MEETING AGENDA. MRO Board of Directors. April 5, :00 a.m. 2:30 p.m. Central. MRO Corporate Offices, King Conference Center St.

Transcription

1 MEETING AGENDA MRO Board of Directors April 5, :00 a.m. 2:30 p.m. Central MRO Corporate Offices, King Conference Center St. Paul, MN St. Peter Street #800 Saint Paul, MN P F W. MidwestReliability.org

2 NOTICE REQUIREMENTS - Board of Directors Meeting NOTICE REQUIREMENTS Pursuant to the Midwest Reliability Organization s ( MRO ) Bylaws, section 7.7, the Secretary is required to publish the schedule of regular board meetings to all members. This meeting is a regularly scheduled meeting of the Midwest Reliability Organization Board of Directors. Notice of this meeting was proper and the date was made available to all members in 2017 by posting the 2018 regularly scheduled board meeting dates on MRO s website calendar at: The location, precise time of the meeting, and draft agenda of items to be discussed was properly noticed to members on March 5, 2018, 30 days prior to the scheduled meeting, and was published on the MRO website. 2 of 126

3 VIDEO AND AUDIO RECORDING - Board of Directors Meeting VIDEO AND AUDIO RECORDING Please note that Midwest Reliability Organization ( MRO ) may make a video and/or an audio recording of this board of directors meeting for the purposes of making this information available to board members, members, stakeholders and the general public who are unable to attend the meeting in person. By attending this meeting, I grant MRO: 1. Permission to video and/or audio record the board meeting including me; and 2. The right to edit, use, and publish the video and/or audio recording; and 3. I understand that neither I nor my employer has any right to be compensated in connection with the video and/or audio recording or the granting of this consent. 3 of 126

4 MEETING AGENDA - Board of Directors Meeting AGENDA ITEM MEETING AGENDA Board of Directors Meeting Thursday, April 5, :00 a.m. to 2:30 p.m. Central MRO Corporate Offices, Saint Paul, MN 1 Call to Order and Introductions Silvia Parada Mitchell, Board Chair 2 Determination of Quorum and Standards of Conduct and Anti-Trust Guidelines Miggie Cramblit, Vice President, General Counsel, Corporate Secretary and Director External Affairs 3 Interim President s Report Sara Patrick, Interim President and CEO 4 Chair s Remarks Silvia Parada Mitchell, Board Chair 5 NERC Interim President and CEO Report Charlie Berardesco, Interim NERC President and CEO 6 Policy Matters Briefing on NERC Board of Trustees and Member Representative Committee February Meetings. Silvia Parada Mitchell, Chair, and Sara Patrick, Interim President and CEO 7 Consent Agenda a. Review and Approve Minutes from November 30, 2017 Annual Member and Board Meeting and Annual Board- Only Meeting. b. Review and Approve New Organizational Group Appointments. c. Review and Approve PRS Charter. d. Review and Approve SAC Chair and Vice Chair. e. Approve Resolution Ratifying the establishment of the Special Oversight Committee. f. Review and Approve MRO s Revised Strategic Plan. 8 SPP RE Transition Update and Entity Q & A Session Sara Patrick, Interim President and CEO 9 Board Committee Reports a. Hearing Body Report. Doug Johnson, Chair b. Finance and Audit Committee Report. Tom Kent, Chair c. Governance and Personnel Committee Report. Jeff Gust, Chair d. Dispute Resolution Committee Report. Tony Clark, Chair BOARD ACTION Information Discussion Discussion Discussion Information and Discussion Action Items TIME 8:00 a.m. 8:05 a.m. 8:20 a.m. 8:35 a.m. 9:05 a.m. 9:25 a.m. *** BREAK *** 9:30 a.m. Information and Discussion Information and Action Items 9:45 a.m. 10:30 a.m. 4 of 126

5 MEETING AGENDA - Board of Directors Meeting 10 Independent Auditor Report Nicki Donlon, Partner, and David Kelly, CPA Audit Senior Manager, Baker Tilly a. Accept 2017 Audit Report of Financial Statements Information and Action Items 11:30 a.m. *** LUNCH BREAK *** 12:00 p.m. 11 MRO Operations Report Dan Schoenecker, Vice President Operations 12 Organizational Group and NERC Reports a. MRO Compliance Committee Report. Mahmood Safi, Chair NERC Compliance and Certification Committee Terry Bilke b. MRO Operating Committee Report. Ron Gunderson, Chair NERC Operating Committee (OC) Report Dick Pursley c. MRO Planning Committee Report. Terry Torgerson, Chair NERC Planning Committee (PC) Report - Dale Burmester d. MRO Security Advisory Council Report. Chair Elect - NERC Critical Infrastructure Protection Committee - Marc Child e. MRO Standards Committee Report. Wayne Guttormson, Chair 13 External Affairs Report Miggie Cramblit, Vice President General Counsel Corporate Secretary and Director External Affairs Information and Discussion Information and Discussion Information and Discussion 14 Other Business Information 12:45 p.m. 1:00 p.m. 2:15 p.m. 15 Adjourn 2:30 p.m. 5 of 126

6 AGENDA 1 - Call to Order and Introductions AGENDA 1 Call to Order and Introductions MRO Board of Directors Guiding Principles Highly effective and reliable board members: 1. Support the MRO mission and its values, and understand the role of the board. 2. Attend at least 75% of regular and special board meetings and other events requiring board participation. 3. Are objective decision makers and avoid participation in board issues which are self-serving or may be perceived as a conflict of interest. 4. Read the materials before board meetings and come prepared with questions. 5. Advocate why MRO is important and why it needs our support. 6. Take leadership roles by chairing a committee and knowing what the committee s responsibilities are, and initiate, as necessary. 7. Respect the different roles of staff and the board. 8. Collaborate and cooperate with other board members. 6 of 126

7 AGENDA 2 - Determination of Quorum AGENDA 2 Determination of Quorum Standards of Conduct and Anti-Trust Guidelines Miggie Cramblit, Vice President General Counsel, Corporate Secretary, and Director External Affairs 2018 Board of Directors Roster Name Sector Company Term Silvia Parada Mitchell, Chair Thomas Kent, Vice Chair Generator and/or Power Marketer Cooperative NextEra Energy December 2018 Nebraska Public Power District December 2019 Brad Cox Generator and/or Power Marketer Tenaska Power Services Co. December 2019 Chris Fleege Investor Owned Utility Minnesota Power December 2020 Doug Johnson Transmission System American Transmission Operator Company December 2020 Gordon Pietsch Cooperative Great River Energy December 2018 Iqbal Dhami Canadian Utility Saskatchewan Power December 2020 Jeffrey Gust Investor Owned Utility MidAmerican Energy Company December 2019 JoAnn Thompson Investor Owned Utility Otter Tail Power Company December 2019 Joe McGovern Investor Owned Utility Alliant Energy December 2019 Krista Tanner Transmission System Operator ITC Holdings December 2020 Larry Koshire Municipal Utility Sector Rochester Public Utilities December 2020 Lloyd Linke Federal Power Marketing Western Area Power Agency Administration December 2018 Dr. Paul Barber Independent Director Consultant December 2018 Micheline Casey Independent Director Former Chief Data Officer, Federal Entity December 2020 Ray Wahle Municipal Utility Sector Missouri River Energy Services December 2019 Richard Doying Midwest Independent Transmission System Transmission System Operator Operator December 2018 Teresa Mogensen Investor Owned Utility Xcel Energy December 2020 Tony Clark Canadian Utility Manitoba Hydro December of 126

8 AGENDA 2 - Determination of Quorum Standards of Conduct Reminder: Standards of Conduct prohibit MRO staff, committee, subcommittee, and task force members from sharing non-public transmission sensitive information with anyone who is either an affiliate merchant or could be a conduit of information to an affiliate merchant. Anti-trust Reminder: Participants in Midwest Reliability Organization meeting activities must refrain from the following when acting in their capacity as participants in Midwest Reliability Organization activities (i.e. meetings, conference calls, and informal discussions): Discussions involving pricing information; and Discussions of a participants marketing strategies; and Discussions regarding how customers and geographical areas are to be divided among competitors; and Discussions concerning the exclusion of competitors from markets; and Discussions concerning boycotting or group refusals to deal with competitors, vendors, or suppliers. 8 of 126

9 AGENDA 3 - President s Report AGENDA 3 Interim President s Report Sara Patrick, Interim MRO President and CEO Interim President and CEO Sara Patrick will provide an oral report at the meeting. 9 of 126

10 AGENDA 4 - Chair s Remarks AGENDA 4 Chair s Remarks Silvia Parada Mitchell, MRO Board Chair Chair Parada Mitchell will provide an oral report at the meeting. 10 of 126

11 AGENDA 5 - NERC Interim President and CEO Report AGENDA 5 NERC Interim President and CEO Report Charles Berardesco, Interim NERC President and CEO Charles A. Berardesco, Interim NERC President and Chief Executive Officer Charles A. Berardesco was named interim president and chief executive officer of NERC in November Berardesco joined NERC in July 2012 as senior vice president, general counsel, and corporate secretary. He is a member of NERC s Board of Trustees and leads the executive management team. Prior to joining NERC, Mr. Berardesco was senior vice president, general counsel, corporate secretary, and chief compliance officer of Constellation Energy, a Fortune 200 energy company, where he had primary responsibility for the company s legal strategies and policies, including corporate governance, legal compliance and ethics, regulatory activities, corporate finance activities, mergers and acquisitions and litigation, along with executive management responsibility for corporate and information security. Mr. Berardesco served as a member of Constellation s management committee, reported directly to the company s chief executive officer, and was the chief legal advisor to Constellation s Board of Directors. Mr. Berardesco served as a member of the Board of Directors of the joint ventures between Constellation and Electricite de France to operate and construct nuclear power plants in the United States. He also served as a member of Constellation s Investment Committee for its pension and employee savings plans and nuclear decommissioning trusts and its diversity council (including serving as its chair) and was a member of the Board of Directors of the Constellation Energy Group Foundation. Prior to joining Constellation, Mr. Berardesco practiced law for nearly 20 years, both in-house and with law firms. He served as vice president, general counsel, and corporate secretary of Fusura, a consortium of AIG, Prudential and Kemper, and senior vice president, general counsel, and corporate secretary of HCIA, a publicly held health care information company. He was counsel with the national law firm of Piper Rudnick (now DLA Piper), where he focused on corporate finance and mergers and acquisitions, and a partner in the law firm of Whiteford, Taylor, and Preston, where he chaired the firm s corporate department and served as a member of its executive committee. He is active in a number of charitable and membership organizations, including serving as the chair of the board of the Gay Men s Chorus of Washington, chair of the board of advisors of the Duke University Chapel, a member of the board of directors of Chorus America, a member of the board of governors of the University Club of Washington, D.C., and a member of the board of advisors of The George Washington University Law School. He also served as a member of the Business Council of the Human Rights Campaign. Mr. Berardesco has been named as one of the top 10 GC s to Watch by Corporate Board Magazine and while he was general counsel Constellation Energy was named as having the 11 of 126

12 AGENDA 5 - NERC Interim President and CEO Report corporate governance team of the year by Corporate Secretary Magazine. He has been awarded the Out and Proud Corporate Counsel award by the National LGBT Bar Association and was named a Leader in the Law by the Maryland Daily Record. Mr. Berardesco received a bachelor s degree magna cum laude in 1980 from Duke University and his juris doctorate with high honors in 1983 from The George Washington University, where he was the managing editor of The George Washington Law Review. 12 of 126

13 AGENDA 6 - Policy Matters AGENDA 6 Policy Matters Briefing on NERC Board of Trustees and Member Representative Committee February Meetings Silvia Parada Mitchell, Chair and Sara Patrick, Interim MRO President and CEO Date: March 23, 2018 To: From: Subject: Action: MRO Board of Directors Chair Silvia Parada Mitchell and Sara Patrick, Interim MRO President and CEO Briefing on NERC Board of Trustees and Member Representative Committee February Meetings None Information and Discussion Dear Board Members: I will provide an oral report on the following NERC meetings that took place in February in Fort Lauderdale, Florida. a. NERC Member Representatives Committee Meeting b. NERC Board of Trustees Meeting The short meeting agendas from the open meetings are attached for your reference. The full meeting agendas, presentations, and draft minutes can be found on NERC s website. 13 of 126

14 Agenda Member Representatives Committee February 7, :00 p.m. 5:00 p.m. Eastern (Please note the Schedule may be adjusted real-time should meetings conclude early and/or extend past their scheduled end time.) Hilton Fort Lauderdale Marina 1881 SE 17 th Street Fort Lauderdale, FL Conference Room: Grand Ballroom (First Floor) Introduction and Chair s Remarks NERC Antitrust Compliance Guidelines and Public Announcement* Consent Agenda 1. Minutes - (Approve) a. November 8, 2017 Meeting* b. January 11, 2018 Conference Call* 2. Future Meetings* Regular Agenda 3. Election of NERC Trustees* - (Elect) 4. Update on NERC Chief Executive Officer and Chief Security Officer Searches 5. Board Reporting Structure for Standards Committee 6. Responses to the Board s Request for Policy Input* a. Improving the Efficiency and Effectiveness of Stakeholder Engagement* 7. Additional Policy Discussion of Key Items from Board Committee Meetings* a. Corporate Governance and Human Resources Committee b. Compliance Committee c. Finance and Audit Committee d. Technology and Security Committee 8. Reliability Issues Steering Committee Activities a. ERO Reliability Risk Priorities Report* 14 of 126

15 b. Resilience Framework* 9. Plan for Addressing Reliability Standard and Guideline Recommendations from Recent Reliability Assessments* 10. Technical Committee Highlights: Critical Infrastructure Protection Committee* 11. Update on FERC Reliability Matters* 12. Accountability Matrix* 13. Regulatory Update* *Background materials included. 15 of 126 Agenda Member Representatives Committee February 7,

16 Agenda Board of Trustees February 8, :30 a.m. 12:00 p.m. Eastern (Please note the Schedule may be adjusted real-time should meetings conclude early and/or extend past their scheduled end time.) Hilton Fort Lauderdale Marina 1881 SE 17 th Street Fort Lauderdale, FL Conference Room: Grand Ballroom (1 st Floor) Call to Order NERC Antitrust Compliance Guidelines Introductions and Chair s Remarks Consent Agenda Approve 1. Minutes* a. December 4, 2017 Conference Call b. November 9, 2017 Meeting 2. Committee Membership and Charter Amendments* a. Election and Appointment of NERC Officers b. Critical Infrastructure Protection Committee Charter Amendments c. Compliance and Certification Committee Charter Amendments d. Reliability Issues Steering Committee Membership e. Personnel Certification Governance Committee Membership f. Operating Committee Membership Regular Agenda 3. Remarks and Reports a. Welcome Remarks Speaker Eric Silagy, President, Florida Power & Light b. Remarks by Kevin McIntyre, Chair, FERC c. Remarks by Bruce Walker, Assistant Secretary, DOE d. Remarks by Murray Doehler, Past Chair, CAMPUT e. Interim President s Report f. Report on Board of Trustees January 24 and February 6, 2018 Closed Sessions 16 of 126

17 g. Board of Trustees Self-Assessment Results 4. Board Committee Reports a. Corporate Governance and Human Resources i Contribution to Savings and Investment Plan Approve ii. Board of Trustees Vice Chair Compensation Approve iii. NERC Bylaws Amendments Approve and Recommend to Member Representatives Committee for Approval iv. Proposed 2018 ERO Enterprise Metrics Revisions Approve b. Compliance c. Finance and Audit i Year-End Unaudited Statement of Activities Accept ii. Investment Policy Revisions Approve d. Enterprise-wide Risk e. Technology and Security f. Nominating 5. Other Matters and Reports* a. Memorandum of Understanding between British Columbia Utilities Commission, NERC, and WECC Approve b. Approvals in Connection with the Termination of the Regional Delegation Agreement with SPP, Inc. i. Termination Agreement for the Regional Delegation Agreement with SPP and NERC Approve ii. Revised Regional Delegation Agreement between NERC and MRO Approve iii. Revised Regional Delegation Agreement between NERC and SERC Approve c. Rules of Procedure Amendments - Consolidated Hearing Process Approve d. RISC s ERO Reliability Risk Priorities Report Accept 6. Standards Quarterly Report and Actions* a. PRC Generator Relay Loadability Approve b. FAC-501-WECC-2 Transmission Maintenance Approve c. BAL-004-WECC-3 Automatic Time Error Correction Approve d. PRC-004-WECC-2 Protection System and Remedial Action Scheme Misoperation Retire e. VAR-002-WECC-2 Automatic Voltage Regulators Retire f. SERC Regional Reliability Standards Development Procedure Approve 7. Committee Reports* a. Operating Committee Agenda Board of Trustees February 8, of 126 2

