Agenda Member Representatives Committee Pre-Meeting ... Highlights...Antitrust laws are complex and...

Agenda Member Representatives Committee Pre-Meeting Informational Session Conference Call and Webinar January 17, 2017 | 11:00 a.m. – 12:00 p.m. Eastern Conference Line: 1-888-857-4242 | Conference ID: 38870822 Click here for: Webinar Registration Introduction and Chair’s Remarks NERC Antitrust Compliance Guidelines and Public Announcement* Agenda Items

1. Schedule and Topics for the Board of Trustees, Board Committees, and MRC Meetings* - February 8-9, 2017

2. Overview of Items Included in the Policy Input Letter

a. ERO Enterprise Strategic Planning Schedule*

b. Next Steps for Distributed Energy Resources Task Force Final Report*

*Background materials included.

https://cc.readytalk.com/registration/#/?meeting=q1lgndtmlh9q&campaign=z062xns6nlwk

Antitrust Compliance Guidelines I. General It is NERC’s policy and practice to obey the antitrust laws and to avoid all conduct that unreasonably restrains competition. This policy requires the avoidance of any conduct that violates, or that might appear to violate, the antitrust laws. Among other things, the antitrust laws forbid any agreement between or among competitors regarding prices, availability of service, product design, terms of sale, division of markets, allocation of customers or any other activity that unreasonably restrains competition. It is the responsibility of every NERC participant and employee who may in any way affect NERC’s compliance with the antitrust laws to carry out this commitment. Antitrust laws are complex and subject to court interpretation that can vary over time and from one court to another. The purpose of these guidelines is to alert NERC participants and employees to potential antitrust problems and to set forth policies to be followed with respect to activities that may involve antitrust considerations. In some instances, the NERC policy contained in these guidelines is stricter than the applicable antitrust laws. Any NERC participant or employee who is uncertain about the legal ramifications of a particular course of conduct or who has doubts or concerns about whether NERC’s antitrust compliance policy is implicated in any situation should consult NERC’s General Counsel immediately. II. Prohibited Activities Participants in NERC activities (including those of its committees and subgroups) should refrain from the following when acting in their capacity as participants in NERC activities (e.g., at NERC meetings, conference calls and in informal discussions):

• Discussions involving pricing information, especially margin (profit) and internal cost information and participants’ expectations as to their future prices or internal costs.

• Discussions of a participant’s marketing strategies.

• Discussions regarding how customers and geographical areas are to be divided among competitors.

• Discussions concerning the exclusion of competitors from markets.

• Discussions concerning boycotting or group refusals to deal with competitors, vendors or suppliers.

NERC Antitrust Compliance Guidelines 2

• Any other matters that do not clearly fall within these guidelines should be reviewed with NERC’s General Counsel before being discussed.

III. Activities That Are Permitted From time to time decisions or actions of NERC (including those of its committees and subgroups) may have a negative impact on particular entities and thus in that sense adversely impact competition. Decisions and actions by NERC (including its committees and subgroups) should only be undertaken for the purpose of promoting and maintaining the reliability and adequacy of the bulk power system. If you do not have a legitimate purpose consistent with this objective for discussing a matter, please refrain from discussing the matter during NERC meetings and in other NERC-related communications. You should also ensure that NERC procedures, including those set forth in NERC’s Certificate of Incorporation, Bylaws, and Rules of Procedure are followed in conducting NERC business. In addition, all discussions in NERC meetings and other NERC-related communications should be within the scope of the mandate for or assignment to the particular NERC committee or subgroup, as well as within the scope of the published agenda for the meeting. No decisions should be made nor any actions taken in NERC activities for the purpose of giving an industry participant or group of participants a competitive advantage over other participants. In particular, decisions with respect to setting, revising, or assessing compliance with NERC reliability standards should not be influenced by anti-competitive motivations. Subject to the foregoing restrictions, participants in NERC activities may discuss:

• Reliability matters relating to the bulk power system, including operation and planning matters such as establishing or revising reliability standards, special operating procedures, operating transfer capabilities, and plans for new facilities.

• Matters relating to the impact of reliability standards for the bulk power system on electricity markets, and the impact of electricity market operations on the reliability of the bulk power system.

