NERC Blackout Recommendations - A Focus on Transmission Planning -

1. NERC Blackout Recommendations- A Focus on Transmission Planning - Brian F. Thumm, P.E. Supervisor – Transmission Planning Entergy Transmission Planning Summit July 8, 2004

2. On August 14, 2003 … … over 50 million people, in 8 states and two Canadian provinces, were directly affected by a cascading failure of the transmission grid … … a blackout, in which nearly 65,000 MW of load was interrupted. On August 15, 2003, President George W. Bush and Prime-Minister Jean Chrétien established a joint U.S.-Canada Power System Outage Task Force. • Investigate the causes • Reduce the possibility of future outages NERC commissioned an independent study of the Blackout.

3. NERC Investigation Conclusions • Entities violated NERC operating policies and planning standards • Existing process for monitoring and ensuring compliance with NERC and regional reliability standards inadequate • Reliability coordinators and control areas adopted differing interpretations of functions, responsibilities, authorities, and capabilities • Problems identified in studies of prior blackouts repeated • Vegetation management • Operator training • Tools to help operators properly visualize system conditions.

4. NERC Investigation Conclusions • Data used to model loads and generators inaccurate • Lack of verification with actual system data and field-testing • Planning studies, design assumptions, and facilities ratings not consistently shared / not subject to adequate peer review • Available system protection technologies not consistently applied to optimize the ability to slow or stop an uncontrolled cascading failure • Communications between system operators were not effective

5. NERC Resolutions • Receive specific information on all violations of NERC standards, including the identities of the parties involved; • Take firm actions to improve compliance with NERC reliability standards; • Provide greater transparency to violations of standards, while respecting the confidential nature of information and need for a fair and deliberate due process; • Inform and work closely with the Federal Energy Regulatory Commission and other applicable federal, state, and provincial regulatoryauthorities in the United States, Canada, and Mexico as needed to ensure public interests are met with respect to compliance with reliability standards.

6. Blackout Recommendations NERC Board of Trustees approved 14 recommendations near term actions – actions that FirstEnergy, PJM, and MISO must take to remedy deficiencies before this summer (Recommendation #1) strategic initiatives – actions to strengthen compliance with existing reliability standards and to track the implementation of recommendations from this and other outage investigations (Recommendations #2-5) technical initiatives – actions to prevent or mitigate the impact of future cascading blackouts. (Recommendations #6-14) NERC Board Recommendations issued prior to release of NERC Blackout Report

7. Recommendation 1Correct the direct causes of the August 14, 2003 Blackout 1a. The companies implicated in the blackout are directed to complete specified remedial actions and certify that these actions have been completed. 1b. NERC will assign experts to help these companies develop plans that adequately address the issues identified in this report, and for any other remedial actions for which they require technical assistance. Near-Term Action

8. Recommendation 2Strengthen NERC’s Compliance Enforcement Program Entergy Status: NERC formed a Compliance Template Task Force, and revised several compliance templates. Many of these revision were a “crisping” of the existing standards, to make the wording less ambiguous. The new compliance templates were disseminated to the industry. The SERC Region adopted the new templates, and incorporated them into the current year’s Compliance and Enforcement Plan. 2a. Each Region will report all violations of NERC operating policies, planning standards and regional standards, whether verified or pending investigation. 2b. If presented with evidence of a significant violation, the offending organization must correct the violation within a specified time. If an organization is determined to be non-responsive and presents a reliability risk, NERC will request assistance of the appropriate regulatory authorities. 2c. NERC will review and update all compliance templates applicable to current NERC reliability standards. 2d. NERC and ECAR will evaluate violations of NERC and regional standards and develop recommendations to improve compliance with reliability standards. Strategic Initiative

9. Recommendation 3Initiate Control Area and Reliability CoordinatorReliability Readiness Audits Entergy Status: Entergy made its personnel and facilities available for a NERC Control Area Readiness Audit from May 12 - 13, 2004 at the System Operations Center. A draft report with recommendations has been issued, and Entergy is incorporating suggestions made by the Audit Team. Entergy personnel have also been participating on the readiness audits of other Control Areas. 3a. NERC and the Regions will establish a program to audit all reliability coordinators and control areas, with immediate attention given to addressing the deficiencies identified in the blackout investigation. These audits shall be completed within three years, with the 20 highest priority audits to be completed by June 30, 2004. 3b. NERC will establish a set of baseline audit criteria that will include evaluation of reliability plans, procedures, processes, tools, personnel qualifications, and training. 3c. The Regions, with input from NERC, will audit each control area’s and reliability coordinator’s readiness to meet these audit criteria. Strategic Initiative

