DM_MTL/118243.00010/2909088.8

COMMENTS OF THE INTERVENOR NEWFOUNDLAND AND LABRADOR HYDRO REGARDING FOLLOW-UP OF DECISIONS D-2011-068 AND

D-2012-091 WITH RESPECT TO THE REQUEST BY HYDRO-QUÉBEC CONTRÔLE DU MOUVEMENT DES ÉNERGIES TO ADOPT RELIABILITY

STANDARDS

FILE R-3699-2009 - PHASE 1

Presented to the Régie de l’énergie du Québec

Montréal, Québec

October 31, 2012

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TABLE OF CONTENTS INTRODUCTION ........................................................................................................ 3

1. COMMENTS OF GENERAL CONCERN .......................................................... 3

(a) Compliance Monitoring .................................................................................. 3

(b) The addition of Section A.6 to the Appendix of HQ’s standards .................. 9

(c) Use of the Defined Term Bulk Power System (“BPS”) ................................ 10

(d) Use of the phrase ‘Loads Affected by MTS’ ................................................ 14

(e) Use of the phrase “Québec Interconnection” ............................................... 14

(f) Comment on different ‘Scope’ statements ................................................... 17

(g) Comments on use of the phrases “Registered Entity” and “Responsible Entity” ........................................................................................................... 17

2. COMMENTS ON THE APPENDICES OF PARTICULAR STANDARDS .... 20

(a) Standard PRC-001 ........................................................................................ 20

(b) Standard EOP-004 ........................................................................................ 20

(c) Standard PRC-018:....................................................................................... 22

(d) Standard TPL-004: ....................................................................................... 22

(e) Glossary ......................................................................................................... 23

3. SUBSEQUENT ACTIONS AND PROCESSES ................................................... 23

(a) Standards related to the FERC Order 890 and Approved by FERC since HQ’s initial submission; ............................................................................... 23

(b) Filing of revised standards ........................................................................... 24

4. CONCLUSION .................................................................................................... 24

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INTRODUCTION

Nalcor / Newfoundland and Labrador Hydro (“NLH”) as both a purchaser of Transmission Service from Hydro-Québec (“HQT”) and as the operator of a synchronously connected electrical system, wishes to pass comment on the thirty-eight reliability standards prepared by the HQ Reliability Coordinator (“HQRC”) and submitted to the Régie de l’énergie (“Régie”) on Sept 24, 2012.

NLH’s comments are in some cases general with application to numerous standards, while in others they are directed at individual standards.

1. COMMENTS OF GENERAL CONCERN

(a) Compliance Monitoring

Reliability standards developed by NERC and subsequently adopted by the Régie identify in section A.4 the “Responsible Entities” to which that standard applies. To ensure that the entities specified comply with the activities required of them (section B), the standard also contains at D 1.1 a section titled “Compliance Monitoring Responsibilities” which identifies the entities which will monitor the performance of the “Responsible Entities” identified in A4.

NLH wishes to comment on the reporting relationships specified in the appendices to the standards and to contrast this reporting relationship to that specified in the QROP1 and the QCMEP2.

Of particular interest to NLH is the fact that for many of these standards HQRC, through section A.4 of its appendix, has removed the requirement that the standard apply to the Regional Reliability Organization (RRO) and has thus removed the requirement that the RRO be “the Compliance Monitor” for the “Responsible Entities” identified in A4. HQRC through section D 1.1, and related subsections, has as well modified the text of the Compliance Monitoring Responsibility Section to make that section conform to the removal of the RRO from the applicability section.

In order to properly asses HQRC filing at the Régie, NLH submit to the Régie the following excerpts from QCROP.

1 Québec Rules of Procedure (QROP) for Compliance Services by the North American Electric Reliability Corporation, July 28, 2009. 2 Québec Compliance Monitoring and Enforcement Program (QCMEP) for Implementation by Northeast Power Coordinating Council, Inc. July 28, 2009. We also refer to Régie’s letter dated December 16, 2009. We understand from this letter that these two documents are not actually into force.

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2.1.1 Components of the NERC Compliance Enforcement Program: NERC shall develop and implement a NERC Compliance Monitoring and Enforcement Program, working through the NPCC to promote the reliability of the electric power transmission system by monitoring compliance with adopted reliability standards in Québec, and making compliance enforcement recommendations to the Régie. There are four distinct parts of the NERC Monitoring and Compliance Enforcement Program: (1) NERC’s oversight of NPCC compliance programs (Section 2.2), (2) the definition of the required NPCC compliance enforcement program attributes (Section 2.3), (3) NERC’s monitoring of NPCC compliance with reliability standards (Section 2.4), and (4) the monitoring of compliance with reliability standards that are applicable to NERC (Sections 2.5–2.6).

(…)

2.1.4 Role of NPCC in the Compliance Enforcement Program: NPCC shall, taking into account Québec’s legal and regulatory environment, administer a regional entity compliance enforcement program to meet the Québec Compliance Monitoring and Enforcement Program goals and the requirements in this Section 2.0. [emphases added]

(…)

2.1.7 Penalties, Sanctions, and Remedial Actions: NERC and NPCC will recommend to the Régie penalties, sanctions, and remedial actions that bear a reasonable relation to the seriousness of a violation and take into consideration timely remedial efforts as defined in the Québec Sanction Guide.

