Power Production. Quarter 1 Commission Update 1/9/18. Powering our way of life.

Transcription

1 Power Production Quarter 1 Commission Update 1/9/18 Powering our way of life.

2 Departmental Purpose and Goal Purpose: Provide safe, secure, economical, reliable and compliant power generation under the Priest Rapid Project Federal Energy Regulatory Commission (FERC) License Project No while supporting the Wanapum relationship. Goal: Execute the aforementioned tasks while championing a culture of safety and operational excellence with continuous focus on the guiding values of safety, innovation, service, teamwork, respect, integrity, and heritage.

3 2017 Business Review Major Projects & Work Activities Safety performance Ongoing unit rehab and outage work at both Priest Rapids and Wanapum Finished major construction projects at Crescent Bar (On/Off Island) shortly after start of recreation season Crescent Bar Phase I construction completed and open to the public More clearly defined work segregation across MC and Plants Business Plan development

4 2017 Business Review Availability 82.58% PR 85.39% WAN Forced Outage %/# of Outages.67% and 15 PR.37% and 10 WAN Planned Outage Hours/# of Outages and 68 PR 4074 and 37 WAN

5 2017 Business Review Actuals-To-Budget Report Total Budget Total Actuals Total Remaining % Spent Capital $102,408,199 $80,470,182 $21,938, % O&M $22,496,384 $21,996,217 $500, % Labor $25,756,162 $25,522,369 $233, % *Capital and O&M actuals include estimated unpaid invoices

6 2018 Forecast Planned Projects & Work Activities Safety/Human Performance/Operational Excellence Continued unit rehab work at Priest Rapids and Wanapum W07 and P02 next units to commence Lean Training and implementation across PP Maintenance Efficiencies Conduct of Maintenance Maximo priorities/criticality Job hour estimates PM optimization/cbm interface Asset Management

7 2018 Forecast Operational and Safety Efficiencies Maximo Procedure review and development/review Continuing operator training (in-house and simulator) Priest Rapids Right Embankment work Cultural Task 6 ongoing work Business Plan refinement and goal correlation One team/one goal(s) Shell Contract and Availability

8 2018 Forecast Use of Allocated Resources Staffing Staffing will be evaluated as opportunities arise Succession Planning Budget Capital $66,816,703 O&M $21,069,154 (4.5% decrease from 2017) Labor $25,120,417 (2.5% decrease from 2017)

9 2018 Forecast Potential Management Challenges Aging workforce Cultural shifts Potential Efficiency Opportunities Maximo utilization and subsequent gains Lean identification and rapid improvement workshops

10 Miscellaneous Topics PR Turbine and Generator P09 expect RTS 1/19 Rehab of components and schedule impacts Spare rotor on schedule for April delivery, head covers in June Upcoming change orders is lessons learned application from 1 st unit ~$1.3M in Feb generator supply contract Advantageous for CREB funding for early delivery on materials Design flaw correction in original rotor poles Lead abatement additional discovery ~300K/unit in March Discharge Ring Machining # of anchor bolts securing the ring from 160 to 352 Increase quantity of weld materials in all seams Increases overall strength and prevents distortion Turbine supply contract/creb funding for early delivery on wicket gate materials

11 Questions?? 11

12 Grant PUD Lands & Recreation Quarterly Business Report Grant PUD Commission Meeting January 9, 2018 Powering our way of life.

13 Departmental Purpose and Goal Purpose: Fulfill certain regulatory obligations under the District s FERC license, provide real estate support services for the District, and manage the District s geographic information system (GIS) program. Goal: Execute the aforementioned tasks and services in light of the District s Strategic Plan objectives related to maintaining a strong financial position, providing long-term low rates, providing excellent customer service, and attaining environmental compliance.

14 2017 Business Review Major Projects & Work Activities Updated the Recreation Resources Management Plan completed & filed w/ FERC Completed Crescent Bar Phase I construction Opened the new Crescent Bar amenities to the public no major security or safety issues Removed all major encroachments along Grant PUD-owned shorelines Completed shoreline restoration adjacent to Sunland Estates Completed two Project Boundary modifications Sunland Estates Lot 51 and Crescent Bar Teal Road Provided right-of-way support for construction of Rocky Ford Dover T-line Hosted a successful 2017 Shoreline Workshop

15 2017 Business Review Regulatory Review 12 FERC filings by Grant PUD 12 submitted on time 8 approved Summary/listing of major filings: Requests to modify Project Boundary to include Lot 51 and Teal Road Update to Recreation Resources Management Plan Request to delay renovation of the Wanapum Lower Boat Launch to 2021

