Statement of Work Reliability Impacts of Climate Change Initiatives (RICCI)

Transcription

1 Exhibit A Statement of Work Reliability Impacts of Climate Change Initiatives (RICCI) Background North American Electric Reliability Corporation (NERC) has recognized the continental scope of Climate Change legislation, and because many of the variables impact reliability on a continental scale, it is vital that NERC, as the industry s sponsor for bulk power system reliability, identify reliability considerations of Climate Change Initiatives. To this end, NERC s recently approved budget included: Federal, state, and provincial CO 2 legislation is pending throughout North America. A special reliability assessment is vital to quickly evaluate a variety of CO 2 legislative scenarios and their impact on bulk power system reliability. A few key principles regarding the Project are: A NERC Advisory Group made up of Planning and Operating Committee members will ensure the commissioned Task Force avoids making any policy recommendations. A NERC Task Force, reporting to an Advisory group, will be formed of industry experts to study the potential impacts of policy issues as part of their reliability assessment. The study work will not focus on legislative or regulatory policy, rather amplify and refine reliability considerations and facts important to these policy and regulation makers. Leverage results of ongoing NERC activities and other sources to ensure that duplicative work is not performed. Focus on getting the facts right. The study will develop the raw data and refine it into useful information and facts about bulk power system reliability impacts. This study will be divided into two Phases: 1. Phase I of the Project will focus on providing a high level view of reliability considerations for Climate Change issues and will identify and categorize technical reliability considerations. 2. NERC anticipates that Phase II of the Project will be a technical assessment of North America, building on the results from the Phase I report, performing reliability assessments of the bulk power system for selected scenarios. Initially, a Village Blvd. Princeton, NJ

2 resource assessment will be performed, and then identification of potential bulk power system reliability issues and requirements. NERC, on behalf of its stakeholders, must identify reliability considerations of Climate Change Initiatives. Namely, this study may need to go beyond the regional view and 10- year assessment period, and develop a continental/regional assessment. A continental view enables a consistent reliability comparison evaluating regional and North American concerns. The targeted audience of these results is industry and government. Description and Scope of Services provided as part of this Agreement Accenture will assist NERC with its Reliability Impacts of Climate Change Initiatives (RICCI) Phase I Project. Proposed project steps involve: Data collection With the support of NERC and the Task Force, Accenture will collect all relevant data sources that it can practically identify and acquire in a timeframe consistent with the planned schedule for the project. Representative resources include: NERC Reports DOE EIA information and models, as relevant Material from national labs such as NETL, NREL, PNL, & LBL, as appropriate Other Publicly Available Studies/information Task Force and other Utility developed materials Accenture Climate Change Initiative Results and other information/studies. Accenture will share original information with the Task Force members as able. Additional sources found through an Accenture literature search to be performed Data Synthesis Accenture shall perform a synthesis of all acquired data and resources. The synthesis step will develop material that will be used to create scenarios to be analyzed in Phase II and will also capture relevant statistics such as: Time to build a transmission line including siting and permitting Synthesizing EIA s annual outlook and scenarios developed for Congress for consideration of modifying or using the developed scenarios Status of and any data on technologies such as clean coal, carbon sequestration, renewable resources, demand response, storage, PHEV, etc. Scenario Development A set of scenarios will be developed that will be analyzed in detail in the planned Phase II work. The scenarios will need to address issues such as how much energy may exist in a region that can be unlocked, what impact it might have on dynamic stability and would load flow issues need to be addressed at a later date. Emphasis will be placed on evaluating the range of scenarios that already exist with analysis completed or in progress (e.g. Department of Energy, Massachusetts Institute of Technology, U.S. Energy Information Administration, Charles River Associates, etc.) and if satisfactory, would be used in lieu of developing new scenarios. 2

3 Report and Supplemental Materials Development Accenture shall consolidate the disparate data assembled in previous tasks into a strategic report document. The report shall be developed similar in context and style to the NERC report template; however it is anticipated the size of the report to be developed will be significantly less in page count than the IVGTF report. Task Force Interaction It is envisioned that NERC shall conduct an initial call to formulate and kick off the Task Force and provide preliminary information and generate data requests. NERC shall also use the kickoff call to schedule a meeting that would be used for the Task Force to guide the interim work product. Further, it is our understanding that NERC is contemplating a final conference call or meeting to seek support for the final deliverables that may require Accenture support. It is also understood that NERC shall be actively involved in the activities to achieve consensus and support on the final deliverables. Phase II support material Accenture shall develop and provide material in support of NERC s planned Phase II activities as instructed by NERC. All deliverables will be provided to NERC in hard copy and electronic media (e.g., CD). Unless otherwise approved by NERC, all deliverables will leverage MS Office suite of products (i.e., Word, PowerPoint, etc.). Project Deliverables The following deliverables ( Deliverables ) will be developed by NERC and Accenture, as described below. Phase I: Develop a high level report (Draft Outline in Attachment I) that outlines: Characteristics of the Grid Myths & Legends Study implications Key Drivers Reliability Implications Way Forward If required, potential Scope of study for Phase III (to be initiated in 2010) The Phase I document will be rationalized into shorter one-page document messaging reliability considerations In addition, an Executive Summary and a supporting PowerPoint presentation will be developed in order to broadly transfer report results to industry. Anticipated completion date of the Deliverables is May 22, The Deliverables are summarized in the table below: 3

