4.1 Violation Reporting Remedial Action Directives Mitigation Plans Internal Training Self Assessments...

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1 NERC Compliance Monitoring and Enforcement Program Florida Reliability Coordinating Council, Inc.

2 Table of Contents 1. Introduction Florida Reliability Coordinating Council Compliance Monitoring and Enforcement Program Organization Program Implementation - Discovery Application of Discovery Methods under the CMEP Compliance Audit and Self Certification Compliance Audit Schedule Semi-Annual Self Certifications for CIP through CIP Reliability Standards Spot Check Periodic Data Submittals Exception Reporting Compliance Violation Investigation Self Report Complaint Reliability Standards Subject to 2009 CMEP Implementation Program Implementation - Enforcement Violation Reporting Remedial Action Directives Mitigation Plans Program Implementation Registration and Certification Outreach Efforts Self Improvement Activities Internal Training Self Assessments FRCC Compliance Monitoring and Enforcement Program i.

3 1. Introduction The Florida Reliability Coordinating Council, Inc. (FRCC) Compliance Monitoring and Enforcement Program (CMEP) Implementation Plan for 2009 includes those procedures and efforts necessary to ensure the reliability of the FRCC Bulk Power System. This effort is done through the monitoring and enforcing of the Federal Energy Regulatory Commission (FERC) and North American Electric Reliability Corporation (NERC) approved Reliability Standards. Compliance monitoring and enforcement of the Reliability Standards will be based on the monitoring processes established in the NERC Rules of Procedure, the FRCC Compliance Monitoring and Enforcement Program (CMEP) and the FRCC Delegation Agreement approved by FERC. In addition, this Implementation Plan will meet the objectives identified in the NERC Compliance Monitoring and Enforcement Program. FRCC Compliance Monitoring and Enforcement Program 1

4 2. FRCC Compliance Monitoring and Enforcement Program Organization 2.1 The FRCC CMEP is implemented by the FRCC Compliance Department. The organization of the compliance department of the FRCC is designed with the primary objectives of: i. Implementation of the CMEP in an accurate, complete, and timely manner, ii. Ensuring independence of the monitoring and enforcement activities, iii. Efficient and effective use of resources. Two compliance engineer/auditor positions are being added to the FRCC compliance organization during These positions will be focused on the Reliability Standards directly related to system planning, engineering, and critical energy infrastructure protection. FRCC Compliance Monitoring and Enforcement Program 2

5 Program Implementation - Discovery The FRCC 2009 CMEP Implementation Plan includes all regulatory approved Reliability Standards being subject to one (1) or more of the eight (8) monitoring processes identified in the FRCC CMEP. NERC and the regional entities, including FRCC, developed a risk based criteria for determining the scope of 2009 compliance audits and self certifications. The risk based criteria allows the compliance auditors/engineers to focus on the Reliability Standards, which if violated, would pose the highest risk to the reliability of the Bulk Power System. FRCC utilized this risk based criteria in the selection of Reliability Standards included in the FRCC 2009 Compliance Audits. 3.1 Application of Discovery Methods under the CMEP FRCC will make use of all monitoring methods described in section 3.0 of the FRCC CMEP as appropriate during The methods to be used by FRCC for the monitoring of each Reliability Standard are identified by NERC in the 2009 CMEP Summary document posted on the NERC website. ( Evaluation and assessment of evidence for compliance with a Reliability Standard will be done through the use of the applicable Reliability Standard Audit Worksheets (RSAWs) provided by NERC. Registered Entities are encouraged to utilize these RSAWs in the preparation of their evidence. The RSAWs can be found on the NERC website at the following link.( 22) Compliance Audit and Self Certification All Registered Entities within the FRCC region are subject to audit for compliance with all regulatory approved Reliability Standards applicable to the functions for which the Registered Entity is registered. The FRCC has developed and implemented a procedure for conducting on-site compliance audits of its Registered Entities. The goal of this procedure, including the use of the NERC RSAWs, is to ensure consistency and fairness in all on-site compliance audits. If the FRCC determines the need to expand the scope of an audit, as allowed in the NERC Rules of Procedure, beyond the scope identified in this Implementation Plan the FRCC will notify the Registered Entity of the expanded audit scope and the reasons for the expansion. In addition, all ongoing and completed Mitigation Plans will be included in the compliance audit scope. FRCC will provide the Mitigation Plan status to the FRCC compliance audit team including documentation and evidence of validation for completed Mitigation Plans. Requests for compliance data and documentation will take place at least 60 (sixty) days prior to the scheduled compliance audit. If the data retention requirements of a FRCC Compliance Monitoring and Enforcement Program 3

