Emerging Environmental Regulations Impacting Bulk Power ... Highlights nad... · • Part 1: Resource adequacy evaluation Scenarios evaluated ... 2015 Summer . Reliability Assessment

Emerging Environmental Regulations Impacting Bulk Power System Reliability: Next Steps on NERC Assessments

Thomas Burgess, Vice President and Director, RAPAMember Representatives Committee MeetingMay 6, 2015

RELIABILITY | ACCOUNTABILITY2

Phase I: Key Findings

1. Accelerates a fundamental change in the generation mix and transforms grid-level reliability services, diversity, and flexibility

2. Industry needs more time to develop coordinated plans to address shifts in generation and corresponding transmission reinforcements

3. Remaining coal-fired generation fleet may need to change operational dispatch from baseload to seasonal peaking, potentially eroding plant economics and operating feasibility

4. Energy and capacity will shift to gas-fired generation, requiring additional infrastructure and pipeline capacity


Phase I: Scope of Assessment

• Part 1: Resource adequacy evaluation Scenarios evaluated Generation capacity and resource changes Energy dispatch changes

• Part 2: Transmission implications Infrastructure needed Industry survey of implementation

• Part 3: Overview of studies by reliability authorities


Phase I: Recommendations

• Continue NERC’s assessment strategy • Coordinated regional industry planning groups’ assessments and

state partnerships • Infrastructure deployment requires more time • Include a formal reliability assurance mechanism in the final rule • State and regional plans developed in consultation with reliability

authorities


NERC Advisory Role

• Serve as a resource to discuss and advise on reliability implications with regulators and industry decision-makers

• Provide reliability guidance and considerations by which plans would be developed, reviewed, and evaluated

• Reliability assurance mechanism needed Assured reliability provisions in place Plan development Plan implementation

• Continue to assess long and short-term reliability, and incorporate state or regional plans as they merge into existing planning


November 2014

April2015

December2016

Q22016

EPA Special Assessment

Phase III• Placeholder for

assessment completed once SIPs are developed

• Potentially integrate with 2016 LTRA


Initial Reliability Review

• High-level reliability considerations

• Assessment of EPA’s rule assumptions


Phase II• Additional

assessment of emerging SIPs

• Reflects final rule• Based on known

requirements • Complete before

states submit SIPs

EPA Special AssessmentPhase I

• Evaluation of resource and transmission adequacy

• Sensitivity analysis used to provide range of potential outcomes

EPA Reliability Impacts AssessmentMultiple Phase Approach


State of Reliability ReportPreview of Key Findings

Howard Gugel, Director of Performance Analysis Member Representatives Committee MeetingMay 6, 2015


Weather Stresses BPS Reliability


Continued Decline in Average Transmission Outage Severity

Misoperation

Failed AC Substation Equipment

Power System Condition

Lightning

Failed AC Circuit Equipment

Weather, Excluding Lightning

0.1

0.11

0.12

0.13

0.14

0.15

0.16

0.17

0.18

0.19

0.2

-0.1 -0.08 -0.06 -0.04 -0.02 0 0.02 0.04 0.06 0.08 0.1

Expe

cted

Tra

nsm

issi

on O

utag

e Se

verit

y

Correlation with Transmission Outage Severity


Significant Decrease in Unplanned Transmission Outages Resulting in Loss of Load


Frequency Response Trend Remains Stable

Eastern Interconnection Western Interconnection

ERCOT Interconnection Québec Interconnection


No Load Loss Due To Physical or Cyber Security Events

• BES Security Metric 1: Reportable Cyber Security Incidents 3 Reportable Cyber Security Incidents in 2014 None resulted in loss of load

• BES Security Metric 2: Reportable Physical Security Events 47 reports of physical security threat events 9 caused physical damage or destruction None resulted in loss of load