18 b. Planning Committee c. Critical Infrastructure Protection Committee i. CIPC 2018 Work Plan Approve d. Member Representatives Committee e. Personnel Certification Governance Committee f. Standards Committee g. Reliability Issues Steering Committee h. Compliance and Certification Committee i. CCC 2018 Work Plan Approve ii. CCC Monitoring Program CCCPP-012 Approve i. Electricity Subsector Coordinating Council 8. Forum and Group Reports* a. North American Energy Standards Board b. North American Transmission Forum c. North American Generator Forum 9. Adjournment *Background materials included. Agenda Board of Trustees February 8, of 126 3

19 AGENDA 7 - Consent Agenda AGENDA 7 Consent Agenda a. Review and Approve Minutes from the November 30, 2017, Annual Member and Board Meeting and Annual Board-Only Meeting. Jessica Mitchell, Assistant Corporate Secretary MIDWEST RELIABILITY ORGANIZATION Draft Minutes of the Annual Member and Board of Directors Meeting MRO Offices, St. Paul, MN November 30, :00 a.m. to 11:00 a.m. Central Time 1. Call to Order and Introductions Board Chair Richard Doying called the meeting to order at 8:00 a.m. and welcomed meeting attendees. Tony Clark joined the meeting by teleconference. 2. Determination of Quorum, Standards of Conduct, and Anti-Trust Guidelines Vice President General Counsel, Corporate Secretary and Director External Affairs Miggie Cramblit advised that a quorum of the board of directors was present. A complete list of attendees is included as Exhibit A. Pursuant to Policy and Procedure 4, she also reminded the board of MRO s Standards of Conduct, Conflict of Interest, and Anti-Trust Guidelines. Cramblit recognized that MRO is a cross-border Regional Entity and noted Canadian policy also reflects the importance of competition embedded in anti-trust guidelines. Chair Doying recognized former board members Mike Risan and Bob Harris and thanked them for attending the final meeting of President s Report President and CEO Dan Skaar extended a warm welcome to attendees of the annual member and board of directors meeting and welcomed new board member Lloyd Linke from Western Area Power Administration. He too, recognized Harris and Risan and thanked them for attending. Skaar opened his remarks by reflecting on the many challenges that faced the organization throughout 2017, and he expressed appreciation for the hard work of the board, committees and staff. He highlighted the work of MRO s Security Advisory Council to bring a strong, regional focus together around security, noting that entities in the region have performed well under the CIP Standards. Skaar reported that the NERC Board of Trustees approved a revised ERO Strategic Plan in November, and stated that MRO will continue its work to align its strategic plan with the ERO plan in He emphasized that an important part of our strategy is maintaining the integrity of our regulatory model which relies on contiguous communities of reliability shared 19 of 126

20 AGENDA 7 - Consent Agenda neighborhoods to keep the lights on. Staying focused on our core responsibilities and keeping costs stable. Regarding the SPP RE dissolution, Skaar stated that staff expects NERC to release its recommendation on December 1, Skaar also highlighted the organization s accomplishments in 2017, such as on-budget performance despite unusual budget pressures, and declining trends in the severity of system events and violations. He stated that the decline in severity levels is the result of staff s comprehensive mitigation efforts to reduce repeat violations and the proactive actions by registered entities. He reported that for 2018, MRO will continue to pursue simplification of regulation consistent with NERC s undertaking to review the effectiveness of the standards, and he encouraged regional participation in this effort. In closing, Skaar thanked Richard Doying for his leadership as board chair in 2017 and he welcomed Silvia Parada Mitchell as 2018 chair. Read the full report included as Exhibit B. 4. Chair s Remarks Chair Doying welcomed attendees to the annual member and board of directors meeting, noting this is the final meeting of 2017 and his final meeting as chair of the board. He reflected on his term, and thanked fellow board members and Silvia Parada Mitchell, board vice chair, for her collaboration and support stating the board will be in good hands with Silvia as chair in Doying reflected on the organization s accomplishments in 2017, and thanked MRO staff and registered entities for their hard work towards achieving reliability excellence. In my two years as chair, Doying said, MRO and its members have accomplished a lot to ensure and enhance reliability for those we serve in our communities. He reflected on future challenges for MRO and the industry, referring to the Department of Energy staff report and recent Notice of Proposed Rulemaking (NOPR) on resiliency. He noted that industry and trade organizations were unusually well-aligned in their responses on the NOPR. At NERC s November board meeting, Doying said Commissioner Cheryl LaFleur discussed what the NOPR means to FERC and she encouraged the ERO Enterprise to continue using its expertise to address important reliability issues, like Essential Reliability Services and frequency response. Recognizing that resilience is a key part of reliability, the NERC Board asked for and discussed policy input on resiliency at its November meeting. In closing, Doying stated that it is both an exciting and challenging time to be in this industry and he is glad to be experiencing it with everyone involved in MRO. Read Chair Doying s full remarks attached as Exhibit C. 5. Policy Matters a. Briefing on NERC Member Representatives Committee and Board of Trustees November Meetings in New Orleans, Louisiana. Dan Skaar provided highlights from the recent NERC Member Representatives Committee (MRC) and Board of Trustees meetings in New Orleans, noting much of the discussion was focused on resiliency. He reported that the Reliability Issues Steering Committee discussed its recently-released reliability risk priorities report and is seeking industry feedback. Skaar reviewed other discussion items from the meetings, which included key NERC assessments and utility 20 of 126

21 AGENDA 7 - Consent Agenda response efforts to Hurricanes Harvey and Irma. He reported on FERC Commissioner LaFleur s remarks, which distinguished FERC s policy work from the ERO s technical work and LaFleur s advice to the ERO to stick to the data and the facts and stay out of the politics, you will be successful in your mission. Skaar also noted that Murray Doehler from CAMPUT informed meeting attendees that CAMPUT has created a NERC committee to better understand and become more involved in important reliability issues. Other reports were provided on GridEx and the 2018 Business Plans and Budgets, which were recently approved by FERC. Chair Doying added that the ERO s strategic plan, operating plan and related metrics were approved by the NERC Board and there was quite a bit of discussion about the plans at the meetings. He said the plans make it clear that the ERO is focused on building on past successes while being able to respond to a changing future. He highlighted a positive addition to the plan s metrics that evaluates NERC s efficiency and effectiveness, noting some of the targets related to the business plan and budget and the effectiveness of the standards were pretty aggressive. Doying stated this indicates NERC is listening to and acting on the feedback it receives from industry. The board recessed at 10:00 a.m. and reconvened at 10:19 a.m. 6. Board Consent Agenda a. Approve the minutes from the MRO Board of Directors executive session held on September 13, Upon motion duly made and seconded, the board approved the minutes from the September 13, 2017 executive session, as written. New board member Lloyd Linke abstained from voting. b. Approve the minutes from the MRO Board of Directors meeting held on September 14, Upon motion duly made and seconded, the board approved the minutes from the September 14, 2017 board meeting, as written. New board member Lloyd Linke abstained from voting. c. Approve organizational group membership and action Items. The board reviewed the formation of a new organizational group and new organizational group appointments since the last board meeting. Upon motion duly made and seconded, the board approved the formation of a CIP Subject Matter Expert Team and its membership, and also approved new organizational group appointments as presented in the agenda materials Treasurer s Report and 2018 Outlook Finance and Audit Committee Chair Silvia Parada Mitchell provided the treasurer s report. She stated that staff anticipates being two and half to five percent within budget at yearend. Looking forward to 2018, Parada Mitchell stated that medical expenses came in higher than budgeted for 2018, but noted that staff will continue to balance the budget through 21 of 126

22 AGENDA 7 - Consent Agenda disciplined cash flow management practices. She thanked MRO finance staff for their efforts in balancing the budget. Skaar added that similar to employing good cybersecurity hygiene, MRO employs good financial hygiene that provides assurance that the finances of the organization remain in order. 8. Canadian Matters Vice President Compliance Monitoring and Regulatory Affairs, Sara Patrick, provided information on MRO s CMEP-related activities in the Canadian provinces of Manitoba and Saskatchewan. She noted that the Manitoba government established a process where it updates the list of Reliability Standards that are effective in the province annually, and stated that she and Vice President Enforcement Val Agnew will be meeting with the Manitoba government in early December to review the list of revised Standards and revisions to the CMEP process for Patrick also reported that Manitoba Hydro is in the process of drafting a Memorandum of Understanding with MRO to monitor Manitoba Hydro reliability standards. In Saskatchewan, Patrick said that MRO staff worked with the Saskatchewan Electric Reliability Authority (SERA) in 2017 to evaluate entities and determine whether they should be registered and subject to mandatory compliance. As a result, six new entities were registered in 2017 in the province and have eighteen months to become compliant with the applicable NERC Reliability Standards. In closing, Patrick stated that there is renewed focus by Canadian regulators to align regulations in Canada and the United States. She said there has also been a lot of discussion on alignment during the conference calls between NERC and the cross-border Regional Entities, much of which is focused on better alignment with Mexico. 9. MRO Operations Report MRO Vice President Operations Dan Schoenecker drew the board s attention to the report in the agenda materials and briefly reviewed four new minor system events in the MRO Region since the last board meeting. He called the board s attention to a chart highlighting the impact events have on the regional bulk power system, noting that the average event impact for 2017 is 60 percent, which is a good trend. He also pointed out that misoperations are typically attributed to 70 percent of events, and noted that rate dropped in 2017 to 50 percent, another positive trend. Dan Skaar also noted the drop in misoperations is due in part to MRO s extensive outreach on the topic, and asked Schoenecker if misoperations is a defined term in the NERC Rules of Procedures. Schoenecker responded that it is and that NERC is working on publishing guidance to assure consistent application of the term across the regions. 10. Board and Committee Reports a. Hearing Body. Hearing Body Chair Doug Johnson informed the board that the committee did not receive any requests for hearing or notices of contested alleged violations or proposed penalties in He reported that staff anticipates scheduling 22 of 126

23 AGENDA 7 - Consent Agenda a meeting with the Hearing Body to review a settlement agreement sometime in January. Johnson also reported on the proposed revisions to the ERO Uniform Hearing Procedures, which are still pending FERC approval. He stated that the final revisions will affect the structure of MRO s Hearing Body, so the committee is tracking the revisions closely and will report back to the board in likely the summer of b. Finance and Audit Committee (FAC). FAC Chair Silvia Parada Mitchell reviewed the recent activities of the FAC. She noted the committee completed its enterprise-wide corporate compliance and ethics review, which is a very helpful tool to ensure the FAC is meeting its responsibilities. In response to a question, Vice President Finance and Administration Sue Clarke clarified that the 2018 budget does not include any costs related to the SPP RE dissolution that may impact MRO. She also noted that MRO has procedures to manage unforeseen cash flow issues. Dan Skaar added that there would be no change in assessments to load serving entities. Chair Doying encouraged staff to the extent appropriate, to develop some high-level budget assumptions for board review at its next meeting. He observed that the topic does not fit well under MRO s existing board committee structure. President Skaar suggested that once NERC makes a recommendation regarding the SPP RE dissolution, the board might consider creating a board committee to provide input on the matter. Doying directed staff to add a report on the SPP RE dissolution to the next board meeting agenda. c. Governance and Personnel Committee (GPC). GPC Chair Tom Vitez drew the board s attention to the report provided in the agenda materials, and highlighted the board s self-assessment that was completed in August. He also stated that the GPC is recommending that the board approve revisions to several of MRO s Policies and Procedures, which were provided in the agenda. He noted that some of the policies only had a change in approval date, and recommended the board s approval of these policies and procedures. Upon motion duly made and seconded, the board approved revising the date approved on Policies and Procedures 5, 6, 7, 8, 9, 10, 11, 11.1, and 12, as reflected in the agenda materials. Vitez continued his report by reviewing the policies and procedures that had editorial or grammatical changes and recommended the board approve of these revisions. Upon motion duly made and seconded, the board approved the revisions to MRO s Policies and Procedures 2 and 4, as written. Vitez continued his review and directed the board to those policies and procedures with substantial revisions, beginning with Policy and Procedure 1 that pertains to the board of directors. He noted that staff combined the existing Policies and Procedures 1 and 1.1 with the draft Policy and Procedure 1.2. He noted the policy now includes soft term limits for board members, which was previous discussed by the board. Miggie Cramblit added that a requirement to report any concerns about a director s ability to continue 23 of 126

24 AGENDA 7 - Consent Agenda serving on the board to the chair of the GPC was included in the revised procedure. Vitez called for questions on the revisions; there were none. Upon motion duly made and seconded, the board approved the revisions to MRO s Policy and Procedure 1 (MRO Board of Directors), as written. Vitez also noted a substantial revision to Policy and Procedure 3 pertaining to organizational groups. Cramblit described the change, stating that it allows regional Planning Coordinators and Reliability Coordinators the opportunity to serve on MRO s Planning and Operating Committees, in the event that entity did not already have representation through an industry sector. Vitez stated that the charters for the MRO Operating and Planning Committees were also revised to reflect this change in membership, and called for a motion to approve the changes. Upon motion duly made and seconded, the board approved the revisions to Policy and Procedure 3 and the accompanying charter changes to the MRO Operating and Planning Committees, as written and presented. Vitez continued his report, reviewing substantial revisions to Policy and Procedure 12 pertaining to finance policies. Cramblit reviewed the revisions, stating they provide greater clarity around the funding of the retiree medical trust. She noted that the changes are also reflected in the FAC charter revisions. Vitez called for questions on the revisions; there were none. He called for a motion to approve both the revised policy and charter. Upon motion duly made and seconded, the board approved revisions to Policy and Procedure 12 and the Finance and Audit Committee charter, as written. Vitez moved to the review and approval of board committee charters, noting that there were no changes proposed to either the Hearing Body or Dispute Resolution Committee Charters with the exception of the approval date. He called for a motion to approve the revised charters. Upon motion duly made and seconded, the board approved revisions to the Hearing Body and Dispute Resolution Committee Charters, as written. Vitez then reviewed proposed revision to the GPC Charter, specifically related to the recommendation that the GPC be comprised of at least two independent directors or as many independent directors that are seated on the board. He stated that the change was responsive to NERC Board of Trustee concerns related to independence around executive compensation matters. He called for questions; there were none. Upon motion duly made and seconded, the board approved the revisions to the Governance and Personnel Committee Charter, as written. 24 of 126

25 AGENDA 7 - Consent Agenda Moving on to review revisions to the organizational group charters, Vitez noted that some of the charters only had a change in approval date and some had more substantial revisions. Cramblit added that having the same approval date makes all of the policies and charters consistent on MRO s public-facing website. Vitez called for a motion to approve the charters with more edits only to the date first. Upon motion duly made and seconded, the board approved revising the date on the Standards Committee, Subject Matter Expert Teams, Protective Relay Subcommittee and Special Protection System Working Group Charter, as written. He then asked for a motion to approve the organizational charters with editorial changes. Upon motion duly made and seconded, the board approved revisions to the Security Advisory Council and Compliance Committee Charters, as written. Cramblit reviewed the changes to the Performance and Risk Oversight Subcommittee charter, stating the edits are straightforward. Upon motion duly made and seconded, the board approved the revisions to the Performance and Risk Oversight Subcommittee Charter, as written. Vitez noted similar edits to the NERC Standards Review Forum Charter, and called for a motion to approve the revisions. Upon motion duly made and seconded, the board approved the revisions to the NERC Standards Review Forum, as written. Vitez continued his report, drawing the board s attention to the agenda materials listing three candidates for appointment to the Security Advisory Council. He called for a motion to approve the appointments. Upon motion duly made and seconded, the board approved the appointment of Stephen Brown, Xcel Energy, Tim Anderson, Dairyland Power Cooperative, and Justin Haar, Minnkota Power Cooperative, to the MRO Security Advisory Council, each for a term of three years. d. Dispute Resolution Committee (DRC). DRC Chair Tony Clark reported that the DRC did not received any notices of disputes in He stated that the committee performed its annual review of the MRO Dispute Resolution Procedures in September and had no changes to recommend. The committee also reviewed the list of mediators and arbitrators and replaced one technical advisor as a result. The board recessed at 9:16 a.m. and reconvened at 9:32 a.m. Board member Micheline Casey did return. 25 of 126

