161917

121011

141112

101313

252419

152420

242830

2012 8

161512

142217

WECCMexico

295551

133145

333839

303539

112731

252825

223332

495145

20042006

2002Key:

Percent Capacity Margin by Region / Subregion


400500600700800900

10001100

89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11

Existing and Under Construction Forecast Demand Demand High Band Demand Low Band Reported by EVA - Updated Reported by EPSA - Updated Actual

US Summer Capacity & Demands(1,000s MW)

3


Coal

Gas

Dual Fuel

Oil

Hydro

Nuclear

OtherPumped Storage

0%

20%

40%

60%

80%

100%

Actual -2001

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Year

Per

cent

age

Pumped Storage

Other

Nuclear

Hydro

Geothermal

Oil

Dual Fuel

Gas

Coal

SERC Capacity Fuel Mix %


2003 Long-Range Reliability Assessment – Issues

n Environmental ¨Kyoto Accord, Üpdate on NOx¨Retiring units¨Clean skies initiative

n Transmission¨History of transmission construction ¨ Issues surrounding new transmission construction¨Prospects for the future

4



n Economics / Reliabilityn Resources¨Fuels mix & diversity¨Renewables¨Nuclear prospectsÏmpact of economics on resources¨Transmission expansion coordination¨Distributed generation



n System concerns & observations¨Coordination of interconnection studies and

transmission service ¨ Lower inertia of new machines ¨Distributed generation – zero inertia¨ Fault duty issues – Chuck¨ Frequency excursions¨Governor inaction¨ Interaction between governor and environmental

controls

5


2003 Summer Assessment Report

n Regional data and writeup submissions due on March 28th


Data Collection Issues

n EIA-411 request made of Regions 12-9-02n EIA-860 data request still not out from EIA¨Currently 74 days lateËIA-860 data was due to NERC on 3-17-03¨NERC DCWG told to send data directly to

NERC

6


Interregional Studies Roadmap

n RAS uses information form Interregional Studies in the Seasonal Assessments

n RAS interested in what is being studied and how¨Focus on studies changing with formation /

expansion of RTOs¨Questionnaire / interviews of Interregional Study

Groups – coordinated with recent ECAR special meeting on the subject


Interregional Studies Roadmap

n RAS will prepare compendium of Interregional studies¨What studied¨What assumptions used¨What transfers analyzed

n Will share insights with Operating Committee

1


Role of NERC Committees

Planning CommitteeMarch 18, 2003


Executive Committee Final ReportRecommendations

n Committee structure¨Majority – 1 committee¨Minority – 2 committees¨Majority – If multiple committees go with 3

n Adopt 10 NERC functionsn Centralize compliance, certificationn Centralize dispute resolutionn CIPAG separate for interimn Transition committees by July 2003

nicastra

Exhibit E

2


Board Action on Role of Committeesn Anderson motion (defeated 3-5)Ädopt 7 majority recommendations of report

n Hodel motion (approved 7-1)Ädopt recommendations 1,2,3,4, and 7¨Retain 3 committees - MIC to become

enhanced Market Committee¨NERC president to resolve inter-committee

conflicts and ensure majority and minority views are reported to Board

n Berry amendment (defeated 4-5)¨Joint executive committee as a steering and

coordination group


Impact of Board DecisionBOT

DisputeResolution

StakeholdersCommittee

Compliance& Certification

Standards

IndustryStakeholders(Ballot Body)

1

2 7

10

Function #

NAESB

CriticalInfrastructureProtectionAdvisory Group

8

PlanningCommittee

OperatingCommittee

3 4 6 9

3 4 6TechnicalSteering

Committee

5

5

5

5

5

5

MarketCommittee

3 4 6 95

3


Implicit Charge to Committees in Approval of Transition Recommendation

n For BOT approval June 2003:Üpdate committee scopesÜpdate committee representation modelsÜpdate procedures manual:¨Prepare committee slates (members and

officers) for new term effective July 1, 2003n Going forwardÜpdate, streamline subcommittees, WGs,

and TFs¨Coordinate work plans and resources

among committees


Planning Committee Scope (Approve)(Attachment 5A)

n Assess long-term reliability and adequacy

n Coordinate reliability matters

n Coordinate data exchange and analysis methods

n Advise standardsn Advise compliancen Advise education and

training materialsn Assist CIPAGn Advise dispute

resolution

4


Planning Committee Representation (Approve)(Attachment 5A)

n Voting Members (35)n Chairman (1) and Vice Chairman (1)n RRO (13) – EI (9); WECC (3); ERCOT (1)n Canada (2 plus 2 RRO Representatives)n Market Segment Representatives (18)

¨ ISO/RTO (2)¨ IOU (2)¨ Federal (U.S.) (2)¨ TDU (2)¨ State/Muni (2)¨ Cooperative (2)¨ Merchant Generator (2)¨ Electricity Marketer (2)¨ End-use Customer (2)

n Non-Voting Members¨ Regulator (state and provincial) Representatives (4 – WI, EI, Texas, Canada)¨ Regulator (federal) Representatives (2 – FERC, NEB)¨ Observer Representatives (same as Board)¨ Past Committee Chair (at the pleasure of the Committee Chair)¨ Committee Secretary (from NERC staff)


Planning Committee SubcommitteesComment (Attachment 5C)n Transmission Issues Subcommitteen Reliability Assessment Subcommitteen Resource Issues Subcommitteen Data, Methods, and Modeling