Use of EEA Level 3 Continues to Decline

0

5

10

15

20

25

30

35

40

45

2006 2007 2008 2009 2010 2011 2012 2013 2014

Num

ber o

f EEA

3 Ev

ents

Year

EEA3 Events NERC-Wide

0

5

10

15

20

25

30

35

40

2006 2007 2008 2009 2010 2011 2012 2013 2014

Num

ber o

f EEA

3 Ev

ents

EEA3 Events by Region

FRCC MRO NPCC RF

SERC SPP TRE WECC

Steady decline NERC-wide since 2011

Overall regional rate declining


State of Reliability 2015 Schedule

May 6 Report Sent to Board of Trustees for Review

May 14 BOT Teleconference and Vote to Accept Report

May 19 Target Release


2015 Summer Reliability AssessmentThomas Burgess, Vice President and Director, RAPAMember Representatives Committee MeetingMay 6, 2015


Reliability Topics and Findings

1. Impacts of ongoing California drought on hydro output 2. Pipeline upgrade and impacts on resources in New England3. Improved coal inventories in the Midwest 4. Improved reserve margin in MISO, TRE-ERCOT and NPCC-New

York5. New operational risk assessment utilizes scenario analysis to

test severe conditions


Improved reserve margin in MISO, TRE-ERCOT and NPCC-New York• MISO Reserve margin - 17.3%, versus 15% for 2014 Includes any capacity in the south in excess of south demand, reserve

requirement, and 1,000 MW contract path limitation

• TRE-ERCOT Reserve margin - 15.7%, 3.76% higher than 2014 reserve margin Change in methodology for on-peak wind capacity contributiono 12% non-coastal, 56% coastal

• NPCC-New York 1000 MW of additional generation Decreased industrial load in upstate area

Key Finding #4


Pilot: Operational Risk Assessment

Example of Operational Risk Assessment - FRCC Region

Resource Margin


2015 SRA Schedule

May 6 Planning Committee vote to accept report

May 6 Report sent to NERC Technical Publications for final review

May 11 Report sent to Board of Trustees for review

May 14 BOT teleconference and vote to accept report

Week of May 18 Target release


ERO Reliability Assessments: Strategic Plan for Process and Analytic Improvements

Thomas Burgess, Vice President and Director, RAPAMember Representatives Committee MeetingMay 6, 2015


• Adopting additional measures on Essential Reliability Services (ERS)

• Integrating probabilistic approaches to identify high- and low-probability conditions

• Development of wide-area transmission adequacy and deliverability analysis

• Using performance data (GADS, TADS, and DADS) to evaluate potential system conditions and resource availability

Analytical Improvements Considered for Long-Term Reliability Assessment


Analytical Improvements Considered for Short-Term Reliability Assessment

• Non-seasonal peak (shoulder and light load) periods due to high transfers

• Increased focus on operational risks• Adopting probabilistic approaches and examination of a wider

range of impacts and risks (i.e., 90/10 conditions)• ERS measures


• Accelerated changes in resource mix with greater reliance on natural gas and renewable resources

• Declining planning reserve margins in several areas impacting overall system flexibility

• Existing and proposed environmental regulations and policy initiatives expected to impact the electric industry

• Rapid integration of variable generation and distributed energy resources

MRC input and insights on emerging reliability issues for inclusion in the 2015 LTRA are greatly appreciated

2015 LTRA Preliminary Reliability Issues


Summer Reliability Assessment• Board/MRC embargoed version release – May 11• Board consideration for approval – May 14• Target release – May 18

Winter Reliability Assessments• Board/MRC embargoed version release – Early November• Board consideration for approval – Early November• Target release – Mid-November

Long-Term Reliability Assessment• Board/MRC embargoed version release – November 6• Board consideration for approval – November 20• Target release – December 1

2015 Reliability Assessments Milestones


ERO Enterprise Effectiveness Survey ResultsKristin Iwanechko, Associate Director, Member Relations and MRC SecretaryMember Representatives Committee MeetingMay 6, 2015


