FRCCFRCCRegistration and Compliance Registration and Compliance

OverviewOverview

Linda CampbellFRCC Director of Reliability and

Compliance

FRCCFRCCEntity RegistrationEntity Registration

OverviewOverview

Registered FunctionsRegistered Functions

• BA, Balancing Authority• DP, Distribution Provider• GOP, Generator

Operator• GO, Generator Owner• LSE, Load Serving

Entity• PA, Planning Authority• PSE, Purchasing-Selling

Entity• RC, Reliability

Coordinator

• RSG, Reserve Sharing Group

• RP, Resource Planner• TO, Transmission

Owner• TOP, Transmission

Operator• TP, Transmission

Planner• TSP, Transmission

Service Provider

Registration CriteriaRegistration Criteria

• Load Serving Entities (LSE)

Peak Load > 25 MW or,Responsible for UFLS facilities or,Responsible for UVLS facilities

Registration CriteriaRegistration Criteria

• Distribution Provider (DP)

System serving > 25 MW or,Responsible for UFLS facilities or,Responsible for UVLS facilities or,Responsible for required SPS

Registration CriteriaRegistration Criteria

• Generator Owner/Operator

(GO or GOP)Individual Generating Unit > 20 MVAGenerating Plant/Facility > 75 MVAAny blackstart unit that is part of

entities restoration planAny generator, regardless of size that

is material to reliability

Registration CriteriaRegistration Criteria

• Transmission Owner/Operator

(TO or TOP)Owns or operates transmission

element 100 KV or above, or lower voltage defined by FRCC as necessary for reliable operation of the grid, or that is included on a critical facilities list defined by FRCC.

Registration CriteriaRegistration Criteria

• Joint Action Agency or Similar OrganizationMay register on behalf of one or more

of its membersMust accept compliance reporting

responsibility for all standards applicable to the members

Shall provide FRCC with an annual “Agency Member Registry”

Registration TimelineRegistration Timeline

• December 14, 2006 – NERC implements Revision 2 to Registry Criteria

• December 20, 2006 – FRCC submitted update of “non-binding” compliance registry

• January 10, 2007 – Review of “non-binding” registry by NERC and Regional Compliance Managers

Registration Timeline Registration Timeline (con’t)(con’t)

• Late January, 2007 FRCC initiate final update of Compliance Registry

• March 2, 2007 – FRCC to submit to NERC a final Compliance Registry

• March 12, 2007 – Final review of Compliance Registry by NERC and Regional Compliance Managers

FRCCFRCCCompliance ProgramCompliance Program

OverviewOverview

What is Compliance What is Compliance Monitoring?Monitoring?

• Process by which a Registered Entity’s performance is measured against:– NERC Reliability Standards– FRCC Regional Reliability Standards

• Does not review anything that is not included in the standards

Who does Compliance Who does Compliance Monitoring?Monitoring?

• FRCC will be a Regional Entity with delegated responsibility and authority from NERC and FERC

• FRCC monitors registered entities in our region

• NERC provides oversight of FRCC compliance program

• FERC provides oversight of both NERC and FRCC

What are Violations?What are Violations?

• Violations occur when a Registered Entity does not comply with a requirement of a Reliability Standard that is applicable to that entity

• Alleged violations are required to be reported to NERC and FERC

• Confidentiality of the entity will be maintained until the alleged violation is confirmed

Sources of ViolationsSources of Violations

• On-site Compliance Audits • Annual Self Certification• Spot Audits• Compliance Violation Investigations• Complaints• Self-Reporting• Periodic Data Submittal• Exception Reporting

Processing Alleged Processing Alleged ViolationsViolations

• Entity provided with written notice of alleged violation

• Entity can accept or object to the alleged violation– Accept : Reported to NERC, Mitigation

Plan prepared by entity– Contest : Entity request FRCC

Hearing Process be initiated

What are Sanctions and What are Sanctions and Penalties?Penalties?

• FERC has identified June 2007 as the time period for which compliance with Reliability Standards will be mandatory and enforceable

Sanctions (Non-Monetary)

– Letters to company officers

– Require actions to be taken

– Placement on “watch list” Penalties (Monetary Fines)

– Calculated by FRCC Compliance Staff• Base penalty adjusted by mitigating or aggravating

factors

How are Sanctions and Penalties How are Sanctions and Penalties determined?determined?

• Example in current standard

BASE PENALTY TABLEBASE PENALTY TABLE

• Future

Low High Low High Low High Low HighLower $1,000 $3,000 $2,000 $7,500 $3,000 $15,000 $5,000 $25,000

Medium $2,000 $30,000 $4,000 $100,000 $6,000 $200,000 $10,000 $335,000

High $4,000 $125,000 $8,000 $300,000 $12,000 $625,000 $20,000 $1,000,000

ViolationRisk

Factor

High Severe

Violation Severity Level

Range Limits Range Limits Range Limits Range LimitsLower Moderate

On-Site Compliance AuditsOn-Site Compliance Audits

• Audits are performed by the FRCC• Based on “pro-forma” program developed

by NERC• Performed every three years for RC, BA

and TOP, others to be on a schedule determined by NERC

• Will include all standards applicable to entity that were monitored in the annual implementation plans since last audit

Audit ReportAudit Report

• A Final Report of the audit will be prepared by the audit team– Audited entity will review and provide

factual or technical corrections

• Submit to the FRCC Compliance Committee for review

• Final Report will be posted on the FRCC website

Mitigation PlansMitigation Plans

• Mitigation Plans are required for every confirmed violation

• Must identify how the entity plans to come into compliance with the requirement

• Will be approved by the FRCC Compliance Committee

• Must include milestones if longer than 3 months to correct.

FRCC Hearing ProcessFRCC Hearing Process

• Registered Entity must contest or respond to notice of violation within 30 days.– If no response, violation is considered to be

accepted• If objection not resolved with 40 days of

entity response, must request hearing• Hearing Body is the FRCC Board

Compliance Committee• If Registered Entity does not agree with

outcome of FRCC Hearing, may appeal at NERC.

Questions?