Also QCMEP excerpts are relevant: 1.0 INTRODUCTION This Québec Compliance Monitoring and Enforcement Program (“QCMEP”) is used by the Northeast Power Coordinating Council, Inc. (“NPCC”) to monitor and assess compliance with Reliability Standards within Québec, and make recommendations to the Régie de l’énergie du Québec (“Régie”) regarding the enforcement of the Reliability Standards, taking into account Québec’s legal and regulatory environment.

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2.0 IDENTIFICATION OF ORGANIZATIONS RESPONSIBLE FOR COMPLYING WITH RELIABILITY STANDARDS NPCC shall receive from the Régie a listing of Registered Entities in Québec. Each Registered Entity will inform the Reliability Coordinator, which will inform the Régie promptly of changes to its Registration information. The Régie will inform NPCC of such changes. NPCC shall inform each Registered Entity of the Reliability Standards that are applicable to the Registered Entity, as determined by the Régie when it adopts the Reliability Standards. NPCC shall maintain on its Web site a current listing of Reliability Standards that are applicable to each Registered Entity. NPCC will designate a contact person(s) and require each Registered Entity to designate a contact person(s) responsible for sending and receiving all necessary information and communications concerning compliance matters. NPCC will designate where and how Registered Entities are to send information, data, Mitigation Plans, or any other compliance-related correspondence. NPCC shall develop, maintain, and provide to NERC the NPCC Compliance Registry with updates whenever changes occur to the registry. NERC shall maintain the NERC Compliance Registry on its Web site.

(…)

2.3.8 NPCC’s QCMEP Content: All Québec reliability standards shall be included in the NPCC’s QCMEP for all Registered Entities. NERC will identify the minimum set of Québec reliability standards and requirements to be actively monitored by NPCC in a given year. [emphases added]

(…)

2.3.10.1 NPCC has the responsibility to collect the necessary information to evaluate compliance and shall develop processes for gathering data from the Registered Entities they monitor. 2.3.10.2 When requested, NPCC shall report information to the Régie and NERC promptly and in accordance with NERC procedures.

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2.3.10.3 NPCC shall notify the Régie and NERC of all violations of Québec reliability standards by entities over which NPCC has monitoring responsibilities, whether self reported, alleged, or confirmed, in accordance with the Reporting and Disclosure Process in Section 2.8. [emphases added]

(…)

2.3.11 Compliance Audits of Registered Entities: NPCC will maintain a program of proactive compliance audits. NPCC shall audit each Registered Entity responsible for complying with reliability standards. A compliance audit is a process in which a detailed review of the activities of a Registered Entity is performed to determine if that Registered Entity is complying with Québec reliability standards. [emphases added]

(…)

3.0 COMPLIANCE MONITORING AND ENFORCEMENT PROCESSES NPCC shall monitor and assess Québec Registered Entities’ compliance with Reliability Standards and make compliance enforcement recommendations, including recommended financial penalties, to the Régie.

Collectively the quotes above demonstrate that NPCC will be responsible for monitoring how Registered Entities comply with Québec standards.

However, contrary to the provisions of these agreements, Appendices to specific standards recommend removing NPCC functions. The appendix to EOP-004 exemplifies this. That appendix in section A4.6 specifies that the standard is not applicable to the Regional Reliability Organization (RRO).

The relationship between the RRO and NPCC is specified in the Glossary of Terms and Acronyms used in Reliability Standards3. That document in its definition of the Regional Reliability Organization (RRO) specifies in footnote #4 that NPCC is the RRO for the Québec system.

As a consequence of the responsibilities outlined in the references noted above NPCC is expected to be the compliance monitor of the standards for Québec that apply to Regional entities. NLH requests that this intention be maintained by rejecting HQRC’s Appendixes which remove the RRO / NPCC as the compliance monitor for the Regional entities.

3 B94-HQCME-6 Glossary following D-2011-068 decision.

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NLH’s desire to maintain the role of the NPCC / RRO will also necessitate a change to the wording in Section D1.1, and applicable sub-sections, of the relevant HQ appendices. The Québec Appendix to the relevant standards recommends changes to section D1.1 by stating: “The Régie de l’énergie is responsible, in Québec, for compliance monitoring with respect to the reliability standard and its appendix that it adopts”.

In the event that the role of NPCC / RRO is maintained NLH suggests that the following wording, or similar, replace the existing wording in Section D1.1 of the relevant HQRC appendices:

Compliance Monitor: NPCC for Regional entities - NPCC shall report compliance and violations to the Régie and/or NERC in accordance with the QROP and the QCMEP.

This language is an adaptation of Similar Language used in NERC Standard PRC-017, where in section D 1.1 it said;

Compliance Monitor: Regional Reliability Organization. Each Region shall report compliance and violations to NERC via the NERC Compliance Reporting process.