Subcommitteen Planning and Analysis Subcommittee

5


Operating Committee ScopeComment (Attachment 5B)n Assess operating

reliabilityn Coordinate reliability

mattersn Facilitate information

exchange among reliability service organizations

n Coordinate data exchange and tools as needed for reliability

n Advise standardsn Advise compliancen Advise training and

educationn Assist CIPAGn Advise dispute

resolution


PC-OC Scope Coordination IssuesCommentn Reliability assessmentÖC – Operating reliability¨PC – Long-term resource and transmission adequacy¨Disturbance/event analysis

n Data exchange and system modelingn Training and educationn Member qualificationsÖC – Use of functional model for expertise

qualificationsÖC – All else being equal, prefer new nominee rather

than incumbent

6


PC and OC SlatesDirect Nominating TF to Prepare Slaten Common process for PC and OCn Slate of officers approved at this meetingn 3/28 solicitation for member nominationsn 4/30 nomination period closesn 5/20 Nominating TFs recommend slatesn 6/10 BOT approves slates and officersn 7/1 – start of new term


Update to Committee ProceduresComment

n Improve manual organizationn Update committee functionsn Maintain and coordinate work plansn Authorities and accountabilities clarifiedn NERC president resolves committee differencesn Joint executive committees help TSC as neededn Committee joint sessionsn Committee membership¨Balancing interests and providing expertise¨Replacement of members and changes in affiliation

n 10 business day notice of actions (OC issue)n Antitrust procedure

7


Market Committee Scope AlternativesCommentn Alternative I¨Promote market views on

reliability and adequacy¨Mitigate barriers to market

solutions for reliability¨Market user views to BOT¨Facilitate collaboration of

regional MC’sÏdentify NERC long-term

issues

n Alternative II¨Review work

of OC and PCn Impacts on

market

¨Market user views to BOT


Achieving Consensus on MC Scopen Committee commentsn Public posting for

commentsn Discussions with

stakeholder interest groups

n Consensus draftn Target board approval

in June 2003

Review of othercommittees

Value-added roleindependent of other committees

- Proper role of a committee- Relation to NAESB, JIC, etc.- Adding value commensurate

with investment of resource

8


Market Committee Membership Alternativesn Adapt from current MIC membershipn Fixed, with 3 per RBB segmentn Open, weighted by RBB segment, biased

toward non-affiliated (20-7)n Open, weighted segments, market users

and independent market operators, biased toward non-affiliated (17-4)

n Open, 3 weighted segments of market users only: TDU, marketers/generators,end users, biased toward non-affiliated (7-2)


Requested Actions and Comments

n Refer to page 2 of agenda item 5

Planning Committee Scope, Membership, and Organization

DRAFT March 3, 2003

Scope The Planning Committee promotes the reliability of the interconnected bulk electric systems in North America and assesses and encourages resource adequacy. It also provides a forum for addressing planning and adequacy issues within the industry. Planning Committee supports the NERC reliability mission by executing the policies, directives, and assignments of the Board of Trustees, and advising the Board on matters related to bulk electric system transmission planning and reliability, and resource adequacy. The Planning Committee’s responsibilities include the following functions 1: 1. Assess, analyze, and report on bulk electric system reliability (adequacy) (Reference NERC

Function 4). a. Assess and report annually on the existing and future reliability of

the bulk electric systems, including both resource adequacy and transmission system reliability.

b. Promote coordination in system planning studies from intra- and interregional perspectives.

c. Evaluate system disturbances and events to identify opportunities for improvement from a planning perspective.

2. Coordinate planning, adequacy, and reliability matters with Reliability Regions and other

organizations (Reference NERC Function 5). a. Assess and report on the reliability impacts of planning and adequacy standards proposed or set by

Regional Councils, regional transmission organizations, and other entities. b. Assess and report the impacts of Interconnection-wide and Region-wide variances to NERC

standards on the planning, adequacy, and reliability of the interconnected bulk electric systems. c. Assess the impacts of existing and emerging electricity market and business practices on the

planning, adequacy, and reliability of the interconnected bulk electric systems. d. Advise on technical matters in support of the development and coordination of reliability, standards,

business practices standards, and other standards affecting bulk electric systems. e. Coordinate bulk electric system planning and adequacy matters with Reliability Regions and other

regional entities. f. Assist the Board in addressing bulk electric system planning and adequacy matters with regulators,

legislators, government agencies, public interest groups, industry associations, and others. 3. Coordinate the development of databases, methodologies, and tools necessary to support the

planning and reliability of the bulk electric systems (Reference NERC Function 6). a. Develop and recommend data requirements, system modeling

techniques, and system analysis programs and methodologies for analyzing system stability (all time frames) and preventing or constraining the extent of system instability, cascading outages, and voltage collapse.

b. Investigate and recommend new methods, procedures, and ana lytical programs and tools for evaluating the reliability of the bulk electric systems.

c. Maintain and develop, as appropriate, system models (steady-state and dynamic) necessary for reliability simulations and assessments.

d. Maintain a unified generator database (UGD) for all existing and proposed future generating units in North America.

1 Reference is made to NERC Functions, from which these Planning Committee functions have been adapted to focus on planning reliability issues.

OC is accountable for pre- and post-seasonal studies (less than one year). Work may be done jointly with PC.

1c – Common function coordinated with OC.

3a – Joint with OC

3d and 3e – Is “maintain” the appropriate term? Is the committee accountable for these functions or does the committee advise staff functions in these areas?

Exhibit F

e. Maintain a generating availability data system (GADS) on the historical performance (maintaining confidentiality as appropriate) of existing generating units.

f. Maintain information security and confidentiality, as required.

4. Assist the development and implementation of reliability standards necessary for planning and assuring the reliability (adequacy) of the interconnected bulk electric systems (Reference NERC Function 1). a. Assist in maintaining the Functional Model upon which reliability

standards are based. b. Identify the need for new and revised planning reliability

standards and initiate standards actions by submitting SARs. c. Recommend industry experts for the development of SARs and reliability standards related to

planning. d. Provide a forum for education, sharing of views, and informed debate of planning reliability

standards. e. Review and comment on proposed draft planning reliability SARs and standards. f. Facilitate the development of reference documents and perform other activities related to planning

standards implementation. g. Assess the effectiveness of the reliability standards and advise the Standards Authorization

Committee and the Board, and initiate revisions when necessary. 5. Advise the Compliance and Certification functions on matters related to bulk electric system

planning and reliability (adequacy) (Reference NERC Function 2). 6. Develop education and training materials to promote effective system planning and demand

management programs, and bulk electric system transmission reliability and resource adequacy (NERC Function 3).