• Proposed filings or other communications with state or federal regulatory authorities or other governmental entities.

Matters relating to the internal governance, management and operation of NERC, such as nominations for vacant committee positions, budgeting and assessments, and employment matters; and procedural matters such as planning and scheduling meetings.

Member Representatives Committee (MRC)

Pre-Meeting and Informational WebinarJanuary 17, 2017

RELIABILITY | ACCOUNTABILITY2

• Review preliminary agenda topics for February 8 MRC meeting• Review preliminary agenda topics for Board of Trustees (Board)

and Board Committee meetings (February 2 and February 8-9)• Receive updates on emerging and informational issues as part of

today’s webinar

Objectives – Pre-Meeting and Informational Session


Schedule of Quarterly NERC Meetings and Conference Calls


• Finance and Audit Committee, February 2 (2:00 p.m. Eastern) 2016 year-end unaudited statement of activities for NERC and the Regional

Entities Review of investment performance and policy Finance and Audit Committee self-assessment results Review procedures for approval of senior management expenses

Conference Calls, Prior to San Diego


• Proposed 2017 Board Committee chair and vice chair appointments

• Board and Board Committees’ self-assessments and MRC assessment of Board effectiveness results

• Review governance guidelines• Annual conflict of interest and independence report• 2016 year-end performance report• Human resources and staffing update

Corporate Governance and Human Resources Committee8:00 – 9:00 a.m., February 8


• Compliance Monitoring and Enforcement Program annual report Implementation of CIP version 5 Reliability Standards

• Coordinated oversight program update• Internal controls evaluation update• Review committee self-assessment results

Compliance Committee9:15 – 10:45 a.m., February 8


• Review committee self-assessment results• ERO Enterprise IT application strategy update• Functional Model update• Supply chain management standard update• Guidelines and technical basis update• Reliability Standards quarterly status report

Standards Oversight and Technology Committee11:00 – 12:30 p.m., February 8


• Election of NERC Trustees• Roadmap for integrating Mexico• Responses to the Board’s request for policy input ERO Enterprise strategic planning schedule Next steps for Distributed Energy Resources Task Force final report

• Additional policy discussion of key items from Board Committee meetings

• Update and schedule of near-term reliability assessments• Geomagnetic disturbance events research work plan update• Inverter disconnects during transmission disturbances• Cyber Automated Information Sharing (CAIS) overview

Member Representatives Committee 1:15 – 5:15 p.m., February 8


• Update on FERC reliability matters• Accountability matrix• Regulatory update

Member Representatives Committee 1:15 – 5:15 p.m., February 8


• Committee membership and charter changes• Election and appointment of NERC officers• Board of Trustees self-assessment results• Standards Adopt IRO-002-5, TOP-001-4, EOP-004-4, EOP-005-3, EOP-006-3, EOP-008-

2, CIP-003-7 Approve regional standards development process document revisions for

Texas RE Adopt VAR-501-WECC-3 Revisions to Attachment 2 of BAL-001-TRE-01

• Approve efficiency and effectiveness metric• Accept Distributed Energy Task Force final report

Board of Trustees8:30 a.m., February 9


• FERC data access update• Update on current U.S. governmental relations• Western Interconnection Assurance Project• Mexico update• E-ISAC quarterly update• Committee, forum, and group reports Approve 2017 Board Committee assignments Approve 2016 contribution to savings and investment plan Accept NERC 2016 unaudited results Accept combined ERO Enterprise 2016 unaudited results Accept Regional Entity 2016 unaudited results

Board of Trustees8:30 a.m., February 9


• Overview of policy input letter items ERO Enterprise strategic planning process Next steps for Distributed Energy Resources Task Force final report

January 17 – MRC Informational Session


• January 10: Policy Input Letter issued• January 25: February Board and MRC agenda packages posted• January 31: Policy Input Letter responses due• February 1: Policy input responses posted• February 1: February Board and MRC presentations posted