And is consistent with the intentions of section 2.8.1 of QROP where it states;

2.8.1 Reporting Requirements: NPCC shall report all known violations, self-reported, confirmed, and alleged, of all reliability standards to the Régie and to NERC in accordance with the requirements established in the NERC Compliance Monitoring and Enforcement Program procedures document.

And is as well consistent with section 8.0 of the QCMEP which states;

8.0 REPORTING AND DISCLOSURE NPCC shall prepare and submit to the Régie and NERC all required reports containing current information concerning (1) Registered Entity compliance with Reliability Standards.[…]

In addition to the recommendations mentioned above the desire to maintain the role of the RRO / NPCC will also necessitate that an entity be responsible for monitoring the compliance of the RRO. It appears this requirement was as well envisioned in QROP and QCMEP.

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Section 2.4 of the QROP states:

2.4 NERC Monitoring of Compliance for NPCC

NERC shall monitor NPCC compliance with NERC reliability standards.

Similarly Section 2.4.1 states:

2.4.1 NERC Obligations: NERC compliance enforcement staff shall monitor the compliance of NPCC with the reliability standards for which NPCC is responsible.

As a result of the references above, it is also suggested that HQRC modify section D 1.1, and applicable subsections, of the relevant appendixes to recognise that NERC is the compliance monitor for NPCC (RRO). Below is suggested test for that revision;

Compliance Monitor: NERC for NPCC - NERC shall report compliance and violations to the Régie in accordance with the QROP and the QCMEP

NLH believes that maintaining the role of the RRO in the NERC standards as they apply in Québec ensures that the application of standards is as stringent as it is in the rest of North America.

In May 2009 the Régie, NERC and NPCC entered into an agreement titled “Agreement on the development of electric power transmission reliability standards and of procedures and a program for the monitoring of the application of these standards for Québec”. Section 4.2 of that agreement states:

NERC and NPCC undertake to ascertain that any electric power transmission reliability standards specific to Québec, and/or any variant of such standards specific to Québec, which the reliability coordinator deems necessary to ensure the reliability of electric power transmission in Québec, is as stringent as the NERC reliability standards applicable in the rest of North America. [emphases added]

NLH believes that the standards adopted for use in Québec should contain the roles intended for NPCC (RRO), NERC and Régie in the agreements specified.

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(b) The addition of Section A.6 to the Appendix of HQ’s standards

In D-2012-091, R-3699-2009 Phase 1, July 25, 2012 decision, the Régie asked the Coordinator to clarify and codify in their appendices the scope specific to Québec according to the regulatory content of the Matrix, as accepted by the Régie in the Decision.

While NLH is thankful for the effort to inject clarity into the documents and agrees with the Régie’s decision, it finds that the inclusion of a new subsection into the appendix, subsection A.6, titled “Scope”, may in itself create conflicts between that section and others presently contained in the Standards.

To illustrate this point by way of example standard FAC-010 will be used. HQRC’s appendix to this standard contains the new subsection A.6 (Scope), however;

1. The newly created subsection, A.6, does not have a corresponding section in the NERC standard which it can say it is clarifying.

2. This new section, A.6 contains the phrase “Main Transmission System, MTS”, which leads NLH to conclude that the electrical or geographic footprint for this standard is the MTS. However, at the same time section A.3 of the NERC standard, titled “Purpose” makes reference to the BES. This reference to the BES is not modified in HQ’s appendix to the standard, where in section A.3 of the appendix it states “No Specific Provisions”. Hence, the appendix, through section A.3, does not modify the Purpose of the standard and maintains the BES specification, while in section A.6, the reader is informed that the Scope of the standard is the MTS. Thus, two different electrical footprints are specified during the reading of the standard and its appendix.

As a result of the above, NLH would like to ensure that the potential for different interpretations is eliminated. It asks that either the “Scope” modifications required by section A.6 be incorporated into the appendices in the section titled “Regional Differences”, section E, or alternatively, that the change in scope required by the standard for Québec not be incorporated into a section or subsection of the appendix, but instead be incorporated into a main section, or heading of the appendix. In any event NLH would like to confirm that in the case of a discrepancy in interpretation, the geographic or electrical boundaries identified in the “Scope”, prevail.

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(c) Use of the Defined Term Bulk Power System (“BPS”) A number of the HQRC appendices which accompany the NERC Reliability standards, (as an example PRC-018 and TPL-004) use the acronym BPS. While this acronym is not defined in the NERC Glossary, HQRC have incorporated it into the Glossary applicable to the reliability standards for the Québec system by sourcing it from the NPCC Glossary. The NPCC glossary, NPCC Document A-7, and the HQRC Glossary both define the BPS as:

The interconnected electrical systems within northeastern North America comprised of system elements on which faults or disturbances can have a significant adverse impact outside of the local area.

