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“NERC Hot Topics” Marc Butts May 9, 2008

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“NERC Hot Topics”. Marc Butts May 9, 2008. List of “hottest” topics Compliance - Are you ready? Compliance Filings for 2008 “Audits for Dummies”! Use the RSAWS Way’s to keep track of the NERC requirements. Hot Topics!. What are the Hottest Topics in the Industry?. - PowerPoint PPT Presentation

TRANSCRIPT

Page 1: “NERC Hot Topics”

“NERC Hot Topics”“NERC Hot Topics”

Marc ButtsMay 9, 2008Marc Butts

May 9, 2008

Page 2: “NERC Hot Topics”

List of “hottest” topicsCompliance - Are you ready?Compliance Filings for 2008“Audits for Dummies”!Use the RSAWSWay’s to keep track of the NERC

requirements

Hot Topics!

Page 3: “NERC Hot Topics”

What are the Hottest Topics in the Industry?

Page 4: “NERC Hot Topics”

• The way that NERC reacts to FERC pressure?• The continuous budget increases – costs?• Will compliance violation penalties be

substantial?• The volume of work:

– FERC NOPR’s, rulemakings– NERC standards comments, drafting teams– SERC standards comments, drafting teams

• Audit processes – lack of volunteers?

What are Your Hot Items?

Page 5: “NERC Hot Topics”

Compliance – Are you Ready?

Page 6: “NERC Hot Topics”

• Only the “Planning Standards (18) required ‘self-certification’ by 7/1/08.

• There are also “Statements of Certifications” that have to be signed by each ‘entities’ Executive Signatories.

What has to be done by July 1, 2008

Page 7: “NERC Hot Topics”

• The “Cyber Standards (8) will require ‘self-certification’ by 7/13/08.

• There will be “Statements of Certification” that will need to be signed by your Compliance Officers or Executive Signatories.

• This standard touches Transmission and Generation. Since the standard covers almost all functions, we’ll all have to file something.

• The Cyber standards, starting this year, will require two ‘self-certifications’ instead of the normal filing one time (Order 706).

What else has to be done in 2008?

Page 8: “NERC Hot Topics”

• The “Operating Standards (36) will require ‘self-certification’ by 10/1/08.

What else has to be done in 2008?

Page 9: “NERC Hot Topics”

What was that“Registration Thing”

all about?

Page 10: “NERC Hot Topics”

Balancing AuthorityBalancing AuthorityDistribution ProviderDistribution ProviderGenerator Operator - GGenerator Operator - GGenerator OwnerGenerator OwnerInterchange AuthorityInterchange AuthorityLoad Serving EntityLoad Serving EntityPlanning AuthorityPlanning AuthorityPurchasing-Selling Entity - GPurchasing-Selling Entity - GReliability CoordinatorReliability CoordinatorRegional Reliability OrganizationRegional Reliability OrganizationResource Planner - GResource Planner - GTransmission OperatorTransmission OperatorTransmission OwnerTransmission OwnerTransmission PlannerTransmission PlannerTransmission Service ProviderTransmission Service Provider

* ‘Black’ functions were * ‘Black’ functions were registered at the SCS levelregistered at the SCS level

* ‘Red’ functions were * ‘Red’ functions were registered at the OPCO levelregistered at the OPCO level

•Not registered as an RRONot registered as an RRO (This is SERC!!)(This is SERC!!)

SoCo Registered for SoCo Registered for

14 NERC functions14 NERC functions

Page 11: “NERC Hot Topics”

• As shown on the previous page, you probably have contact mostly with the Power Coordination Center (PCC) in Birmingham or the Southern Company Fleet Operations (GOP function).

• In the NERC-world, the PCC in Birmingham is the TOP, BA, INT and RC functions.

• The GCC, ACC and others in our system do local switching, voltage coordination and other tasks and probably communicate directly with you all also.

Who do you make contact with?

Page 12: “NERC Hot Topics”

Buy the Book:“Audits for Dummies”!

Page 13: “NERC Hot Topics”

Step #1: Are you Registered for the Correct

Functions?• Have you reviewed the latest Version 3 of the Functional

Model?• Have you referred to NERC’s Compliance Monitoring &

Enforcement Plan (CMEP) for applicability?