10. Recommendation 4Evaluate Vegetation Management Procedures and Results Entergy Status: September, 2003: Entergy staff drafted a Transmission Vegetation Work Management Process. The new process is in the review stage. June, 2004: Entergy submitted a Transmission Vegetation Management Report to FERC, NERC, SERC, States. Another report is being prepared in response to an APSC order for all Transmission and Distribution lines and Rights of Way in Arkansas (due July 16, 2004). July, 2004: Entergy will begin monthly reporting of vegetation-related outages to SERC. Entergy has actively participated in the development of a new NERC vegetation standard through comments on the SAR individually and through EEI and has nominated a volunteer to serve on the NERC standard drafting team. 4a. NERC and the Regions will initiate a program to report all transmission line trips resulting from vegetation contact. 4b. Each transmission operator will submit an annual report of all vegetation-related high voltage line trips to its Region. 4c. Each transmission owner shall make its vegetation management procedures and documentation of work completed available for review and verification. Strategic Initiative

11. Recommendation 5Establish a Program to TrackImplementation of Recommendations • Entergy Status: • Entergy participates in SERC at the Regional level on committees and subcommittees which are developing the types of programmatic controls required by Recommendations 5a and 5b. • Compliance Oversight Group • Compliance Review Steering Committee (EC) • Compliance Subcommittee (OC) 5a. NERC and the Regions will establish a program to document the completion of recommendations resulting from the August 14 blackout investigation and investigations of other historical outages, reports of violations of reliability standards, results of compliance audits, and lessons learned from system disturbances. 5b. NERC will establish a program to evaluate and report on bulk electric system reliability performance. Strategic Initiative

12. Recommendation 6Improve Operator and Reliability Coordinator Training 6. All reliability coordinators, control areas, and transmission operators shall provide at least five days per year of training and drills in system emergencies for each staff person with responsibility for the real-time operation or reliability monitoring of the bulk electric system. Technical Initiative

13. Recommendation 7Evaluate Reactive Power and Voltage Control Practices Entergy Status: The Entergy Transmission Planning Technical Studies group is scoping studies on reactive power planning and voltage stability. 7a. NERC will reevaluate the effectiveness of the existing reactive power and voltage control standards and how they are being implemented in practice, and develop recommendations to ensure voltage control and stability issues are adequately addressed. 7b. ECAR will review its reactive power and voltage criteria and procedures and verify that its criteria and procedures are being fully implemented in regional and member studies and operations. Technical Initiative

14. Recommendation 8Improve System Protection to Slow or Limitthe Spread of Future Cascading Outages Entergy Status: As of the week ending June 25, over one-third of the Zone 3 settings have been reviewed and tested. This review is expected to be completed by the second week of August. Entergy identified two areas in its system that have the potential for developing voltage stability problems and has implemented undervoltage load shed programs to address these extreme contingencies. 8a. All transmission owners will evaluate the zone 3 relay settings on all transmission lines operating at 230 kV and above for the purpose of verifying that each zone 3 relay is not set to trip on load under extreme emergency conditions. NERC will review any proposed exceptions to ensure they do not increase the risk of widening a cascading failure of the power system. 8b. Each Region will evaluate the feasibility and benefits of installing under-voltage load shedding capability in load centers that could become unstable as a result of being deficient in reactive power following multiple-contingency events. The Regions are to promote the installation of under-voltage load shedding capabilities within critical areas that would help to prevent an uncontrolled cascade of the power system. 8c. Evaluate Planning Standard III – System Protection and Control and propose revisions to adequately address the issue of slowing or limiting the propagation of a cascading failure. Evaluate the lessons from August 14 regarding relay protection design and application and offer additional recommendations for improvement. Technical Initiative