Integral to the BPS definition is an analysis (test) which determines whether or not a fault on a system element can have a significant impact outside its local area. FERC, in Order 743 refers4

to the use of the BPS definition as an impact based methodology which is used to identify the elements subject to a standard. This process for identifying elements or facilities is in contrast to the more prescriptive MTS definition which identifies more directly the elements and facilities (lines, generators and controls) which perform specific system functions. The HQRC Glossary defines MTS as:

The transmission system comprised of equipments and lines generally carrying large quantities of energy and of generating facilities of 50 MVA or more, providing control over reliability parameters: Generation/load balancing Frequency control Level of operating reserves Voltage control of the system and tie lines Power flows within operating limits Coordination and monitoring of interchange transactions Monitoring of special protection systems System restoration

The product of this definition is the list of MTS elements contained in document HQCME-06-07, June 8, 2012, annexes B to E, pages 66 to 90.

4 Revision to Electric Reliability Organization Definition of Bulk Electric System, Order No. 743, 133 FERC ¶ 61,150, (Issued November 18, 2010) available at : http://www.ferc.gov/whats-new/comm-meet/2010/111810/E-2.pdf

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Contrary to the definitive list above, the BPS elements referred to in the NPCC Glossary (but not adopted by NERC nor FERC) are identified through an impact assessment process contained in, NPCC Document A-105. That document provides a methodology for the identification of those elements to which the Bulk Power System criteria are applicable; i.e. those which would have a wide area reliability impact on the operation of the Interconnection and its operation with neighbouring systems.

NLH, in its review of the Reliability Standards Application Matrix6 related to the use of the term BPS was not able to identify a reference to NPCC A-10 in either of the columns titled ‘Mandatory Compliance to NPCC Documents’, ‘Optional Compliance to NPCC Documents’ or ‘Other Support Documents’.

NLH assumes that based on HQRC’s desire to include the BPS definition into certain standards, HQRC will also be recommending a requirement to undertake an assessment similar to that identified in NPCC A-10 and as a result will be proposing a reference to either NPCC A-10, or a similar methodology document, in the Application Matrix.

Without advanced knowledge of the particular impact assessment that could be applied to identify facilities subject to reliability standards, NLH expects that the application of such a test will result in the exemption or addition of elements to the MTS list of facilities already reviewed by the Régie in HQCME-06-07, June 8, 2012, annexes B to E, pages 66 to 90. Such additions and exemptions would be undertaken without the oversight of the Régie.

NLH believes that the methodology employed to identify the elements which will be subject to reliability standards, and any ambiguity within, can have an impact on the identification of the elements captured by the definition. Any lack of clarity associated with the BPS analysis methodology may prevent the application of a standard to an MTS element that would protect the system from instability, uncontrolled separation or cascading failures and prevent the development of a mitigation plan in the event such an element is the cause of a contingency.

While NLH acknowledges that the Régie does not have to adopt NERC’s BES definition for application to the standards, and has the authority to adopt the MTS, BPS or another definition which identifies system elements, NLH does feel that clarity should be considered integral criteria in the standards adoption process.

NLH believes that ambiguity in the BPS identification process, as per the methodology of A-10, or any similar process, could fail to ensure that all the element and facilities 5 We added this document as Appendix 1 of our comments. 6 HQCME-2, Document 6.1

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necessary for the reliable operation of the Québec System are covered by the Reliability Standards and fails to ensure that elements are not added to, or subtracted from, the list of facilities and elements already analysed by the Régie.7

Similar concern was expressed by FERC in Order 743 when it commented on the superiority of its BES definition as a mechanism for identifying facilities necessary for reliable system operation when compared to the impact assessment approach suggested by NPCC through the use of A-108. FERC, at the following paragraphs stated:

76 […]The Commission does not support using the material impact tests offered by commenters as a basis for determining a facility’s importance. Section 215 states that the Reliability Standards apply to facilities that are necessary for operating an interconnected electric energy transmission network (or any portion thereof). The material impact tests that either are under development or implemented appear to exclude facilities without regard to whether they are necessary to operate the system, and instead seek to determine the impact of the loss of an element.

77. We disagree with commenters who assert that NPCC’s current material impact assessment, referred to as NPCC Document A-10, ensures that the proper facilities are included in the bulk electric system. Although the NPCC Document A-10 provides a test methodology to identify elements of the bulk electric system, the tests prescribed are subjective. In the test, a specific bus is subjected to a three-phase fault and the impacts on other buses are determined. NPCC Document A-10 states that “a transient stability test may be done first to identify buses at which faults may cause a significant adverse impact outside of the ‘local area.’” The term “local area” is broadly defined and is open to interpretation. Thus, under NPCC Document A-10, if an entity chooses a large geographical area for its “local area,” the impact resulting from a fault at a specific bus could be considered a “significant adverse impact,” but since the impact falls within the large “local area,” the bus may not be declared part of the bulk electric system. For example, if one entity defines the “local area” as the boundary of the balancing authority, while another entity

7 A review of the document titled ‘Reliability Standards Application Matrix, under the heading titled “Applicable System(s) or Facilities in Quebec” Makes reference to both the MTS and the BPS thus indicating that the complete list of facilities covered by each definition are not identical 8 In the summary of order 743-A, 134 FERC 61,210, the Commission denied rehearing and otherwise reaffirmed its determinations in order 743, FERC

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defines the local area as adjacent buses, the outcome of the two tests could vary significantly. In particular, this likely could result in an exclusion of a large number of facilities from the purview of the bulk electric system for the first entity that applies a broader view of “local area.” 78. NPCC Document A-10 does not assess whether the facilities within the “local area” are necessary for reliable operation of the interconnected transmission network and also does not discuss system performance or any “significant adverse impact” on the facilities within the “local area.” Therefore, facilities within a local area could operate in an unstable manner or violate emergency operating limits, and as long as these adverse effects are contained within the defined “local area,” NPCC’s Document A-10 assessment would deem those facilities outside the scope of the bulk electric system. We believe NPCC’s Document A-10 assessment has resulted in an inconsistent process that excludes facilities from the bulk electric system.