26 AGENDA 7 - Consent Agenda Chair Doying stated the meeting is progressing ahead of schedule, and the board will likely finish its meetings by the scheduled lunch recess. 11. Organizational Group Reports The following are highlights from the organizational group annual reports provided to the board by the organizational group chairs. The full reports can be found in the meeting agenda packet on MRO s website. a. Compliance Committee (MRO CC) Annual Report. MRO CC Chair Mahmood Safi (Omaha Public Power District) reviewed the 2017 activities of the MRO CC and its subcommittee with the board. He noted that the MRO CC established six goals in 2017 that directly supported the MRO 2017 Strategic Objectives, stating that the goals were met, although some of the goals have ongoing work. The status of each goal was provided in the agenda materials. He stated the MRO CC will elect its chair and vice chair in early Safi provided information on MRO s Annual CMEP Conference, which was held on November 28, 2017, and congratulated staff on a well-executed and successful conference. Dan Skaar asked about the PROS review of the Department of Justice questionnaire on fraud, and Sara Patrick responded that MRO CC thought the questionnaire could be integrated in the PROS governance document. Skaar stated that this is a good governance practice and thanked the committee for its work. Chair Doying noted that the NERC CCC meeting is scheduled to take place at the same time as the MRO Board meeting and that a written report will be provided to the board following the NERC CCC meeting. c. Operating Committee (MRO OC) Annual Report. MRO OC Chair, Dean Schiro (Xcel Energy), reviewed the 2017 activities of the MRO OC and its subcommittee, the Protective Relay Subcommittee (PRS). He highlighted reports from the regional Reliability Coordinators (RC) to the MRO OC at its meetings, and also noted the revisions that were approved to the MRO OC Charter recognize the value of RC representation on the committee. He reported that the committee reviewed twelve event reports in 2017, noting a positive trend in reduction of event impacts on the bulk power system in the last seven years. Schiro stated that the MRO OC began important analysis in 2017 of the risks associated with inverter-connected generation, which will be ongoing. He highlighted a NERC whitepaper on EMS events that is under development, and described EMS availability on the system. He closed by stating that the MRO OC provides input and support of the two reliability conferences hosted by MRO, and highlighted committee leadership changes. Schiro responded to questions from the board on inverter-based faults with the Blue Cut wildfire event, and on the causes of EMS events on the regional bulk power system. He clarified that the NERC whitepaper will look at the impact, but not the causes of EMS events. The board discussed behind the meter inverters and the importance of this 26 of 126

27 AGENDA 7 - Consent Agenda topic to the industry. A board member raised a concern that the industry should be more vocal about the impact of behind the meter generation on reliability, and should address it as an emerging risk. Upon further discussion, a board member noted that it is considered a risk by NERC and the Reliability Issues Steering Committee, and that discussions on the topic are ongoing. Chair Doying added that the organization of MISO states has a committee looking more closely at the distribution of solar, and he noted the group would be open to input from stakeholders. Board Member Micheline Casey rejoined the meeting during Schiro s report. MRO s representative on the NERC Operating Committee (NERC OC) Dick Pursley (Great River Energy), provided the 2017 activities of the NERC OC and its subgroups. He highlighted the important work of the Essential Reliability Services Working Group (ERSWG) to address the concerns that the board raised during the previous report. He noted that the MRO Region is well-represented on the NERC OC and in its leadership, and the NERC OC recognizes the risks facing the MRO Region. He stated that the ERSWG has been fairly active in the areas of frequency response, balancing and ramping, and distributed energy resources. Pursley reviewed the work of the Inverter-Based Resource Performance Task Force, stating that its review of the Blue Cut wildfire event indicated that NERC was nimble in its response and engaging industry and manufacturers to find a solution. He noted that many of the recommendations have already been implemented. Pursley also reviewed the activities of the Real-Time Assessments Task Force, noting this subject is important to the MRO Region because of the prevalence of Transmission Operators. He noted that NERC s IROLs Task Force was created to develop a technical reference document to support common criteria and study parameters for establishing IROLs. Pursley said this is a complex subject because one size does not fit all in North America, and the work is expected to be complete in early He closed his report by reviewing the special reliability assessment on bulk power system impacts due to severe disruption in service on the natural gas system, and noted there will be an increased effort by NERC to involve the gas industry in planning studies. d. Planning Committee (MRO PC) Annual Report. MRO PC Chair, Gayle Nansel (Western Area Power Administration), provided the board with a report on the 2017 activities of the MRO PC and its subgroups. She stated the MRO PC focused its efforts on risks specific to the MRO Region, such as the changing resource mix, operating and planning studies, and the addition of renewable resources. She added that MRO s Reliability Conferences covered these topics and were well-received by industry. Nansel noted that the MRO PC s primary method of addressing the impact of changing resource mix on the bulk power system is to involve the Planning Coordinators in the discussion. She highlighted the changes to the MRO PC Charter that allow Planning Coordinator representation on the committee, and also noted that MRO PC is also closely monitoring the activities of NERC s Essential Reliability Services Working Group. Nansel reflected that the industry has seen a significant change in how it builds 27 of 126

28 AGENDA 7 - Consent Agenda regional models with the change to the MOD-032 Reliability Standard. She noted that the MRO Modeling Task Force was instrumental in a smooth transition of modeling work. In closing, Nansel reported that Terry Torgerson of Dairyland Power will be the new MRO PC Chair in 2018 and she responded to questions from the board. On behalf of MRO s representative on the NERC Planning Committee (NERC PC) Dale Burmester, MRO Senior Manager Reliability and Operations John Seidel drew the board s attention to the report on the 2017 activities of the NERC PC and its subgroups. He commented on the board s discussion on Distributed Energy Resources (DER), and noted that NERC has asked for regional input on where there is line of sight into DERs. He provided his thoughts on the matter. Seidel also provided information on the Inverter Resource Performance Task Force, which is addressing the loss of solar generation during frequency and voltage excursions. During the Blue Cut wildfire event, Seidel stated that 7200 MW were exposed to this kind of tripping in CAL ISO, which is roughly two-thirds of the connected nameplate. He noted that Reliability Standard PRC-024, which addresses no trip-zones, did not clearly articulate inverterconnected generation. NERC is in the process of reviewing the standard for changes. With respect to inverter-connected wind power, Seidel noted that it is also susceptible to tripping. NERC released a lessons learned on wind generation related to multiple voltage dips and auxiliary power, but an alert may be needed. He stated this is an important issue for MRO because of the amount of wind in the upper Midwest region, and noted that both the MRO OC and PC will be looking into it. Seidel also reviewed the Aliso Canyon event and the potential impact a severe disruption on the natural gas system could have on bulk power system reliability. He discussed key findings and lessons learned from NERC s report on the event. He closed his report by stating that the Minnesota Power Systems Conference took place in early November and addressed some of the same issues discussed today, like inverters, distributed generation and modeling. Brad Cox departed the meeting briefly and returned. e. MRO Security Advisory Council (MRO SAC) Annual Report. MRO SAC Chair, Mike Kraft, reviewed the 2017 activities of the MRO SAC. He stated that the council successfully met its purpose in 2017, and he reviewed the membership of the council. He noted that very few nominations were received for open positions on both the MRO SAC and MRO representation on the NERC CIP, and stated that although the positions were filled the council will work to solicit more nominations for these positions in the future. Kraft reviewed NERC s GridSecCon and GridEx, and noted the MRO SAC will work to boost participation from the Municipal and Cooperative Utility Sectors. He reported that the council successfully achieved four goals with twenty-four associated objectives, which were provided in the agenda materials. He highlighted the group s accomplishments, which included important stakeholder outreach, noting that the council hosted five webinars on security-related matters and also supported the annual Security Conference. These events were very well-received by the industry. Kraft added that the Security Conference had world-class speakers and quickly sold out. He 28 of 126

29 AGENDA 7 - Consent Agenda also reported that the council completed a regional security risk assessment to better understand regional risks and potential impacts on registered entities in the region. The council is looking at ways to improve this assessment in the future. He also reported that the MRO SAC created a list of regional security contacts in 2017, and worked to develop relationships with local security partners, like the FBI, DHS and Public Safety Canada. Kraft highlighted other items of interest, noting that in its first year of work the council identified some important communication processes and barriers, and will continue working on these items in In closing, he reviewed 2018 objectives for the MRO SAC to ensure the council is providing value according to its purpose. In response to a suggestion, Kraft agreed that the council could look at translating the recommendations in the public FERC report on CIP audits into a guidance document on vulnerabilities. MRO Representative and chair of the NERC Critical Infrastructure Protection Committee (NERC CIPC) Marc Child reviewed 2017 NERC CIPC and subcommittee activities. He began his report thanking Kraft for his work on the MRO SAC. Child stated that the NERC CIPC has been asked by NERC staff to address the recommendations in the public FERC report. He highlighted NERC CIPC leadership changes, noting that he had been elected as chair for a second term. He provided information on the execution of GridEx, which involved more than 5,000 individuals and included cross-sector and international participants from multiple continents. He stated that the GridEx Working Group is already beginning plans for GridEx V. Child reported that the NERC CIPC will be approving its strategic and work plan in December, and work will be ongoing to balance compliance with security. In 2018, the committee plans to tackle the supply chain recommendations, emerging risks with cloud technologies, remote access, and the findings from the FERC-led CIP audits. He closed by noting that the NERC CIPC is aligning its work with the ERO Enterprise strategy documents and related risk reports. Board Member Ray Wahle briefly departed the meeting during Child s report. b. Standards Committee (MRO SC) Report. MRO SC vice chair Mark Buchholz (WAPA) provided a review of the 2017 activities of the MRO SC and its subgroups. He highlighted the work of the NSRF and the ERO s endorsement of MRO Standard Application Guides (SAGs). He noted that the MRO SC approved modifications to two SAGs, which are being considered by NERC. Buchholz reported that the MRO SC completed its objectives for 2017, and noted the committee is creating two new Subject Matter Expert Teams to develop SAGs that address stakeholder concerns with the CIP and MOD Reliability Standards. He stated that the MRO SC successfully transitioned its security work to the MRO SAC in 2017, and closed by reporting that work continues to reach a steady state with standards development. He also commented on the new NERC Reliability Standards Efficiency Review Teams and stated he looks forward to being involved in that process. 29 of 126

30 AGENDA 7 - Consent Agenda 12. External Affairs Report Miggie Cramblit provided the external affairs report, highlighting two upcoming speaking engagements of MRO staff at the EmPower North Dakota Commission and the NAES NERC Conference. She stated that MRO considers it an honor to be asked to present at these events. Cramblit reported that she and Dan Skaar had an introductory meeting with FERC Commissioner Powelson and also met with staff from the Office of Electric Reliability. Cramblit continued her report, noting that meetings with Commissioners LaFleur and Chatterjee, which were scheduled for mid-december, will be rescheduled for early Other Business Dan Skaar thanked outgoing board members Bob Harris and Tom Vitez for their service and leadership on the MRO Board over the past several years. He stated that both Bob and Tom have contributed to MRO s success and will be missed. Chair Doying recommended that the board approve two written resolutions (attached as Exhibit D) acknowledging Bob s and Tom s accomplishments. Upon motion duly made and seconded, the board approved a resolution conveying its appreciation for the hard work and effort of outgoing board member, Tom Vitez. Upon motion duly made and seconded, the board approved a resolution conveying its appreciation for the hard work and effort of retiring board member, Bob Harris. Chair Doying directed staff to convey the board s appreciation to Bob Harris, who had already departed the meeting. 14. Adjourn Having no further business to discuss, the meeting was adjourned at 11:00 a.m. A complete list of decisions from this meeting has been compiled and is attached as Exhibit E. The presentations and handouts provided at the meeting can be found on our website. Prepared by: Jessica Mitchell, Assistant Corporate Secretary Reviewed and submitted by: Miggie E. Cramblit, Vice President General Counsel, Corporate Secretary and Director of External Affairs 30 of 126

31 AGENDA 7 - Consent Agenda Exhibit A Meeting Attendees Board Members Present Richard Doying Silvia Parada Mitchell Brad Cox Chris Fleege Doug Johnson Gordon Pietsch Iqbal Dhami Jeffrey Gust JoAnn Thompson Joe McGovern Larry Koshire Lloyd Linke Micheline Casey Dr. Paul Barber Ray Wahle Teresa Mogensen Thomas Kent Thomas Vitez Tony Clark MRO Staff Carolina Margaría Dan Schoenecker Dan Skaar Desirée Sawyer Jessica Mitchell John Seidel Ken Gartner Miggie Cramblit Richard Burt Russ Mountjoy Sara Patrick Steen Fjalstad Sue Clarke Val Agnew Guests: Bob Harris Brendan Kennelly Dan Coomes Darrell Piatt Dean Schiro Dick Pursley MISO, Chair NextEra Energy, Vice Chair Tenaska Power Services Minnesota Power American Transmission Company Great River Energy SaskPower MidAmerican Energy Company Otter Tail Power Company Alliant Energy Rochester Public Utilities Western Area Power Administration Independent Director Independent Director Missouri River Energy Services Xcel Energy Nebraska Public Power District ITC Holdings Manitoba Hydro, by teleconference Administrative Assistant Vice President Operations President and Chief Executive Officer Compliance Administrator Assistant Corporate Secretary Senior Manager Operations and Reliability CMEP Process Principal Vice President General Counsel, Corporate Secretary and Director External Affairs Vice President Risk Assessment, Mitigation, and Standards Standards, Certification and Registration Manager Vice President Compliance Monitoring and Regulatory Affairs Risk Assessment and Mitigation Principal Vice President Finance and Administration Vice President Enforcement Retired Former MRO Board Member Minnkota Power East River Electric Power Cooperative FERC Staff Xcel Energy Great River Energy 31 of 126

32 AGENDA 7 - Consent Agenda Eric Ruskamp Gayle Nansel Joe Lang Larry Heckert Mahmood Safi Marc Child Mark Buchholz Mike Kraft Mike Risan Tracey Stewart Lincoln Electric System Western Area Power Administration Omaha Public Power District Alliant Energy Omaha Public Power District Great River Energy Western Area Power Administration Basin Electric Power Cooperative Basin Electric Power Cooperative Former MRO Board Member Southwestern Power Administration 32 of 126

33 AGENDA 7 - Consent Agenda Exhibit B President s Report NOVEMBER 30, 2017 Dan Skaar Thank you for attending our last meeting for 2017 and our annual meeting. I d like to welcome Lloyd Linke to the board. We ve known Lloyd for a long time for many years he has served on MRO s Operating Committee and as MRO s representative on the NERC Operating Committee. Lloyd is the VP of Operations for the Upper Great Plains Region of Western Area Power Administration. As we close out the year, I want to thank our board, committee members, and staff for their work this past year has had a lot of challenges for us to address: o We addressed governance issues o The effectiveness of our CIP outreach was tested as Version 5 became effective o We worked on the ERO Enterprise Strategic Plan and Metrics which will result in the full integration of our strategic plan with NERC in 2018 o We finalized oversight plans with the RC, TOP, and BA entities o And, we are awaiting NERC staff s recommendation on the SPP RE dissolution, which will be posted tomorrow We said goodbye to longstanding board members, and welcomed a long-time friend to our board- Paul Barber. Registered entities CIP performance has been excellent in our region with very few serious compliance issues. The Security Advisory Council has done an outstanding job of bringing our focus around security, rather than just compliance with CIP. This last security conference was one of our highest rated and most attended conferences. And, we collaborated with Dragos, a leading cybersecurity solutions provider, to provide free security training to stakeholders. Registered entities have been very cooperative in working with us to enhance the comprehensive oversight plans. Our long-term goal is being completed. NERC s strategic plan was revised and we will align with our own strategic plan in 2018 as we work on adopting the NERC plan as our own. Part of our strategy should address maintaining the integrity of our regulatory model communities of reliability a shared neighborhood to keep the lights on. We must stay focused on our core responsibilities within our jurisdiction. Not only does this keep our costs stable, it also provides us with the focus to sharpen our operations. On costs, we continue to see savings from our investment in the conference area. We have hosted more than 500 attendees at various conferences and meetings and are in the process of improving 33 of 126