6 Reliability Standard do not cover the full period of the on-site compliance audit, the audit will only be applicable to the data retention period specified in the Reliability Standard Compliance Audit Schedule The FRCC will perform on-site compliance audits on a schedule established by NERC, as required in the NERC Rules of Procedure and as described below. By December 31 st each year, the FRCC will notify the Registered Entities, in the FRCC region, that are scheduled for the next calendar year s on-site compliance audits. For 2009 it is planned that all compliance audits will be conducted by the FRCC compliance staff. The schedule for compliance audits of the Reliability Coordinators, Balancing Authorities, or Transmission Operators is a minimum of once every three (3) years. For those Registered Entities that are registered for other functions in addition to Reliability Coordinator, Balancing Authority, or Transmission Operator, all functions will be audited on the three (3) year minimum cycle. Compliance audits of other Registered Entities, in the FRCC region, will begin in 2009 on a rolling 6 (six) year schedule at a minimum. During 2009, sixteen (16) on-site compliance audits are planned in the FRCC region. The following Registered Entities are scheduled for a Compliance Audit during Registered Entity Reliant Energy Florida, LLC Florida Municipal Power Pool Orlando Utilities Commission Florida Municipal Power Agency Southern Company Florida, LLC Vandolah Power Company, LLC Gainesville Regional Utilities City of Vero Beach Ft. Perce Utilities Authority Beaches Energy Services of Jacksonville Beach Lee County Electric Cooperative, Inc. City of Lake Worth Seminole Electric Cooperative City of Tallahassee City of Key West Florida Keys Electric Cooperative NERC Registration ID# NCR06009 NCR00023 NCR00057 NCR00022 NCR00071 NCR00078 NCR00032 NCR00079 NCR00027 NCR00004 NCR00045 NCR00043 NCR00068 NCR00073 NCR00041 NCR00021 This schedule is also included in more detail on the NERC website at the following link ).pdf Semi-Annual Self Certifications for CIP through CIP Reliability Standards FRCC will require self certifications from all applicable Registered Entities identified in all Tables of the Implementation Plan for Cyber Security Standards CIP through FRCC Compliance Monitoring and Enforcement Program 4

7 CIP on January 1, 2009 and July 1, 2009 regardless of the enforcement status of CIP through CIP requirements Spot Check In 2009, FRCC will perform spot checks for thirteen (13) requirements in CIP through CIP that will be classified as Auditably Compliant for specific functions identified in Table 1of the NERC/FRCC Implementation Plan for Cyber Security Standards CIP through CIP These Spot Checks will begin July 1, 2009 going forward into 2010 until all applicable Registered Entities in Table 1 of the Implementation Plan for Cyber Security Standards CIP through CIP are assessed for compliance. These spot checks can occur during a regularly scheduled compliance audit or as a separate activity. Guidance on the implementation plan for the CIP through CIP standards can be found on the NERC website at the following link. With regard to other regulatory approved Reliability Standards, the FRCC has developed and implemented a procedure for conducting Spot Checks of its Registered Entities that are subject to the FRCC CMEP. The goal of this procedure, including the use of NERC RSAWs, is to ensure consistency and fairness in all Spot Checks. Spot Checks may be initiated by the FRCC at any time to verify or confirm Self-Certifications, Self Reporting or Periodic Data Submittals. In addition, Spot Checks may be random or required in response to system events, operating problems or complaints from within or outside the FRCC. At a minimum, a Spot Check will be conducted annually for all Registered Entities that did not have an On-Site Compliance Audit during the previous calendar year and are not scheduled to have an on-site compliance audit during the next calendar year. The following Reliability Standards, as required by NERC s, will be included in Spot Checks of Registered Entities as applicable to the functions for which the entity is registered: EOP Documentation of Blackstart Generating Unit Test Results FAC Establish and Communicate Transfer Capabilities IRO Procedures, Processes, or Plans to Support Coordination Between Reliability Coordinators PRC Assessment of the Design and Effectiveness of UVLS Program PRC UVLS System Maintenance and Testing TOP Planned Outage Coordination As mentioned above, the FRCC may conduct other spot checks as necessary. FRCC Compliance Monitoring and Enforcement Program 5