NLH believes the opinion supplied by FERC in relation to the BES apply equally to the MTS.

A read of the HQ glossary indicates that RC has not included into its Glossary the definition of Local Area, as contained in the NPCC Glossary. While the exclusion of this term does not diminish the potential for subjective or inconsistent application of the BPS test process, NPCC’s definition is cited below for reference:

Local area — An electrically confined or radial portion of the system. The geographic size and number of system elements contained will vary based on system characteristics. A local area may be relatively large geographically with relatively few buses in a sparse system, or be relatively small geographically with a relatively large number of buses in a densely networked system.9

Neither the definition above, nor the lack of one, should misconstrue the fact that the electrical systems outside of Québec are not considered to be either a “local Area” or an electrically confined or radial portion of the HQ system which could be presented as being subject to the BPS testing Methodology.

9 Northeast Power Coordinating Council, Inc, Glossary of Terms, Approved Available at :

https://www.npcc.org/Standards/Directories/Glossary%20of%20Terms.pdf

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As a consequence of the ambiguity inherent in the BPS methodology’s suitability for identifying facilities that are to be subject to standards, NLH suggests that the Régie adopt a clear process for exempting or adding facilities to the Registry’s list of facilities and elements derived from the MTS definition.10. Such a process would prove useful and convenient for cataloging facilities such as the generating and load servicing assest which are switched to be either isolated from, or connected to the HQ and Ontario or New Brunswick systems.

In the event that the Régie agrees to accept the implementation of an impact assessment based methodology, the methodology should be approved by the Régie, and referenced in the Reliability standards Application Matrix, prior to including the BPS term in the Appendices supplied by HQRC. In the interim MTS should be maintained as the scope. An approval process for the application of BPS within the ‘Scope’ of a standard would ensure that the test is not subjective, and would prevent the addition to or deletion from the list of MTS elements without Régie oversight.

(d) Use of the phrase ‘Loads Affected by MTS’

The appendix to particular standards submitted by HQRC for approval contain the phrase “or loads affected by the MTS” in the newly adopted “Scope” Section, A.6. As was the case with the use of the phrase “BPS”, NLH is concerned with the use of the phrase “or loads affected by the MTS” in that the phrase utilizes the word “affected”, which implies a process that will be utilized to identify facilities which could be subject to the reliability standards. The appendix to standard EOP-004 is an example of such a document.

At this point of the standards adoption process the loads affected by the MTS have not been identified and cataloged nor has a method for identifying them been discussed or approved thus making the scope of the standard indeterminate.

(e) Use of the phrase “Québec Interconnection”

The Reliability standards Application Matrix and the appendix to standard MOD-018, and possibly the appendices to other standards listed in the matrix, use subsection A.6 in the appendix, titled “Scope” to indicate that within Québec the standard applies to the “Québec Interconnection”. A review of the document titled “Glossary of Terms and

10 In order 743 at paragraph 95 FERC states;……We also note that the Final Rule directs the ERO to consider adopting an exemption process that would help alleviate the Joint Canadian Parties’ concerns about a “one-size fits all” approach….

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Acronyms used in Reliability Standards” did not provide a definition of the geographic or electrical footprint of the Québec Interconnection.

NLH believes that if this ‘Scope’ of application is accepted, the Régie should also request that HQRC submit a definition of the Québec Interconnection to remove subjectivity, uncertainty or ambiguity associated with the term.

As a guide for the development of such a definition NLH provides references to NERC, FERC and other documentation.

NERC on its web site illustrates the Québec Interconnection as follows:

Consistent with this interpretation, FERC in Order 119 FERC 61,060 11 made the following determinations:

288. The geographic region in which NPCC will perform its duties and functions under the NPCC Delegation Agreement will include, as noted above, New York State, the six New England states, and Ontario, Québec, and the Maritime Provinces in Canada. The region covers approximately one million square miles. NERC, in support of this proposed regional boundary, states that the six Regional Entities within the Eastern Interconnection, including NPCC, have worked together to develop their respective Exhibit A proposals. This is

11 Order accepting ERO compliance filing, accepting ERO/regional entity delegation agreements, and accepting regional entity 2007 business plans (issued April 19, 2007)

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especially important for a region that is less than interconnection-wide, where failure of one of the region’s bulk-power system components may have an adverse impact on the neighboring regions’ bulk-power systems. NERC asserts that these Regional Entities are satisfied that they have properly identified their boundaries so as to avoid both gaps and overlaps, and know which owners, operators and users of the bulk-power system located along the boundaries are in which regions.

