COMPLIANCE 101Module One

Module 1: WECC History & Roles

Review of Resources

Settlement Processes

Enforcement Processes

New Possible Violation

Compliance Processes

Implementation of CMEP

Development of CMEP

Regulatory Structure in U.S.

WECC History & Roles

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The Western Electricity Coordinating Council (WECC) is a non-profit corporation that exists to assure a reliable bulk electric system in the geographic area of the Western Interconnection. This area

includes all or parts of the 14 western United States, two Canadian provinces,

and the northern portion of Baja California, Mexico.

WECC Profile

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• Incorporated in 2002

• Predecessor, WSCC formed in 1967

• Largest geographic area of the eight Regional Entitieso Entire Western Interconnection (1.8 million square miles) -

includes all or part of 14 U.S. states, 2 Canadian provinces and a portion of Baja California Norte, Mexico

• Non-Governmental

• Industry participants join together to promote system reliability

• Member-driven (401 members divided into 7 membership classes)

WECC History

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WECC Coverage Service Area

1.8 million square miles

126,285 miles of transmission

Population of 78 million

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• Memberso 401

Grid owners, operators, users Stakeholders State and Provincial

• Board of Directorso 32 membersoCommittees

Board Member

WECC Organization

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• Reliability coordinationo Operate two Reliability Coordination Offices (Vancouver

Wa. and Loveland Co.) that provide situational awareness and real-time supervision of the entire Western Interconnection

WECC Services

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• Transmission expansion planningo Management of a comprehensive planning databaseo Provide coordination of sub-regional planning

processeso Analyses and modeling

• Studieso Model the system and perform studies under a variety

of scenarios to set operating policies and limits

• Market-operations interfaceo Ensure that competitive power markets do not

negatively impact reliability

WECC Services

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• Loads and Resources Assessmentso Perform annual assessment of 10-year loads and resourceso Maintain 10-year coordinated plan of system growth o Provide information to NERC for summer and winter

assessments of the reliability and adequacy of the bulk-power system

• Operator trainingo Provide training sessions for operators, schedulers and

dispatchers

• WREGISo Hosts the Western Renewable Energy Generation Information

System, which creates and tracks renewable energy certificates

WECC Services

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• Delegation AgreementoPerform functions delegated to WECC as

a Regional Entity under Delegation Agreement with NERC, including regulating entities subject to mandatory Reliability Standards

WECC Services

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Mandatory Reliability Regulation

• Northeast Blackout of 2003o 10 Million people

in Ontario, Canada

o 45 million people in eight U.S. states

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Task Force Report

● Final report of the U.S.-Canada Power System Outage Task Force on the 2003 blackout concluded:

the single most important recommendation for preventing future blackouts, and reducing the scope of those that occur, is for the U.S. government to make reliability standards mandatory and enforceable.

Task Force Findings

Inadequate System Understanding

Inadequate Situational Awareness

Inadequate Tree Trimming

Inadequate Reliability Center Diagnostic Support

Congressional Action

•Energy Policy Act of 2005On August 8, 2005, the Energy Policy Act of 2005 (EPAct 2005) was signed into law.

•“Section 215”Section 215 of the EPAct 2005 directed FERC to certify an Electric Reliability Organization (ERO) and develop procedures for establishing, approving and enforcing electric reliability standards.

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Authority for Compliance Monitoring

●FERC Order 672 (Implementing Rule 18 CFR 39)oResponsibility and oversight assigned to

FERCo FERC designated NERC as Electric Reliability

OrganizationoNERC has delegation agreement with WECC

and seven other regions

Implementing Section 215

SECTION

215

•Creates Electrical Reliability Organization (ERO)

•FERC names NERC as ERO

Regional Entities

•NERC selects 8 regional entities

•WECC is selected for Western Interconnection

Delegation Agreement

•NERC and WECC sign agreements

•WECC oversight begins in Western Interconnection

Development of Mandatory Reliability Standards

Critical Infrastructure Protection (CIP) standards become

mandatory and enforceable December 2009

(FERC Order 706)

Operations and Planning (O&P) Standards become mandatory and enforceable

June17, 2007 (FERC Order 693)

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Order 693 & Order 706 Standards

• Order 693 (Operations and Planning) includes:o Resource and Demand Balancing (BAL)o Emergency Preparedness & Operations (EOP)o Facilities Design, Connection & Mtnce. (FAC)o Protection and Control (PRC)

• Order 706 (CIP) includes:o Critical Cyber Asset Identificationo Personnel & Trainingo Electronic Security Perimeters

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• Registers Entitieso Register users, owners, operators according to function

• Monitors Compliance with Standardso Monitor compliance by users, owners and operators of the bulk

power system in the United States

• Enforces Complianceo Violation mitigation and settlement negotiationo Representation of WECC in any hearing or appeal process

• Administration o Audit coordinationo Reporting systems

WECC Compliance

NERC Registration & Certification

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Registration

• Registered Functions determine applicable standards

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Compliance Monitoring Activities

• Onsite Audit• Offsite Audit• Self Reports• Self Certifications• Spot Checks• Compliance Violation Investigations• Complaints

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Enforcement Activities

• If a violation is identified, due process includesoNotice of Alleged Violation and Penalty or

SanctionoRegistered Entity ResponseoRequest for Settlement or HearingoNERC Approvalo FERC Approval

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Enforcement Activities

• Mitigation of Violationso Prompt mitigation of violations and of risk to

BES is importantoMitigation is not an “admission of guilt”oWECC reviews mitigation plans and accepts,

rejects or requests revisionsoWECC reviews completion of mitigation

activities

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Outreach

• Compliance User Groups/ Critical Infrastructure Compliance User Groups

• Open WebEX - Monthly• Targeted Training

oCIP 101oWebCDMS and EFTo E-learning ModulesoCompliance 101

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Reference Documents

• Compliance Monitoring and Enforcement Program (CMEP) & WECC’s annual plan

• Delegation Agreement• Rules of Procedure• NERC Standards and WECC Regional

Standards• NERC Guidance, Bulletins, Directives and

Compliance Application Notices (CANs)• FERC Orders

Constance B. White

Vice President of Compliance

Questions?