7. Assist the critical infrastructure protection (security) program on matters related to bulk electric

system planning and reliability (adequacy) (Reference NERC Function 8). a. Advise the critical infrastructure program on matters related to the physical security of the

interconnected bulk electric systems. b. Assist in the development and maintenance of spare equipment databases from a critical

infrastructure protection (security) perspective. c. Assist in the development of guidelines for the physical protection of the interconnected bulk electric

systems and the response to threats. 8. Advise the Dispute Resolution function as needed (Reference NERC Function 10).

a. Strive to resolve all conflicts and disputes arising from committee activities within established committee and NERC procedures.

b. Advise the Dispute Resolution function on bulk electric system planning and reliability (adequacy) matters, as requested.

Reporting The Planning Committee reports to the NERC Board of Trustees.

Planning Committee Membership The Planning Committee shall have voting and non-voting members as follows: a. Voting Members (35)

• Chairman (1) and Vice Chairman (1) • Regional Reliability Organization (RRO) Representatives (13)

− Eastern Interconnection (9) (including 1 from Eastern Canada) − Western Interconnection/WECC(3) (including 1 from Western Canada)

4a – Common function with OC; coordinated by NERC president or TSC?

− Texas Interconnection/ERCOT (1) • Other Canada Representatives (2)

− At Large • Market Segment Representatives (18)

− ISO/RTO (2) − Investor-owned Utility (2) − Federal (U.S.) (2) − Transmission Dependent Utility (2) − State/Municipal Utility (2) − Cooperative (2) − Merchant Electricity Generator (2) − Electricity Marketer (2) − End-use Electricity Customer (2)

b. Non-Voting Members • Regulator (state and provincial) Representatives (4) – Western Interconnection (1) – Eastern Interconnection (1) – Texas Interconnection (1) – Canada (1) • Regulator (federal) Representatives (2) – Federal Energy Regulatory Commission – United States (1) – National Energy Board – Canada (1) • Observer Representatives (from agencies and organizations that send observers to the Board) • Past Committee Chair (at the pleasure of the Committee Chair) • Committee Secretary (from NERC staff)

Considerations for Member Selection The Planning Committee shall be staffed through an annual nominating process that is open, inclusive, and fair. A Nominating Task Force approved by the Planning Committee shall review the nominations and recommend a committee slate for Board approval. Terms shall be for two years, with the membership staggered to refill approximately half of the committee membership each year. There are no term limits. The PC Nominating Task Force, every two years, shall also present a slate of committee officer (chair and vice chair) candidates for endorsement by the PC and a recommendation to the NERC Board chairman for approval. The officer candidates shall be selected from the open nominations to the task force. Within the constraints of achieving balance of representation as outlined in the membership model above, deference shall be given in the staffing of the Planning Committee to the following: a) providing the best available expertise from industry on system planning, assessment, and transmission and resource adequacy; and b) providing committee members who are collectively well- informed in policy matters affecting planning and adequacy, such as regulatory policy and electricity market issues. Regional Reliability Organization representatives are to be nominated by their respective Regions. The four representatives from Canada are to be provided through the Canadian Electricity Association process. For the remaining positions, should the qualifications of nominees be deemed by the Nominating Task Force to be equal, preference should be given to candidates nominated by industry trade associations representing the segment.

To promote inclusiveness, should preference be given to new candidates over incumbents when all other factors are equal? The OC scope says yes. The PC scope is silent on this issue, preferring to leave this judgment to the Nominating TF.

Subgroups The Planning Committee may, subject to Board consent, form subcommittees, working groups and task forces as necessary to accomplish its assigned functions.

Comments of the Planning Committee on the

Proposed Committee Scopes, Membership, and Procedures Manual

(March 18, 2003 PC Meeting) The comments of the Planning Committee members on the proposed committee scopes, membership, and draft “Organization and Procedures Manual for NERC Technical Committees” as recommended by the joint executive committees of the NERC standing committees are summarized below. PC Scope ♦ Generally agreed in concept with the proposed scope. ♦ Include the work plan mentioned in the Organization and Procedures Manual in the PC’s

scope. ♦ Move the “Considerations for Member Selection” portion of the PC scope to the Organization

and Procedures Manual. ♦ Scope of PC and OC should include a review of business practices and how they affect

reliability. ♦ On joint PC and OC activities, one committee should be in charge (e.g., system modeling

should stay with the PC, but accommodate the OC). ♦ No problem with the shifting of responsibilities as long as some group is accountable. ♦ Difficult to have one group (RAS) responsible to two committees. OC needs to be

accountable and have the responsibility for the seasonal assessments, and needs its own group to perform this function. The existing RAS needs to have its job simplified and should concentrate on long-term assessments and report to the PC. The OC group should have liaison representation from the PC and vice versa.

♦ PC needs to coordinate with the OC in evaluating system disturbances. ♦ “Maintain” system models should possibly be changed to “oversee” the development of

system models. Need to focus on improvements as well. ♦ Avoid overlaps in responsibilities. ♦ Committees appear to be taking on similar roles related to the standards. PC Membership ♦ Approved the proposed membership model for the PC (35 voting members, plus non-voting

regulator and observer members, past committee chair (at the pleasure of the committee chair), and a committee secretary.

♦ Need general consistency in the selection of members for the PC and OC. No preferences should be given (as stated in the OC selection criteria) to new candidates over incumbent members whose terms are retiring. If preferences are given, then term limits should be instituted.