16 2017 Business Review Use of Allocated Resources Staffing 10 FTRs & 6 FTEs Manager & GIS (2 FTR) Property Management/Real Estate (5 FTR) Parks & Recreation (3 FTR) Lands & Recreation Maintenance (6 FTE) Budget Capital - $18,421,980 O&M - $1,347,706 Labor - $1,217, Budget Capital O&M Labor

17 2017 Business Review Actuals-To-Budget Report Total Budget Total Actuals Total Remaining % Spent Capital $18,421,980 $17,324,593 $1,097,387 94% O&M $1,347,706 $1,202,572 $145,134 89% Labor $1,217,805 $1,184,381 $33,424 97% *Capital and O&M actuals include estimated unpaid invoices

18 2018 Forecast Planned Projects & Work Activities Complete Crescent Bar recreation & water/wastewater construction Analyze long-term recreation O&M Complete encroachment removal along shoreline communities Complete shoreline restoration adjacent to Desert Aire (PRRA) Initiate discussions with the Columbia Cliffs community on a Public Recreation Development Plan (PRDP) Acquire property rights for Priest Rapids right embankment project Surplus Cascade Gardens property Acquire property rights to support fiber build-out and Power Delivery projects Support vegetation management Develop more functional asset inventory tracking tool

19 2018 Forecast Regulatory Outlook Anticipated FERC filings NONE! Anticipated FERC approvals RRMP Update EOT for Wanapum Lower Boat Launch Project Project boundary modifications Vantage Boat Launch, PRRA day use parking Any regulatory threats or risks none known/anticipated

20 2018 Forecast Use of Allocated Resources Staffing Reduction of 2 FTRs (8 FTR/6 FTE) Considering backfill of 1 FTR 2018 Budget Budget Capital $7,540,673 (CB construction) O&M $1,277,290 (5.2% decrease from 2017) Labor $1,067,854 (12.3% decrease from 2017) Capital O&M Labor

21 2018 Forecast Potential Management Challenges Crescent Bar water/wastewater cost allocation District use of Sunland Estates Lot 51 Agricultural leasing of project lands Columbia Cliffs Public Recreation Development Plan Crescent Bar residential lease management Crescent Bar recreation management Potential Efficiency Opportunities Crescent Bar recreation management Consolidation of vegetation management duties Q1/Q2 - establish O&M metrics, including budget reduction goals for 2019 and beyond

22 Miscellaneous Topics Crescent Bar Revenues and Expenses for 2017 Total Revenues = $1,597,335 Campground (partial year) = $70,064 Golf Course = $84,610 Fuel Sales = $92,916 Other = $1,349,745 Total Expenses = $1,123,644 Campground = $72,306 Golf Course = $336,943 Fuel Sales = $113,171 Other = $601,224 Crescent Bar Operations & Maintenance Change Order proposed for Central Washington Management Group contract Extends contract term through December 2018 Expands scope of contract to include areas that have previously been responsibility of construction contractor (campground)

23 GCPUD Enterprise Risk First Quarter 2018 Update

24 Presentation Objectives Why Enterprise Risk Management? Purpose Risk Model GCPUD Program Initiated Work Plan 2018

25 Why ERM? Tasks & Line Management INSIGHT Everyone manages risks as part of their duties and aspirations

26 Why ERM? Goals & Objectives Tasks & Line Management INSIGHT Everyone manages risks as part of their duties and aspirations

27 Why ERM? Management Goals & Objectives Tasks & Line Management INSIGHT Everyone manages risks as part of their duties and aspirations

28 Why ERM? Management Goals & Objectives Tasks & Line Management INSIGHT Everyone manages risks as part of their duties and aspirations

29 Why ERM? Management Goals & Objectives Tasks & Line Management Risks INSIGHT Everyone manages risks as part of their duties and aspirations

30 Why ERM? Management Goals & Objectives Tasks & Line Management Risks INSIGHT Everyone manages risks as part of their duties and aspirations

31 Why ERM? Management Goals & Objectives Tasks & Line Management Risks INSIGHT Everyone manages risks as part of their duties and aspirations

32 Why ERM? Management Goals & Objectives Tasks & Line Management Risks INSIGHT Everyone manages risks as part of their duties and aspirations

33 ERM Purpose Organizational Risk Profile Corporate MRI Correlation and Location Cross-Functional Evaluation Johari Window Alignment Allocation

34 Risk Model ERM at GCPUD is built on a four-component model Compliance Strategic Mission and Direction Operational Strategic Operational effective and efficient use of resources Compliance adherence to applicable policies, procedures, laws and regulations Financial Reputational Financial fiscal performance and reliable reporting RISK UNIVERSE A risk universe is a good way to get an audience to conceptualize risk, to organize a risk register or catalog, and to categorize enterprise-wide concerns into types as above. RISK SOURCES We look at individual risks as emanating from individual factors (personal), management factors, or external factors. Independence among individual risks is a goal.

