ERO Enterprise Three-Year Strategic Plan and 2014 Performance Metrics

Transcription

1 ERO Enterprise Three-Year Strategic Plan and 2014 Performance Metrics Gerry Cauley, President and CEO Member Representatives Committee Meeting February 5, 2014

2 Background 2014 corporate performance measures based on Updated ERO Enterprise Strategic Plan for o Five goals o Four overarching metrics for NERC and Regions o Eleven sub-metrics 2014 corporate business plan and budget (and early preparation for the 2015 BP&B) Stakeholder inputs Progress reviewed quarterly with management and internal audit team Results tied to performance compensation at corporate and department levels 2

3 Goal Area: Standards Goal #1: Develop clear, reasonable and technically sound mandatory Reliability Standards in a timely and efficient manner. a. Standards are clear, responsive to reliability and security risks, practical to implement and cost effective. 3

4 Goal Area: Compliance, Registration and Certification Goal #2: Be a strong enforcement authority that is independent, without conflict of interest, objective and fair and promote a culture of reliability excellence through risk-informed compliance monitoring and enforcement. a. The ERO registers entities commensurate with risk to the bulk power system and ensures all key reliability entities are certified to have essential capabilities. b. The ERO holds industry accountable for violations that create serious risk to the bulk power system; resulting actions are timely and transparent to industry. Goal #3: Promote a culture of compliance that supports reliability excellence within industry. a. Industry has effective procedures and programs to monitor, detect, correct, report, and prevent compliance, reliability, and security issues. b. All ERO compliance activities are risk informed, efficient and effective. 4

5 Goal Area: Risks to Reliability Goal #4: Identify the most significant risks to reliability, be accountable for mitigating reliability risks and promote a culture of reliability excellence. a. Risks are identified and prioritized based on reliability impacts, cost/practicality of assessments, projected resources, and emerging issues. b. Events and system performance are consistently analyzed for sequence, cause, and remediation to identify reliability risks and trends, and lessons learned. c. ERO supports industry situational awareness, cyber security preparedness and provides independent reliability information to policy makers. d. Reliability models and data accurately represent system behavior and are shared among reliability entities. 5

6 Goal Area: Coordination and Collaboration Goal #5: Improve transparency, consistency, quality and timeliness of results; operate as a collaborative enterprise; and improve efficiencies and cost effectiveness. a. The ERO acts in a coordinated and collaborative manner with stakeholders. b. The ERO acquires, engages, and retains highly qualified talent suited to the mission. c. The ERO internal risks are understood and managed; ERO processes are effective, efficient, and continuously improved. 6

7 ERO Enterprise Performance Metrics Metric 1: Reliability Results Determine the frequency of BPS events. The target is fewer, less severe events during ; no Category 4 and 5 events and Category 3 events are trending down. (GMD) is included in metric. Metric 2: Assurance Effectiveness Assess all Category 3 and above events. The target is to reach zero gaps in Reliability Standards and compliance monitoring by Metric 3: Risk Mitigation Effectiveness Review the BES risk profile each year to determine actual and potential risks. The target is to identify, select and mitigate the high priority risks (and issue specific metrics for each established project). Metric 4: Program Execution Effectiveness Percentage of sub-metrics projected to achieve target. 7

8 ERO Enterprise Sub-Measures Sub metric A (NERC) Percent of all existing standards meet quality criteria and resultsbased construct Sub metric B (NERC) Quality RSAWs, or successor guidance, developed for standards Sub metric C (Joint ERO Enterprise) Implementation of risk-based registration criteria to achieve efficient and effective allocation of compliance obligations Sub metric D (Joint) Timeliness and transparency of compliance results Sub metric E (Joint) Percent of self-identified non-compliances Sub metric F (Joint) Mitigation aging curve improving Sub metric G (Joint) RAI reforms and percent of findings not going to enforcement Sub metric H (NERC) Participation in ES-ISAC increased Sub metric I (Joint) Assessment of quality and availability of planning and engineering models and data Sub metric J (Joint) Achieving transition regarding ERO Enterprise personnel, infrastructure and applications qualifications Sub metric K (Joint) Stakeholder annual satisfaction/perception survey of the ERO s effectiveness to manage risk, budget and stewardship 8

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10 2015 Business Plan and Budget Schedule Michael Walker, Senior Vice President and Chief Financial and Administrative Officer Member Representatives Committee Meeting February 5, 2014

11 2015 BP&B Schedule-Key Enhancements Schedule reflects consideration of MRC and stakeholder feedback during 2014 BP&B cycle Increased opportunities for input prior to posting of initial draft January 30 th FAC conference call to review schedule February CGHRC, MRC and Board meetings- review of strategic plan and metrics April- informal briefings and meetings with MRC BP&B Input Group and Trades May MRC and FAC meetings- overview of key elements of NERC proposed draft 2

12 2015 BP&B Schedule-Key Enhancements May 16 th posting of NERC, Regional Entities and Consolidated BP&Bs Complete drafts containing program area detail First time a consolidated budget will be presented this early Should facilitate more informed stakeholder review and input Will include focus on cost control, resource allocation and efficiency Extends stakeholder comment period from 30 to 45 days Incorporates several webinars and informal stakeholder input opportunities Finance and Audit Committee engagement through the process 3

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14 Risk-based Registration Assessment Project Gerry Cauley, President and CEO Member Representatives Committee Meeting February 5, 2014

15 Current Framework Developed in 2006 Uniform criteria based on the Functional Model Limited flexibility to adapt based on risk Difficult to differentiate between entities that present different levels of risk 2

16 Future Framework More flexible registration criteria based on risk to the Bulk- Power System Benefits Provide efficiencies and cost savings Better focus of resources on reliability 3