34 AGENDA 7 - Consent Agenda remote access through webinars. Our short, precisely focused webinars are working, stakeholders appreciate the convenience and content. Our status change to a 501(c)(3) exceeded the returns we planned saving us an estimated $20,000 for Every nickel counts. It s real money. While we had unusual budget pressures this year, we were able to squeeze savings in other areas to maintain on-budget performance. We have a very cost-conscious staff. Our workload continues to be strong. While our response times can improve, our stakeholders appreciate the thoughtful care and access of our staff to help solve problem and address concerns. Our event severity index declined in 2017 we had fewer, less severe events. The reliability impacts from events was about 60 percent as compared to 2016 and the number of events declined through the end of November. This is really indicative of the proactive measures of our stakeholders to analyze past events and take corrective actions. Our compliance severity index has been declining as well less severe violations. Our outreach efforts and strong mitigation practices reduce severity levels and repeat violations. Again, it s the hard work of our stakeholders to be involved and to operationalize compliance making compliance an outcome of good operations. However, we had two self-reported vegetation contacts in 2017, which is disappointing and concerning. As a result, staff issued a special selfcertification to respond to the matter. This type of proactive oversight prevents problems from getting bigger, consistent with our HRO mantra of keeping the small stuff small. For 2018, we will continue to pursue simplification of regulation. I believe that this is our strategic theme in the face of complex risk, simple is better. Less is more. In 2018, NERC will kick-off an initiative to review the standards and make them more effective. We need strong participation from our Region. Through the risk analysis process and our performance-based oversight plans, we have identified hundreds of requirements and sub-requirements, which are reductant or administrivia. In addition, we have identified areas where standards can be strengthened. We will need stakeholder support on this project and expect MRO entities to be very involved in the process. Particularly, the NSRF and the Standards Committee. Throughout the year, we have depended on your support to get the job done. In 2018, we will continue to seek your support and advice to remain an effective and efficient regulator. And, we are fortunate to have a great staff that can handle difficult tasks and balance priorities to meet our reliability objectives. I want to thank Richard Doying for being our chair through some difficult times. He asks good questions and provides me with good insights. We improved as a result of his leadership. I look forward to Silvia being our incoming chair for the next two years. 34 of 126

35 AGENDA 7 - Consent Agenda Exhibit C Chair s Remarks NOVEMBER 30, 2017 Richard Doying, Chair Good morning everyone and welcome to the final MRO Board of Directors meeting for It is hard to believe that the holidays are upon us and that 2017 is coming to a close as is my twoyear term as chairman of the MRO Board. I wanted to take a moment and thank everyone who made my time as the chair an enjoyable experience. First, I appreciate Teresa Mogensen, who provided a good example of how to execute the responsibilities of the chair. And it has been a pleasure working with Silvia Parada Mitchell as the board s vice chair. Your collaboration and support have been much appreciated. MRO and the board will be in great hands over the next two years with Silvia s style of leadership. To Dan and the MRO management and staff what a great group of hard-working and diligent professionals. You should be proud of your 2017 accomplishments and excited for the new challenges ahead. Last, but not least to the registered entities thank you for the time you take and the efforts you expend to make MRO a premiere reliability organization. Because of your efforts in achieving reliability and operating excellence, you are making a difference for those we serve in our communities. Over the past two years of my chairmanship, MRO and its members have accomplished a lot to ensure and enhance reliability. MRO s strategic focus in 2017 will continue in But just when we think we can execute on that well-thought out plan, we are challenged to consider other options or elements. At our last meeting, I spoke about the Department of Energy s much-anticipated Staff Report on Electricity Markets and Reliability. Before the industry finished assimilating what the Staff Report meant to their businesses, the DOE then issued the Notice of Proposed Rulemaking (NOPR) on Grid Resiliency Pricing in mid-october, which set aggressive time lines for FERC and the industry to act on grid resilience pricing. Industry trade groups and utilities that rarely agree on many topics filed comments in the FERC docket suggesting that FERC reject the timelines set out in the NOPR and that no reliability emergency existed to warrant such rash action on revising price formation in organized power markets across the US. Some groups suggested that FERC convene technical conferences in order to allow the industry and regulators an opportunity to better understand key aspects of the proposed regulations. Commissioner Cheryl LaFleur spoke at the NERC Board of Trustee s meeting a few weeks ago on resilience, what it means, and FERC s plan to deal with the NOPR. Commissioner LaFleur indicated that FERC does plan to act on the NOPR and the industry s comments by December 11 th. As an independent federal agency, FERC is required to consider the proposed rule, but not necessarily approve it. Commissioner LaFleur summarized the NOPR as directing a rule around penalties or payments for resilience and likened the term resilience to fuel adequacy. However, she also said that the 35 of 126

36 AGENDA 7 - Consent Agenda issues before FERC are like spaghetti on the plate you can t separate them, you can t really see where they begin and end. The Commissioner then talked about the work that the ERO Enterprise had accomplished on Essential Reliability Services, blackstart, frequency response, etc. and asked the ERO Enterprise to continue our efforts and expertise in these areas while they (FERC) deal with politics in Washington, D.C. I think that is good advice from the Commissioner. Despite that good advice, NERC and the Regions will be engaged in the issues raised by the DOE NOPR. It will be an interesting exercise in how a final rule on grid resiliency pricing will impact reliability standards and the efforts of the ERO Enterprise. How will the DOE and FERC s attempts to accurately price generation resources necessary to maintain the reliability and resiliency of our Nation s bulk power system affect what NERC, the Regions, and Registered Entities do on a daily basis to ensure reliability and now resiliency - whatever that term may mean? Recognizing that resilience is a key part of reliability, NERC asked for policy input from its members on whether NERC should formally add resilience to its mission statement as recommended in the DOE Staff Report and if NERC should take on additional activities to support bulk power system resilience. NERC received policy input comments from 13 different organizations, including MRO on these questions. MRO correctly summarized that system resiliency is an inherent aspect of reliability and that MRO supports more focus on resiliency through the RISC (Reliability Issues Subcommittee) and assessment processes. It is both an exciting and challenging time to be in this industry. I can t wait to see what the new Commissioners do with this NOPR and I m glad to be experiencing it with you all. Congratulations on a successful 2017 and best wishes for an even better Thank you. 36 of 126

37 AGENDA 7 - Consent Agenda Exhibit D Board Resolutions RESOLUTION MIDWEST RELIABILTIY ORGANIZATION, INC. BOARD OF DIRECTORS Resolution Regarding Appreciation of Bob Harris WHEREAS, Bob Harris of Western Area Power Administration has served as a member of the Midwest Reliability Organization Board of Directors since 2003 and assisted in the formation of Midwest Reliability Organization; WHEREAS, Bob Harris served as the board s first chair, and served on the board s Dispute Resolution Committee, Finance and Audit Committee, Governance and Personnel Committee, and Hearing Body; and WHEREAS, he has been a strong supporter of reliability of the bulk power system in the upper Midwest; and WHEREAS, he has been a dedicated and thoughtful leader and given wise counsel and constructive feedback to the organization. NOW, THEREFORE, BE IT RESOLVED that the following resolution is adopted and is to be appropriately conveyed to Bob Harris: RESOLVED that the Board of Directors of Midwest Reliability Organization express its sincere appreciation to Mr. Harris for his contribution to the success of Midwest Reliability Organization and the electric utility industry. MIDWEST RELIABILITY ORGANIZATION Daniel P. Skaar, President and CEO Miggie E. Cramblit, Corporate Secretary Corporate Secretary Signature Dated 37 of 126

38 AGENDA 7 - Consent Agenda RESOLUTION MIDWEST RELIABILTIY ORGANIZATION, INC. BOARD OF DIRECTORS Resolution Regarding Appreciation of Tom Vitez WHEREAS, Tom Vitez of ITC Holdings has served as a member of the Midwest Reliability Organization Board of Directors since 2013; and WHEREAS, he has served as a member of the board s Hearing Body and as a member and chair of the Governance and Personnel Committee; and WHEREAS, he has been a strong supporter of reliability of the bulk power system in the upper Midwest; and WHEREAS, he has dedicated many hours of thoughtful leadership and constructive work to the organization. NOW, THEREFORE, BE IT RESOLVED that the following resolution is adopted and is to be appropriately conveyed to Tom Vitez: RESOLVED that the Board of Directors of Midwest Reliability Organization express its sincere appreciation to Mr. Vitez for his contribution to the success of Midwest Reliability Organization and the electric utility industry. MIDWEST RELIABILITY ORGANIZATION Daniel P. Skaar, President and CEO Miggie E. Cramblit, Corporate Secretary Corporate Secretary Signature Dated 38 of 126

39 AGENDA 7 - Consent Agenda Exhibit E Decision List November 30, 2017 AGENDA ITEM 6. Board Consent Agenda DECISION Approve the minutes from the MRO Board of Directors meeting held on September 14, Upon motion duly made and seconded, the board approved the minutes from the September 14, 2017 board meeting, as written. Approve organizational group membership and action Items. The board reviewed the formation of a new organizational group and new organizational group appointments since the last board meeting. Upon motion duly made and seconded, the board approved the formation of a CIP Subject Matter Expert Team and its membership, and also approved new organizational group appointments as presented in the agenda materials. 10c. MRO Board GPC Report Review and approve revisions to MRO s Policies and Procedures. Upon motion duly made and seconded, the board approved revising the date approved on Policies and Procedures 5, 6, 7, 8, 9, 10, 11, 11.1, and 12, as reflected in the agenda materials. Upon motion duly made and seconded, the board approved the revisions to MRO s Policies and Procedures 2 and 4, as written. Upon motion duly made and seconded, the board approved the revisions to MRO s Policy and Procedure 1 (MRO Board of Directors), as written. Upon motion duly made and seconded, the board approved the revisions to Policy and Procedure 3 and the accompanying charter changes to the MRO Operating and Planning Committees, as written and presented. Upon motion duly made and seconded, the board approved revisions to Policy and Procedure 12 and the Finance and Audit Committee charter, as written. Review and Approve revisions to Board Committee Charters, Organizational Group Charters Upon motion duly made and seconded, the board approved revisions to the Hearing Body and Dispute Resolution Committee Charters, as written. Upon motion duly made and seconded, the board approved the revisions to the Governance and Personnel Committee Charter, as written. Upon motion duly made and seconded, the board approved revising the date on the Standards Committee, Subject Matter Expert Teams, Protective Relay Subcommittee and Special Protection System Working Group Charter, as written. Upon motion duly made and seconded, the board approved revisions to the Security Advisory Council and Compliance Committee Charters, as written. 39 of 126

40 AGENDA 7 - Consent Agenda Upon motion duly made and seconded, the board approved the revisions to the Performance and Risk Oversight Subcommittee Charter, as written. Upon motion duly made and seconded, the board approved the revisions to the NERC Standards Review Forum, as written. Review and Approve Appointment to the Security Advisory Council. Upon motion duly made and seconded, the board approved the appointment of Stephen Brown, Xcel Energy, Tim Anderson, Dairyland Power Cooperative, and Justin Haar, Minnkota Power Cooperative, to the MRO Security Advisory Council, each for a term of three years. 40 of 126

41 AGENDA 7 - Consent Agenda MIDWEST RELIABILITY ORGANIZATION Draft Minutes of the Annual Board of Directors Board Only Meeting MRO Offices, St. Paul, MN November 30, :15 to 11:30 a.m. (Central) 1. Call to Order and Welcome New Board Members MRO Board Chair Richard Doying called the annual meeting of the board of directors to order at 11:15 a.m. Tony Clark joined the meeting by teleconference. 2. Determination of Quorum and Standards of Conduct and Anti-Trust Guidelines Miggie Cramblit, MRO Vice President General Counsel, Corporate Secretary and Director External Affairs, determined that a quorum of the board of directors was present. A complete list of attendees is included as Exhibit A. She reminded the board of MRO s Standards of Conduct, Conflict of Interest and Anti-Trust Guidelines. 3. Chair and Vice Chair Election President and CEO Dan Skaar thanked Richard Doying for his leadership on the board over the past two years, and stated that Silvia Parada Mitchell indicated she is willing to continue leading the board as chair in He also stated that Tom Kent is willing to serve as vice chair. Chair Doying called for a motion to elect the board chair and vice chair for Upon motion duly made and seconded, the board elected Silvia Parada Mitchell as MRO Board Chair and Tom Kent as MRO Board Vice Chair for Chair Doying thanked Silvia and Tom for their willingness to serve. 4. MRO Board Committee Appointments Chair Doying reviewed a handout listing the proposed 2018 committee appointments with the board and called for any objections; there were none. Cramblit clarified that the term listed on the handout is the committee term and not the board term. Doying called for a motion to approve the 2018 board committee appointments (included as Exhibit B). Upon motion duly made and seconded, the board approved the committee appointments for 2018, as presented. 5. Other Business The board was provided with the board-approved meeting dates for 2018, as well as proposed meeting dates for 2018 and Upon discussion, the board selected the following additional meeting dates for 2018 and it s preferred 2019 meeting dates: January 4, 2018 at 10:00 a.m. (bylaw review teleconference) 41 of 126

42 AGENDA 7 - Consent Agenda February 15, 2018 at 10:a.m. (strategic plan update teleconference) April 20, 2018 at a time tbd (business plan and budget teleconference) February 20-21, 2019 (strategic planning session) March 27-28, 2019 June 19-20, 2019 September 18-19, 2019 December 4-5, 2019 Upon motion duly made and seconded, the board approved the meeting dates as presented above, and directed staff to seek a time for the April 20, 2019, board teleconference. 6. Adjourn The meeting was adjourned at 11:30 a.m. Prepared by: Jessica Mitchell, Assistant Corporate Secretary Reviewed and Submitted by: Miggie E. Cramblit, Vice President General Counsel, Corporate Secretary and Director of External Affairs 42 of 126

43 AGENDA 7 - Consent Agenda Board Members Present Richard Doying Silvia Parada Mitchell Brad Cox Chris Fleege Doug Johnson Gordon Pietsch Iqbal Dhami Jeffrey Gust JoAnn Thompson Joe McGovern Larry Koshire Lloyd Linke Micheline Casey Dr. Paul Barber Ray Wahle Teresa Mogensen Thomas Vitez Tom Kent Tony Clark MRO Staff Carolina Margaria Dan Skaar Dan Schoenecker Desirée Sawyer Jessica Mitchell John Seidel Ken Gartner Miggie Cramblit Richard Burt Russ Mountjoy Sara Patrick Sue Clarke Steen Fjalstad Val Agnew Guests: Darrell Piatt Dean Schiro Dick Pursley Eric Ruskamp Gayle Nansel Joe Lang Larry Heckert Mahmood Safi Tracey Stewart Exhibit A Meeting Attendees MISO, Chair NextEra Energy, Vice Chair Tenaska Power Services Minnesota Power American Transmission Company Great River Energy SaskPower MidAmerican Energy Company Otter Tail Power Company Alliant Energy Rochester Public Utilities Western Area Power Administration Independent Director Independent Director Missouri River Energy Services Xcel Energy ITC Holdings Nebraska Public Power District Manitoba Hydro (by teleconference) Administrative Assistant President and Chief Executive Officer Vice President Operations Compliance Administrator Assistant Corporate Secretary Senior Manager Operations and Reliability CMEP Process Principal Vice President General Counsel, Corporate Secretary and Director External Affairs Vice President Risk Assessment and Mitigation, and Standards Standards, Registration and Certification Manager Vice President Compliance Monitoring and Regulatory Affairs Vice President Finance and Administration Risk Assessment and Mitigation Principal Vice President Enforcement FERC Staff Xcel Energy Great River Energy Lincoln Electric System Western Area Power Administration Omaha Public Power District Alliant Energy Omaha Public Power District Southwestern Power Administration 43 of 126

44 AGENDA 7 - Consent Agenda Exhibit B Board Committee Appointments 2018 MRO Board Committee Roster Committee Member Company Sector Term Finance and Audit Nebraska Public Power Tom Kent, CHAIR Committee District COOP 12/31/2018 Finance and Audit Committee Chris Fleege Minnesota Power <IOU 12/31/2018 Finance and Audit Committee Larry Koshire Rochester Public Utilities MU 12/31/2018 Finance and Audit Committee Iqbal Dhami SaskPower CAN 12/31/2019 Finance and Audit Committee Teresa Mogensen Xcel Energy >IOU 12/31/2019 Governance and Personnel Committee Jeff Gust, CHAIR MidAmerican Energy Co >IOU 12/31/2019 Governance and Personnel Committee Richard Doying MISO TSO 12/31/2018 Governance and Personnel Committee Micheline Casey Independent Director 12/31/2018 Governance and Personnel Committee Dr. Paul Barber Independent Director 12/31/2018 Governance and Personnel Committee Brad Cox Tenaska Power Services Co. GPM 12/31/2019 Hearing Body Ray Wahle Missouri River Energy Services MUN 12/31/2018 Hearing Body Dr. Paul Barber Independent Director 12/31/2018 Hearing Body JoAnn Thompson Otter Tail Power Company <IOU 12/31/2018 Hearing Body Doug Johnson American Transmission Co. TSO 12/31/2019 Hearing Body Iqbal Dhami SaskPower CAN 12/31/2019 Hearing Alternate Hearing Alternate Hearing Alternate Hearing Alternate Body Body Body Body Lloyd Linke (alt) WAPA FPMA N/A Gordon Pietsch (alt) Great River Energy COOP N/A Krista Tanner (alt) ITC Midwest TSO N/A Joe McGovern (alt) Alliant Energy >IOU N/A 44 of 126