35 Organizational Risk Profile Enterprise Dashboard Functional Areas Warmer colors prone to move CORPORATE MRI Each Functional Area s risk profile is visible and can be expanded for greater review.

36 Organizational Risk Profile Enterprise Dashboard Functional Areas Warmer colors prone to move Danger Zone QUADRANT ANALYSIS The Danger Zone is above 5 impact and likelihood. Yellow, orange, or red dots in this area are cause for concern

37 Organizational Risk Profile Enterprise Dashboard Functional Areas Warmer colors prone to move Danger Zone jumpers QUADRANT ANALYSIS The Jump Zone is above 5 likelihood, and risks here may be prone to cause great impacts in conjunction with other risks or alone.

38 Organizational Risk Profile Enterprise Dashboard Functional Areas Warmer colors prone to move sliders Danger Zone jumpers QUADRANT ANALYSIS The Slide Zone is above 5 impact, but lower likelihood, and risks here may be prone to increase frequency without active management.

39 Organizational Risk Profile Root Cause Analysis Frequency Severity PERVASIVENESS The more given risks are selected and rated, the greater the correlation they can represent in your organization.

40 Cross-Functional Evaluation IT Groups IT Customers Bringing up its risk dashboard, there is a broad difference between the perception of how well this risk is managed by commercial groups and operational groups. JOHARI WINDOW Functional Areas don t often see themselves as others see them; cross-correlation offers insights.

41 Organizational Alignment Risk informed data discovery and review Compliance, Insurance, Audit data inform risk cloud Planning and allocation can be selectively aligned REVIEW AND REFRESHMENT Any reviewing function (industry compliance, audit, accounting, etc.) can drive revision of the data and promote accuracy.

42 Work Plan Initiation Completed Ongoing Insurance optimization Development of ERM, Cyber and Energy Risk Committees LogicManager platform INITIATION Development of new process or revision/repurposing of old processes, staffing, and training.

43 Work Plan Direct Support for Internal Audit, Capital Planning Risk Appetite Task-level risk analysis and allocation Risk reported to management and Commission OPERATIONALIZATION Creating repeatable processes with reportable, reviewable activities because of which decisions can be supported.

44 Work Plan Risk Analysis by end of 2018:Q1 Top Risks facing the District Key Functional Areas affected By end of 2018:Q2 Refreshed Risk data Review new Risk Profile and Task Analysis By end of 2018:Q3 Cohesive Risk Appetite Internal Audit Support By end of 2018 Capital Planning Support Committee activity Cyber, Energy, Enterprise PROGRESS Demonstrate measurable accomplishment of goals with demonstrable value to the District.

45 Questions?

46 Thank you. Devon Williams Risk Manager grantpud.org

47 NERC Compliance 2018 Q1 NERC Compliance Update Powering our way of life.

48 Compliance Overview NERC Background Grant Program Past Performance The Path Forward

49 Authorities Federal Energy Policy Act of 2005 Tasked FERC to develop an Electric Reliability Organization NERC executed delegation agreements with Regional Entities Regional Entities carry out Electric Reliability Compliance activities Registered Entities required to meet Reliability Compliance Standards FERC NERC WECC Grant

50 NERC Compliance Scope Bulk Electric System (BES) Transmission elements at 100kV or higher Real Power and Reactive Power connected at 100kV or higher Operations and Planning System operations System planning Maintenance Continuity and Recovery Critical Infrastructure Protection Cyber Security Physical Security Continuity and Recovery

51 Grant PUD Compliance Organization CFO: Jeff Bishop CIP Senior Manager: Kevin Marshall RC Manager: Nick Weber (Interim) RC Analyst: Yvonne McMackin RC Internal Auditor: Alex Ybarra

52 Grant PUD Compliance Program Designated CIP Senior Manager Kevin Marshall Electric Reliability Compliance Department Manager: Nick Weber (interim) RC Analyst: Yvonne McMackin RC Internal Auditor: Alex Ybarra Third party consultants: Archer Security Group Standard Owners and Subject Matter Experts Implementation of processes and activities to meet Reliability Standards