PC Subcommittee Scopes ♦ Coordinate subcommittee work plans with the PC and other committees and subcommittees,

as appropriate. ♦ Resource issues subcommittee new scope and focus for PC. ♦ Avoid creating a hierarchy. ♦ Subcommittees need to address the PC functions.

Exhibit G

2

Comments of the PC on the Proposed Committee Scopes, Membership, and Procedures Manual (March 18, 2003 PC Meeting) Market Committee ♦ View the MC as the link between the OC and PC on business standards. ♦ Provide liaison between the standing committees and business practices (NAESB). ♦ Suggest key business issues to the PC and OC. ♦ Voting procedures of the MC should follow the PC and OC. Operating Committee Scope ♦ Should include a review of business practices and how they affect reliability. ♦ In the selection of candidates, eliminate the preference for new candidates over incumbent

members. Organization and Procedures Manual ♦ Wants to see general consistency in membership selection procedures, voting procedures,

and the size of the executive committees among the standing committees. ♦ Need scope document for the Technical Steering Committee. ♦ Maybe the TSC should be expanded beyond the committee officers. ♦ Officer nomination procedure needs to be spelled out in the manual. ♦ Mention staggered terms in the manual. ♦ If all committees do not have the same size executive committee, then another voting

procedure that provides balance and levelizes the playing field needs to be developed. Many decisions will come down to a vote. (CIPAG may need to be incorporated in some fashion.)

♦ OC is in violation of the current executive committee procedures. (OC has a six-member executive committee.)

♦ Committees’ annual work plans should be coordinated with NERC’s business plan. ♦ Need to describe the process that will be used to resolve issues among the committees. ♦ Voting procedures of all three committees should be the same. ♦ Once the required quorum is established at the beginning of a committee meeting, the

business of the meeting can be carried out regardless of the number of attendees in the meeting room.

♦ A concerted effort should be made to review the life of the subgroups in light of the changing industry structure and market designs. Add requirement to the manual.

Proposed PC Subcommittee Organization and Responsibilities: Transmission Issues Subcommittee (A Transfer Capability Working Group and an Interconnection Dynamics Working Group will likely exist under this subcommittee to assist in carrying out the subcommittee’s functions.) • Promote the reliability (adequacy) of the interconnected bulk electric systems in North America. • Provide a forum to address the planning and adequacy of the bulk electric systems. • Review and develop data requirements, and new ana lytical tools and methodologies for evaluating bulk

electric system reliability (adequacy), including system stability (all time frames), voltage collapse, reactive resource adequacy, and coordinated system protection and control.

• Review, monitor, and develop procedures and processes for consistency and coordination in determining transmission transfer capabilities

• Review the activities and practices in the electricity market as they may relate to the determination of transfer capability.

• Assess the impacts of new and evolving electricity market business practices on the reliability of the interconnected bulk electric systems.

• Develop training and educational materials as necessary for use by others and for communicating with the public on issues related to the reliability of interconnected bulk electric systems.

• Review and comment on proposed Standard Authorization Requests and Reliability Standards in its area of expertise.

• Assess the effectiveness of the standards and develop and submit Standard Authorization Requests as appropriate.

• Assist in maintaining the Functional Model upon which reliability standards are based. • Advise the critical infrastructure protection program, as requested, on matters related to the physical

security of the bulk electric systems. • Identify and investigate long-term issues that may impact the reliability of the transmission systems. Reliability Assessment Subcommittee (Planning) (A Load Forecasting Working Group and an Infrastructure (e.g., Gas/Electricity) Interdependency Working Group will likely exist under this subcommittee to assist in carrying out the subcommittee’s functions.) • Perform an independent assessment of, and report on, the reliability (adequacy and operational security)

of Regional and interregional existing and planned bulk electric systems to determine if each Region (or entity) meets its own planning criteria and NERC reliability standards.

• Perform detailed assessments for a five-year horizon, with an analysis of trends in resources and transmission adequacy over the longer-term (six- to ten-year) horizon.

• Assess and report on the reliability (adequacy and operational security) of the interconnected bulk electric systems for each upcoming summer and winter season.

• Prepare a post-seasonal report following each respective summer and winter season.

• Develop NERC’s ten-year aggregated projections of U.S. and Canadian peak demands (summer and winter), net energy for load, demand management programs, and generating capacity resources.

• Determine and report on the degree of uncertainty inherent in NERC’s U.S. and Canadian demand and supply aggregations.

• Maintain and update, as appropriate, a bandwidth methodology for determining probabilistic bandwidths on the ten-year peak demand and net energy for load projections for the United States, Canada, and the three NERC Interconnections.

• Monitor and report on the use of natural gas for electricity generation, the interdependency of natural gas and electricity, and the potential impacts of gas transmission system contingencies on electric system operations and reliability.

Seasonal assessments may be done by RAS, but accountability is with OC.

Exhibit H

2

Resource Issues Subcommittee (A Long-Term Issues Working Group will likely exist under this subcommittee to assist in carrying out the subcommittee’s functions.) • Encourage, evaluate, and report on long- term resource adequacy and resource adequacy trends. • Develop and evaluate resource methodologies for determining resource adequacy. • Develop training and educational materials as necessary for use by others and for communicating with

the public on issues related to resource adequacy, including generation, transmission, and demand program impacts.

• Review and comment on proposed Standard Authorization Requests and Reliability Standards in its area of expertise.

• Assess the effectiveness of the standards and develop and submit Standard Authorization Requests as appropriate.