15. Recommendation 9Clarify Reliability Coordinator and Control Area Functions, Responsibilities, Capabilities 9. The NERC Operating Committee shall perform the following: • More clearly define the characteristics and capabilities necessary to enable prompt recognition and effective response to system emergencies. • Ensure the accurate and timely sharing of outage data necessary to support real-time operating tools such as state estimators, real-time contingency analysis, and other system monitoring tools. • Establish the consistent application of effective communications protocols, particularly during emergencies. • The operating policies must be clarified to remove ambiguities concerning the responsibilities and actions appropriate to reliability coordinators and control areas. Technical Initiative

16. Recommendation 10Establish Guidelines for Real-Time Operating Tools 10. Evaluate the real-time operating tools necessary for reliable operation and reliability coordination, including backup capabilities and report both minimum acceptable capabilities for critical reliability functions and a guide of best practices. Technical Initiative

17. Recommendation 11Evaluate Lessons Learned During System Restoration 11a. Evaluate the black start and system restoration performance following the outage of August 14 and develop recommendations for improvement. 11b. All Regions will reevaluate their procedures and plans to assure an effective blackstart and restoration capability within their region. Entergy Status: Entergy is represented on the SERC Operations Planning Subcommittee and participated in the April 13, SERC OPS annual review of blackstart plans. An effort is underway to determine the status of synchronization capability between the companies in SERC. The OC OPS committee expects to present a new SERC Blackstart Plan Appendix for approval at an OC meeting listing availability of control area to control area synchronization points in the near future. Internally, Entergy's blackstart team performs a thorough annual review of all aspects of the plans for each Transmission Operation Center, and, on a seasonal basis updates and refreshes information such as emergency and operations contacts, document owners, team members, feeder priority lists, testing schedules and synchronization. Technical Initiative

18. Recommendation 12Install Additional Time-SynchronizedRecording Devices as Needed Entergy Status: Entergy is in its third year of a six-year program of modernizing and replacing DFRs with new technology units that will synchronize using satellite clocks. Presently, 43 of Entergy’s 70 DFRs are synchronized. Of the twenty-seven DFRs that are not time synchronized, ten are installed at nine substations that tie to other companies. Entergy is implementing new technologies to facilitate a good understanding of the dynamic behavior of eastern interconnection, such as the EIPP and the the WAMS programs. The expected completion date is Fall 2004; eleven total installations are planned by October 2004. 12a. Define regional criteria for the application of synchronized recording devices in power plants and substations and facilitate the installation of the devices to allow accurate recording of system disturbances and to facilitate benchmarking of simulation studies. 12b. Facility owners will upgrade existing dynamic recorders to include GPS time synchronization and, as necessary, install additional dynamic recorders. Technical Initiative

19. Recommendation 13Reevaluate System Design, Planning and Operating Criteria • Entergy Status: • Entergy participates at in SERC at the Regional level on committees and subcommittees which are developing the follow-up reports on blackout lessons learned. Entergy will continue to participate at the Regional level to have input into the process. • Reliability Review Subcommittee • Operations Plannng Subcommittee • Security Coordinators’ Subcommittee 13a. Evaluate operations planning and operating criteria and recommend revisions. 13b. ECAR will reevaluate its planning and study procedures and practices to ensure they are in compliance with NERC standards, ECAR Document No.1, and other relevant criteria; and that ECAR and its members’ studies are being implemented as required. 13c.Reevaluate the criteria, methods and practices used for system design, planning and analysis. This review shall include an evaluation of transmission facility ratings methods and practices, and the sharing of consistent ratings information. Technical Initiative

20. Recommendation 14Improve System Modeling Data and Data Exchange Practices Entergy Status: The SERC Region has commissioned a Model Validation Task Force to implement Recommendation 14. Entergy will be represented on the task force by members of the VAST and VST study groups. Entergy also participates in the SERC Regional modeling efforts by remaining active in the VST, which is responsible for the development of the base case models that will ultimately be validated. 14. Establish and implement criteria and procedures for validating data used in power flow models and dynamic simulations by benchmarking model data with actual system performance. Validated modeling data shall be exchanged on an inter-regional basis to support reliable system planning and operation. Technical Initiative

21. Questions