45 AGENDA 7 - Consent Agenda 2018 MRO Board Committee Roster Committee Member Company Sector Term Dispute Resolution Committee Tony Clark, Chair Manitoba Hydro CAN 12/31/2018 Dispute Resolution Committee Gordon Pietsch Great River Energy COOP 12/31/2018 Dispute Resolution Committee Joe McGovern Alliant Energy IOU 12/31/2018 Dispute Resolution Committee Lloyd Linke WAPA FPMA 12/31/2018 Dispute Resolution Committee Chris Fleege MN Power <IOU 12/31/ of 126

46 AGENDA 7 - Consent Agenda AGENDA 7 Consent Agenda b. Review and Approve New Organizational Group Appointments. Jessica Mitchell, Assistant Corporate Secretary Date: March 23, 2018 To: From: Subject: Action: MRO Board of Directors Jessica Mitchell, Assistant Corporate Secretary Review and Approve New Organizational Group Appointments Approve Organizational Group Appointments Dear Board Members: Since the last board meeting, the following individuals have been elected by an industry sector or approved by the appropriate committee to serve on an MRO organizational group or NERC committees or working groups. Staff respectfully requests board approval on these appointments. Formation of new MOD Subject Matter Expert Team Previously, the MRO Standards Committee (MRO SC) reported a request for a Standard Application Guide (SAG) for MOD Verification and Data Reporting of Generator Real and Reactive Power Capability and Synchronous Condenser Reactive Power Capability for testing Real and Reactive Power capabilities, with a focus on asynchronous generators. The MRO SC approved the request and MRO held a special election for a MOD Subject Matter Expert Team. The MRO SC approved the nominations of five individuals forming the MOD Subject Matter Expert Team for the development of the SAG and respectfully requests board approval for the Subject Matter Expert Team and its appointments. 1. MOD Subject Matter Expert Team a. Jessie Kiddoo, Great River Energy, Term ending December 31, 2020 b. Craig Wrisley, Xcel Energy, Term ending December 31, 2020 c. George Brown, Acciona Energy, Term ending December 31, 2020 d. Mac Bonham, Minnesota Power, Term ending December 31, 2020 e. Yuguang Xiao, Manitoba Hydro, Term ending December 31, 2020 MRO Operating Committee 1. Kevin Bornhoft, Corn Belt Power Cooperative Filling the Generator Power Marketer Seat, At-Large 46 of 126

47 AGENDA 7 - Consent Agenda MRO Planning Committee 1. Larry Brusseau, Corn Belt Power Cooperative Filling the Generator Power Marketer Seat, At-Large 47 of 126

48 AGENDA 7 - Consent Agenda AGENDA 7 Consent Agenda c. Review and Approve PRS Charter. Jessica Mitchell, Assistant Corporate Secretary Date: March 23, 2018 To: From: Subject: Action: MRO Board of Directors Jessica Mitchell, Assistant Corporate Secretary Review and Approve Protective Relay Subcommittee Charter Approve Protective Relay Subcommittee Charter Dear Board Members: The MRO Protective Relay Subcommittee has made some minor changes to its charter, which are attached for your review in both redline and clean form. These changes were approved by the MRO Operating Committee (MRO OC) at its March 13, 2018 meeting and the MRO OC is seeking board approval of these changes. 48 of 126

49 MRO PROTECTIVE RELAY SUBCOMMITTEE CHARTER December 6, 2017April 5, 2018 I. Purpose The purpose of the MRO PRS is to identify, review and discuss system protection and control issues relevant to the reliability of the bulk electric system and to develop and implement regional procedures for applicable NERC PRC standards. The MRO Protective Relay Subcommittee (MRO PRS) reports to the Operating Committee. II. III. Membership Pursuant to Policy and Procedure 3 (PP3), membership of organizational groups shall be determined based upon experience, expertise and geographic diversity and to the extent practicable, shall include a balanced representation of the sectors. The MRO PRS is comprised of industry experts in the areas of system protection and control. The specific experience and expertise needs of the MRO PRS are determined by the MRO PRS. The subcommittee shall be comprised of no more than 14 members, with membership based on geographic representation and not more than one member from the same company. Key Objectives Develop, maintain, and implement regional procedures as needed that address the requirements of NERC PRC standards. Annually review the summary of Misoperations (prepared by MRO staff) for the purpose of identifying Lessons Learned and communicating these lessons with MRO membership. Trend the Event Analysis reports submitted to MRO for the purpose of identifying misoperations that are causing, or increasing the severity of, these events. Through the PRS, work with the Entities involved with these events to assure that the misoperations are effectively identified and mitigated. Assure that any protection-related Lessons Learned of value to the industry are prepared and submitted to NERC Event Analysis staff. Prepare as necessary additional reports/whitepapers that identify methods that can reduce the likelihood and/or severity of system events or misoperations that can lead to system events. Provide oversight of the Remedial Action Schemes (RAS) review process to ensure that all new and modified RASs are reviewed before they come into service, and that all RASs in the MRO region are reviewed every five years. Provide technical input related to system protection and control to MRO. Interface with the NERC groups related to protection and control. 49 of 126

50 IV. Meetings The MRO PRS will meet quarterly, or as necessary, in person or via conference call or web meeting. Meetings of the MRO PRS are open to public attendance; however, an executive session may be called by the chair or vice-chair. Additional meeting requirements related to agendas and minutes, voting and proxy, and rules of conduct are outlined in MRO Policy and Procedure 3, Organizational Groups. V. Costs Meeting costs incurred by MRO PRS members are reimbursable by MRO according to MRO Policy and Procedure 2, Expense Reimbursement. VI. Reporting Requirements The chair of the MRO PRS, or delegate, will provide a written and/or oral report describing the activities and actions of the group quarterly to the Operating Committee. Every November, the PRS shall perform a review of this charter and the group s overall purpose and key objectives to ensure that the group is efficient and effective in its operations and according to its purpose. The chair shall provide an annual summary report, including a statement of its conclusions, to the boardoperating Committee. 50 of 126

51 MRO PROTECTIVE RELAY SUBCOMMITTEE CHARTER April 5, 2018 I. Purpose The purpose of the MRO PRS is to identify, review and discuss system protection and control issues relevant to the reliability of the bulk electric system and to develop and implement regional procedures for applicable NERC PRC standards. The MRO Protective Relay Subcommittee (MRO PRS) reports to the Operating Committee. II. III. Membership Pursuant to Policy and Procedure 3 (PP3), membership of organizational groups shall be determined based upon experience, expertise and geographic diversity and to the extent practicable, shall include a balanced representation of the sectors. The MRO PRS is comprised of industry experts in the areas of system protection and control. The specific experience and expertise needs of the MRO PRS are determined by the MRO PRS. The subcommittee shall be comprised of no more than 14 members, with membership based on geographic representation and not more than one member from the same company. Key Objectives Develop, maintain, and implement regional procedures as needed that address the requirements of NERC PRC standards. Annually review the summary of Misoperations (prepared by MRO staff) for the purpose of identifying Lessons Learned and communicating these lessons with MRO membership. Trend the Event Analysis reports submitted to MRO for the purpose of identifying misoperations that are causing, or increasing the severity of, these events. Through the PRS, work with the Entities involved with these events to assure that the misoperations are effectively identified and mitigated. Assure that any protection-related Lessons Learned of value to the industry are prepared and submitted to NERC Event Analysis staff. Prepare as necessary additional reports/whitepapers that identify methods that can reduce the likelihood and/or severity of system events or misoperations that can lead to system events. Provide oversight of the Remedial Action Schemes (RAS) review process to ensure that all new and modified RASs are reviewed before they come into service, and that all RASs in the MRO region are reviewed every five years. Provide technical input related to system protection and control to MRO. Interface with the NERC groups related to protection and control. 51 of 126

52 IV. Meetings The MRO PRS will meet quarterly, or as necessary, in person or via conference call or web meeting. Meetings of the MRO PRS are open to public attendance; however, an executive session may be called by the chair or vice-chair. Additional meeting requirements related to agendas and minutes, voting and proxy, and rules of conduct are outlined in MRO Policy and Procedure 3, Organizational Groups. V. Costs Meeting costs incurred by MRO PRS members are reimbursable by MRO according to MRO Policy and Procedure 2, Expense Reimbursement. VI. Reporting Requirements The chair of the MRO PRS, or delegate, will provide a written and/or oral report describing the activities and actions of the group quarterly to the Operating Committee. Every November, the PRS shall perform a review of this charter and the group s overall purpose and key objectives to ensure that the group is efficient and effective in its operations and according to its purpose. The chair shall provide an annual summary report, including a statement of its conclusions, to the Operating Committee. 52 of 126

53 AGENDA 7 - Consent Agenda AGENDA 7 Consent Agenda d. Review and Approve SAC Chair and Vice Chair. Jessica Mitchell, Assistant Corporate Secretary Date: March 23, 2018 To: From: Subject: Action: MRO Board of Directors Jessica Mitchell, Assistant Corporate Secretary Review and Approve Security Advisory Council Chair and Vice Chair Approve The Governance and Personnel Committee s Recommendation regarding SAC Chair and Vice Chair Appointments Dear Board Members: The Midwest Reliability Organization Security Advisory Council (MRO SAC) voted for the council s 2018 chair and vice chair by on February 9, Seven of the nine members submitted ballots, resulting in recommendations to the Governance and Personnel Committee (GPC). The GPC voted to recommend the following individuals to the board for approval MRO SAC Chair: John Hochevar, Information Security Officer, American Transmission Company (ATC). John Hochevar is a technology risk professional with more than 14 years of Information Security experience. John worked for 5 years with a control vendor prior to 10 years with ATC focusing on security and systems integration, along with risk management. John has a BA in Business, Management of Information Systems and a MBA in Global Strategy. Certifications include CISA, CISSP, GCIH, and SECRET clearance level with DHS. Affiliations include Infragard (Milwaukee), ISACA (Kettle Moraine), ISSA (Milwaukee), and ISC2 (Great Lakes) MRO SAC Vice Chair: Jodi Jensen, Senior SCADA Specialist, Western Area Power Administration (WAPA). Jodi has over 17 years of experience programming, leading and managing the development, implementation, support, security, and compliance of an in-house developed SCADA system. She served as Operations Support Manager for 8 years, overseeing the Power Billing Division, SCADA Development Division, and SCADA Infrastructure Division. Jodi led her teams through several successful CIP, IG and FISMA compliance reviews, and led a cross-functional IT team ensuring successful SPP market integration for WAPA s Upper Great Plains Region. 53 of 126

54 AGENDA 7 - Consent Agenda Jodi currently serves on the MRO Security Advisory Council, MRO NERC Standards Review Forum, and NREL s Industry Advisory Board. Jodi holds a BS from South Dakota State University and an MBA from the University of South Dakota. The MRO Governance and Personnel Committee (GPC) voted to approve the SAC s request and is now seeking the approval of the MRO Board of Directors to appoint these nominees for terms beginning January 1, 2018 and ending December 31, of 126

55 AGENDA 7 - Consent Agenda AGENDA 7 Consent Agenda e. Approve Resolution Ratifying Establishment of Special Oversight Committee. Jessica Mitchell, Assistant Corporate Secretary Date: March 23, 2018 To: From: Subject: Action: MRO Board of Directors Jessica Mitchell, Assistant Corporate Secretary Approve Resolution Ratifying Establishment of Special Oversight Committee Approve establishment of Special Oversight Committee Dear Board Members: Staff requests approval of the following resolution ratifying the establishment of the board s Special Oversight Committee: WRITTEN RESOLUTION BY UNANIMOUS CONSENT MIDWEST RELIABILTIY ORGANIZATION, INC. BOARD OF DIRECTORS Resolution to Ratify Establishment of Special Oversight Committee WHEREAS, the Midwest Reliability Organization (MRO) Board of Directors (board) agreed to establish a Special Oversight Committee of the board to provide advice and counsel to the chief executive officer. WHEREAS, the Special Oversight Committee will, in particular, provide advice and counsel on the transition of Southwest Power Pool Regional Entity registered entities to MRO. NOW, THEREFORE, BE IT RESOLVED that the board ratifies the establishment of the Special Oversight Committee, which will consist of the following members: Tom Kent, Chair; Chris Fleege, Vice Chair; Paul Barber; Brad Cox; Doug Johnson; Larry Koshire; Lloyd Linke; and Gordon Pietsch. Alternate members Teresa Mogensen and JoAnn Thompson will participate as needed. MIDWEST RELIABILITY ORGANIZATION Sara E. Patrick, Interim President and CEO Miggie E. Cramblit, Corporate Secretary Corporate Secretary Signature Dated 55 of 126

56 AGENDA 7 - Consent Agenda AGENDA 7 Consent Agenda f. Review and Approve MRO s Revised Strategic Plan Jessica Mitchell, Assistant Corporate Secretary Date: March 23, 2018 To: From: Subject: Action: MRO Board of Directors Jessica Mitchell, Assistant Corporate Secretary Review and Approve MRO s Revised Strategic Plan Approve MRO s Revised Strategic Plan Dear Board Members: During the board s strategic planning session in early 2017, there was broad consensus that MRO should work to align its strategic plan with the Electric Reliability Organization s long-term strategic plan and related metrics. On November 9, 2017, the NERC Board of Trustees approved the final ERO Enterprise Long-Term Strategy, ERO Enterprise Operating Plan, and the 2018 ERO Enterprise Metrics. To better align MRO s strategic plan with the ERO strategic plan and metrics, staff performed a side-by-side comparison of the plans to identify and address any gaps. Based on input from the boards February 15, 2018 Teleconference the plan was revised and provided to the Governance and Personnel Committee for review and discussion at its first meeting on March 13, Staff is requesting approval of the MRO Strategic Plan and Metrics, including the revisions to MRO s Vision Statement and the Mission Statement, which is attached. 56 of 126

57 MRO Strategic Plan and Metrics March 2018 MIDWEST RELIABILITY ORGANIZATION 380 St. Peter Street, Ste.800 St. Paul, MN P: F: of 126

58 Contents Preface... 2 Executive Summary... 3 Background... 3 Introduction... 3 Vision, Mission and Principles... 4 Vision... 4 Mission... 4 Core Principles... 4 Strategic Goals and Contributing Activities... 5 Goal 1: Risk-Responsive Reliability Standards... 5 Goal Description... 5 Key MRO Contributing Activities... 5 Goal 2: Objective, Risk-Informed Compliance Monitoring, Mitigation, Enforcement, and Entity Registration... 5 Goal Description... 5 Key MRO Contributing Activities... 5 Goal 3: Reduction of Known Risks to Reliability... 6 Goal Description... 6 Key MRO Contributing Activities... 6 Goal 4: Identification and Assessment of Emerging Reliability Risks... 6 Goal Description... 6 Key MRO Contributing Activities... 6 Goal 5: Identification and Reduction of Cyber and Physical Security Risks... 7 Goal Description... 7 Key MRO Contributing Activities... 7 Goal 6: Effective and Efficient Operations... 7 Goal Description... 7 Key MRO Contributing Activities... 7 Metrics... 9 MRO STRATEGIC PLAN AND METRICS APPROVED BY THE BOARD: 1 58 of 126

59 Preface Midwest Reliability Organization (MRO) operates as a cross-border Regional Entity and is headquartered in Saint Paul, Minnesota. The MRO Region spans the provinces of Saskatchewan and Manitoba, and all or part of the states of Arkansas, Illinois, Iowa, Kansas, Louisiana, Michigan, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, and Wisconsin. The region includes more than 220 organizations that are involved in the production and delivery of electricity to more than 27 million people. These organizations include municipal utilities, cooperatives, investor-owned utilities, transmission system operators, federal power marketing agencies, Canadian Crown Corporations, and independent power producers. MRO's primary responsibilities are to: ensure compliance with mandatory reliability standards by entities who own, operate, or use the interconnected, international bulk power system; conduct assessments of the grid's ability to meet electricity demand in the region; and analyze regional system events. MRO STRATEGIC PLAN AND METRICS APPROVED BY THE BOARD: 2 59 of 126