• Assess the impacts of new and evolving electricity market business practices on resource adequacy. • Assist in maintaining the Functional Model upon which reliability standards are based. • Identify and investigate long-term issues that may impact resource adequacy. Data, Methods, and Modeling Subcommittee (A System Modeling Working Group and a Data Coordination and Analytical Methods Working Group will likely exist under the subcommittee to assist in carrying out the subcommittee’s functions.) • Maintain and manage data collection and system modeling (steady-state and dynamic) efforts necessary

for reliability simulations and assessments. • Assure that data and simulation modeling capabilities are maintained within each of the three NERC

Interconnections (Eastern, Western, and ERCOT). • Maintain the existing procedures and analytical techniques used to evaluate the reliability of the

interconnected bulk electric systems. • Develop a library of solved power flow models and associated dynamics simulation models of the

Eastern Interconnection for use by the Regions and their members. • Maintain a system dynamics modeling database of the Eastern Interconnection. • Maintain a Procedures Manual for submitting power flow and system dynamics modeling data. • Develop and submit Standard Authorization Requests as appropriate. • Maintain a unified generator database (UGD) of all existing and future generating units in North

America. • Maintain a generating availability data system (GADS) on the historical performance (maintaining

confidentiality as appropriate) of existing generating units. Planning and Analysis Subcommittee • Recommend guidelines or procedures to help fully integrate the reliability standards developed through

the NERC Standards Development Process into the planning and analysis activities of electric industry participants.

• Review the business practice standards developed through the North American Energy Standards Board (NAESB) and determine how to integrate their impacts into the planning and analysis activities of electric industry participants.

• Review and comment on NERC-proposed Standard Authorization Requests and Reliability Standards as to their potential impact on industry electric system planning and analysis methodologies and practices.

• Review and comment on NAESB-proposed wholesale electricity business practice standards as to their potential impact on industry electric system planning and analysis methodologies and practices.

• Assess the effectiveness of the NERC reliability standards and NAESB business practice standards to ensure that a consistent set of industry planning and analysis standards are maintained.

• Develop and submit Standard Authorization Requests when it is determined that a planning or analysis reliability requirement is not being addressed.

1

WECC Bus Section Breaker Study Summary

WECC formed Task Force to develop a methodology for studies:

• NERC’s cascading definition is difficult to interpret.

• These events must comply with ALL Category C Performance Standards not just no cascading.

• Each entity should apply its own interpretation of NERC’s cascading definition.

WECC Bus Section Breaker Study Summary

Number of Stations Identified 167Companies that did not respond 6 out of 43Stations not requiring studies 34Stations requiring studies 133

Stations studied so far 39Stations Studied that had Level C Violations 8

Stations left to study 94

nicastra

Exhibit I

2

BPA Bus Section Breaker Studies

BPA used the following interpretation of Level C performance standards for Level C2 and C9 contingencies:

•If the contingency results in transient or voltage instability, this is a violation of the Level C performance standards.

•If the contingency results in any thermal overload cannot be operationally mitigated within 20 minutes, that event could result in cascading and is a violation of the Level C performance standards.

BPA Bus Section Breaker StudiesNumber of Station Busses Identified 25

Detailed studies competed 5Stations meeting NERC Level C 1

Stations that have Level C Violations 4Violations that could be handled operationally 0Violations requiring mitigation 4

Cost station cost ranged from $250,000 to $1.14 million

Assessment studies completed 18Stations meeting NERC Level C 2Stations that have Level C Violations 15

Violations that could be handled operationally 5

Violations that will have to be mitigated 10Stations not requiring studies, meet Level C 1

Stations not studied or assessed 2

3

WECC Motion

• Extend waiver on C2 and C9 compliance an additional year to complete further studies (and prepare justification for a possible variance to the NERC Planning Standards).

1

1

Planning Reliability Model Task Force

Michael C. Raezer — PRMTF Chairman

NERC Planning Committee MeetingMarch 18, 2003

2

PRMTF MembershipMichael C. Raezer (Chairman – WECC)

Douglas C. Collins (MAIN) David C. Westbrock (TDU)

Ken Kuyper (MAPP) Susan L. Morris (MAL*)

Roger C. Zaklukiewicz (NPCC) Stanley E. Kopman (CRS Liaison)

Mike Risan (Cooperative) James E. Byrd (CACTF Liaison)

Gregory M. Vincent (Federal) Virginia C. Sulzberger (NERC Staff)

Dennis Chastain (Federal Alt)

*Member-at-Large

nicastra

Exhibit J

2

3

Functional Model Development

n CACTF developed “operating” Functional Model (June 2001)

n PRMTF formed to address planning functions (Nov 2001)

n “Planning Authority” function posted (Mar 2002)

n FMRTG (CACTF/PRMTF/Others) to review Model (Aug 2002)

n PRMTF revises Planning functions (Nov 2002)n Planning Authority

n Transmission Planning

n Resource Planning

n Functional Model (O&P functions) posted (Jan-Feb 2003)

BalancingAuthority

InterchangeAuthority

TransmissionServiceProvider

GeneratorOperator

GeneratorOwner

TransmissionOwner

Load-ServingEntity

Purchasing-SellingEntity

TransmissionOperator

DistributionProvider

ReliabilityAuthority

PlanningAuthority

ResourcePlanning

TransmissionPlanning

StandardsDeveloper

ComplianceMonitor

ServiceFunctions

Planningand

OperatingFunctions

StandardsFunctions

MerchantFunctions

NERC FunctionalModelVersion 2

MarketOperator

3

5

Model Functions — Format

Descriptionn Type — Service, operating, or planning

functionn DefinitionSpecificationsn Criteria and Compliance for the Organization

Performing the Functionn Responsibilitiesn Functional Relationshipsn Boundary Relationships

6

Is the Functional Model a Standard?

n Model is not a standard.n Model is “framework” for developing

n Reliability standardsn Certification requirementsn Approved by SCs and Board.

n Standards and certification requirementsn Developed through Standards Processn Standards may deviate from Modeln Compliance judged against standards.

n Standards “trump” the Model.