8 3.1.5 Periodic Data Submittals FRCC requires Periodic Data Submittals in accordance with the schedule stated in the Reliability Standards or on an as-needed basis. Requests for data submittals will be issued by the FRCC to one or more Registered Entities with at least the minimum advance notice period specified by the applicable Reliability Standard. If the Reliability Standard does not specify an advance notice period, the request will normally be issued with no less than twenty (20) business days advance notice. In 2009, FRCC is requiring periodic data submittals from the Registered Entities for the following Reliability Standards: BAL-001-0a Real Power Balancing Control Performance BAL Disturbance Control Performance (DCS) BAL-003-0a Frequency Response and Bias BAL Inadvertent Interchange FAC Transmission Vegetation Management Program PRC Analysis and Mitigation of Transmission and Generation Protection System Misoperations PRC Special Protection System Misoperations PRC Under-Voltage Load Shedding Program Data TPL System Performance Under Normal Conditions TPL System Performance Following Loss of a Single BES Element TPL System Performance Following Loss of Two or More BES Elements TPL System Performance Following Extreme BES Events During the first quarter of 2009, the FRCC will move toward the use of a web based approach for periodic data submittal. A review of FRCC periodic reporting procedures will be done by FRCC compliance staff prior to this change to ensure that the reporting intervals as required in standards are followed as a minimum. FRCC will continue to develop its Compliance Tracking and Submittal (CTS) system for this and other reporting purposes Exception Reporting Some Reliability Standards require reporting of exceptions to compliance with the Reliability Standard as a form of compliance monitoring. FRCC requires Registered Entities to provide reports identifying any exceptions to the extent required by any regulatory approved Reliability Standard. Specific Reliability Standards and requirements in the 2009 CMEP Reliability Standard spreadsheet have been identified for exception reporting. In 2009, FRCC is requiring exception reporting from the Registered Entities for the following Reliability Standards: BAL-003-0a Frequency Response and Bias BAL Time Error Correction BAL Inadvertent Interchange EOP Disturbance Reporting EOP Reliability Coordination - System Restoration FRCC Compliance Monitoring and Enforcement Program 6

9 INT Interchange Information INT Interchange Transaction Implementation INT Dynamic Interchange Transaction Modifications IRO Reliability Coordination - Operations Planning IRO Notifications and Information Exchange between Reliability Coordinators IRO Coordination of Real-time Activities between Reliability Coordinators PER Operating Personnel Credentials TOP Operational Reliability Information TOP Reporting SOL & IROL Violations Evaluation VAR-002-1a Generator Operation for Maintaining Network Voltage Schedules The FRCC CMEP Section 3.7 states: The FRCC shall also require Registered Entities to confirm the number of exceptions that have occurred in a given time period identified by NERC, even if the number of exceptions is zero. Therefore the FRCC will confirm monthly the number of exceptions that have occurred in a given time period identified by NERC, even if the number of exceptions is zero. During the first quarter 2009, the FRCC will also move toward the use a web based approach for exception reporting using the CTS system Compliance Violation Investigation A Compliance Violation Investigation may be initiated at any time by the FRCC Compliance Staff in response to a system disturbance, complaint or notification of a possible violation from any other means. The FRCC has a procedure for conducting Compliance Violation Investigations of its Registered Entities that are subject to the FRCC CMEP. The goal of this procedure is to conduct the Compliance Violation Investigation in a consistent and fair manner. Possible compliance violations can be reported to the FRCC Compliance Staff from a number of sources. The FRCC Compliance Staff may not have enough information or data to determine if an alleged violation has occurred or not. The FRCC Compliance Staff may request additional from the Registered Entity that has possibly violated the Reliability Standard, however it still may not provide enough information to determine if a violation has occurred or not. When this circumstance arises the FRCC Compliance Staff will implement the FRCC procedure to conduct an independent Compliance Violation Investigation. The intent or scope is to investigate the possible violation that was reported or identified in which the FRCC Compliance Staff feels that further investigation is required. However, the FRCC Compliance Staff will be obligated to act on any other potential violation(s) that is noted as part of the investigation through data review or on-site inspection. FRCC Compliance Monitoring and Enforcement Program 7