Upcoming Dates

Agenda Item 2a MRC Informational Session January 17, 2017

ERO Enterprise Strategic Planning Process

Action Information Summary In 2016, the ERO Enterprise strategic planning documents were consolidated and integrated, aligning the linkages among the goals, metrics, and Reliability Issues Steering Committee’s (RISC) risk priorities. During the November 2016 Board of Trustees (Board) meeting, the ERO Enterprise Strategic Plan and Metrics 2017–2020 was approved, which contains the following components:

• ERO Enterprise vision, mission, and values;

• Five ERO Enterprise goals and their contributing activities for the next three years;

• Six enduring ERO Enterprise metrics, focused on measuring progress on reliability improvement (each metric’s measure of success, threshold, and target is adjusted annually as needed); and

• The risk profiles and recommendations from the RISC’s current ERO Reliability Priorities report (RISC report).

An initial draft of NERC performance metrics were also shared during the November Board meetings. Since that meeting, these metrics have been revised to be a single metric, with four supporting measures focused on NERC efficiency and effectiveness. This efficiency and effectiveness metric will be added as a seventh metric to the ERO Enterprise Strategic Plan and Metrics 2017–2020 once approved by the Board during their February 2017 meeting. The measures and their thresholds and targets will also be adjusted annually as needed. Also during the November meetings, an approach to begin in 2017 was reviewed with the Member Representatives Committee (MRC) that increases the alignment between the timing of the production of the annual business plan and budget (BP&B) and evaluation of the strategic plan and metrics as follows:

• Remove the year designation from the ERO Enterprise Strategic Plan and Metrics (e.g., 2018–2021) and move to an every-other-year review cycle

• Annual BP&B development is always based on latest strategic plan and metrics

• Risk prioritization and strategic plan and metrics revisions would occur every two years, starting with 2017, with the opportunity to make interim updates based on identification of any significant new emerging risks or operational goals.

Additionally, in 2017, the ERO Enterprise will develop a long-term strategy (beyond five years) for the ERO Enterprise. As part of this effort, the ERO Enterprise Strategic Plan and Metrics document would be referred to as the ERO Enterprise Operational Plan. The long-term strategy would provide a long-term framework for the ERO Enterprise’s goals and related areas of focus,

while the ERO Enterprise Operational Plan, together, with the set of multi-year metrics, would continue to address near-term operating priorities. The ERO Enterprise Operational Plan, as noted above, will be revised every other year, aligning with the RISC activities and BP&B development. The schedule for developing the BP&B has been expanded to include the 2017 schedule for developing the long-term strategy, ERO Enterprise Operational Plan, and metrics. The schedule includes touchpoints for the ERO Enterprise throughout the year, such as public postings, policy input requests, MRC, NERC Board, Regional Entity, and stakeholder-related meetings. The Board is seeking MRC policy input on the schedule for 2017 (specifically related to the strategic planning activities highlighted in yellow) and overall improvements to the strategic planning process and its supporting activities as described above.

http://www.nerc.com/gov/bot/MRC/Documents/ERO_Enterprise_Strategic_and_Operational_Planning_and_2018_BPB_Preparation_Schedule.pdf

ERO Enterprise Strategic Planning ProcessMichael Walker, Senior Vice President and Chief Financial and Administrative OfficerMRC Informational SessionJanuary 17, 2017


• Consolidated and aligned strategic planning documents• Established reduced set of metrics focused on measuring

progress on reliability improvement• Board of Trustees (Board) approved the ERO Enterprise Strategic

Plan and Metrics 2017–2020 in November• Developed NERC efficiency and effectiveness metric with four

measures to be presented to the Board for approval in February

Strategic Planning in 2016


• Develop long-term strategy for the ERO Enterprise• Terminology adjustments: ERO Enterprise Strategic Plan and Metrics to ERO Enterprise Operational

Plan Remove year designation (e.g., 2018–2021)

• Risk prioritization by the Reliability Issues Steering Committee (RISC) and review of the ERO Enterprise Operational Plan and metrics undertaken every two years Opportunity for interim updates based on identification of any significant

new emerging risks or operational goals Annual business plan and budget development based on latest operational

plan and metrics Metrics’ measures, thresholds, and targets adjusted annually as needed

Strategic Planning Starting in 2017


• Scope of proposed longer-term strategy• Change to updating RISC report, ERO Enterprise Operational

