NERC, NPCC & New England Compliance

1. NERC, NPCC & New EnglandCompliance Kathleen Goodman Operations Compliance Coordinator January 19, 2005 RC Meeting

2. ComplianceGeneral Information

3. Reporting Structure

4. 2005 ISO-NE Compliance ResponsibilitiesMatrix Organization Layout

5. Compliance Survey Timelines • Send out data request to appropriate Participants (i.e. generation, transmission) at least 2 months before due to NPCC • Give Participants at least 45 days to respond to ISO-NE • ISO-NE requires a minimum of 15 days to assimilate data for reporting Area Compliance to NPCC • NPCC reports Regional Compliance, based on Area submittals to NERC, if a NERC measure

6. 2005 Program Schedule • Will be published as soon as we have it • NPCC dependent on NERC to set their schedule • ISO-NE dependent on NPCC to set schedule based on NERC requirements, as well as NPCC requirements • Once NPCC sets schedule, ISO-NE modifies to include Participant-reporting requirement deadline to ISO-NE

7. Participant Reporting Structure • Compliance Contacts Maintained • Transmission • Generation (by Lead Participant) • These are the Individuals who are held responsible for providing the data • May request data from another individual (i.e. station operator, protection engineer), but you are still accountable

8. Compliance Contacts Maintained • One per Company - ONLY • Will CC another individual, if requested • Will not maintain multiple contacts at same company • Need to have one person to call and notify of lateness • Very burdensome due to lack of administrative staffing levels • Investigating the use of CAMS • Participants are responsible for notifying us of changes

9. NERC Version 0 Update

10. “Version 0” NERC Standards • “Plan for Accelerating the Adoption of NERC Reliability Standards” – June 15, 2004 • Translation from existing requirements • Existing Planning Standards, including post-blackout Compliance Template revisions • Existing Operating Policies, including post-blackout Policy 5, 6 & 9 revisions • This Committee was updated by John Norden at their August 31st meeting

11. “Version 0” First Ballot • Initial ballot conducted from December 3 through December 13, 2004 • 87.4% of the ballot pool voted, achieving a quorum • a weighted average of 94.4% affirmative vote by the ballot pool indicating approval • Several negative votes with comments were cast, requiring a recirculation ballot in accordance with NERC's ANSI-accredited standards process. • The recirculation ballot provides an opportunity for the ballot pool to view the dissenting comments and reconsider their votes

12. “Version 0” Final Ballot Results • The recirculation ballot was held from December 20, 2004 through January 7, 2005 • The Version 0 Reliability Standards Drafting Team reviewed comments submitted with the ballots and prepared their consideration of the comments • Stakeholders voted to approve the Version 0 Reliability Standards by a 95.5% weighted average • The standards will now be forwarded to the NERC Board of Trustees for adoption on February 8, 2005. • If adopted by the Board, the standards will become effective on April 1, 2005

13. “Version 0” Implementation • If adopted by the Board, the standards will become effective on April 1, 2005 • Because Version 0 is based on existing Policy, NERC expects industry to be fully compliant on April 1st • The first compliance reporting period will be April 1st through June 30th • Compliance based on Registered Entities (i.e. the Functional Model) and existing Compliance Templates – if their was existing compliance measures, if not, there are no measures

14. “Version 0” ISO-NE Next Steps • Project is aimed at preparing the ISO for the conversion to Version 0 of the NERC Standards • Perform Gap Analysis for the NERC Version 0 Templates with existing ISO-NE documentation • Based upon the Gap Analysis finding, re-write and or develop new Operating Procedures, M/L Procedures, SOPs, Planning Procedures etc. to fill gaps identified • Revise Compliance Procedure to ensure compliance and reporting responsibilities under Version 0, the NPCC RCEP, NRAP and ISO New England Standards • Re-write the Compliance SOP to include all compliance activities with “detailed” instructions

15. NERC Version 1 Update

16. “Version 1” NERC SARs • Standards Authorization Requests (SARs) – Proposition that a Standard be written for a specific Reliability need • Industry determines whether or not it is needed, based on vote • Six were posted for comment until January 7th • “Related” to Blackout Recommendations, requested to be expedited

17. Posted “Version 1” NERC SARs • Phase III/IV planning standards not included in Version 0; grouped into 4 SARs • Blackstart Capability • Disturbance Monitoring and Reporting • Modeling • Protection and Control • System Personnel Training • Nuclear Offsite Supply Reliability