Step #2:

Review Standards applicable to each Function• Are you satisfied that you are registered correctly? If not,

contact Regional Entity staff.• Review all standards and all requirements for those functions

you are registered for .

Roadmap for Audit Preparation!

Page 14: “NERC Hot Topics”

Step #3: Who will be accountable for meeting the

requirements of the standards?

• Will you make a department accountable?• Or, will you make a Manager accountable?• Maybe even make the specific employee “punching the button”

accountable?

Step #4: What Type of Documentation is Required?

• Does evidence warrant written procedure, methodology, or guideline being developed?

• Is your current documentation up to date for the requirement? Does it meet the latest version of standard?

Roadmap for Audit Preparation!

Page 15: “NERC Hot Topics”

Step #5: Select a Documentation Application

• It protects documents/evidence from unauthorized edits.• Need formal process for making revisions; administrator of the

application who is the gatekeeper for all revisions.

Step #6: Review Reliability Standards Audit

Worksheets for Applicable Standards

• In 2007, auditor’s questions originated from the corresponding RSAWs.

• Review the RSAWs thoroughly for each requirement of each standard and assemble evidence needed to prove compliance.

Roadmap for Audit Preparation!

Page 16: “NERC Hot Topics”

Step #7: Assemble all Documents

• Have an electronic copy of all procedures referenced and provide to the audit team; Flashdrives are great for holding large volumes of information.

• Projectors are an excellent means to show evidence during the audit.

Step #8:Perform “Mock” Audit Prior to Real Audit

• Have internal team perform audit using RSAW questions.• Request documentation and evidence necessary for

compliance. Plan to present just like a real audit!

Roadmap for Audit Preparation!

Page 17: “NERC Hot Topics”

• It is imperative to have Management place a high emphasis on getting procedures written early and the audit done right.

• Need to make assignments early.• Have meetings regularly to assess where you are.• Assign someone to handle the logistics of meals for the

auditors, refreshments, parking, badge access, remote internet access, etc.

• Make the audit “easy” on the auditors!• If you have multiple assets in various regions, it will be

important for the procedures to look very similar for the same standard & requirement for consistency reasons.

Key Lessons Learned

Page 18: “NERC Hot Topics”

Why is this so important?

Page 19: “NERC Hot Topics”
Page 20: “NERC Hot Topics”

Sanction TableRanges with Adjustment Factors Applied

Page 21: “NERC Hot Topics”

Penalty and Fine Process ($)• Aggravating factors increase the sanction– Time horizon of standard – operations vs. long term (+ 0-

50%)– Repetitive infractions (+ 10, 30, and 50% discrete steps)– Prior warnings (+ 25% initial; 50% multiple) – Lack of cooperation (+0-50%)

• Mitigating factors decrease the sanction– Prompt disclosure (- 0-25%)– Voluntary corrective measures (- 0-25%)– Substantial cooperation (- 0-25%)

Page 22: “NERC Hot Topics”

Where Do I Find These Standards?

Page 23: “NERC Hot Topics”

• There are ~ 120 NERC Board Approved, Reliability Standards, with a total of approximately 1,500 specific requirements and sub-requirements

• 94 have been FERC approved, where fines can be levied ($)!

What’s the Magnitude of work here?

Page 24: “NERC Hot Topics”

Click here

Page 25: “NERC Hot Topics”

Click here for all FERC approved standards

Page 26: “NERC Hot Topics”

Click here for matrix of all

standard

Requirement and what functions

they apply to.

Page 27: “NERC Hot Topics”

This is a great matrix to help you

decide what applies to your

company and to get organized!

Page 28: “NERC Hot Topics”

Going back a bit…..do you know where to find the

RSAW’s?

Page 29: “NERC Hot Topics”

Click here

Page 30: “NERC Hot Topics”

Click here

Page 31: “NERC Hot Topics”

These are the

RSAW’s!!

Page 32: “NERC Hot Topics”
Page 33: “NERC Hot Topics”
Page 34: “NERC Hot Topics”

…and Then there’s SERC!!!

Also SERC Supplements

(soon to be called ‘standards’

that we must consider as well.)

Page 35: “NERC Hot Topics”