4

7

Functional Model — Documents

n Create three documents for clarity.n Functional Model document (functions and

their definitions).n Conclusions and Recommendations

document (record of FMRTG concepts and views).

n “Roll-up” document (functions and their “roll up” into organizations).

8

Comments — Planning Issues

n 40 sets (100 pages) of comments.n Model describes functions.n Organizations perform functions.n Model accommodates all Standards.n Model is implemented through Standards.n Should Planning Authority be certified?n Timeframe of planning functions.n Extent of Planning Authority functions.

5

9

Functional Model — Schedule

n Respond to comments (May 2003)n Prepare draft documents (June 2003)

n Functional Modeln Conclusions and Recommendationsn Roll-up document

n Approval of NERC standing committees (July 2003)

n Approval of NERC Board of Trustees (Oct 2003)

Spare Equipment Database Survey Results August 2002

General Questions Total Responses 104 Would your organization find the availability of a Spare Equipment Database to be useful? 97 93.3% Would your organization be willing to participate? 97 93.3%

Equipment to include in Spare Equipment Database Power Transformers? 99 95.2% Transportation Equipment? 49 47.1% Breakers? 91 87.5% Current Transformers? 67 64.4% Shunt Reactors? 52 50.0% Potential Transformers? 74 71.2%

Note: The majority of WECC respondents wished to include Shunt Reactors. Respondents from the Eastern Interconnection did not see the need (shunt reactors are not used in the East).

Power Transformer Pedigree Information Include in Database? 99 95.2% Serial Number? 55 55.6% Type? 87 87.9% Phase? 95 96.0% Rating (MVA)? 99 100.0% Impedance? 88 88.9% Impedance Base? 73 73.7% Bushing Location? 66 66.7% Transport Requirements? 62 62.6% Connection Configuration? 87 87.9% High Side Voltage (kV)? 99 100.0% High Side Tap Changer? 80 80.8% Range? 72 72.7% Step Size? 65 65.7% Low Side Voltage (kV)? 99 100.0% Low Side Tap Changer? 86 86.9% Range? 75 75.8% Step Size? 70 70.7% Tertiary Voltage (kV)? 84 84.8% Tertiary Capacity (MVA)? 81 81.8%

Transportation Equipment Pedigree Information Include in Database? 49 47.1%

Schnabel Rigs? 40 81.6%

Railcars? 43 87.8%

Special Trailers? 41 83.7%

nicastra

Exhibit K

Spare Equipment Database Survey Results – August 2002

2

Breaker Pedigree Information Include in Database? 91 87.5% Manufacturer Type? 84 92.3% Voltage Class? 91 100.0%

Continuous Rating? 89 97.8% Insulation Type? 73 80.2% Interrupting Capability? 90 98.9% Mechanism Type? 72 79.1% Trip Voltage? 72 79.1% Close Voltage? 72 79.1%

Shunt Reactor Pedigree Information Include in Database? 52 50.0% Voltage Class? 51 98.1%

Rating (MVAR)? 50 96.2%

Current Transformer Pedigree Information Include in Database? 67 64.4% Voltage Class? 67 100.0%

Rating? 66 98.5%

Ratio? 65 97.0%

Potential Transformer Pedigree Information Include in Database? 74 71.2% Voltage Class? 74 100.0%

Rating? 71 95.9%

1

Proposed Cyber Security Standard

NERC Standing Committee MeetingsMarch 18-20, 2003

Kevin B. PerryDirector, Information TechnologySouthwest Power Pool

Proposed Cyber SecurityStandard

♦ Currently Appendix G to the FERC Standard Market Design NOPR

♦ NERC CIP Advisory Group is initiating an Urgent Action SAR to codify FERC standards requirement as NERC standard.

nicastra

Exhibit L

2


♦ The proposed standard covers:– Governance– Scope– Asset Identification– Access Control– Personnel– Systems Management– Planning– Incident Response– Business Continuity

E t h e r n e t

latigid latigid

EMS ICCP

OperatorConsole

Internet WAN

Ethernet

latigid

latigid

CommFrontEnd

latigid

RTU

latigid

RTU

latigid

RTU

latigid

RTU

Office LAN

Secure LAN

Electronic Security Perimeter

Electronic Security Perimeter

3

Market Participant

Market Participant Market Participant

WAN

Access Control PointElectronic Security Perimeter


♦ Compliance– Substantial compliance with standards by

January 1, 2004.– Full compliance with standards by January

1, 2005– Annual self-certification required.– Periodic field audits expected.

4

Questions?

Contact SPP

Kevin B. [email protected]

www.spp.org

1

Compliance and Certification Organization Proposal

Compliance and Certification Organization Task Force

March 2003

Need for the Proposal

nJoint Standing Committee Executive Committee Review of Committees

nBoard of Trustees Action Separating Compliance and Certification

nReview of the Current Operator Certification Program

nBoard Strategic Objective - Compliance

nicastra

Exhibit M

2

BOT Action & Exec. Committee Recommendation

BOT

DisputeResolution



Standards


1

2 7

10

Function #

NAESB


8

PlanningCommittee

OperatingCommittee

3 4 6 9

3 4 6

Joint TechnicalSteering Group

5

5

5

5

5

5

MarketCommittee

3 4 6 95

Varying Levels of Staff Support

BOT

DisputeResolution



Standards


1

2 7

10

Function #

NAESB

5

5

5

PlanningCommittee

3 5 64


85

ReliabilitySupportServices

Committee

Staff

CEO

6

ISAC(Critical

InfrastructureProtection)

8

OperatingCommittee

3 4 6 95

MarketCommittee

3 4 6 95

3

CCOTF Focus

BOT

DisputeResolution



Standards


1

2 7

10

Function #

NAESB

5

5

5

PlanningCommittee

3 5 64


85

ReliabilitySupportServices

Committee

Staff

CEO

6

ISAC(Critical

InfrastructureProtection)