18. Phase III/IV Planning Standards “Certain planning standards that were part of the Phase III and IV NERC compliance program were not included in the Version 0 reliability standards.  The Version 0 drafting team, supported by industry comments, realized it could not achieve industry consensus on these specific standards in the timeframe or within the scope of the Version 0 standards project.  These standards are important, nonetheless, as they contain critical reliability requirements in support of recommendations from the NERC and U.S./Canada Power System Outage Task Force reports on the August 14, 2003 blackout.  Recognizing the importance of these standards, the NERC board resolved on October 15, 2004, that: "A satisfactory resolution of the issues regarding Phases III and IV of the planning standards would be to: (1) develop reliability standards covering the Phase III and Phase IV issues separate from the Version 0 effort, using the NERC standards development process; (2) have the Planning Committee expeditiously complete the drafting of the proposed standards needed to address the Phase III and Phase IV issues, and move those standards through the NERC standards development process as promptly as possible, but not later than the May 2005 board meeting."  This SAR proposes the development of reliability standards that address the disturbance monitoring and reporting requirements of those Phase III and IV planning standards.”

19. Contentious “Version 1” NERC SARs • Phase III/IV planning standards • II.B Standards - System Modeling Data Requirements – Generation Equipment • Field Verification • Verification ofgross and net reactive power capability of generators • Test results of generator voltage regulator controls and limit functions • Test results of speed/load governor controls • Verification of excitation system dynamic modeling data

20. More Generations “Version 1”NERC SARs • III.C Standards – Generation Control and Protection • Prime mover control (governors) shall operate with appropriate speed/load characteristics to regulate frequency… • Generator owners/operators shall analyze protection system operations… • Generator owners/operators shall have a generator protection system maintenance and testing program in place… • Generation representatives should be providing input!

21. “Version 1” NERC Standards

22. “Version 1” Implementations? • Implementing some of these requirements could cost you money! • How will these costs be recovered? • Are all these requirements necessary for BES Reliability? • Are the necessary requirements included in what will ultimately come to pass? • New England will have to be compliant with the NERC requirements – if you have not been involved, you will be held to Standards that other people have drafted

23. NERC StandardsRecommendations

24. Shaping the Standards • Provide comments • Process is designed to build greater stakeholder participation and consensus as proposed standards proceed from the initial proposal to the final ballot • The NPCC builds consensus comments, for Member consideration; but we all provide individual company comments as well • The more “similar” comments are received the louder the voice becomes and the more influence it has

25. How is ISO-NE Involved • We comment directly to NERC, through the Registered Ballot Body mechanism • We actively participate in the NPCC group which has been charged with tracking, commenting, recommending voting, etc. during the NERC Standards development initiative • We actively participate in the ISO/RTO/Council SRC, a review group of ISO’s and RTO’s across the country designed to participate in NERC Standards development

26. Recommendations • GET INVOLVED – these will impact you directly • NPCC Group (CP-9) charged with reviewing and providing consensus comments to SARs, Standards, and – additionally – recommending a vote to NPCC Membership • The Registered Ballot Body (RBB) comprises all entities that qualify and register for one of the nine industry segments as defined in the Reliability Standards Process Manual. Members of the RBB are eligible to vote on proposed reliability standards • You can participate individually!

27. RBB Industry Segments • Segment 1 – Transmission Owners • Segment 2 – RTOs, ISOs, RRCs • Segment 3 – Load Serving Entities (LSEs) • Segment 4 – Transmission Dependent Utilities • Segment 5 – Electric Generators • Segment 6 – Electricity Brokers, Aggregators, and Marketers • Segment 7 – Large Electricity End Users • Segment 8 – Small Electricity Users • Segment 9 – Federal, State, and Provincial Regulatory or Other Government Entities

28. 2005 Compliance Proposal

29. 2005 Compliance Proposal • It is certainly time to keep a close watch on compliance requirements, therefore, ISO-NE proposes: • Retirement of the NEPOOL Compliance Working Group (NCWG) with thanks for their hard work and dedication • Hold quarterly update meetings with the RC, similar to today’s and • Have annual Workshops in the Spring

30. 2005 Compliance Proposal Schedule • Quarterly meetings with the RC • Same format as today • Piggyback on existing meetings; no additional meetings • February, May, August & October timeframes • Workshop on annual compliance requirements in the Spring of each year • RC members and Compliance Contacts invited to attend – central location

31. Questions?