60 Executive Summary Background The ERO Enterprise Long-Term Strategy looks ahead five to seven years to examine how changes in the industry and reliability ecosystem will affect how the ERO Enterprise achieves its vision and mission in the future. The Long-Term Strategy outlines the driving forces behind the changing reliability ecosystem and presents six strategic focus areas to ensure the ERO Enterprise preserves its current strengths and achievements in assuring BPS reliability, while adapting to the significant changes ahead. In support of the Long-Term Strategy, NERC and the Regional Entities together develop a three-year ERO Enterprise Operating Plan to guide coordinated operations and annual resource budgeting. The Operating Plan includes a set of operational goals and general description of the contributing activities that will be undertaken by NERC and the Regional Entities over a three-year period. Further details, resources, and resource allocation in support of these goals and contributing activities is set in the NERC and Regional Entities annual business plans and budgets. Metrics and supporting measures accompany the Operating Plan and will be reviewed and updated as needed on an annual basis. In 2018, MRO worked to fully integrate the above referenced ERO Enterprise strategy documents into MRO s Strategic Plan and Metrics. Introduction As part of the ERO Enterprise, MRO s strategic planning process is informed by the risks and mitigating strategies identified and developed in the ERO Enterprise s Long-Term Strategy and three-year Operating Plan. In addition, working closely with registered entities and subject matter experts in the MRO Region, MRO continually identifies and assesses risks to reliability of the regional bulk power system. Region-specific activities to address these regional risks are reflected in MRO s Strategic Plan and Metrics. MRO will review this plan on an annual basis, and with input from the ERO Enterprise s ongoing risk work, the MRO Board of Directors, and MRO s technical stakeholder organizational groups, will revise the plan as necessary. MRO will perform a deep-dive strategy review biennially to assess the need for any significant plan changes. MRO STRATEGIC PLAN AND METRICS APPROVED BY THE BOARD: 3 60 of 126

61 Vision, Mission and Principles Vision A highly reliable and secure North American bulk power system. Mission To identify, prioritize and assure effective and efficient mitigation of risks to the reliability and security of the North American bulk power system by promoting Highly Effective Reliability Organizations (HEROs). Core Principles We are accountable for results, providing clarity and assurance of procedures, processes and controls to improve the reliability of the bulk power system. The following core principles guide our conduct and behavior: Accountability o Maintain the public trust in fulfilling responsibilities and use our funding wisely. o Act in a timely manner on the basis of facts to address issues related to events, emerging reliability risks, the needs of stakeholders, and the public interest. Independence o Be impartial, objective, fair, and intellectually honest. o Ensure governance practices that provide both regulatory independence and inclusion of stakeholder expertise to address reliability and security matters. Inclusiveness and Transparency o Create opportunities for stakeholder engagement. o Consider and balance the diverse interests of all stakeholders, including costs imposed to the consumer. o Leverage industry expertise and avoid unnecessary duplication. Innovation o Assess emerging risks and adapt to change. o Encourage new ideas and prioritize efforts that contribute to improving productivity and reliable operations. Excellence o Strive for operational excellence by being rigorous, accurate, and exacting. o Promote the active participation of the best technical experts. o Make informed decisions regarding efficient use and allocation of resources. Integrity o Maintain the highest levels of ethical conduct. o Maintain respectful relationships. o Protect the security of confidential information. MRO STRATEGIC PLAN AND METRICS APPROVED BY THE BOARD: 4 61 of 126

62 Strategic Goals and Contributing Activities Goal 1: Risk-Responsive Reliability Standards Goal Description Reliability Standards establish threshold requirements for assuring the Bulk Electric System (BES) is planned, operated, maintained, and secured to minimize risks of cascading failures, avoid damage to major equipment, or limit interruptions of the BPS. Reliability Standards are clear, timely, effective in mitigating risks to reliability, and consider cost-effectiveness/impact. Key MRO Contributing Activities MRO, through its stakeholder group structure, will work to coordinate and provide stakeholder input on and facilitate industry review of new and existing Reliability Standards, including cost effectiveness/impact analysis. MRO staff will provide input and feedback to NERC and standard drafting teams for new and existing Reliability Standards using compliance monitoring and other experience as a basis. MRO, through its stakeholder group structure, will gather stakeholder feedback to assess which NERC Reliability Standards may need further guidance and will develop Subject Matter Expert Teams to provide guidance and outreach on approved Reliability Standards following the NERC Compliance Guidance process. Develop, as needed for technical reasons, regional variances or regional standards to address specific reliability risks and evaluate the need for existing regional standards. Work with ERO Enterprise teams to review existing regional standards in all Regions to determine if any could be incorporated as a regional variance to a continent-wide Reliability Standard. MRO staff will continue to answer questions and provide ERO Enterprise supported guidance on the requirements. Goal 2: Objective, Risk-Informed Compliance Monitoring, Mitigation, Enforcement, and Entity Registration Goal Description As part of the ERO Enterprise, MRO is a strong enforcement authority that is objective, fair, and promotes a culture of reliability excellence through risk-informed compliance monitoring, mitigation, enforcement, and registration. Key MRO Contributing Activities Identify and register BES owners, operators, and users. Maintain accurate, up-to-date registration information, identifying entities responsible for compliance. Ensure entities performing the functions of Reliability Coordinator, Balancing Authority, and Transmission Operator have the tools, processes, and training to perform their reliability functions. Develop and implement compliance oversight plans for registered entities focusing on relevant risks, including identified and emerging reliability risks identified by RISC (goal 4), consideration MRO STRATEGIC PLAN AND METRICS APPROVED BY THE BOARD: 5 62 of 126

63 of entity inherent risk assessments, entity performance history, and effectiveness of entity internal controls. Work collaboratively with NERC and other Regional Entities to provide clear and consistent guidance on the CMEP process, including coordinated oversight of Multi-Region Registered Entities. Conduct technical assessments of registered entities plans and activities to mitigate noncompliance. Undertake enforcement activities proportional to the noncompliance in accordance with ERO Enterprise risk-based approaches. Take action to address any findings, recommendations, enhancements, guidance, and inconsistencies identified in NERC s registration, compliance monitoring, and enforcement oversight reports. Participate in the development and implementation of the CMEP Technology Project. Goal 3: Reduction of Known Risks to Reliability Goal Description As part of the ERO Enterprise, MRO recognizes significant known risks to reliability, assures those reliability risks are reduced, and promotes a culture of reliability excellence. Key MRO Contributing Activities Address NERC and/or regionally identified risks, such as protection system misoperations, and report against targets established for the ERO Enterprise. Quantify and measure known risks to the region. Communicate regional risks to NERC, and both regional and NERC-identified risks to industry. Conduct information gathering and sharing regarding good industry practices in risk identification, mitigation, and lessons learned. Communicate and share information regarding significant BPS events with NERC, FERC, and the other Regional Entities in a timely manner. Provide outreach and input for ERO Alerts and advisories. Participate in and coordinate with NERC on the activities of the NERC and regional technical committees. Goal 4: Identification and Assessment of Emerging Reliability Risks Goal Description As part of the ERO Enterprise, MRO identifies, objectively assesses, and prioritizes emerging risks to reliability to inform stakeholders and enable effective actions to reduce these risks to reliability. Key MRO Contributing Activities Ensure closer coordination of assessments and modeling across the Eastern Interconnection. MRO STRATEGIC PLAN AND METRICS APPROVED BY THE BOARD: 6 63 of 126

64 Use all tools and data available (reliability assessments, engineering software/studies, inherent risk profiles, compliance monitoring data, NERC alerts, analytics, system events, etc.) to identify trends or leading indicators of potential new or emerging BPS reliability risks. Provide input or review independent reliability assessments to reflect changing resource mix behavior, including distributed energy resources and essential reliability services. Seek and engage risk experts both inside and outside industry to better identify unique, new, or emerging risks that may affect the region. Perform and/or review objective seasonal and longer-term resource adequacy assessments and coordinate with NERC on interconnection and North American-wide BPS reliability assessments. Conduct objective assessments and studies to address specific emerging risks. Provide input to the RISC to provide regional perspectives for incorporation into the RISC report. Goal 5: Identification and Reduction of Cyber and Physical Security Risks Goal Description As part of the ERO Enterprise, MRO identifies and evaluates cyber and physical security risks to the BPS and assures those risks are reduced through active stakeholder engagement and information sharing of current threats and vulnerabilities, security workshops, and development of good industry practice guides. The ERO Enterprise supports the Electricity Information Sharing and Analysis Center (E-ISAC), the Cybersecurity Risk Information Sharing Program (CRISP), technical protective programs, and physical and cybersecurity preparedness exercises, and engages with government partners to de-classify sensitive security information needed to protect BPS devices and assets. The ERO Enterprise works with stakeholders to develop and share information to foster BPS resiliency in connection with both traditional and emerging risks. Key MRO Contributing Activities Participate in a pilot E-ISAC information-sharing program with the goal of enhancing protection of Regional Entity information and systems. Participate in E-ISAC technical projects such as CRISP, the CAISS, and CHIRP. Improve industry engagement regarding cyber and physical security risks, including (but not limited to) engagement with the E-ISAC and the MRO SAC. Leverage engagement with registered entities to encourage effective security practices and controls. Work collaboratively with NERC and other Regional Entities to develop procedures to effectively monitor and mitigate significant cyber and physical security risks. Goal 6: Effective and Efficient Operations Goal Description As part of the ERO Enterprise, MRO embraces transparency, collaboration, consistency, quality, efficiency, and timeliness of results and operates as a coordinated and collaborative enterprise. Key MRO Contributing Activities Make effective and efficient use of stakeholder expertise and resources to obtain input on key initiatives. MRO STRATEGIC PLAN AND METRICS APPROVED BY THE BOARD: 7 64 of 126

65 Participate in the development and implementation of ERO Enterprise-wide software solutions. Identify and support opportunities to improve regional and ERO Enterprise collaboration and efficiency. Ensure Yellow Book or C-SAG rules are followed through MRO s CMEP Quality Assurance Program (C-QA). MRO STRATEGIC PLAN AND METRICS APPROVED BY THE BOARD: 8 65 of 126

66 Metrics In support of the ERO Enterprise s and MRO s goals, the following six reliability metrics 1 have been established to measure achievement of a highly reliable and secure bulk power system (BPS). 1. Fewer, less severe events 2. No gaps in Reliability Standards and compliance monitoring 3. Any resource deficiencies are foreseen 4. Reduced reliability risk from unauthorized physical or electronic access 5. Reduced reliability risk from noncompliance 6. Reduced risks in targeted areas 7. MRO s efficiency and effectiveness The following lists the measures of achievement for each metric. Metric 1: Fewer, less severe events (Supports ERO Enterprise Operating Plan Goals 1 5) Measure(s) Threshold(s) Target(s) Notes Number and severity of BES events. No category 4 or 5 events resulting from a violation of a Reliability Standard. No category 3 events resulting from a violation of a Reliability Standard. Stable/downward trend from peak for the event severity index. Metric 2: Feedback loops exist between MRO compliance monitoring activities and NERC Reliability Standards (Supports ERO Enterprise Operating Plan Goals 1 3) Measure(s) Threshold(s) Target(s) Notes Gaps between compliance monitoring activities (or the RRA) and Reliability Standards are identified and communicated to NERC. Technical risk-based feedback is provided to NERC supporting the Standards Efficiency Review (P-81^2) initiative. Complete annual review of Standards to identify administrative and/or low-risk requirements and incorporate this review into MRO s Performance Areas. 1 These metrics are in addition to the metrics MRO establishes each year to support its performance-based compensation program, which values the achievement of specific company-wide and departmental objectives for the operating year. MRO STRATEGIC PLAN AND METRICS APPROVED BY THE BOARD: 9 66 of 126

67 Metric 3: Any resource deficiencies are foreseen (Supports ERO Enterprise Operating Plan Goals 1, 3, and 4) Measure(s) Threshold(s) Target(s) Notes Number of unanticipated resource deficiencies. No load shedding over 300 MW due to resource or essential reliability services deficiency, or common mode failure. This excludes deficiencies or common mode failures identified as a risk in an assessment during the past 3 years and not reported as resolved. No Energy Emergency Alert 3 (EEA-3) declarations for resource deficiencies. This excludes (1) any deficiencies or common mode failures identified as a risk in an assessment during the past 3 years and not reported as resolved and (2) any deficiencies that do not lead to a load shedding event. Metric 4: Reduced reliability risk from unauthorized physical or electronic access (Supports ERO Enterprise Operating Plan Goals 1 3 and 5) Measure(s) Threshold(s) Target(s) Notes Number of disruptions to BES facilities caused by unauthorized physical or electronic access. No load loss due to BES cyber attack. No reported disruption of electrical operations of the BES facilities due to cyber attack. No BES facility disruptions resulting in 100 MW or more of load loss due to physical attack. Compliance severity index of CIP violations stable to declining. Metric 5: Reduced reliability risk from noncompliance (Supports ERO Enterprise Operating Plan Goals 1 and 2) Measure(s) Threshold(s) Target(s) Notes Compliance severity index. Compliance severity index stable (within 110% of peak). Compliance severity index declining. Repeat violations. No repeat of severe violations within three years of mitigation completion. No repeat of severe or moderate violations within two years of mitigation completion. MRO STRATEGIC PLAN AND METRICS APPROVED BY THE BOARD: of 126

68 Metric 6: Reduced risks in targeted areas (Supports ERO Enterprise Operating Plan Goals 1 4) Measure(s) Threshold(s) Target(s) Notes Annual Misoperations rate of performance. Number of transmission line outages due to vegetation. Annual Misoperations rate of performance is less than 12.0% or declining. No transmission line outages due to FAC-003 violations on transmission lines above 300kV. Annual Misoperations rate of performance drops by 2 percentage points from the composite rate of the last three years. No transmission line outages due to FAC-003 violations on any transmission lines above 200kV. Metric 7: : ERO Enterprise s efficiency and effectiveness (Supports ERO Enterprise Operating Plan Goal 6) Measure(s) Threshold(s) Target(s) Notes Financial performance. Staff turnover. +/- 10% or less actuals as compared to budget (or revised budget target). No more than three voluntary terminations on a twelve-month rolling basis. Actuals to budget (or revised budget target) within + 2.5%/-5%. No more than two voluntary staff terminations on a twelvemonth rolling basis. MRO STRATEGIC PLAN AND METRICS APPROVED BY THE BOARD: of 126

69 AGENDA 8 - SPP RE Transition Update and Entity Q & A Session Date: March 23, 2018 AGENDA 8 SPP RE Transition Update and Entity Q & A Session Sara Patrick, Interim President and CEO To: From: Subject: Action: MRO Board of Directors Sara Patrick, Interim President and CEO SPP RE Transition Update and Entity Q & A Session None - Information and Discussion Dear Board Members: The North American Electric Reliability Corporation (NERC), jointly with Midwest Reliability Organization (MRO) and SERC Reliability Corporation (SERC), filed a petition with the Federal Energy Regulatory Commission (FERC) on March 5, 2018, seeking FERC s approval for the dissolution of the Southwest Power Pool Regional Entity (SPP RE) and expansion of the boundaries of both MRO and SERC to allow registration of SPP RE s registered entities. The petition requests an order in early May, and an effective date of July 1, 2018, for the MRO and SERC revised Delegation Agreements. Once approved by FERC, MRO s newly-expanded region will include more than 220 registered entities and all or part of the states of Arkansas, Illinois, Iowa, Kansas, Louisiana, Michigan, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, and Wisconsin, as well as the Canadian Provinces of Manitoba and Saskatchewan. Changes to MRO s Bylaws to accommodate representation of the expanded region on MRO s Board of Directors have been approved by both the MRO Board and Members, and staff anticipates presenting those to the NERC Board of Trustees for approval at its May 10, 2018 meeting. Once approved by the NERC Board of Trustees, those changes will subsequently be filed with FERC for approval. MRO is working closely with NERC, SERC and SPP RE on a plan to transition oversight activities and data from SPP RE to MRO and SERC, and to ensure a smooth transition for SPP RE registered entities. MRO staff has begun contacting SPP RE entities that will be registered with MRO to provide information about the organization and to answer any questions or concerns that entities may have. A new webpage has been created on MRO s website dedicated to transition information and resources, and includes a New Registered Entity Welcome Packet. 69 of 126

