risk-based registration - nerc rbr powerpoint_final...• concepts: pses are commercial in nature...

Risk-Based RegistrationMark Lauby, Senior Vice President and Chief Reliability Officer, NERCFrank Gaffney, Assistant General Manager of and Officer of Compliance, FMPAEarl Shockley, Senior Director, Compliance Analysis and Certification, NERCJune 6, 2014

RELIABILITY | ACCOUNTABILITY2

Outline

• Why are we doing this?• What is being proposed?• Why are we proposing it?• Summary


Background

• There are ~1,900 registered entities Of these, ~1,200 are owners or operators of the Bulk Electric System (BES) Of these, ~700 are only users of the BES

• Are we registering the right entities, the entities that are material to reliability?

• We have an opportunity to “right-size” the registry


Background (cont’d)

• Currently, some Reliability Standards already align, or “tier” requirements to risk. There is an opportunity to further promote this concept FAC-003, PRC-023: generally > 200 kV CIP v5: High, Medium and Low GO/TO effort

• A lot of administrative overhead related to “proving the negative”


Highlights of Risk-Based Registration (RBR) Draft Design Proposal

• Remove functions that are commercial in nature – Purchasing-Selling Entity (PSE), Load-Serving Entity (LSE), Interchange Authority (IA)

• Raise the Distribution Provider (DP) threshold to 75 MW (directly connected to the BES) and create a new “Under-Frequency Load Shedding (UFLS) Only DP” registration

• Align, or “tier”, standards/requirements to risk for Transmission Operators (TOPs)

• Develop a registration exception process modeled after the BES Exception process.

• Improve the attestation process by allowing a one-time attestation updated as needed


RBR Benefits

• Aligns entity registration and compliance burden to its risks and contributions to BES reliability

• Reduces the industry burden associated with registration, while sustaining continued BES reliability

• Improves use of NERC, Regional Entity and registered entity resources

• Provides feedback to Reliability Standards development to enhance current and future Reliability Standards

• Increases consistency in registration across the eight Regional Entities by developing a common and repeatable approach with improved registration and deactivation procedures


Proposal Details


Guiding Principles

• Jurisdiction includes users, owners and operators of the bulk power system (BPS)

• For owners and operators: BES Definition is the guiding principle for registration Entities that “own (and maintain)” or “operate” BES Facilities are

candidates for registration as transmission/generator owners or transmission/generator operators (TO/GO, TOP/GOP)

• For “users” of the BES: material “use” is a guiding principle for registration


Owners and Operators

• Improve alignment with BES Definition in Registry Criteria• Use of the term “Facility” From the NERC Glossary: “A set of electrical equipment that operates as a

single Bulk Electric System Element” Changes in Part II allows deletion of Part III of the Registry Criteria related

to a TO, TOP, GO, GOP

• Proposed Registration Criteria TO: “The entity that owns and maintains transmission Facilities” TOP: “The entity responsible for the reliability of its local transmission

system and operates or directs the operations of the transmission Facilities”

GO: “Entity that owns and maintains generating unitsFacility(ies)” GOP: “The entity that operates generating unit(s)Facility(ies)


Users: DP

• Concepts: Load is even more dispersed than dispersed resources/power plants The use of the BES by dispersed load is believed to be equivalently

impactful to reliability as use of the BES by dispersed resources (and possibly less so)

Proposed revisions in the DP registration criteria parallels GO/GOP criteria for dispersed resources, except for …o Necessary protection: UFLS, Under-Voltage Load Shedding (UVLS), Special

Protection Systems (SPS), BES Protectiono Necessary participation in restoration plan – e.g., cranking patho Necessary provision of nuclear plant interface requirements


Users: DP Proposal

• Proposed DP criteria: DP system that is directly connected to the BES and that serves >75 MW of

peak load; or DP that is responsible for providing services related to Nuclear Plant

Interface Requirements (NPIRs) pursuant to an agreement executed pursuant to NUC-001; or

DP with field switching personnel identified as performing unique tasks associated with the TO’s restoration plan that are outside of their normal tasks; or

DP is the responsible entity that owns, controls, or operates part of any of the following Protection Systems or programs designed, installed, and operated for the protection of the BES:o a required UVLS programo a required SPSo a required transmission Protection System


Users: DP Proposal (cont’d)

• Proposed UFLS-Only DP registration criteria: Does not meet any of the other registration criteria for a DP; and Is the responsible entity that owns, controls, or operates UFLS Protection

System(s) needed to implement a required UFLS Program designed for the protection of the BES.

• UFLS-Only DPs are subject only to the PRC-006-1 Reliability Standard (as modified from time to time) under the DP applicability and any Reliability Standards that specifically reference UFLS-Only DPs in the applicability section.

• Other standards applicable to DPs are not applicable to UFLS-Only DPs.


Users: DP - Testing the Concepts

• Evaluation of impact of raising DP threshold to 75 MW• Evaluation of potential impact to UFLS programs


Users: PSE

• Concepts: PSEs are commercial in nature Individual transactions are governed by other rules and regulations:

NAESB, OATT, market rules, contracts There are over 400 PSE-only entities in the registry

• Proposal: Remove PSE from the registry• Test: Are there material impacts to reliability as a result of correcting dynamic

transfer projections for future hours if past hours actual use compared to projection were out of tolerance (INT-004-3)?

Are there other standard considerations?


Users: IA

• Concepts: IA requirements are proposed to be eliminated from the INT standards in

the revision filed at FERC Is IA actually a “user”, or is it an administrative function?

