Board of Trustees Compliance Committee...Compliance Design Framework May – Present the framework...

Board of Trustees Compliance Committee May 6, 2014 | 10:00 a.m. – 11:00 a.m. Eastern

Hyatt Regency Philadelphia at Penn's Landing 201 South Columbus BlvdPhiladelphia, PA 19106

Remarks by Board Committee ChairMay 6, 2014 | 10:00 a.m. – 11:00 a.m. Eastern

Hyatt Regency Philadelphia at Penn's Landing 201 South Columbus BlvdPhiladelphia, PA 19106

Reliability Assurance Initiative (RAI) Progress ReportJerry Hedrick, Director of Regional Entity Assurance and OversightSonia Mendonca, Associate General Counsel and Director of EnforcementCompliance Committee Open MeetingMay 6, 2014

RELIABILITY | ACCOUNTABILITY4

RAI Progress Report

• Initial auditor training of Auditor Manual completed• Identifying and prioritizing Manual content areas for 2014 development • Compliance Auditor Manual published on NERC web site

• Initial auditor training of Auditor Manual completed• Identifying and prioritizing Manual content areas for 2014 development • Compliance Auditor Manual published on NERC web site

Auditor Resources and Tools

• Developed and approved the common framework design• Finalizing individual program designs and develop program examples• Developed and approved the common framework design• Finalizing individual program designs and develop program examples

Single Compliance Design

• User guide to support improved self reporting process completed in December 2013; Revisions under way

• User guide to support improved self reporting process completed in December 2013; Revisions under way

Improvements to Self‐Reporting

• Triage process implemented across ERO by January 1, 2014• Evaluation of results of enforcement pilots to test aggregation and exercise of enforcement discretion under way

• Triage process implemented across ERO by January 1, 2014• Evaluation of results of enforcement pilots to test aggregation and exercise of enforcement discretion under way

FFT Enhancements

• Inform eligibility for aggregation process• Integrate control evaluations with enforcement processes• Finalize integrated program design feedback loops and processes

• Inform eligibility for aggregation process• Integrate control evaluations with enforcement processes• Finalize integrated program design feedback loops and processes

Compliance and Enforcement Integration


Pilot Evaluation and Convergence

• Pilots Completed Pilot Teams created a single design Results and single program design presented to the Evaluation Team

• Evaluation Results Preliminary evaluation of results and program design is complete Program framework adopted by the ERO Enterprise

• Next Steps Finalize documentation of the single detailed program design Complete the evaluation to assure:

o Effectivenesso Sustainabilityo Transparency

Develop examples to demonstrate methodology


RAI Oversight Plan Framework

ScopeScope

Applicable Standards

RiskElements

Controls Not Evaluated

CMEP Tools

IRA

ICE

Com

plia

nce

Ove

rsig

ht P

lan

Oversight Scoping

Inherent RiskAssessment

Internal ControlsEvaluation

Input Input• RE Functions• Characteristics - ERO / Regional• Events• RISC


2015

Timeline for Implementing Single Compliance Design Framework

May – Present the framework overview

August – Finalize documentation of the converged pilots

October – Incorporate single design into the CMEP annual plan

December – Complete regional evaluations and adoption of processes

January 2015 – Execute on deployment and training

May June July Aug Sep Oct Nov Dec Jan Feb Dec 2016


Triage and Exercise of Discretion

• Process in place• Results monitored and analyzed throughout the year• Continuous communication between Compliance and Enforcement

Self-Report

ExternalDiscovery

ERO Review of Noncompliance

EnforceEvaluation and Triage

Compliance

Feedback Compliance Risk

and Controls Assessment

Risk and Control Assessment

Input

Record (Discretion)


User Guides

Drafts available at: www.nerc.com/pa/comp/Pages/Reliability‐Assurance‐Initiative.aspx

• Support a common understanding of what constitutes a good initial record, how risk of noncompliance is assessed, and how mitigation is documented and evaluated

• Revised documents expected to be posted in the second quarter of 2014


Enforcement Pilots

• Aggregation pilot Selected entities Minimal risk issues Record corresponds to contents of FFT spreadsheet Presumption of discretion

• Discretion pilot Selected entities Minimal risk issues Record corresponds to contents of FFT spreadsheet

• Evaluation and next steps


Compliance and Enforcement Integration

• Finalize Internal Control Evaluation (ICE) processes• Leverage risk and controls evaluations in support of Compliance discretion and Enforcement decisions

• Consolidation of coordination processes for multi‐region registered entities (compliance monitoring and enforcement)

RSAW Review and Revision ProcessMark Lauby, Senior Vice President and Chief Reliability OfficerBoard of Trustees Compliance CommitteeMay 6, 2014


• February 2014 – Working group formed Vet proposed changes to RSAWs in place for existing standards Ensure proposed change does not materially change scope or intent

• March 2014 – Working group developed proposed process• April 29, 2014 – Policy input received• May 1, 2014 – Working group reviewed policy input• May 6, 2014 – Final recommendation for NERC adoption

Timeline


• Substantive revisions posted for at least 15 business days• Comments to focus on: Any material change in scope Technical error Effective date concern

• Additional postings for further revisions• Final revisions reviewed by chair of Standards Oversight and

Technology Committee (SOTC) RSAW goes into effect; or RSAW revisions reviewed by full SOTC

Proposed Process

Board of Trustees Compliance Committee...Compliance Design Framework May – Present the framework...

Documents

Transcript of Board of Trustees Compliance Committee...Compliance Design Framework May – Present the framework...