70 AGENDA 8 - SPP RE Transition Update and Entity Q & A Session Other outreach activities underway include an Introduction to MRO workshop planned specifically for SPP RE entities on May 22, 2018, the day before MRO s Spring Reliability Conference. The agenda for this workshop will be finalized soon. Additionally, I, along with other MRO staff will attend SPP RE s Spring Workshop in Little Rock on March 27, The workshop agenda includes a Q&A session with NERC, MRO, and SERC representatives. MRO staff continues to meet with SPP RE registered entities by request. Finally, we are encouraging those entities that are interested in membership with MRO to submit applications at this time membership will become effective upon the effective date of the revised delegation agreement. Specific questions on the SPP RE registered entity transition can be directed to transition@midwestreliability.org. Staff is tracking all questions through to completion, and will post a frequently-asked questions document on our website as the transition progresses. 70 of 126

71 AGENDA 9 - Board Committee Reports AGENDA 9 Board Committee Reports a. Hearing Body Report Doug Johnson, Chair Date: March 23, 2018 To: From: Subject: Action: MRO Board of Directors Doug Johnson, Hearing Body Chair Hearing Body Report None - Information and Discussion Dear Board Members: The Hearing Body meets as needed throughout the year to consider contested violations and approve Settlement Agreements negotiated by MRO Enforcement staff. The full meeting agendas and associated documents can be found on the MRO confidential board site on the Settlement section of the Hearing Body page. MRO has not received any requests for hearings or notices contesting alleged violations or proposed penalties so far in Summary of Discussion Items and Committee Actions: 1. On January 24, 2018, MRO staff provided members of the MRO Hearing Body with an overview of the responsibilities of the MRO Hearing Body and links to the governing documents via On February 27, 2018, NERC amended its December 9, 2016 petition requesting approval of proposed revisions to the NERC Rules of Procedure related to the Hearing Procedures. NERC s December 2016 Petition proposed revisions to the ROP that incorporate the Consolidated Hearing Process, which would provide Regional Entities an option to select NERC to manage the hearing process. The amendment addresses FERC staff questions relating to the Hearing Officer having the ability to cast the deciding vote in the event of a tie by proposing five members instead of four, and consistency in the use of terms by proposing replacing the term segment with the term sector. The February 2018 amendment was filed following a public comment period that ended on January 14, 2018 and NERC Board of Trustee approval at its February meeting. A copy of the petition is available here. 3. On March 6, 2018, the MRO Hearing Body considered and approved one Settlement Agreement negotiated by MRO Enforcement staff for one violation of an Operation and Planning Reliability Standard. 71 of 126

72 AGENDA 9 - Board Committee Reports Action Items for Consideration by the MRO Board of Directors: There are no action items at this time. 72 of 126

73 AGENDA 9 - Board Committee Reports Date: March 23, 2018 AGENDA 9 Board Committee Reports b. Finance and Audit Committee Report. Tom Kent, Chair To: From: Subject: Action: MRO Board of Directors Tom Kent, Finance and Audit Committee Chair Finance and Audit Committee Report None - Information and Discussion Dear Board Members: Due to the timing of the Finance and Audit Committee Meeting, the committee s report will be provided as a handout to board members ahead of the meeting 73 of 126

74 AGENDA 9 - Board Committee Reports Date: March 23, 2018 AGENDA 9 Board Committee Reports c. Governance and Personnel Committee Report. Jeff Gust, Chair To: From: Subject: Action: MRO Board of Directors Jeff Gust, Governance and Personnel Committee Chair Governance and Personnel Committee Report None Information and Discussion Dear Board Members: The Governance and Personnel Committee (GPC or committee) consists of Dr. Paul Barber, Micheline Casey, Brad Cox, Richard Doying, and me. The Committee met in March and will meet again April 4, The committee will provide a report in the board s Executive Session, in addition to this report, which address the following topics: Security Advisory Council 2019 Independent Director Fees Administrative Services Report and Whistleblowing Report 2017 Stakeholder Survey Results 2017 Board Self-Assessment Revised Strategic Plan and Metrics New Director Orientation Security Advisory Council Included on the board s consent agenda is the GPC s recommendation to approve John Hochevar, American Transmission Company (ATC), and Jodi Jensen, Western Area Power Administration (WAPA), as Chair and Vice Chair of the Security Advisory Council respectively. These highly qualified people are included in the consent agenda to the board. Independent Director Fees The committee reviewed the fees paid to MRO Independent Directors for their service. The fees consist of an annual retainer, fees paid for meeting attendance, and an annual retainer if an Independent Director serves as the chair of a committee or the board. The committee reviewed the estimated 2018 Independent Director compensation paid by the other Regional Entities. The committee continues to believe the structure of the fees (retainer and meeting fees) is correct, with greater weight given to the meeting fees. The committee is concerned that the MRO Independent Director fees seem to be lagging the fees for the other Regional Entity Independent 74 of 126

75 AGENDA 9 - Board Committee Reports Directors as shown in the table below. If the SPP RE Independent Director fees are removed, the 2018 average would be $67,960 compared to the $63,633 shown in the table. Table 2: Estimated 2018 Independent Director Compensation Data Shown with Assumptions January 2018 Independent Director Compensation Data Shown with Assumptions Annual Retainer Fee Board Meeting Fee Committee Meeting Fee Approximate Annual Compensation* Independent Conference Board Chair Board Vice- Committee Comp. Region Directors Call Fee Fee Chair Fee Chair Fee Work FRCC Yes N/A N/A N/A N/A N/A N/A N/A N/A N/A MRO Yes $20,000 $6,200 $2,000 $1,600 $5,200 $0 $5,200 N/A $59,200 NPCC Yes $77,000 $0 $0 $500 $19,000 $0 $0 $0 $79,000 RF Yes $38,850 $2,000 $2,000 $750 $0 $0 $10,000 N/A $57,850 SERC No N/A N/A N/A N/A N/A N/A N/A N/A N/A SPP Yes $20,000 $2,500 $2,500 $500 $22,500 $0 $3,000 N/A $42,000 TRE Yes $65,000 $0 $0 $0 $10,000 $5,000 $7,500 N/A $65,000 WECC Yes $78,750 $0 $0 $0 $10,000 $7,500 $7,500 N/A $78,750 Average N/A $49,933 $2,675 $1,300 $838 $13,340 $12,500 $8,300 $0 $63,633 *Assumptions: - There are 4 Board meetings/year each being 1 day in length - There are 4 Committee Meetings/year - There are 4 conference calls/year Note this table does not reflect the higher than normal meetings we anticipate at MRO for The committee is meeting on April 4, 2018, to finalize its recommendation to the board for 2019 Independent Director fees. Action Item: Adopt the revised Independent Director Fee Schedule effective January 1, As presented by the committee at the April 5, 2018 board meeting. Execution of Corporate Secretary and Treasurer s Responsibilities MRO staff reported that the Corporate Secretary and Treasurer had complied with all of their responsibilities. Compliance with Delegation Agreement Representations Staff noted that annually the Delegation Agreement is reviewed to ensure all representations are being met. Staff also noted that consistent with NERC s direction and good faith interpretation of FERC regulations, MRO does not submit its policies and procedures for review and approval by NERC and FERC. MRO as required does submit all proposed bylaw changes to NERC and FERC for approval. Whistleblowing Report MRO maintains a whistleblowing hotline that can be used to anonymously report legal or ethical concerns. No reports have been received since the inception of the hotline. MRO staff concluded this report with an update on the annual reviews that are completed to ensure proper administration of benefit plans. 75 of 126

76 AGENDA 9 - Board Committee Reports Administrative Services Report Each quarter we receive a report providing an overview of all employee meetings and various employee training opportunities. In February, there is an all-staff kick-off meeting where MRO s Vision, Purpose and Principles is reviewed with all employees and key organizational accomplishments are highlighted. At the meeting, staff also heard the Why, the Who, and the How of work at MRO, which included Aiming for Perfection as described by Jon Bowers in his 2017 TED Talk. Upcoming staff training was reviewed, including a workshop for project and time management. Finally, MRO the results of the Gallup 12 survey were provided, and high performance related to high engagement was emphasized. At our next committee meeting, MRO staff will provide additional detail regarding MRO s results, which are high as compared to the benchmark industry results Stakeholder Survey Results The themes from the 2017 Stakeholder Survey remain consistent with previous years. Stakeholders continue to be very positive about the professionalism and competency of staff. While the number of respondents decreased as did some ratings, ratings related to communication, training and education, and board categories all saw an increase. Under the committee s suggestion, additional question were included in 2017 to measure stakeholder satisfaction; several responses complimented the knowledge, willingness, and professionalism of MRO staff; the level of stakeholder outreach and communication; and MRO s leadership of risk-based regulation. At the same time, there is continued concern expressed by stakeholders about the timeliness of certain CMEP processes and responses from staff, which MRO leadership is continuing to monitor. A summary of the results is attached and will be posted on the MRO website following our meeting Board Self-Assessment The board focused on two areas of improvement arising from the 2017 Board Self-Assessment: The board s communication with stakeholders The board s role in ensuring that the MRO President and CEO has proper leadership development and succession plans for MRO s senior management Revised Strategic Plan and Metrics The committee reviewed the changes made to the MRO Strategic Plan and Metrics based on the board February 15, 2018 teleconference, and a final plan will be presented to the board for approval under the consent agenda. New Director Orientation Miggie Cramblit, Vice President, General Counsel, Corporate Secretary and Director External Affairs, or I will provide a brief update on the new director orientation, which will be held on April 4, 2018, prior to our executive session. All directors are welcome to come to this meeting. 76 of 126

77 MRO 2017 Stakeholder Survey Summary Results Conducted in October 2017 MIDWEST RELIABILITY ORGANIZATION 380 St. Peter Street, Ste.800 St. Paul, MN P: F: of 126

78 Contents Preface... 2 Executive Summary... 3 Target Audience... 3 Background... 3 Survey purpose... 3 Survey Results... 4 Performance Measurements... 4 Year-Over-Year Comparisons Summary Results... 6 Question 1: Sector... 6 Question 2: Role... 7 Question 3: Newsletter... 7 Question 4: Service... 8 Question 5: Communication... 9 Question 6: Training and Education Question 7: Reliability Improvement Question 8: Leadership Question 9: Board of Directors Question 10: MRO s Outreach Efforts Question 11: Satisfaction Question 12: Dissatisfaction Question 13: Remaining Thoughts Conclusion MRO 2017 STAKEHOLDER SURVEY SUMMARY RESULTS 1 78 of 126

79 Preface Midwest Reliability Organization (MRO) is dedicated to its vision to maintain and improve the quality of life through a highly reliable regional bulk power system. MRO operates as a cross-border Regional Entity and is headquartered in Saint Paul, Minnesota. The MRO Region covers roughly one million square miles spanning the provinces of Saskatchewan and Manitoba, and all or parts of the states of Illinois, Iowa, Minnesota, Michigan, Montana, Nebraska, North Dakota, South Dakota and Wisconsin. The region includes more than 130 organizations that are involved in the production and delivery of electricity to more than 20 million people. These organizations include municipal utilities, cooperatives, investor-owned utilities, transmission system operators, a federal power marketing agency, Canadian Crown Corporations, and independent power producers. MRO's primary responsibilities are to: ensure compliance with mandatory reliability standards by entities who own, operate, or use the interconnected, international bulk power system; conduct assessments of the grid's ability to meet electricity demand in the region; and analyze regional system events. MRO 2017 STAKEHOLDER SURVEY SUMMARY RESULTS 2 79 of 126

80 Executive Summary Target Audience MRO s Annual Stakeholder Survey is sent to all MRO members, registered entities and industry stakeholders that do business, are subject to the regulatory oversight, or have an interest in Midwest Reliability Organization. Recognizing that individual experiences may vary, MRO encourages participation from multiple individuals within an organization and does not limit responses in any way. Background Annually, MRO seeks feedback on MRO s performance in six areas: service, communication, leadership, training and education, reliability improvement, and the board. The results of this survey are used primarily to benchmark MRO s year-over-year performance related to stakeholder satisfaction, as well as to identify areas for improvement. The survey is conducted anonymously so respondents can be open and honest in their responses. Respondents are asked to rate MRO on a 4-point scale of Excellent, Good, Average, and Poor. Respondents can also respond Not Applicable. Qualitative comments can be provided in response to all questions. We define these ratings as follows. EXCELLENT - Outstanding. Consistently embodies MRO s Principles of doing the right thing in the right way to support the reliable operations of the bulk power system. MRO creates substantial value for bulk power system reliable operations. GOOD - Superior. More than acceptable. Reflects MRO s Principles of doing the right thing in the right way to support the reliable operations of the bulk power system. MRO creates value for bulk power system reliable operations. AVERAGE - Passable without distinction. POOR - Seriously deficient and unacceptable. Often runs counter to expected behaviors under MRO s Principles. In 2017, one question was added to help measure the success of MRO s outreach efforts. Responses to this question does not impact the numerical ratings for the year-over-year performance in the six areas noted above. Finally, at the end of each survey we ask respondents to comment on any particular areas of satisfaction or dissatisfaction. Survey purpose The primary purpose of the annual survey is to provide a basis for performance improvements using candid feedback from stakeholders, as well as to provide future performance metrics. The eight basic questions have remained the same to ensure consistency year-over-year. The survey is short to provide focus and ease of completion. MRO 2017 STAKEHOLDER SURVEY SUMMARY RESULTS 3 80 of 126

81 Survey Results The 2017 stakeholder survey was available to complete between November 1 and November 15. The complete survey results are shared first with MRO s Governance and Personnel Committee and then with the entire board. Following the board s review, this summary of the survey results is posted on MRO s public-facing website. Performance Measurements MRO first performed its annual stakeholder survey in 2010 and has performed it each year after. The 2017 survey reflected a drop in stakeholder participation, with 56 respondents in 2017 as compared to 60 respondents in All sectors participated in the survey and the proportion of respondents who have compliance roles remained the highest at 62.5%. The percentage of respondents with operations and executive-level roles were the same at 12.5%, and those in engineering roles comprised 7.1% of the survey participants. Below is a summary of the year-over-year "Excellent" and "Good" responses by survey category. In 2015, we removed the not applicable rating from the results so these zero ratings would not affect the weighted average. The not applicable rating was also removed from previous year s survey results to provide accurate year-over-year comparisons. As you will see by the data provided, 2017 ratings of MRO s performance continue to remain high, with the average percentage of year-over-year Excellent and Good ratings remaining the same as The Communication, Training and Education, and Board categories all saw an increase in Excellent and Good ratings, while the Service, Reliability Improvement, and Leadership ratings all saw decreases. The results from each category are summarized in this report. MRO 2017 STAKEHOLDER SURVEY SUMMARY RESULTS 4 81 of 126

82 Year-Over-Year Comparisons Average Percentage of Excellent/Good Ratings Across All Categories Year over Year Number and Percentage of Excellent/Good Ratings by Category Category 2013 % 2014 % 2015 % 2016 % 2017 % Service Communication Training and Education Reliability Improvement Leadership Board Average % across all categories: MRO 2017 STAKEHOLDER SURVEY SUMMARY RESULTS 5 82 of 126

83 2017 Summary Results Question 1: Sector My Organization Belongs to the Following Sector: 13 (23%) 6 (11%) 11 (20%) 6 (11%) 4 7% 14 (25%) 2 (3%) CAN COOP FPMA GPM IOU MU TSO Sector CAN (Canadian Utility) COOP ( Cooperative Utility) FPMA (Federal Power Marketing Agency) GPM ( Generator and/or Power Marketer) IOU (Investor Owned Utility) MU (Municipal Utility) TSO (Transmission System Operator) Other Skipped Total Respondents MRO 2017 STAKEHOLDER SURVEY SUMMARY RESULTS 6 83 of 126

84 Question 2: Role My role within the organization is: 1 (2%) 7 (13%) 2 (4%) Compliance Engineering 7 (12%) 4 (7%) 35 (62%) Executive (Director or Officer) Legal or Regulatory Operations Technical/IT Other Role Compliance Executive (Director or Officer) Engineering Legal or Regulatory Operations Technical/IT Other Question 3: Newsletter Are you a regular reader of the MRO newsletter Midwest Reliability Matters? % 2017 % Yes N/A No N/A MRO 2017 STAKEHOLDER SURVEY SUMMARY RESULTS 7 84 of 126