• NERC partnered with TalentQuest to conduct survey on ERO Enterprise effectiveness

• 73 survey questions across 10 topic areas• Issued January 2015 to 1,112 individuals 247 responses on behalf of 441 NERC Compliance Registry (NCR) numbers 19 responses with no associated NCR number

• Overall results were positive ERO Enterprise averages ranged from 3.42 to 4.45 NERC ratings ranged from 3.04 to 4.42

Overview


• Audit teams conduct themselves in a professional and credible manner (4.45)

• Most recent audit process conducted in a timely manner (4.33)• Audit team is prepared and organized (4.31)• Audit team adheres to established rules and processes (4.18)• Audit report identifies clear, definitive, and actionable items to

address (4.16)

Highest Rated Items


• Registration Registers and deregister entities commensurate with risk to the BES (3.42) Timely and effective response during the Registry Appeals Process (3.24)

Risk-based registration phase I implementation and phase II analysis

• Risk-Based Compliance Monitoring and Enforcement Consistency in tools, processes, and templates where necessary (3.42) Efficiency and effectiveness of compliance activities (3.39)

Implement risk-based compliance monitoring and enforcement program

Areas for Improvement


• Standards Cost-effectiveness in addressing the risk (3.04) Practicality to implement (3.14) Clarity of standards (3.20)

Request policy input on the future of standards development

Areas for Improvement


• Review comment analysis for additional insights• Implement action plans to address areas for improvement• Provide quarterly progress reports to NERC Board of Trustees• Incorporate lessons learned into 2015 survey

Next Steps


Revised Pro Forma and Individual Regional Delegation Agreement

Charles A. Berardesco, Senior Vice President, General Counsel and Corporate SecretaryMember Representatives Committee MeetingMay 6, 2015


• Regional Delegation Agreements (RDAs) expire on December 31, 2015

• Proposed NERC Board action: Approve revised, pro forma RDA Authorize NERC to execute individual RDAs

• Pro forma RDA and individual RDAs are also pending approval of the Regional Entity boards

• FERC may approve (with or without modifications) or reject the RDAs

Background


• Develop guidance, policies and procedures, and oversight parameters

• Confirm that the NERC President may issue a directive to bind a Regional Entity when collaboration is not successful

• Conclude the directive process once the NERC President approves a directive

Regional Entity Collaboration


• Define the types of confidential information that may be exchanged within the ERO

• Recognize each Regional Entity as a “third party beneficiary” to better ensure confidentiality

• Clarify that Section 1500 of the NERC Rules of Procedure (NERC ROP) continues to govern the use and permitted disclosure of registered entity confidential information outside of the ERO

Confidentiality


• Remove Regional Entity-specific bylaws and Reliability Standards development procedures as exhibits to the RDAs

• Ensure that future changes to such procedures remain consistent with NERC ROP and Commission directives

• Continue to submit changes for NERC Board of Trustees and FERC approval

Regional Entity Bylaws and Standards Development Procedures


• Update provisions that are not consistent with current, risk-based practices

• Maintain NERC’s authority to review all Regional Entity dispositions of noncompliance

• Recognize NERC’s ability to develop and implement policies and procedures for the review and approval of such dispositions

Compliance Monitoring and Enforcement


• Assess the Regional Entities’ performance beyond compliance with the RDAs and the NERC ROP

• Identify policies and procedures, guidance and directives as additional oversight tools

• Monitor Regional Entities’ implementation of policies and procedures, guidance, and directives

• Emphasize that oversight tools pertain to Regional Entities’ delegated authority

General Oversight


• Allow for a five-year term, with one automatic five-year extension

• Remove five-year audit renewal condition• Continue Commission-mandated ERO five-year performance

assessments

Term and Termination


Documents

Emerging Environmental Regulations Impacting Bulk Power ... Highlights nad... · • Part 1: Resource adequacy evaluation Scenarios evaluated ... 2015 Summer . Reliability Assessment