8

OperatingCommittee

3 4 6 95

MarketCommittee

3 4 6 95

Components of the NERC Compliance and Certification

Programs

StandardsCompliance & Certification Committee

NERC & Regional

Staffs

Rules

Requirements

Compliance and Certification•Policy•Processes•Procedures•Program Audit

Implementation

4

Balance

Independent Staff Stakeholders

ProgramImplementation

PolicyProcesses

Procedures

Independence Program Acceptance

CCOTF Proposal – Part 1Compliance & Certification Committee

Board ofTrustees

Compliance &CertificationCommittee


Other BoardReports

Includes Support Groupsas Needed

Proposed NewCommittees

n Establish Compliance & Certification Committee

n Does not control specific compliance actions

n Stakeholder based membershipn Stakeholder advisory role with

Compliance and Organization Certification

n Responsible for process and procedure documents describing Compliance and Organization Certification Programs

5

CCOTF Proposal – Part 2Personnel Certification Governance

Committeen NERC BOT

Establishes To:– Govern Personnel

Certification programs defined through Standards Process

– Periodically report regarding Personnel Certification program implementation.

Board ofTrustees



PersonnelCertificationGovernanceCommittee

Other BoardReports



Accreditation Advantagesn NERC program meets

recognized standardsn Protect the integrity of the

programn Provide legal defensibility

of the programn Enhances confidence and

credibility of the programn Independent evaluation of

programn Promotes continuous

improvement of program

Board ofTrustees




Structured to Meet theRequirements of a

Nationally RecognizedAccrediting

Organization - LimitedDirect Reporting to

BOT

Other BoardReports



6

Components of the NERC Compliance and Certification

Programs

StandardsCompliance & Certification Committee

NERC & Regional

Staffs

Implementation

NERC Staff SupportBoard ofTrustees


NERCPresident

NERCCompliance &CertificationProgramsDirector






BOT

Other BoardReports



Administrative &Budget

7

NERC and Regional ProgramsBoard ofTrustees


RegionalComplianceEnforcement

Programs

NERCPresident


NERCPersonnel

CertificationProgram

Administration

NERC &Regional

OrganizationCertificationProgram(s)

Administration






BOT

Other BoardReports



NERC and Regional ProgramsBoard ofTrustees

Compliance&

CertificationManagersCommittee Compliance &

CertificationCommittee

RegionalComplianceEnforcement

Programs

NERCPresident


NERCPersonnel

CertificationProgram

Administration

NERC &Regional

OrganizationCertificationProgram(s)

Administration

SupportGroups asNeeded



Includes Ad-Hoc TechnicalGroups for ComplianceAssessment as Needed




BOT

Other BoardReports



Present NERC andRegional Staff

SupportingCompliance and

Certification Functions

8

Next Stepsn March 15

– Post draft recommendation for public comment with due date of April 25

n March 17-20– Present proposal to Standing Committees and Regional

Managersn April 25

– Comments Due

n May 19– Final recommendation to Board

n June 9-10– NERC Stakeholder and Board meeting

Questions ?

u1

NERC Compliance Enforcement Program

Report to the NERC

Standing Committees and Regional

ManagersMarch 2003

What will be coveredØ 2002 Compliance Program

ResultsØObservations

Ø 2003 Compliance ProgramØMeasures included

ØQuestions?

nicastra

Exhibit N

u2

NERC Compliance Enforcement Program

Background –

Ø NERC CEP is beginning its 5th year

Ø New measures were introduced for field-testing during each of the 1st, 2nd, and 3rd years

Ø No new measures from the Planning Standards or Operating Policies were introduced in the 4th and 5th

year

Ø Measures will be introduced as standards emerge from the new NERC Reliability Standards Process

How Did We Do? -2002 CEP

Ø Field-tested 10 Planning Measures and 17 Operating Measures

Ø First time Program spanned a full year (January 1 to December 31)

Ø Regional Summary Reports due to NERC - February 15, 2003

Ø NERC Final 2002 CEP Report – March 31, 2003Ø Post on NERC Compliance website

Ø Audits of 3 Regional CEPs Completed

u3

ReliabilityCoordinator

Audits

Enforcement

Monitoring,Assessmentand Review

(CEP)

2002 Compliance Activities

FunctionalModel

CertificationControlArea

Audits

PersonnelCertification

TotalVio la t ions

Planning Subtota l 44 7 0 4 6 9 7 $90K1 0 m e a s u r e s

O p e r a t i n g S u b t o t a l 59 45 4 9 291 4 4 4 $10M1 7 m e a s u r e s

T o t a l 1 0 3 52 4 9 337 5 4 1 $ 1 0 M

C o m p l i a n c e R e s u l t s2001 2 0 0 2

P l a n n i n g M e a s u r e s 8 4 % 8 9 %O p e r a t i n g M e a s u r e s 9 1 % 9 4 %

T O T A L 8 8 % 9 3 . 5 %

Total S a n c t i o n s

P r e l i m i n a r y N E R C 2 0 0 2 C E P S u m m a r yLevel 1 Level 2 Level 3 Level 4 Standards

2002 Compliance Enforcement Program - Preliminary Results

u4

2002 CEP- Preliminary Results

Note - Contains violations reported by occurrence, and excluded from the % compliance index.