53 Grant PUD Compliance Program $400,000 $350,000 $300,000 $361,713 $305, Budget $327,063 $250,000 $200,000 $219,495 $150,000 $100,000 $50,000 $0 $64,005 $29,700 $22,366 $4,950 Total O&M Labor Travel and Training Budget Actual

54 Grant PUD Compliance Program $500, Budget $450,000 $449,488 $400,000 $382,088 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 $47,400 $20,000 $0 $0 $0 $0 Total O&M Labor Travel and Training Budget Actual

55 Grant PUD Violation History $176,000 $49, $45,000 $15,000 TBD * Self Report Audit Finding * Pending adjudication from WECC Enforcement

56 Compliance Violation Impacts Penalties and Sanctions Up to $1M/violation/day $275,500 in penalties to date Mitigations Violations must be mitigated Failure to mitigate will incur further penalties and sanctions Cumulative Impacts Violation history influences penalties and sanctions Risk-based enforcement

57 Risk-based Compliance Enforcement 402 Requirements applicable to Grant 47 Requirements in scope for 2017 Audit Based on WECC s risk assessment of Grant Contributing Factors Compliance history Bulk Electric System coordination High Impact cyber systems Reported Category 2b EMS/SCADA Event Low maturity level for cybersecurity Out of Scope In Scope

58 2017 Audit Audit Results Two week audit engagement One week remote One week onsite One Open Enforcement Action (OEA) Dismissed by WECC Two Possible Noncompliance (PNC) findings Pending adjudication from WECC 82% Reduction in findings from 2014 Audit 14 OEA, 2 PNC 7 OEAs dismissed by WECC No Finding Open Enforcement Action Possible Noncompliance

59 2017 Accomplishments Thrived in spite of uncertainties Complete turnover of leadership from RC Staff to General Manager All occurred in 90 days between WECC Notice of Audit and Audit Realigned RC Staff Improves support to Standard Owners and SMEs CIP Lead: Alex Ybarra O&M Lead: Yvonne McMackin

60 2017 Accomplishments Executed Archer Security Group contract Expands available competencies Allows for capacity surge Increased participation in industry groups Western Interconnection Compliance Forum (WICF) WECC Human Performance WECC Physical Security Work Group (PSWG) Electricity Information Sharing and Analysis Center (E-ISAC) EnergySec Forum

61 2018 Goals Update Internal Compliance Program RACI model Align responsibilities to positions Mature Internal Controls Program Identify and mitigate potential failure points Measure against controls rather than Standards Compliance becomes a byproduct Meet external reporting requirements Quarterly to NERC Quarterly and Annual to WECC

62 Compliance RACI Responsible: Subject Matter Experts Execute compliance tasks Implement controls Maintain compliance evidence Accountable: Standard Owners Accountable for compliance with assigned Standard(s) Quality Assurance of evidence and documentation Manage controls Consulted: RC Staff Provide advice and interpretation of Standards Communication between external parties and Standard Owners Manage NERC Compliance Program Quality Checks of evidence and documentation Informed: Executive Staff and Board of Commissioners Policy Resource allocation

63 Internal Controls Example NERC CIP Requirement 3 Part 3.1 Maintenance and testing of each Physical Access Control System and locally mounted hardware or devices at the Physical Security Perimeter at least once every 24 calendar months to ensure they function properly. Grant CIP-006 R3 Program Document Maintenance and testing shall be performed for each PSP identified in the Physical Security Plan and include each Physical Access Control System (PACS) and locally mounted hardware or devices, at least once every 12 calendar months to ensure proper function.

64 2018 Work Plan Q1 Align Responsibilities Formalize RC Staff Position changes Standard ownership at appropriate level Q2 Complete Standard Teams All Standard Owners onboarded Subject Matter Experts assigned to teams Q3 Internal Controls Development Workshops Developed at Requirement level Q4 Internal Controls Review Conducted by RC Staff and external parties as appropriate

65 2018 Challenges/Unknowns Personnel 2 FTR on RC Staff Standard Owners and SMEs wear many hats Mitigation: Archer Contract Mitigation: Evaluating technology efficiencies FERC Commissioners Anticipate complete turnover of FERC Commission from Unknown agenda and viewpoints Mitigation: Remain active in industry groups WECC Support Provides assistance and guidance on internal controls programs Initiating a reorganization in Q Mitigation: Archer Contract

66 Powering our way of life.