Project 2014-03 Revisions to TOP-001-3

1. Project 2014-03 Revisions to TOP-001-3 Third Posting Webinar October 2014

2. Agenda • Objectives • Background • Standard Drafting Team (SDT) Roster • Project History and Schedule • Project Inputs • Second Posting Ballot Results • Third Posting Details – TOP-001-3 • Questions and Answers

3. NERC Antitrust Compliance Guidelines It is NERC’s policy and practice to obey the antitrust laws and to avoid all conduct that unreasonably restrains competition. This policy requires the avoidance of any conduct that violates, or that might appear to violate, the antitrust laws. Among other things, the antitrust laws forbid any agreement between or among competitors regarding prices, availability of service, product design, terms of sale, division of markets, allocation of customers or any other activity that unreasonably restrains competition. It is the responsibility of every NERC participant and employee who may in any way affect NERC’s compliance with the antitrust laws to carry out this commitment.

4. Public Announcement Participants are reminded that this meeting is public. Notice of the meeting was posted on the NERC website and widely distributed. The notice included the number for dial-in participation. Participants should keep in mind that the audience may include members of the press and representatives of various governmental authorities, in addition to the expected participation by industry stakeholders.

5. Objectives Present the changes in the third posting with emphasis on TOP-001-3 Explain the SDT’s reasons for the changes Or, explain why the SDT didn’t make certain changes Continue outreach and education • If you have a group that you would like to make certain receives a presentation, let one of the SDT members know

6. Background

7. SDT Roster Dave Souder, PJM, Chair Andy Pankratz, FPL, Vice Chair David Bueche, Center Point Jim Case, Entergy Allen Klassen, Westar Bruce Larsen, WE Energies Jason Marshall, ACES Bert Peters, Arizona Public Service Robert Rhodes, SPP Kyle Russell, IESO Eric Senkowicz, FRCC Kevin Sherd, MISO

8. Project History and Schedule April 16, 2013: Projects 2006-06 and 2007-03 submitted November 21, 2013: Both projects proposed for remand December 20, 2013: NERC asked FERC to postpone remand January 14, 2014: FERC agreed to postpone until January 31, 2015 February 12, 2014: Project 2014-03 started May 19, 2014 – July 2, 2014: First posting August 6, 2014 – September 19, 2014: Second Posting October x, 2014 – October y, 2014: Final ballot October x, 2014 – October y, 2014: Third posting of TOP-001-3 November 12, 2014: Present to NERC Board of Trustees (Board) for approval January 31, 2015: submittal to FERC deadline

9. Project Inputs Projects 2006-06 and 2007-03 • Standard Authorization Requests (SARs) • Directives and Issues FERC Notice of Proposed Rulemaking (NOPR) Independent Experts Report SW Outage Report Operating Committee Executive Committee Memo IRO Five-Year Review Technical Conferences • St. Louis, MO • Washington, DC • Sacramento, CA First and Second Posting Comments

10. Second Posting Ballot Results

11. Second Posting Ballot Results * Dr

12. Third Posting Details

13. Third Posting Details TOP-001-3 Requirements R1 and R2: • Deleted ‘Operations Planning’ from all time horizons dealing with Operating Instructions • Operating Instructions are Real-time oriented • Replaced ‘ensure’ with ‘address’ • Entity can only address reliability issues, can’t guarantee reliability • Restructured requirement wording for clarity • Did not bring back Reliability Directive • Definition was rejected in FERC NOPR • Operating Instruction is approved terminology and capture’s SDT intent • RSAW modified to address industry concern regarding increased compliance risk. • Data Retention modified to address industry concern regarding administrative burden.

14. Third Posting Details TOP-001-3 Requirement R7: • Capitalized ‘E’ in Emergency • Uses defined term from Glossary Requirement R8: • Deleted ‘other’ from ‘known other Transmission Operators’ • Consistency with other requirements • Wouldn’t be notifying itself so term is redundant

15. Third Posting Details TOP-001-3 Requirement R9: • Deleted ‘NERC registered’ in front of ‘entities’ • Consistent with other such deletions in second posting • Added ‘sustained’ in front of ‘outages’ • Not interested in momentary loss • Combined ‘telemetering’ and ‘control’ equipment • Consistent with Version 0 requirement language

16. Third Posting Details TOP-001-3 Requirement R10: • Restructured to make clear what needs to be done internal versus neighboring TOP Areas • Emphasized why this was being done – to determine SOL exceedances • Changed ‘sub-100 kV’ to ‘non-BES’ for clarity of SDT’s intent • Did not delete requirement for non-BES as this is required from FERC NOPR, IERP Report recommendations, and SW Outage Report recommendations

17. Third Posting Details TOP-001-3 Requirement R11: • Replaced ‘ensure’ with ‘in order for it to be able to’ perform its reliability functions • Can’t ensure reliability Requirement R13: • Did not replace ‘ensure’ as term is correct here – entity must ensure Real-time Assessment is performed • Did not change 30 minute timeframe as this is a FERC approved timeframe for Real-time Assessments • Emphasized that an entity may have others perform the assessment

18. Third Posting Details TOP-001-3 Requirement R16: • Replaced ‘Real-time Assessment’ with ‘analysis’ • Need to consider all analyses such as Operational Planning Analysis Requirement R18: • Deleted ‘Balancing Authority’ • Balancing Authority not involved with SOLs

19. Third Posting Details SDT made a good faith effort to address comments within constraints of project inputs Although 8 of 9 standards passed in second posting, all is dependent on TOP-001-3 as standards are tightly intertwined and can’t be filed in pieces If TOP-001-3 doesn’t pass, then all fail FERC remand kicks in if Project 2014-03 isn’t filed by January 31, 2015 • Result would be specific directives from FERC on how to revise TOP and IRO standards

20. Additional Questions and Answers