17 Industry Survey Are current criteria sufficient to cover entities with material impact Do the current criteria allow entities without material impact to be excluded Are entities currently being held responsible for complying with more requirements than necessary Should additional risk categories be defined that apply compliance obligations based on risk to reliability Are there attributes/aspects of implementing the current framework that are detrimental to reliability How could the registration criteria be modified to focus more on reliability and deliver efficiencies Most important factors for risk-based evaluation 4

18 Process Timeline January 8, 2014 initial rollout at MRC Informational Session January 24, 2014 public solicitation for industry input February 5, 2014 discussion and input at the MRC meeting February 28, 2014 due date for industry response to survey Prior to May 2014 Board meeting develop draft outline of new framework May 2014 Board meeting input to draft outline of new framework November 2014 Board meeting present new framework and transition plan 5

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20 Definition of BES Implementation Overview Thomas Burgess, Vice President and Director, Reliability Assessment and Performance Analysis Member Representatives Committee Meeting February 5, 2014

21 High-level Overview: BES Definition Step 1 Core BES Definition Establish 100 kv bright-line Identify Real and Reactive Power resources connected at 100 kv or higher Step 2 Inclusions Apply definition to identify specific BES elements Address specific criteria (Transmission Elements, Real and Reactive Power resources) Step 3 Exclusions Evaluate specific situations for potential exclusion from the BES Self-determined notifications Overall provide for a consistent determination of an Element as BES or Non-BES 2

22 Reference Documents FERC Order Nos. 773 and 773-A NERC Rules of Procedure (Section 500; Appendix 5C) Bulk Electric System definition BES Definition Reference Document BES Guideline for Reviewing Self-Determined Notifications BES Exception Request Evaluation Guideline BESnet Application User Guide BES Implementation Reference Document Frequently Asked Questions (FAQs) Overview BES Implementation milestones Technical justification white papers 3

23 Key Points Dispersed Generation Individual Units SAR seeking modification of the standards applicability sections for GO/GOP Proposes reliability standards applicability at the point of aggregation at 75 MVA or above Large End-use Industrial Customers 50 kv threshold eliminates consideration of most parallel connections Loops operated below 50 kv unlikely carry parallel through-flow with BES, can be disregarded in applying E1 Does not preclude self-determined exclusions of elements 4

24 Timeline Mid Feb 2014 Feb 24 Mar 31 Early Jun July 1 Draft Training and Outreach material Frequently Asked Questions webpage updates BES net Final Coding Final UAT ERO staff Training Regional workshops User Registration ERO Staff Training on Definition and Exception Process Training and Outreach for BESnet users Communication to Industry through announcements of postings on BES Notifications and Exceptions webpage 5

25 Timeline First Quarter 2014: completion and posting of reference documents February 2014: BESnet tool final coding and user acceptance tests March 2014: projected issue date of FERC s final order March 2014: NERC and Regional Entity training on process, BESnet tool April/May 2014: Registered Entity training on implementation and BESnet tool June 2014: BESnet tool user registration July 1, 2014: implementation and effective date : submit self-determined notifications and Exception Requests July 2016: compliance date for newly identified Elements 6

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27 Five-Year Performance Assessment Update Rebecca Michael, Associate General Counsel, Corporate and Regulatory Matters Member Representatives Committee Meeting February 5, 2014

28 Timeline Late February/March 2014 Post NERC statement of activities and accomplishments with all attachments for industry comment Post Regional Entities self-assessments April 2014 Due date for comments on postings May 2014 Review first complete draft of five-year report with MRC and the Board June 2014 Deadline for Regional Entity boards to review or approve, as applicable, Regional Entity self-assessments 2

29 Timeline (cont d) July 2014 Review and finalize complete performance assessment File complete performance assessment at FERC File information copies with Canadian jurisdictions FERC Actions after filing After receipt of the assessment, FERC will establish a proceeding with opportunity for public comment in which it will review the ERO s performance 3

30 Overview of Survey Thirty eight-question survey Quantitative and qualitative responses Scale of = Strongly disagree 5 = Strongly agree Only Registered Entities primary compliance contacts Posting period: November 1, 2013 November 26, 2013 Doubled response rate compared to three-year report One hundred twenty eight responses for three-year vs. 326 responses for five-year 4

31 Overview of Numerical Responses NERC received the highest average scores for its work involving Reliability Standards as well as for stakeholder communications, public relations and information technology (IT) Average scores for Reliability Standards ranged from 3.2 to 4.1 Average scores for stakeholder communications/public relations/it ranged from 3.3 to 4.1 NERC received the lowest average scores for its work involving enforcement, registration and certification, reliability assessment and critical infrastructure protection Average scores for enforcement ranged from 1.7 to 2.3 Average scores for registration and certification ranged from 1.2 to 2.6 Average scores for reliability assessment ranged from 2.2 to 2.4 Average scores for critical infrastructure protection ranged from 1.7 to 2.3 5

32 Overarching Themes in Comments Adopt an independent approach to prioritizing standards projects Provide additional guidance on required evidence and levels of performance needed to comply with standards Increase transparency in calculation of penalties Improve timeliness of enforcement processing Provide guidance regarding Coordinated Functional Registrations/Joint Registration Organizations and allocation of responsibilities Allow more stakeholder vetting for reliability assessment reports, budget approval, Reliability Standard Audit Worksheet development 6

33 Overarching Themes in Comments Devise metrics to show the impact of ERO programs on the level of reliability of the Bulk Power System Improve oversight of the Regional Entities to increase consistency in approach Consolidate and coordinate communication of information to industry 7

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