289. We find that the NPCC region, as described in Exhibit A, represents a sufficient size, scope and configuration. In the pro forma Exhibit A accepted by the Commission in the ERO Certification Order, the regional boundary is required to reflect coordination with neighboring Regional Entities, as appropriate, to ensure that all relevant areas are either included within the geographic boundary of a Regional Entity or specifically identified as not being within that Regional Entity’s geographic boundary. NERC, as noted above, asserts that it has undertaken this review with NPCC and NPCC’s neighboring Regional Entities and that each of these entities is satisfied that NPCC’s boundaries have been properly identified.

The image above illustrates NERC’s definition of both the Québec interconnection, and in accordance with the colour coding in the image identifies the NPCC regional boundaries as understood by both NERC and the NPCC, as determined in the ruling.

Finally within the document titled Agreement on the development of electric power transmission reliability standards and of procedures and a program for the monitoring of the application of these standards for Québec, the recitals to this document states:

WHEREAS the Québec electric power transmission system is an asynchronous interconnection and NERC and NPCC have recognized it as an Interconnection, it may therefore, require reliability standards or variants of such standards specific to this Interconnection;

The definition recognises that the Québec electric power transmission system alone constitutes the Québec Interconnection and that the Québec Interconnection is not constituted from the combination of the Québec system with that of any other.

NLH believes that a definition of the Québec Interconnection, consistent with the descriptions above, must be incorporated into the Québec Glossary to clarify the scope of application for the standards.

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(f) Comment on different “Scope” statements

A review of the Appendixes submitted shows that within the section titled “Scope”, A.6, HQ has suggested at least 4 different scopes. Four of the scopes identified are:

The MTS

The MTS or Loads Affected by the MTS

MTS or any element of a regional system whose protection trips an

element of the MTS

The Québec Interconnection

NLH believes that the Régie should consider the use of only one ‘Scope’, or one comprehensive list of applicable facilities in Quebec, to identify the geographical or electrical footprint covered by all standards and that the creation of different, standard specific, scopes statements creates ambiguity, uncertainty and subjectivity with regard to the assets collectively covered by the standards. One definition should be sufficient to ‘ring fence’ all the assets to be covered by all standards. Such a ‘ring fence’ would ensure that all the assets required for the reliable operation of the Québec System are accounted for and that non are left out. That definition can either be one prescriptive identification process such as the use of the phrase MTS or it can be the use of one impact based assessment methodology which should first be approved by the Régie. In either case an inventory or cataloging of the assets, the asset owners, and the standards which apply to both, as contained in HQCME-6 should be established for approval, be maintained and be used as the ‘standard’ list.

(g) Comments on use of the expressions “Registered Entity” and “Responsible Entity”

NLH wishes to pass comment on the expressions “Registered Entity” and “Responsible Entity” and their use when determining who is subject to the content of reliability standards.

The Registry of Entities and Facilities12 contains a list of “Registered Entities” which are subject to the standards in Quebec. The categorization of these entities is established as per the column headings contained in the matrixes for the registry. A copy of the matrix headings is reproduced below:

12 HQCMÉ-6, Document 7, June 8, 2012

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The matrix heading categories have been used to specify within the Reliability Standards Application Matrix13, those entities to which the standards apply in Québec. The specifics of which are contained in 5 last columns of the heading as taken from the Application Matrix:

An examination of the last column identifies the category of functions according to the Registry of Entities.

In contrast to the entities identified in HQRC’s list of Registered Entities, NERC utilizes the expression “Responsible Entity” to identify the entities to which a standard is applicable. A copy of Section 4 from standard CIP-002 is pasted below for reference. 4. Applicability:

4.1 Within the text of Standard CIP-002, “Responsible Entity” shall mean :

4.1.1 Reliability Coordinator 4.1.2 Balancing Authority 4.1.3 Interchange Authority 4.1.4 Transmission Service Provider 4.1.5 Transmission Owner 4.1.6 Transmission Operator 4.1.7 Generator Owner 4.1.8 Generator Operator 4.1.9 Load Serving Entity 4.1.10 NERC 4.1.11 Regional Reliability Organizations

13 B-55 HQCME-2 document 6 November 10, 2010

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A review of the list above indicates that the standard in question applies to both NERC and RRO (NPCC) however an examination of CIP-002 at page 83 of HQ’s Application Matrix suggests that the standard does not apply to either NERC or NPCC.

NLH would like to bring the attention of the Régie on the inconsistency between the Standard and the Appendix regarding the usage of the expression “Responsible Entity”. In fact, as we see from the NERC and Régie standard, the phrase “Responsible Entities” (giving for example section A.4 of the standard CIP-002-1) is used to identify the applicability of the standard. The RRO is mentioned as a responsible entity in the CIP-002 Standard. Therefore, as we can see, the totality of the entities that are mentioned in A4 vanished in the Appendix. The Appendix of CIP-002 Standard mentions specifically that the Responsible Entity is the Régie not the RRO.