• Proposal: Remove IA from the registry• Test: Evaluate if remaining requirements of the IA are

“covered” by the Balancing Authority (BA) function and/or by NAESB standards


Users: LSE

• Concepts: The LSE function is commercial in nature An LSE is not required to own any wires or distribution equipment Activities assigned to the LSE in the standards may be better assigned to a

different function DPs may be registered as LSEs in certain cases already under the criteria

• Proposal: Remove LSE from the registry• Test: Ensure all requirements to the LSE are “covered” by

another function.


Aligning, or “Tiering”, Requirements to Risks

• Concepts Many standards adjust requirements to risk:o FAC-003, PRC-023: generally > 200 kVo CIP v5: High, Medium and Lowo GO/TO effort

There is more opportunity to do so in RBRo Low risk TOP sub-set of applicable standards is the focus in RBRo Dispersed Resources Project 2014-1 may provide a future sub-set for GO/GOPo There is less opportunity for additional “tiering” of standards applicable to a TO

and BA than that already contained within the standards; but the effort for TOPs can be used to inform future efforts for other functions


Options to Align Requirements to Risk

• We have several options to align requirements with risk: Reliability Standards Development Process Case-by-case registration reviewo Individual entityo Commonly shared characteristics of entities

• Standards development process is slower, more labor intensive process; but may achieve the highest level of alignment

• We can obtain the majority of that alignment through the registration process GO/TO effort resulted in sub-set through registration and later changes to

Reliability Standards Low risk TOP and UFLS-Only DP build on this experience


Aligning Requirements to Risk:Proposal, Part 1

• “Low-Risk TOP” that meets the registry criteria for a TOP, but has: No interconnected BES generation No Blackstart unit No cranking path Its Load is not used in a neighboring TOP restoration plan to control

frequency or voltage within that TOP’s System No Facilities that meet PRC-023-2 Attachment B No Medium Risk assets in accordance with CIP-002-5 other than a TOP

Control Center


Aligning Requirements to Risk:Proposal, Part 2

• A “Low-Risk TOP” is proposed to have a reduced set of requirements to comply with, and is proposed to not be subject to: EOP-005-2 on System Restoration Plan EOP-008-1 on Loss of Control Center Functionality, specifically R4, R6 and

R7 PER-003-1 on operator certification PER-005-1 on operator training, rather than an annual requirement, is

proposed to be adjusted to a biennial requirement. TOP-004-2, R4 on unknown states TOP-008-1, R4 on causes of System Operating Limit (SOL) violations VAR-001-3 on voltage schedule


Registration Candidates:Exceptions to the Bright-line

criteria through Materiality determinations


Registration Exception Process:Modeled after the BES Exception Process

• The BES Definition is designed around a series of bright-lines with an “Exception” process to either remove Elements from the BES or include Elements in the BES based on the Element’s materiality to BES reliability

• Similarly, the Registration Criteria is proposed to be a series of bright-lines (discussed in prior slides) accompanied by an Exception process to either de-activate or reduce compliance responsibilities or include compliance responsibilities based on the materiality of the entity on reliability

• A new Materiality test is proposed for “above-the-line” and “below-the line” registration reviews


Centralized Review Process

• Comprised of a NERC-lead with Regional Entity participants• To provide a basis for NERC and Regional consistency• To vet threshold applications, materiality, or Reliability

Standard requirement applicability issues• Decisions will be shared throughout the ERO Enterprise and

publicly posted on the NERC website, subject to confidentiality requirements in Section 1500 of NERC Rules of Procedure (ROP)


• Is the entity specifically identified in the emergency operation plans and/or restoration plans of a Reliability Coordinator (RC), BA, GOP or TOP?

• Will intentional or inadvertent removal of a resource or Element owned or operated by the entity lead to loss of a BES resource or transmission Element of a GOP or TOP?

• Will intentional or inadvertent removal of a resource or Element owned or operated by the entity lead to an unintended loss of firm BES connected load of a BA or TOP?

• Can the normal operation, Misoperation or malicious use of the entity’s cyber assets cause a detrimental impact on the operational reliability of an associated BA, GOP or TOP?

• Can the normal operation, Misoperation or malicious use of the entity’s Protective Systems cause a detrimental adverse impact on the operational reliability of an associated BA, GOP or TOP, or the automatic load shedding programs of a Planning Coordinator or Transmission Planner (UFLS, UVLS)?

Factors for Materiality


RBR Overview Flowchart


Improving the Attestation Process

• Entity can submit a one-time attestation with updates as needed No need to prove a negative if no reporting changes are required Entity has no SPS, no UVLS, no reportable disturbances, does not provide

nuclear plant interface services, has received no directives, etc.

• The entity has the obligation to report changes• The electric reliability organization (ERO) has the opportunity to

verify the attestations


Summary and Next Steps


Summary

• By removing commercial functions from the registry and aligning the DP threshold to the GOP threshold of 75 MW, from which we expect to reduce the number of registered entities by upwards of 25%

• By “tiering” requirements to Low Risk TOPs and UFLS-Only DPs• By improving the Attestation process• And by developing and implementing a consistently applied

registration exception process• We expect to significantly improve the efficacy and efficiency of

the ERO Enterprise (Regions, NERC, entities) by reducing unnecessary burden with immaterial impact to reliability


RBR Timeline


Upcoming Dates

• Comment period on the draft Design is now open, and comments are due on June 23, 2014.

• Technical Studies supporting or refuting any draft Design proposals are due on June 27, 2014.

• Draft Design will be revised and submitted to the Member Representatives Committee (MRC) for input in mid-July.

• Draft Design and Implementation Plan will be presented to the NERC Board of Trustees Compliance Committee (BOTCC) and MRC on August 13-14, 2014.

• Revised Design, Implementation Plan, and ROP changes will be posted for comments in mid-August.

• Final industry comments due early October.• Final Design, Implementation Plan, and ROP changes will be presented to the

NERC Board of Trustees in November.

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