Plan, and metrics every two years instead of annually• Improvements to development of the RISC priorities report• Improvements to the development of updates to the ERO

Enterprise Operational Plan• Adequate stakeholder input provided in 2017 schedule

Policy Input

Agenda Item 2b MRC Informational Session January 17, 2017

Next Steps for Distributed Energy Resources Task Force Final Report

Action Information Background The Distributed Energy Resources Task Force (DERTF) was established in response to recommendations from the Essential Reliability Services Task Force (ERSTF) Measures Framework Report. The DERTF has developed a report which is being distributed to the MRC. The report is focused on operational and planning impacts of Distributed Energy Resources (DER) and examining the potential implications to bulk power system (BPS) reliability. This report explores existing policies and requirements oriented to support the reliable integration of DER with respect to BPS reliability. In developing this report, the task force reviewed the NERC Functional Model, existing NERC Reliability Standards, and coordinated with IEEE-1547-related efforts. Additionally, the task force reviewed definitions for Behind-the-Meter Generation (BTMG), Distributed Generation (DG), and other related terms to provide clear distinctions between each category. Next Steps and Actions The final report recommends action in several areas, including:

• Reliability Guidelines

• Data Sharing

• System Modeling

• DER Models

• Definitions

• Industry Collaboration NERC has identified several actions that should be prioritized including enhancements to NERC Reliability Standards, guideline development by the technical committees, model improvements, and increased attention in assessments, monitoring, and reliability studies. The DERTF final report will be presented to the NERC Board of Trustees for approval at its February meeting.

http://www.nerc.com/comm/Other/essntlrlbltysrvcstskfrcDL/ERSTF%20Framework%20Report%20-%20Final.pdf

http://www.nerc.com/comm/Other/essntlrlbltysrvcstskfrcDL/ERSTF%20Framework%20Report%20-%20Final.pdf

Next Steps for Distributed Energy Resources Task Force (DERTF) Final ReportJohn Moura, Director of Reliability Assessment and System AnalysisMRC Informational SessionJanuary 17, 2017


• Formed December 2015 • Reports to the Essential Reliability Services Working Group• Membership: representatives from Transmission planning and operations Renewable developers Regulatory organizations Distribution utility Researchers

• Final report to NERC Technical Committees in December 2016 Identify current state Recommendations to NERC, industry, and regulators

DERTF Background


• Operational impacts in areas with high penetration of distributed energy resources

• Recommendation for consistent modeling and assessing DER• Review existing NERC Reliability Standards and coordinate with

IEEE 1547 standard related efforts• Review the NERC Functional Model, registration categories• Evaluate the need for Reliability Guidelines and/or Standard

Authorization Requests (SAR)

DERTF Scope Tasks


• How should DER be included in planning and operating models?• What level of control is needed for reliable system operations?• What level of visibility do system operators require?• How can DER contribute to the reliability of the bulk power

system? • What does the ERO need to consider?

DERTF Report – Key Areas of Focus


Relationship between DSM and DER


• DER penetration is rapidly increasing and altering the load mix • Technical and engineering challenges of integrating DERs on

distribution system are well understood, but less so on BPS• DERs will increasingly have capabilities for active power control

and reliability services • Fundamental changes to modeling, planning and operations and

conventional assumptions

Key Findings


• Modeling of DERs • Ramping and variability • Provision of reactive power • Frequency and voltage ride-through • System protection considerations• Visibility and control• Load and generation forecasting• NERC Reliability Standards

Key Areas of Focus


• Reliability Guidelines Technical committee actions for load modeling, operations

• Data Sharing Potential enhancement to NERC Reliability Standards Continue to monitor in Long-Term Reliability Assessment

• System Modeling Consistency and best practices Annual assessment

• DER Models• Definitions• Industry Collaboration IEEE, national laboratories, inverter manufacturers, software vendors

Recommendations for Next Steps


• Approved at the December 2016 Operating and Planning Committee meetings

• Report provided to MRC for policy input on NERC’s response to the recommendations

• NERC Board of Trustees to consider approval at February 2017 meeting

Next Steps for the Report

Agenda Member Representatives Committee Pre-Meeting ... Highlights...Antitrust laws are complex and...

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