NLH’s review of the QCMEP, QROP and the Glossary which accompanies the Reliability standards use the expression “Registered Entity” to identify Entities subject to the Reliability standards (see QCROP page 2, QROP page 1, and for the Glossary page 25). As mentioned earlier in this submission NPCC, who is also the RRO, is a party to those agreements

NLH contends that HQRC’s Application Matrix should include the entities specified by NERC in section A4 of its standards. NLH believes that the column titled ‘Categories of Functions Applicability according to the registry of Entities’ does not specify all of the entities to which a standard should apply as it does not include all of the Responsible Entities identified by NERC in the applicability section of its Standards (ie: NPCC and NERC are examples of two entities that NERC includes but are not included in HQRC’s Register of entities.)

As a result NLH requests that either another column be added to HQRC’s Reliability Standards Application Matrix to identify the entities that NERC has specified as being subject to specific reliability standards or alternatively that the last column of HQRC’s existing Application Matrix be modified to include the entities identified by NERC as being subject to standards. Both NERC and FERC are specifically identified in NERC’s Violation Risk Factor Matrix.

The Régie should clarify and confirm that the RRO in Québec is the NPCC. If so, the Appendices should be modified accordingly to give NPCC a role in the applicability because as it now stands the NPCC (RRO) seems to have no role to play.

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2. COMMENTS ON THE APPENDICES OF PARTICULAR STANDARDS

(a) Standard PRC-001

The HQRC Appendix to standard PRC-001, in subsection A.6, titled “Scope”, indicates that the scope of the standard is the Main Transmission System (MTS) or any element of a regional system whose protection trips an element of the MTS. The Glossary of Terms accompanying the HQRC standards does not contain a definition for the term “regional system”.

In an effort to provide clarity with respect to interpretation of the standard and the identification of to whom the standards apply, NLH believes that the term “regional system” should be defined, prior to approval of the standard, for inclusion in the Glossary of Terms used in the standards.

NLH requests that the definition be sufficiently clear for the reader to differentiate a “regional system” from;

a “local system” or “local area”,

the MTS

the entirety of a “Balancing Area” or

the collective systems of a Regional Entity.

As was the case with the use of the phrase BPS, NLH is concerned with the possible ambiguity or the subjective use of an undefined term.

(b) Standard EOP-004

Paragraph 604 of FERC Order No. 69314 which adjudicated the approval of the majority of the NERC standards states:

EOP-004-1 establishes requirements for reporting system disturbances to the regional reliability organization and the ERO. It also establishes requirements for the analysis of these disturbances.

14 118 ferc 61,218 March 16, 2007

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The HQRC Appendix submitted to clarify the application of this standard in Québec recommend, through modifications to Requirements R1 and Applicability A4.6, that the RRO not be responsible for establishing and maintaining a reporting procedure for Disturbances.

General concerns associated with HQ’s suggested removal of the role played by the RRO were expressed in section 1 (a) earlier.

The HQRC Appendix to this Standard, through the abolishment of the above and Measure M1, recommends that a procedure not be available to appropriate stakeholders.

Similarly, the abolishment of Requirement R5, recommends that the RRO will not be required to track the status of any recommendations which may result from these reports, nor be required to notify various NERC committees on the progress associated with the implementation of the recommendations.

NLH, as a holder of a Transmission Service Agreement with HQ, is subject to delivery Curtailment and interruptions during those periods when Disturbances require that load relief be applied to the Transmission System.

As a consequence NLH believes that a written procedure to guide the analysis and to establish content requirements, developed in accordance with industry practices, be made available to HQRC customers so that transmission customers can verify the reason for the curtailments. As mentioned earlier, NPCC is recognised by the Régie, HQRC and NERC as the RRO for Québec15.

In May 2009 the Régie, NERC and NPCC entered into an agreement titled “Agreement on the development of electric power transmission reliability standards and of procedures and a program for the monitoring of the application of these standards for Québec”. Section 4.2 of that agreement states:

NERC and NPCC undertake to ascertain that any electric power transmission reliability standards specific to Québec, and/or any variant of such standards specific to Québec, which the reliability coordinator deems necessary to ensure the reliability of electric power transmission in Québec, is as stringent as the NERC reliability standards applicable in the rest of North America. [emphases added]

15 Footnote number 4 in the Glossary of Tems and Acronyms used in Reliability Standards says; Note from

direction – Contrôle des mouvements d’énergie : The Regional Reliability Organization for Québec is the Northeast Power Coordinating Council (NPCC).

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NLH believes that the change proposed to the standard should be demonstrated as a change needed to ensure reliable operation of the electric power system in Québec and that such changes ensure the standard is as stringent as that applicable in the rest of North America.

(c) Standard PRC-018:

The HQRC appendix to Standard PRC-018, contains a new section, section A.6, titled “Scope”, which states:

As per the Regional Reliability Organization’s installation requirements for the Disturbance Monitoring Equipments (DMEs) defined in Requirement 2.