85 Question 4: Service When my company asks a question regarding reliability matters, how well does MRO staff address these questions and concerns in a timely, responsive manner? Question 4: Service Year over Year Comparison Excellent Good Average Poor Number of Year over Year Responses by Category 2013 % 2014 % 2015 % 2016 % 2017 % Excellent Good Average Poor N/A Total Number and Percentage of Excellent/Good Ratings by Category Category 2013 % 2014 % 2015 % 2016 % 2017 % Service Feedback and Suggestions The responses in this section continue to reflect high satisfaction with the level of service MRO provides to its stakeholders 79.6% of respondents provided either Excellent or Good ratings. Respondents expressed that overall, MRO staff are thorough and knowledgeable in their responses to stakeholder requests. One respondent noted that [M]RO can be counted on to give a useful answer for any compliance question in a timely manner while preserving its independence Three poor ratings were received and some respondents expressed frustration with delayed and longer than usual response times. MRO staff continues to work closely with the ERO on the development and implementation of riskbased processes and procedures, which adversely affects response times in other areas. MRO leadership will continue to evaluate resources and workload in 2018 and look for opportunities to continue to improve the timeliness of staff responses to stakeholder inquiries. MRO 2017 STAKEHOLDER SURVEY SUMMARY RESULTS 8 85 of 126

86 Question 5: Communication How well does MRO share information to help you improve reliability? Question 5: Communication Year over Year Comparison Excellent Good Average Poor Number of Year over Year Responses by Category 2013 % 2014 % 2015 % 2016 % 2017 % Excellent Good Average Poor N/A Total Number and Percentage of Excellent/Good Ratings by Category Category 2013 % 2014 % 2015 % 2016 % 2017 % Communication Feedback and Suggestions Respondents continue to be very satisfied with the information MRO communicates regarding reliability issues. One respondent noted that MRO is strong in this area, sharing in a timely manner using multiple approaches. Newsletter, Hot Topics meetings and conferences are appreciated and valuable. Standards Application Guides are very much appreciated, as is the opportunity to participate in those efforts. Another responded that Our organization is very pleased with the outreach conducted by MRO and hopes to see it continued in the future. Based on the responses, there is a clear desire for MRO to continue its outreach efforts. MRO will also continue to focus on improving and expanding its communication and outreach activities in MRO 2017 STAKEHOLDER SURVEY SUMMARY RESULTS 9 86 of 126

87 Question 6: Training and Education Has MRO effectively created opportunities for you and your staff to participate in the organization through committees, workshops and other areas? Question 6: Training and Education Year over Year Comparison Excellent Good Average Poor Number of Year over Year Responses by Category 2013 % 2014 % 2015 % 2016 % 2017 % Excellent Good Average Poor N/A Total Number and Percentage of Excellent/Good Ratings by Category Category 2013 % 2014 % 2015 % 2016 % 2017 % Training and Education Feedback and Suggestions Respondents continue to be very satisfied with the number and type of educational opportunities offered by MRO. One respondent stated that MRO workshops are always very informative and address current topics. Adding in NERC speakers at conferences is of great value. The recent Security Conference was excellent. In 2017, MRO offered remote attendance to many of its webinars and conferences. Based on the feedback received, being able to attend conferences remotely is very cost-effective and much appreciated. MRO records many of its conferences and webinars, which can be viewed in our stakeholder outreach video library. Respondents also expressed appreciation for the training and outreach provided by MRO s new Security Advisory Council. You can view Security Advisory Council webinars here. If you would like to suggest a future training topic, please contact training@midwestreliability.org. MRO 2017 STAKEHOLDER SURVEY SUMMARY RESULTS of 126

88 Question 7: Reliability Improvement How well has MRO assisted your company in addressing matters related to reliability? Question 7: Reliability Improvement Year over Year Comparison Excellent Good Average Poor Number of Year over Year Responses by Category 2013 % 2014 % 2015 % 2016 % 2017 % Excellent Good Average Poor N/A Total Number and Percentage of Excellent/Good Ratings by Category Category 2013 % 2014 % 2015 % 2016 % 2017 % Reliability Improvement Feedback and Suggestions Respondents continue to be generally satisfied with MRO s efforts to improve reliability. Respondents expressed that MRO has done a good job of focusing on reliability, instead of just compliance, and conveying information that helps industry understand and address reliability risks. One commenter observed MRO s focus on risk-based compliance has helped us to implement our own risk assessment, which has been extremely valuable to us. We followed the process provided by [MRO] a couple of years ago and it led us down the reliability path and not the compliance path. Maintaining compliance is much easier when we focus on reliability. In 2018, we will continue working on ERO-wide initiatives to improve reliability. MRO 2017 STAKEHOLDER SURVEY SUMMARY RESULTS of 126

89 Question 8: Leadership Overall, how would you rate MRO s leadership to improve reliability and address risks to the bulk power system? Question 8: Leadership Year over Year Comparison Excellent Good Average Poor Number of Year over Year Responses by Category 2013 % 2014 % 2015 % 2016 % 2017 % Excellent Good Average Poor N/A Total Number and Percentage of Excellent/Good Ratings by Category Category 2013 % 2014 % 2015 % 2016 % 2017 % Leadership Feedback and Suggestions The responses in this section continue to reflect a very high level of satisfaction with the leadership of the organization 84.6% of respondents provided either Excellent or Good ratings. The comments from respondents were overwhelmingly positive; one respondent said that In my opinion, MRO is at the forefront of addressing risks and improving reliability. MRO is a leader in improving processes associated with NERC compliance. Another stated that We appreciate the consistent tone and messaging of MRO, and Dan Skaar in particular, that compliance should not come at the expense of reliability. The MRO leadership team will continue to seek opportunities to promote the ERO Vision to be a highly reliable and secure North American bulk power system through support of highly effective reliability organizations or HEROs in MRO 2017 STAKEHOLDER SURVEY SUMMARY RESULTS of 126

90 Question 9: Board of Directors How well do you feel that the board provides adequate strategic guidance and review of the activities of MRO? Question 9: Board Year over Year Comparison Excellent Good Average Poor Number of Year over Year Responses by Category 2013 % 2014 % 2015 % 2016 % 2017 % Excellent Good Average Poor N/A Total Number and Percentage of Excellent/Good Ratings by Category Category 2013 % 2014 % 2015 % 2016 % 2017 % Board Feedback and Suggestions The number of Excellent and Good responses in this area significantly increased this year, however, 14 respondents still rated this question as Not Applicable. Respondents generally stated they had limited exposure to the board and do not follow the board s activities. One respondent stated that [W]e could surmise that MRO leadership is following the guidance of the board, but that guidance, even if made available to us, is simply something we do not pay attention to. MRO will continue to seek ways to communicate information about the work of the board to its stakeholders. MRO 2017 STAKEHOLDER SURVEY SUMMARY RESULTS of 126

91 Question 10: MRO s Outreach Efforts Respondents were asked to provide feedback on MRO s outreach efforts (publications, guidance documents, webinars, conferences, etc.). Thirty respondents provided feedback on this question, twenty-eight of whom noted overwhelming satisfaction with the quality and content of MRO s outreach. Several stated they have seen a marked improvement in MRO s outreach efforts over the past few years. The majority of the responses indicated that MRO s publications and guidance document are useful and valuable, and many commenters noted that MRO s conferences and facilities are excellent. One respondent stated that MRO provides outstanding outreach support. Everything from webinars to publications provide the registered entity with valuable tools to help maintain a viable compliance program. Two respondents noted that information can be hard to find on MRO s website, and three respondents stated that although the information published by MRO is very good, the sheer volume of it makes it hard to digest and may detract from important messages. MRO staff will continue to assess its outreach efforts and look for ways to improve the delivery of information in Question 11: Satisfaction Respondents were asked to list any specific characteristics of MRO with which they were SATISFIED. Thirty-two respondents provided comments; several complimented the knowledge, willingness and professionalism of MRO staff, the level of stakeholder outreach and communication, and MRO s leadership of risk-based regulation. One respondent noted that MRO s culture and desire to be part of the reliability solution are outstanding. Another stated that MRO s continued leadership of self-logging and keeping the small stuff small is appreciated. Several respondents complimented the competency of MRO staff and the proactive work of MRO s Risk Assessment and Mitigation team to partner with registered entities to improve compliance programs and overall system reliability. Respondents also expressed appreciation for the opportunities MRO provides registered entities to participate and influence the direction of MRO. Question 12: Dissatisfaction Respondents were asked to list any specific characteristics of MRO with which they were DISSATISFIED. Of the twenty-two comments received, six were none. Most of the responses related to timeliness of certain CMEP processes and the desire for shorter timeframes for closing out audits. One respondent noted that more discussion on Internal Controls is warranted, and another suggested that MRO s office location in downtown Saint Paul is not convenient as it is about 20 minutes from the Minneapolis St. Paul International Airport. In 2017, MRO staff continued to focus on developing risk-based oversight practices, such as performing Inherent Risk Assessments of each registered entity and developing MRO s Regional Risk Assessment. Significant resources were dedicated to ensure the success of these programs. MRO leadership will continue to monitor resources and workload in MRO 2017 STAKEHOLDER SURVEY SUMMARY RESULTS of 126

92 Question 13: Remaining Thoughts Respondents were asked to share any remaining thoughts about their experiences with MRO, including suggestions for improvement. Twenty comments were received. Respondents generally expressed appreciation for MRO s innovativeness and effectiveness as a regulator, and encouraged a continued focus on risk and more streamlined approaches to compliance and enforcement. A few suggestions were made for NERC and the Regional Entities to continue working to improve the quality of Reliability Standards and CMEP processes. Only two suggestions were MRO-specific; one was to extend MRO s outreach opportunities to a wider audience and consider alternate event locations; the second was to provide a staff roster on MRO s website. These suggestions will be considered by the MRO leadership team. MRO 2017 STAKEHOLDER SURVEY SUMMARY RESULTS of 126

93 Conclusion MRO s Annual Stakeholder Survey provides an opportunity for stakeholders that do business, are subject to the regulatory oversight, or have an interest in Midwest Reliability Organization to provide input and feedback on MRO s performance as a regulator. We sincerely appreciate the open and honest responses we receive through this survey each year, and will continue to use it as a tool to identify inefficiencies and areas for future improvement. We d like to thank those who responded to this year s survey, and will work to enhance the areas identified for improvement in 2018, along with continuing to promote our Vision of a reliable regional bulk power system through adaptive, risk-based regulation. MRO 2017 STAKEHOLDER SURVEY SUMMARY RESULTS of 126

94 AGENDA 9 - Board Committee Reports Date: March 23, 2018 AGENDA 9 Board Committee Reports d. Dispute Resolution Committee Report. Tony Clark, Chair To: From: Subject: Action: MRO Board of Directors Tony Clark, Dispute Resolution Committee Chair Dispute Resolution Committee Report None - Information and Discussion Dear Board Members: Members of the Midwest Reliability Organization (MRO) Dispute Resolution Committee (DRC) provide oversight of the dispute resolution processes and procedures instituted pursuant to the MRO Bylaws. MRO Policy and Procedure 6 describes the objectives, responsibilities, membership, and quorum requirements of the committee. Appendix 6.1 contains the MRO Dispute Resolution Procedures. The DRC is required to meet at least annually and has established a practice of reviewing and recommending to the MRO Board of Directors any changes to the MRO Dispute Resolution Procedures. Additionally, the DRC annually reviews the lists of Mediator Arbitrators and Technical Advisors to ensure that those listed still meet the requirements and are interested in remaining on the list. This review was last conducted in September 2017 and will occur again around the same time in MRO has not received notice of any dispute for resolution under the Dispute Resolution Procedures. Action Items for Consideration by the MRO Board of Directors: There are no action items at this time. 94 of 126

95 AGENDA 10 - Independent Auditor Report AGENDA 10 Independent Auditor Report a. Accept 2017 Audit Report of Financial Statements. Nicki Donlon, Partner, and David Kelly, CPA Audit Senior Manager, Baker Tilly Date: March 23, 2018 To: From: Subject: Action: MRO Board of Directors Nicki Donlon, Partner, and David Kelly, CPA Audit Senior Manager, Baker Tilly Independent Auditor Report Review and Approve 2017 Audit Report of Financial Statements Dear Board Members: Nicki Donlon, Partner, and David Kelly, CPA Audit Senior Manager, Baker Tilly will provide a report on MRO s audited 2017 financial statements. The report will be provided to board members ahead of the meeting under separate cover. 95 of 126

96 AGENDA 11 - MRO Operations Report Date: March 23, 2018 AGENDA 11 MRO Operations Report Dan Schoenecker, Vice President Operations To: From: Subject: Action: MRO Board of Directors Dan Schoenecker, Vice President Operations MRO Operations Report None - Information and Discussion Dear Board Members: The following is a summary of the event analysis reports that have been submitted to MRO. It includes new event reports that were submitted since the last board meeting and a year-year trend of the BPS impacts of all events. Also included are misoperations trending charts. New Events Reported Since the Last Board Meeting: Since the last board meeting on November 30, 2017, there were no brief reports submitted for Energy Management System (EMS) events and three brief reports submitted for bulk power system (BPS) events through March 1, November 7, 2017 Event in the Dakotas: Event Category: 1.a # of BES facilities Interrupted: 5 MW of Generation Lost: 1100 MW MW of Load Lost: 30 MW # Misoperations: 0 Details: During a maintenance outage of two 230 kv lines at Coal Creek, a 4 kv aux power bus-tie at Coal Creek inadvertently tripped during a switching routine, interrupting all station aux service to the HVDC. The Coal Creek RAS operated correctly, but the full output of 1100 MW was momentarily on the remaining CC-Harvey 230 kv line, which tripped on zone January 15, 2018 Event in the Nebraska: Event Category: 1.a # of BES facilities Interrupted: 5 MW of Generation Lost: 0 MW of Load Lost: 0 # Misoperations: 1 96 of 126

97 AGENDA 11 - MRO Operations Report Details: A shield wire broke within a substation, faulting a 345 kv line and then faulting the 345 kv bus. There was one suspected misoperation, a 345 kv line over-trip due to a saturated CT. 3. January 22, 2018 Event in the Nebraska: Event Category: 1.a # of BES facilities Interrupted: 3 MW of Generation Lost: 0 MW of Load Lost: 21 MW # Misoperations: 1 Details: A Nebraska 115kV bus tripped which open-ended three BES facilities. Subsequent analysis found that there was damage to a current transformer (CT) circuit on the 115 kv bus tie, which incorrectly identified a remote non-bes fault as being in its zone of protection and initiated a differential relay trip on the 115kV bus. The CT control circuitry was damaged by wildlife. Summary of 2017 Transmission-Related Events: There were 13 transmission-related events reported within the MRO Region calendar year Six of the 13 events involved one or more misoperations. 97 of 126

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99 AGENDA 11 - MRO Operations Report Status of Past Events: 1. February 1, 2017 Loss EMS in Minnesota (Cat 1h event): This event is pending cause-coding with the entity. 2. March 7, 2017 Event in the Tioga, North Dakota area: This event is pending cause-coding with the entity. 3. March 31, 2017 Event in the North Dakota area (1.a): This event is pending cause-coding with the entity. 4. April 12, 2017 Event in Montana area: This event is pending cause-coding with the entity. 5. April 19, 2017 Event in South Dakota area: This event is pending cause-coding with the entity. 6. May 10, 2017 Loss of EMS Event in the Minnesota area: This event is pending cause-coding with the entity. 7. June 5, 2017 Event in the Wisconsin area: This event is pending cause-coding with the entity. 8. June 11, 2017 Loss of EMS Event in the Minnesota area: This event is pending cause-coding with the entity. 9. July 6, 2017 Loss of EMS Event in the Wisconsin area: This event is pending cause-coding with the entity. 10. July 20, 2017 Loss of EMS Event in the Nebraska area: Awaiting cause coding. 11. July 27, 2017 Event in the North Dakota area: This event is pending cause-coding with the entity. 12. August 15, 2017 Event in the North Dakota area: This event is pending cause-coding with the entity. 13. August 17, 2017 Loss of EMS Event in the Minnesota area: Awaiting cause coding. 99 of 126

100 AGENDA 11 - MRO Operations Report Recommendations/Lessons Learned: The NERC Event Analysis Subcommittee (EAS) continues to develop and publish Lessons Learned from events. Since the last OC meeting, there have been three new lessons learned published: Inadequate Battery Configuration Management Damaged a Generating Station and Tripped an HVDC Conversion Station. State Estimator Outages Requiring Tuning/Calibrating EMS Settings Breaker Failure Due to Trip Coil Polarity Lessons Learned can be found at: MRO staff has been reviewing the individual company submittals of misoperations and working with the entities to assure their misoperations and total operations counts are accurate. Additionally, NERC is preparing a guidance document with examples to help entities accurately submit their counts. MRO entities are also participating on a series of WECC webinars that walk through various examples on establishing misoperation and total operation counts consistently. 100 of 126

101 AGENDA 11 - MRO Operations Report The MRO overall misoperation rate for 2017 is 9.1%. It can be seen that the overall total misoperation count per year has been consistently dropping since of 126