NERC Reliability ReadinessThe Next Steps

Mitch NeedhamNERC Readiness Evaluator

September 24, 2007

About the Speaker

● BSEE from the University of Tennessee, Knoxville, 1978

● MS Engineering from the University of Tennessee, Chattanooga, 1985

● 28½ Years with the Tennessee Valley Authority Energy Research Protective Relaying Event Analysis Performance Benchmarking Regulatory Compliance

● Joined NERC as a Readiness Evaluator 10/2006

Readiness - Brief History

Reliability coordinator ‘audits’ conducted since 2001

February 10, 2004 - NERC Board of Trustees approved Recommendation 3 Jointly establish a program to audit the

reliability readiness of reliability coordinators and control areas on a three-year cycle

Establish a set of baseline audit criteria U.S. Canada Power System Outage

Task Force Report – August 14, 2003 Blackout Recommendation 18 Supported NERC Board

recommendations Added public posting of audit reports

Basis for Readiness Evaluations

• Standards cannot prescribe every aspect of reliable operations.

• Standards set minimum thresholds, not targets for performance.

Readiness

OperationalExcellence

BA

RC

TOP

Original Program Application

● Establish the Readiness Audit Program for reliability coordinators, transmission operators, and balancing authorities Program organizationally aligned with

compliance and enforcement program

● Make recommendations to audited entities that address deficiencies and promote compliance

● Publicly post audit reports

Presentation Focus

● Findings from the first cycle of ‘audits’ (Round 1)

● Changes made to the readiness program (Round 2)

● Steps to be taken in the future (initiatives)

NERC Reliability Readiness

Findings from Round 1

Audits by Function

0

10

20

30

40

50

60

2004 2005 2006

RCBATOPLCC

0

100

200

300

400

500

600

RC BA TOP BA-TOP RC-BA-TOP

LCC

200420052006

Recommendations by Function

14%

21%

20%

18%

12%

15%

RCBATOPBA-TOP

RC-BA-TOPLCC

Recommendations By Function(s)

*** This data has been normalized by the number of recommendations made per function and the number of evaluations completed per function

14%

12%

14%

12%

15%

11%

12%

10%

WECC

MRO

ERCOT

SPP

FRCC

SERC

RFC

NPCC

Recommendations By Region

*** This data has been normalized by the number of recommendations made per region and the number of evaluations completed per region

20 Areas Evaluated

● Agreements● Operator Authority● Delegation of Authority● Staff Certification● Training● Operating Policies and Operating Procedures● Planning● Outage Coordination and Communication● Plans for Loss of Control Facilities● Tools

● Load Shedding Plans● Real-Time Monitoring● System Restoration● Capacity and Energy Emergency Plan● Equipment Maintenance and Testing● Vegetation Management● Nuclear Power Plant Requirements● Physical Security● Cyber Security● Infrastructure

Recommendations Data

● 163 Audits/Evaluations completed ● 2727 Total Recommendations● 426 Open (15.6 %)● 677 In Progress (24.8 %)● 1540 Completed (56.5 %)● 84 No Action (3.1 %)

Recommendation Status By Year

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2004 2005 2006

No Action

Complete

In Progress

Open

0

50

100

150

200

250

300

350

200420052006

Grouping of Recommendations

Areas Evaluated

● 48% of the 2727 recommendations found in 3 areas Training Real-Time Monitoring Operating Policies and Procedures

Areas of Interest – Top 3

24%

9%

15%

52%

Training

Operating Policies andOperating Procedures

Real-Time Monitoring

Other

Training By Category

5%

19%

25%28%

9%

8%

6%

Systematic Approach toTraining

Staffing

Initial Training Program

Continuing EducationProgram

Dispatcher TrainingSimulator

Records Management

Other

NERC Reliability Readiness

Changes Made for Round 2

Response to Industry Feedback

Increased consistency (NERC staffing and contractors)

Reduction of preparation time by focusing on demonstration and observation

Review the link to compliance Changed from “audit” to “evaluation” Re-aligning NERC

Reduce on-site evaluation time – (under investigation)

Increased flexibility of on-site schedule – (under investigation)

Limit the evaluation scope Higher degree of focus on targeted topics Size of entities should be considered – (under

investigation)

● Shifted to a framework used in the nuclear industry Developed by a self-regulatory organization Uses an evaluation process refined over nearly

25 years Consists of cycled evaluations of many nuclear

power plants Based on a documented set of principles,

objectives, and criteria that support operational excellence of plant operations

Revamped Readiness Evaluation Program

Operational Excellence/Readiness

Performance Objectives Performance Objectives Performance Objectives

CriteriaCriteriaCriteria Criteria CriteriaCriteria

Readiness Topics

Auditor Guides Auditor Guides Auditor Guides

Core Principles

Readiness Topics Readiness Topics

Not Documented

2004-2007 Framework

Five Major Program Groupings

● Culture Corporate support of reliability

● Fundamentals of Operations System operators, operations management, operator

tools, infrastructure

● Fundamentals of Training Approach adopted, provision, tracking

● Fundamentals of Maintenance Focusing on the control center environment

● Fundamentals of Operational Planning Near term planning and interface with operations

● Physical Security Policy and reality

● Cyber Security Status of compliance to upcoming standards

● Loss of Facilities Plans and procedures, interim activities and

notifications● Computer Systems and Support

Focusing on the control center environment● Power Supply for Control Facilities

Backup generators, uninterruptible power supplies, testing and adequacy

Secondary Program Groupings

Non published, critical infrastructure information.

● Ensure and improve reliability● Provide an independent review of

registered RC/BA/TOP operations● Share noteworthy practices● Provide constructive feedback ● Raise the bar in order to help

achieve excellence

Current Program Application

● The NERC Readiness Evaluation is not a Compliance Audit.

● The Regions are responsible for Compliance Audits.

● There will be a single NERC Readiness Report issued.

Current Program Application

● Any possible non-compliance issue observed during the evaluation will be sent to the NERC Vice President – Compliance.

● The NERC VP - Compliance will refer the matter to the regional compliance manager.

● Possible noncompliance with a NERC standard will not be identified in the final readiness report but a recommendation may be reported.

[Paraphrased from the NERC Rules of Procedure, Appendix 7.]

Compliance Caveat

Reliability Readiness Products

● Potential Examples of Excellence Above and Beyond Industry Leaders Final Determination by NERC Readiness Developed with Entity and Shared with Industry

● Notation of Positive Observations (in posted report)

● Improvement Possibilities Recommendations from the Team Perspective (Expert

Consultants)- “Key” Recommendations Identified by Entity- Tracked by the Region(s)

Notation of additional things to consider (not a separate list, not tracked by regions)

NERC Reliability Readiness

Additional Initiatives

● Procedure development for Examples of Excellence (pilot phase) Teams nominate Potential Examples of

Excellence NERC team and industry representatives

develop and implement criteria- Operating Reliability Subcommittee

● Identify mentoring opportunities within the industry (under development) Match recommendations with Examples

of Excellence

Additional Initiatives

Questions