10 3.1.8 Self Report Self-Reporting is encouraged any time a Registered Entity becomes aware: (i) (ii) of its possible violation of a Reliability Standard, a change in the violation severity level of a previously reported violation. Self-Reporting of a possible violation of a Reliability Standard is encouraged even if the Reliability Standard requires reporting on a pre-defined schedule and the violation is determined outside the pre-defined reporting schedule. Self-reporting of possible violations may be considered as a mitigating factor during the determination of the penalty and/or sanctions. The FRCC will continue in 2009, to encourage and respond to self-reporting of a possible violation by a Registered Entity following the procedure and timelines as outlined in the FRCC CMEP Complaint Either NERC or FRCC may receive Complaints alleging violations of a Reliability Standard. The FRCC will conduct a review of each Complaint it receives to determine if the Complaint provides sufficient basis for a Compliance Violation Investigation. NERC will conduct a review of each Complaint that: (1) Is related to FRCC, (2) The FRCC has determined it cannot conduct the review, (3) The complainant wishes to remain anonymous, (4) The complainant specifically requests NERC to conduct a review of a Complaint. If the Complaint is submitted to NERC, and does not meet any of the four (4) criteria above, NERC will forward the information to the FRCC. The initial FRCC review will determine if the Complaint should be closed or if there is sufficient basis for a Compliance Violation Investigation. FRCC Compliance Staff will report the results of its review of the Complaint to NERC. If, as a result of the initial review of the Complaint, the FRCC Compliance Staff determines that a Compliance Violation Investigation is warranted, a Compliance Violation Investigation will be conducted. FRCC Compliance Monitoring and Enforcement Program 8

11 3.2 Reliability Standards Subject to 2009 CMEP Implementation 2009 is the first year in which all regulatory approved Reliability Standards are identified in the program. All regulatory approved Reliability Standards are subject to a compliance audit, spot check, self report, self certification, compliance violation investigation and complaint. All Reliability Standards identified in this Implementation Plan are listed in the NERC CMEP Summary Document posted on the NERC website at the following link: This spreadsheet has several tabs that are useful to the Registered Entity. This detail identifies the standards and requirements that were included in the 2007 and 2008 Compliance Programs. The FRCCC CMEP Section Scope of Compliance Audits states: A Compliance Audit will include all Reliability Standards applicable to the Registered Entity monitored in the NERC Implementation Plans in the current and three previous years, and may include other Reliability Standards applicable to the Registered Entity. If a Reliability Standard does not require retention of data for the full period of the Compliance Audit, the Compliance Audit will be applicable to the data retention period specified in the Reliability Standard. There are presently no FRCC Regional Reliability Standards that have been approved by FERC and therefore no FRCC Regional Reliability Standards will be included in the. FRCC Compliance Monitoring and Enforcement Program 9

12 Program Implementation - Enforcement Alleged violations will be processed by the rules and procedures outlined in the FRCC Compliance Monitoring and Enforcement Program and the Sanction Guidelines of the North American Electric Reliability Corporation (NERC Rules of Procedure - Appendix 4B). 4.1 Violation Reporting Reporting of findings of each monitoring method will be done in accordance with Section 8.0 of the FRCC CMEP. The FRCC will report to NERC, on a confidential non-public basis, any allegations or evidence of violations of Reliability Standards regardless of significance, whether verified or still under investigation, that are received or obtained by the FRCC through any means within five (5) business days or less as required by NERC. The FRCC will report to NERC at least quarterly the status of violations of Reliability Standards, regardless of significance, that have not yet resulted in a final determination of violation or have not completed the hearing process, if applicable, or for which mitigation activities (including activities being carried out pursuant to a settlement) have not been completed. The FRCC will ensure the information is current when these reports are provided. 4.2 Remedial Action Directives Remedial Action Directives will be used by the FRCC to address imminent threats to reliability of the FRCC Bulk Power System. FRCC will notify NERC within two (2) business days after issuing a Remedial Action Directive. FRCC will make every effort to consult with NERC prior to issuing a Remedial Action Directive. Prior to issuing a Remedial Action Directive, the FRCC shall consult the Reliability Coordinator for the Registered Entity, if applicable, to ensure that the Remedial Action Directive is not in conflict with directives issued by the Reliability Coordinator. Further information concerning Remedial Action Directives are included in section 7.0 of the FRCC CMEP. 4.3 Mitigation Plans Registered Entities will be required to submit a mitigation plan (per section 6.0 of the FRCC CMEP) whenever they are found in violation of a Reliability Standard. All mitigation plans will be reviewed by the FRCC compliance staff and if accepted the mitigation plan will be submitted to NERC review and approval. Completion of an accepted and approved Mitigation Plan is important to protecting the reliability of the FRCC Bulk Power System. Therefore, appropriate actions will be taken FRCC Compliance Monitoring and Enforcement Program 10