4 Deliverable Accenture Responsibility NERC Responsibility Phase I NERC Format Report Primary Secondary Phase I Report Executive Summary Primary Secondary Phase I PowerPoint Summary of Findings Primary Secondary The parties will develop mutually agreeable acceptance criteria and procedures that will apply to the Deliverables developed by Accenture hereunder. The only basis for acceptance of Deliverables will be substantial conformance to such acceptance criteria, in accordance with the acceptance procedures. The only basis for rejection of Deliverables will be the failure of the Deliverables substantially to conform to the acceptance criteria, in accordance with the acceptance procedures. Project Structure & Responsibilities The work on the Project will be a collaborative effort between NERC, its Task Force and Accenture. NERC and Accenture, without relieving either party of its individual responsibilities under this Agreement, are mutually responsible for managing the project scope and timelines per the project plan defined and signed off by both parties. The Task Force will advise on study scope and scenario development driven by climate change initiatives. Study output from this Agreement and NERC staff will be reviewed and industry perspective provided. The Task Force s schedule and milestones guiding this Project are as follows: Date January 2009 April 2009 April 2009 May 2009 May 2009 Milestone RICCI Task Force Charter and Plan Scope of Work and Scenario Descriptions - Select Contractor, negotiate contract and begin work - RICCI Task Force meeting Status Report to NERC Planning Committee (PC) Draft High Level Phase I report - Request incremental NERC funding for Phase II (2010) if required - RICCI Task Force meeting Approval by NERC s OC/PC and BOT. Accenture to provide support and report enhancements. Accenture Team Staffing Accenture is pleased to staff this Project with team of professionals who have the relevant knowledge and expertise to coordinate, conduct and manage this effort. Accenture will provide several resources on a minimal part-time basis, in additional to the two full-time resources. The purpose of the part-time resources is to provide expertise as needed. The following is a list of Accenture resources that will be participating in this Project: 4

5 Project Role Resource Participation Start Date Program Manager - Accenture Omar Al-Juburi Part-time April 22, 2009 Assessment Manager Marc Perraud Full-time April 22, 2009 Technology Assessment Expert Wade Malcolm Part-time April 22, 2009 Accenture Project Analyst TBD Full-time April 22, 2009 Accenture will not substitute team member resources without prior consent by NERC. If a need arises to change out a team member, NERC may review resumes in connection with providing prior consent and speak with candidate resources before Accenture will staff him/her on the team. Meetings Meeting and conference calls will be scheduled as needed. The initial proposed schedule is outlined in the material above. Project Schedule The NERC Reliability Impacts of Climate Change Initiatives (RICCI) Phase I project will require three to four weeks of full time project work and two weeks of edit and revision for a total of six weeks elapsed time. Accenture understands NERC s desire to complete the NERC Reliability Impacts of Climate Change Initiatives (RICCI) Phase I project by June 5, 2009 to incorporate the findings and recommendations into its processes. Accenture full time team members will work five days/week on the Project. Accenture team members will work at Accenture s facilities. NERC Responsibilities In addition to the other responsibilities and duties described in this Statement of Work, set forth below is a list of specific responsibilities that NERC must fulfill. If any of these responsibilities are not performed, it may cause changes to the Project schedule, fees and expenses, deliverables, level of effort required, or otherwise impact Accenture s performance of the Services described in this Statement of Work, and Accenture shall have no liability with respect to its inability to perform the Services resulting there from. NERC will schedule interactions with key stakeholders (Task Force, etc.), as identified by NERC. NERC will make reasonable efforts to schedule those interactions to be aligned with the Project end date of May NERC will be primarily responsible to seek final consensus and support for the Deliverables from the Task Force and Planning Committee, and will undertake minor editing on its own to achieve such support 5

6 NERC will commit necessary resources and management involvement to support the Project and perform the agreed upon acceptance procedures in a timely manners. Decisions to be made by NERC will be made promptly and without delay. NERC understands and agrees that NERC will be responsible for determining whether the Services and Deliverables provided by Accenture hereunder meet NERC s business requirements and guidelines. NERC will be responsible for determining if and how it will implement any recommendations made by Accenture. Accenture agrees to provide the services described in this Agreement, and will not provide any tax or legal services. The scope of this Project as documented in this Agreement shall remain unchanged, except as the parties may mutually agree in writing. 6

7 Attachment I Draft Chapters for First Overview Report 1. Characteristics of the Grid Locational impacts i. Supply (current mix) ii. Transmission Demand-Side Management Bulk system definition Aging Infrastructure and performance considerations 2. Myths & Legends Potential impacts on reliability Challenges to transition from current system to potential future 3. Study implications Review of existing study work Gap identification Assumptions Meaningful scenarios i. Potential resource scenarios ii. Bulk system scenarios 4. Key Drivers Lay the framework, develop the regulation and assume the technology will get to the end-point. Technology is not the limiting factor Trends for regulation (Environmental markets/ vertically integrated, etc.) State-by-state (Province-by-Province) characteristics Regional Federal Technology (G & T & Demand resources) Current state of technology Smart Grids Demand response Renewables Nuclear PHEV Distribution (as it impacts the bulk system) Is CCS feasible (technically, financially, and politically)? Industry agreed upon costs, capacity factor, availabilities, time to construction Existing plant retirement/retrofit/refurbishment 7

8 Potential Future Options Deal killers in cost and reliability Seismic technology shifts Financial Implications (Global versus National) Energy Costs Equipment Costs Financing Costs Financial stability of all the players Consumer impacts Cost/Reliability trade offs (i.e. solar/storage). Transition implications 70 percent is fossil fueled energy (50 percent coal, 20 percent gas) What are potential energy sources and replacement strategy? Dash to Gas Demand-Side Management Renewable Plant retirement 5. Reliability Implications Transition for current state to future system Cyber security Business Model Planning/Business paradigm shift Coordinated/balancing of planning, operations and environmental goals Timing Appropriate cost/reliability relationship 6. Way Forward Appropriate level of depth of analysis Ability/time to get to the depth needed 8