REGION Measure Type

Level 1 Level 2 Level 3 Level 4 Level 4 Non-submittals

% Compliance

Planning 2 0 0 0 2 96Operating 10 0 0 3 0 98Planning 0 0 0 0 0 100

Operating 6* 21* 32* 45* 0 100Planning 0 0 0 0 0 100

Operating 1 0 2 2 0 99Planning 0 0 0 0 0 100


Operating 6 1 0 1 0 99Planning 2* 0 0 1 2* 95


Operating 0 0 0 2* 0 100Planning 2 0 0 0 5* 98

Operating 5* 1 0 1 0 99Planning 12 0 0 2 2 81

Operating 6* 4 5* 39 1 91Planning 21 7 0 1 28 73

Operating 20* 16* 9* 147* 41 82Planning 44* 7 0 6 40* 89

Operating 59* 45* 49* 248* 43 94103 52 49 254 83 93.5

FRCC

ERCOT

ECAR

NERC 2002 Compliance Enforcment Program

NPCC

MAIN

MAPP

MAAC

NERC Totals

WSCC

SPP

SERC

Operating Measures

2001 2002 2001 2002 2001 2002 2001 2002 2001 2002ECAR 11 9 6 0 3 0 9 1 2 3ERCOT 12 0 33 104 1 0 0 0 0 0FRCC 0 0 0 0 1 0 0 1 4 3MAAC 0 0 0 0 0 0 0 0 0 0MAIN 2 6 0 0 0 0 4 0 6 0MAPP 0 0 0 0 0 3 1 2 6 5NPCC 0 0 1 1 0 0 0 0 1 0SERC 8 1 1 0 1 0 3 2 0 0SPP 1 0 1 0 8 3 13 3 21 41WECC 9 9 175 20 24 9 28 18 152 141TOTAL 43 25 217 125 38 15 58 27 192 193

Operating Policy Measures with Most Violations

Region

CPS1 & 2 OSL Violations Emergency Operation Plans

System Restoration

Plans

Certified Operators on

Duty

u5

Other ObservationsMeasure

Compliance Calculation

Method

In FullCompliance

TotalViolations

Total Observations

Number of Entities

Observed

Control Performance Standard CPS-1 and CPS-2

MONTHLY 2031 25 2056 171

Disturbance Control Standard QUARTERLY 321 8 329 82

Formal policies and procedures - coordination of activities - transmission system security

ANNUALLY 164 12 176 176

Adequate facilities for the system operators to monitor specific system parameters

ANNUALLY 179 9 188 188

CA and Operating Authority to provide system data to Reliability Authority

ANNUALLY 174 11 185 185

Reliability Coordinator to exchange system data

ANNUALLY 19 0 19 19Emergency Operation Plans developed and maintained

ANNUALLY 175 16 191 191

System Restoration Plans developed and maintained

ANNUALLY 166 27 193 193

System Operator Authority ANNUALLY 169 13 182 182Certified Operators on Duty MONTHLY 1628 193 1821 152

2002 Compliance Enforcement Program

Preliminary Results/Findings

Ø 2002 Implementation Plans Followed

Ø Extensive Use of Self-CertificationsØ Process Continues to Work Extremely WellØOn-Site Review (Audit) Programs Implemented in More RegionsØNumber and Scope of Audits Increased; Good Validation

Observed

Ø Electronic Reporting Initiated in Two Regions

Ø Annual Compliance Workshops ØConducted by 50% of the RegionsØOthers communicated program via Committees,

electronic/website

u6

2002 Compliance Enforcement ProgramPreliminary Results/Findings (continued)

ØException reportingØAlmost half of the Regions require an affirmative reportØRemainder working on mechanism following BOT request

ØNon Submittals Significantly Reduced

ØParticipation of Small Entities Improved

ØRegions Simulated Sanctions and Requested/Obtained Mitigation Plans

2003 Compliance Enforcement Program

Ø Recognize the new NERC Reliability Standards processØ No “new” measures from Planning Standards or Operating

Policies introduced

Ø 17 Operating Policy Measures and 24 Planning Measures

Ø New Enforcement Table to be Field-TestedØ Single enforcement table Ø Revised distribution of sanction letters

Ø Regional Compliance Program AuditsØ ERCOT, MAIN, and WECC {Will complete initial NERC audit

cycle}

u7

Contract Based Enforcement Program

Contract BasedEnforcement ProgramØ Establishes agreement among Regions and NERC to

enforce (collect dollar penalties) compliance for a set of agreed upon measures

Ø 9-out-of-10 Regions Have Signed Agreement

Ø Contains Three Compliance MeasuresØ CPS1, CPS2, and DCS

Ø Several Regions Expected to Include Enforcement Actions in 2003

Ø BOT requested detailed reports - June

1

Virtual RTOImplications for Planning

Stephen LeeMarch 18, 2003

Presented to NERC Planning Committee

What is a Virtual RTO?

• A well-coordinated group of RTOs which collectively covers an entire Interconnection.

• Coordination includes:– Information Technology– Congestion management procedures,– Interchanges – Financial settlements – Market interface– Transmission planning & resource adequacy

• Objectives: – reliability– market efficiency.

nicastra

Exhibit O

2

Planning and Resource Adequacy Perspectives

• Virtual RTO calls for interconnection-wide planning through more formal coordination among the regions– Transmission planning– Resource adequacy assessment– Data reporting– Financial settlement formulas

• Virtual RTO operation may result in more data for planning studies– Statistics on transmission bottlenecks– Statistics on wholesale transactions for realistic planning

studies– Capacity and forced outage rate data for generators and

transmission facilities• What is NERC Planning Committee’s role?

Standards and Guidelines

• Develop data reporting standards for enhancing coordinate transmission planning and resource adequacy assessments

• Develop data reporting procedures and standards for generator and transmission outage statistics

• Develop standards for defining Cohesive Electrical Zones and Common Flowgates

• Develop guidelines for regional planning

3

Reliability Assessments

• Coordination of Regional Reliability Assessments (including Resource Adequacy) with the Virtual RTO

• Perform statistical analysis of transmission bottlenecks

• Coordinate with Virtual RTO on Pre-Season Reliability studies

• Publish “non-confidential” aggregated statistics of generator and transmission forced outage rates