13 by the FRCC to ensure completion of all mitigation plans in accordance with accepted completion dates and means of mitigation. If Mitigation Plans for violations that pose a high risk to the reliability of the FRCC Bulk Power System are not completed by the Registered Entity, FRCC will utilize all efforts allowed by the FERC and NERC to ensure the completion of these Mitigation Plans. Such actions may include the use of Remedial Action Directives (refer to FRCC CMEP section 7.0), the requiring of a new Mitigation Plan, the initiating of a Compliance Audit or Spot Check, and the issuing of penalties at the highest levels allowed by FERC. FRCC will validate the completion of a Mitigation Plan by assessing the evidence of compliance provided by the Registered Entity either on-site or submitted to the FRCC office. The Mitigation Plan validations will be conducted in the same manner as the compliance assessment process used for the eight (8) compliance discovery methods. This compliance assessment process will be executed by NERC trained FRCC compliance staff using NERC compliance assessment guides such as Reliability Standard Audit Worksheets (RSAWs). The Mitigation Plan validation process and documentation will be retained by the FRCC for review by NERC. FRCC Compliance Monitoring and Enforcement Program 11

14 Program Implementation Registration and Certification Proper registration of users, owners, and operators of the Bulk Power System is essential to monitoring and enforcing the regulatory approved Reliability Standards. FRCC will review the registration of each Registered Entity in the region during 2009 to ensure that each Registered Entity is correctly registered for the functions that should apply. In addition, a review will be done of the bulk power elements and associated functions to monitor for any possible registrations that are necessary. This approach is intended to avoid any possible reliability gaps in the implementation of the Reliability Standards within the FRCC region. FRCC Compliance Monitoring and Enforcement Program 12

15 6. Outreach Efforts To accommodate the dynamic nature of the reliability compliance processes and Registered Entity community, it is imperative that there be frequent and effective communication from the FRCC to its Registered Entities. With this understanding, the FRCC plans to conduct a minimum of two (2) compliance workshops during These workshops will include items such as use and changes to the FRCC web base Compliance Tracking and Submittal program, forms updates, compliance processes, registration changes, and other updates. Question and answer opportunities will be provided during these workshops to allow Registered Entities the opportunity to provide feedback to the FRCC compliance staff and to improve efficiency, transparency, and consistency of the implementation of the FRCC CMEP. The workshops will be coordinated and led by the FRCC compliance staff and will be made available to all Registered Entities in the FRCC region. The FRCC compliance staff will also continue to participate in the FRCC Compliance Committee as a means of educational outreach. The FRCC has begun the use of a Frequently Asked Questions section on its website and will continue this in 2009 as a means of promoting consistency and transparency in the compliance monitoring and enforcement processes. 7. Self Improvement Activities Continuing self improvement by the FRCC compliance staff is seen by the FRCC as essential to monitoring and enforcing the NERC in a fair, consistent, and complete manner. Therefore during 2009 both internal and external training as well as review sessions will be utilized to ensure effective skills and procedures. 7.1 Training FRCC compliance staff will participate in all NERC provided auditor training as appropriate. This training will include attending the CIP training in the first quarter of Also all FRCC auditors that have not previously done so will attend the NERC Lead Auditor Training. As new reliability standards and changes to existing reliability standards are approved by the Federal Energy Regulatory Commission, the FRCC compliance staff will develop internal review and training sessions to ensure prompt and consistent monitoring and enforcement in the FRCC region. FRCC Compliance Monitoring and Enforcement Program 13

16 7.2 Self Assessments FRCC Compliance staff will continue with a lessons learned session after each Compliance Audit in an effort to improve accuracy, completeness, and efficiency of this monitoring method. These improvement efforts will also include information received from the audited entities through use of the Compliance Audit Feedback Form provided by NERC. FRCC Compliance Monitoring and Enforcement Program 14