Subsequently within the standard, Requirements R2.1 and R2.2 make reference to the NPCC term Bulk Power System (BPS). Concerning the definition of BPS, please see the general comment.

(d) Standard TPL-004:

NLH makes three comments related to the Appendix which has been submitted by HQRC to accompany the original NERC standard.

Firstly, it should be noted that the standard as written by NERC is titled ‘System Performance Following Extreme Events Resulting in the Loss of Two or More Bulk Electric System Elements (Category D). HQRC, has titled the appendix to this standard as “System Performance Following Extreme Events Resulting in the Loss of Two or More Bulk Power System Elements (Category D)”. NLH believes that the title to the appendix should be consistent with the standard to which it applies and asks the HQRC not modify the title.

Secondly, HQRC in section A.6 of the appendix to the NERC Standard uses the phrase ‘Bulk Power System (BPS) as defined in HQRC’s Glossary Register of Entities’. NLH questions whether the reference in HQRC’s Glossary to the Register of Entities should really be a reference to the Glossary of Terms and Acronyms used for interpreting the standards in the Québec context.

Thirdly the Standard utilizes the phrase BPS. NLH documented its concerns with the use of this phrase in Section 1(c) of this submission.

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(e) Glossary

As discussed previously, NLH requests that the Glossary be revised and updated to incorporate the new terms requested.

3. SUBSEQUENT ACTIONS AND PROCESSES

(a) Standards related to the FERC Order 890 and Approved by FERC since HQ’s initial submission;

The Régie in D-2012-010, a decision related to Décision relative aux modifications du texte des Tarifs et conditions en lien avec les ordonnances 890, 890-A, 890-B, 890-C et 890-D de la FERC, wrote in paragraph 148:

“Subject to the other conclusions set forth in this decision, the Régie does not consider it necessary to delay the application of the methodology and algorithms proposed in Attachment C-1 for calculating the firm ATC and non-firm ATC, pending approval of the reliability standards in Québec on this matter. This methodology and these algorithms are used in calculating the ETC and ATC and refer to industry practices. They may be adjusted later if necessary, when the reliability standards have been approved by the Régie”. [Unofficial translation]

In exhibit HQCMÉ-6, Document 8, HQRC recognises the relationship and the fact that related standards have not yet been submitted16.

NLH considers the modelling, data and analysis (MOD) group of reliability standards to be an integral component of the analysis for determining ATC and ETC.

FERC in Order 729 17 approved the six, previously unapproved, MOD standards listed below:

MOD-001 Title: Available Transmission System Capability; 16 HQCMÉ-6, Document 8, Section 2, ‘Glossary’ (last version dated June 11, 2002) states; The Tariffs and conditions of service of the Hydro-Québec ("OATT"), presented in Appendix C, contains a methodology for assessing available transfer capacity (ATC) as well as comprehensive descriptions of its components TTC, ETC TRM and CBM. These descriptions arise from other standards MOD-001, MOD-004, MOD-008 and MOD-029 have been approved by FERC, but have not yet been submitted for approval to the Board by the Coordinator 17 “Mandatory Reliability Standards for the Calculation of Available Transfer Capability, Capacity Benefit Margins, Transmission Reliability Margins, Total Transfer Capability, and Existing Transmission Commitments and Mandatory Reliability Standards for the Bulk-Power System”, dated November 24th 2009 (129 FERC 61,155), and subsequent Orders 729-A and 729-B.

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MOD-004 title: Capacity Benefit Margin Methodology;

MOD-008 Title: Transmission Reliability Margin Methodology;

MOD-028 Title: Area Interchange Methodology;

MOD-029 Title: Rated System Path Methodology;

MOD-030 Title: Flowgate Methodology;

Given that the Modeling, Data and Analysis (MOD) standards listed above inform the content of Attachment C-1 of the HQ OATT, as referenced by the Régie in its decision, NLH, as a customer of transmission service from HQ, requests that these standards be submitted to the Régie for approval as soon as possible.

(b) Filing of revised standards

HQRC has proposed to withdraw 27 Standards (now obsolete), to revise them and to resubmit them to the Régie for approval, in the context of a new file. To justify this request, HQRC states that these Standards would benefit from the “consultation process prior to the filing of reliability standards for adoption by the Régie”, as provided by the Régie in its decision D-2011-139 dated September 14, 2011.

As stated by the Régie in its letter dated October 12, 2012, HQRC needs to justify its proposal. The Régie, asked HQRC to identify which standards are obsolete and to identify which of those standards has a version subsequent to the one last filed with the Régie. Those would be the standards it would be preferable not to consider revising within the context of the present file.

NLH agrees with the Régie on the fact that it is unnecessary to revise a standard that is no longer in effect. NLH also agrees that HQRC needs to better justify its proposal to withdraw certain standards. Until such justification has been provided, NLH will withhold comments in this regard.

4. CONCLUSION

NLH submits these comments in the interest of consistency and clarity. NLH attributes importance to clarifying any existing ambiguity to avoid future difficulties in interpreting the standards and to avoid case-by-case disputes. NLH also wants to ensure that the time lag between FERC and Régie decisions is minimized.